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===Wow, what else can go wrong with that stock? ====
well, i guess it could go to zero, but that is the risk.
off topic big w
thanks, just some light rain and wind here
hope you ok in harvey. I remember those tx dry beds filling up fast during hard rains.
=== completely out of your remaining long positions===
not quite but almost.
probably time to do the inverse, HA
take care
I really have no clue so take this with a grain of salt. I see it as the wild west of investing, now with competition. Reminds me of when everyone in America needed the latest Tulip seeds, only it's built on nothing, just ask MT. GOX (sp?) investors that lost everything when that exchange was hacked or went belly up.
not even sure how a blockchain works but seems like gaining traction.
i wondered why i stopped getting those quotes. that old ctix one that changed keeps going back and forth in a way the old cortex would be proud....
Thunderstorms came just as it approached. got to see it 15/16 covered, it triggered outdoor lights to come on, then ssaw it again at about 7/8, then clouds again. 30 minutes later, bright blue skys everywhere, ha.
take care
ps, sold my flo, (thanks,) and wy a while ago, raising cash.
OFF TOPIC
gfp, i have watched this guy call earthqukes 3 times in ny state, within a day and 50 or so miles, one in new ham, and one in maine,
most of us have been taught that earthquakes were not predicatable, but i have watched him do it for weeks now. he come his live stream around 5pm est most days. have to follow him for a while to kind of get what he has done/is doing.
now geo medal winners are attacking him on facebook and his patreon acct. he has called at least a dozen quakes by date and mag and the usgs won't publish it, he had to get the quakes off of canada, a university, or the euro folks to get the feed that shows the usgs no show eq.
he just moved to a gated community, still running his you tube, now just a few away from 200,000 subs. a couple days in his new home two folks came to his front door and were asking if they could walk down the property line as they were going to buy the lots on one side. he is deep in the woods now, and found out that there are no properties for sale around him and the front gaurd to the community said no real estate folks or anyone looking at property reported through the gate that day. very strange and made me think of you, ha.
you tube name = dutchsinse fing genious or lucky sucker that fell into an 8 year quest.......he is about 82% accurate with time and within a magnitude, plus many times he removes a watch or warning, only to have the exact area the next day, ha.
most of us have been taught that eq's are not predicable, but i watched him go about 10 for 10 last week, true. unreal.
didn't murdock get this prize in the downturn that gave the nyt to mexico and the wapo to amz?????
#1 lesson life for me was, don't believe everything you read. my father used to have drinks with newspaper guys and hand then pretty much pre written stories on new products coming out, so that way they could just smoke, drink, and lay back. he taught me out of first hand experience.
they remind me of tulips EOM
thanks for heads up --EOM
hey gfp, I am not a good charter, but your last golden cross did about a 7x if I remember right.....like the golden crosses, ha.
take care
US Destroyer Ignored Warnings Ahead Of Deadly Collision
===hey gfp, even I find this one a liitle hard to believe...=====
http://www.zerohedge.com/news/2017-06-26/us-destroyer-ignored-warnings-ahead-deadly-collision
by Tyler Durden Jun 26, 2017 12:53 PM
The latest update on the mysterious circumstances surrounding a collision between a Philippines’ flagged container ship and a Navy destroyer that left seven sailors dead has arrived, courtesy of Reuters.
The news agency is reporting exclusively that the USS Fitzgerald ignore the much-larger cargo ship’s repeated warnings to get out of its path of travel.
“In the first detailed account from one of those directly involved, the cargo ship's captain said the ACX Crystal had signaled with flashing lights after the Fitzgerald "suddenly" steamed on to a course to cross its path.
The container ship steered hard to starboard (right) to avoid the warship, but hit the Fitzgerald 10 minutes later at 1:30 a.m., according to a copy of Captain Ronald Advincula's report to Japanese ship owner Dainichi Investment Corporation that was seen by Reuters."
The incident has spurred no fewer than six investigations, including two internal hearings by the US Navy and a probe by the United States Coast Guard (USCG) on behalf of the National Transportation Safety Board. The Japan Transport Safety Board, the JCG and the Philippines government are also conducting separate investigations.
However, the details of what transpired during the June 17 collision remain sketchy because, as Reuters, noted, nobody is talking.
“The U.S. Navy declined to comment and Reuters was not able to independently verify the account.
A spokesman for the U.S. Navy's Seventh Fleet in Yokosuka, the Fitzgerald's home port, said he was unable to comment on an ongoing investigation.
Spokesmen from the Japan Coast Guard (JCG), U.S. Coast Guard and ship owner, Dainichi Invest, also declined to comment.”
As Reuters reports, investigators will examine witness testimony and electronic data to determine how a naval destroyer fitted with sophisticated radar could be struck by a vessel more than three times its size. Another focus of the probes has been the length of time it took the ACX Crystal to report the collision. The JCG says it was first notified at 2:25 a.m., nearly an hour after the accident. In his report, the ACX Crystal's captain said there was "confusion" on his ship's bridge, and that it turned around and returned to the collision site after continuing for 6 nautical miles.
As we reported three days ago, data obtained from the ACX Crystal suggests the ship was on autopilot at the time of the collision, which has raised the specter that the incident was caused by sophisticated hackers.
And while investigators say they’ve found no evidence the collision was intentional, that the ship was relying on its computerized navigation system at the team of the collision means hackers could’ve infiltrated into the ship’s navigation system and steered it into the Navy ship – though the collision off the coast of Japan could’ve just as easily been caused by a malfunction, or human error if the system’s warning signals were ignored.
The incident left the highest rarity of such crashes has also raised questions about what caused the collision, and who might be at fault.
Collisions at sea involving Navy ships are extremely uncommon, occurring only once or twice a decade. Indeed, the incident amounted to the worst loss of life for the Navy since the bombing of the USS Cole in Yemen’s Aden harbor, an incident that left 17 sailors dead.
US naval history includes a few notable accidents. In 2005, the USS San Francisco, a Los Angeles-class submarine, hit a seamount or underwater mountain, injuring dozens of crew. In 2001, the USS Greeneville, another Los Angeles-class sub, performed an emergency ballast blow for special visitors aboard the vessel, surfacing quickly and hitting a Japanese fishing ship on the surface near Hawaii, killing nine crew members of the Japanese vessel.
In one of the Navy’s worst incidents, the aircraft carrier Wasp in April 1952 collided with the destroyer Hobson in the North Atlantic, killing 176 men.
Mr. McGrath declined to speculate as to what occurred or who or what might be to blame in the Fitzgerald incident. The collision occurred in darkness in a high-traffic area of the Pacific, he said. The most concerning aspect of the collision, from the destroyer’s point of view, is the damage to the Fitzgerald’s starboard side below the waterline, resulting from the container ship’s construction and the way its bow hit, he said.
the Fitzgerald collided with the merchant vessel, which was more than three times its size, some 56 nautical miles southwest of Yokosuka early on Saturday. Three people were evacuated to the U.S. Naval Hospital in Yokosuka after the collision, including the ship's commanding officer, Bryce Benson, who was reported to be in stable condition. According to Reuters, Benson took command of the Fitzgerald on May 13. He had previously commanded a minesweeper based in Sasebo in western Japan.
The Fitzgerald limped into port on Saturday evening, listing around 5 degrees, a U.S. Navy spokesman in Yokosuka said. The flooding was in two berthing compartments, the radio room and auxiliary machine room, he said. There were 285 crew onboard.
Ed Altman Warns Credit Market Looks Like 2007 Again, "Could Come To An End Very Dramatically"
http://www.zerohedge.com/news/2017-06-26/ed-altman-warns-credit-market-looks-2007-again-could-come-end-very-dramatically
by Tyler Durden Jun 26, 2017 2:28 PM
Legendary bankruptcy expert Dr. Edward Altman, the creator of the financial-distress sniffing Altman Z-Score, warned in mid-2007 of a “Great Credit Bubble” and that there was going to be trouble in the market. He predicted that a meltdown would stem from corporate defaults. While the primary culprit of the financial crisis turned out to be mortgage-backed securities, investors who heeded Altman’s warning nevertheless avoided a lot of grief.
As a reminder, the Altman Z-Score is the output of a credit-strength test that gauges a publicly traded company's likelihood of bankruptcy. The Altman Z-score is based on five financial ratios that can be calculated from data found on a company's annual 10K report. It uses profitability, leverage, liquidity, solvency and activity to predict whether a company has a high degree of probability of being insolvent.
Troublingly, Yahoo Finance's Julia La Roche notes that Altman sees the reckless behavior of 2007 surfacing again.
“We’ve never had such a long benign cycle. And just that one little fact is something that we should be concerned about because if it comes to one and it could come to an end very dramatically.”
“Back in 2007 prior to the crisis in ’08 and ’09, the fundamentals of credit risk of the companies issuing bonds and taking out loans were quite low,” he said.
“And the similarity that I see now between 2007 and 2016 is very similar fundamentals, quite a bit high risk and it doesn’t seem to bother the market because it’s the only game in town in terms of getting yield greater than what you can get for low-risk securities like governments and high-grade corporates.”
“Speaking about the Z-score, if you compare the average Z-score of companies in 2007 with the average in 2016, which is the last time we looked at it, guess what. The average is actually lower today than it was in 2007, and 2007 was right before the great financial crisis, and of course, in ’08 and ’09 we saw a tremendous increase in corporate bond defaults and loans.”
Click the image below for a link to La Roche's full interview...
Low Z-scores are associated with financial distress. Here are some examples from Retail, Tech, and Energy...
Altman concluded:
“So the good news is that it’s no worse, but the bad news is, fundamentally, the companies are no better than they were back in 2007 at least by our model.”
And, just as Moody's predicts, if the gusher of liquidity and low rates is about to end (Janet?) then a pessimistic scenario looks very ominous...
Moody's: Modest Downside Could Spark $3 Trillion Surge In Pension Liabilities
by Tyler Durden Jun 22, 2017 9:35 PM
http://www.zerohedge.com/news/2017-06-22/moodys-modest-downside-scenario-could-spark-59-surge-net-public-pension-liabilities-
Some very simplistic math from Moody's helps to shed some light on just how inevitable a public pension crisis is in the United States. Analyzing a basket of 56 public plans with net liabilities of $778 billion, Moody's found that just a modest downside return scenario over the next three years (2017: +7.2%, 2018: -5.0%, 2019: 0%) would result in a 59% surge in new unfunded liabilities. Moreover, given that total unfunded public pension liabilities are roughly $5 trillion in aggregate, this implies that a simple 5% drop in assets in 2018 could trigger a devastating ~$3 trillion increase in net liabilities.
Meanwhile, Moody's found that even if the funds return 19% over the next three years then net liabilities would still increase by 15%. Per Pensions & Investments:
In its report, Moody's ran a sample of 56 plans with $778 billion in aggregate reported net pension liabilities through three different investment return scenarios. Due to reporting lags, most 2019 pension results appear in governments' 2020 financial reporting, Moody's noted. The plans had $1.977 trillion in trillion assets.
Under the first scenario with a cumulative investment return of 25% for 2017-'19, aggregate net pension liabilities for the 56 plans fell by just 1%. Under the second scenario with a cumulative investment return of 19% for 2017-2019, net pension liabilities rose by 15%. Under the third scenario with a 7.2% return in 2017, -5% return in 2018 and zero return in 2019, net pension liabilities rose by 59%.
In 2016, the 56 plans returned roughly 1% on average and would have needed collective returns of 10.7% to prevent reported net pension liabilities from growing.
Of course, as we pointed out before, the problem is that the pending doom surrounding these massive public pension obligations often get clouded over by complicated actuarial math with a plan's funded status heavily influenced by discount rates applied to future liability streams. Translation, they can "kick the can down the road" for a very long time before having to actually admit there's a problem.
Take Chicago's largest pension fund, the Municipal Employees Annuity and Benefit Fund of Chicago (MEABF), as an example. Most people focus on a funds 'net funded status', which for the MEABF is a paltry 20.3%. But the problem with focusing on 'funded status' is that it can be easily manipulated by pension administrators who get to simply pick the rate at which they discount future liabilities out of thin air.
So, rather than lend any credence to some made up pension math, we prefer to focus on actual pension cash flows which can't be manipulated quite so easily.
And a quick look at MEABF's cash flows quickly reveals the ponzi-ish nature of the fund. In both 2015 and 2014, the fund didn't even come close to generating enough cash flow from investment returns and contributions to cover it's $800mm in annual benefit payments...which basically means they're slowing liquidating assets to pay out liabilities.
Of course, like all ponzi schemes, liquidating assets to pay current claims can only go on for so long before you simply run out of assets.
So we decided, as Moody's did above, to take a look at the impact of a couple of return scenarios. But, rather than looking at "funding status" which can be maniupulated to say pretty much whatever pension administrators want, we focused on calculating when Chicago's largest pension fund would actually run out of money.
On the expense side, annual benefit payments are currently just over $800 million and are growing at a fairly consistent pace due to an increasing number of retirees and inflation adjustments guaranteed to workers. Assuming payouts continue to grow at the same pace observed over the past 15 years, the fund will be making annual cash payments to retirees of around $1.3 billion by 2023.
Investment returns, on the other hand, are much more volatile but have averaged 5.5% over the past 15 years. That said, the fund took big hits in 2002 (-9.3%) and 2008 (-27.1%) following the dotcom and housing bubble crashes.
And while we hate to be pessimistic, lets just take a look at what happens if, by some small chance, today's market gets exposed as a massive bubble and we have another big correction in 2018.
Such a correction would force the fund to liquidate over $1.5 billion in assets in 2018 alone....
....and the system would run out of cash completely within 4 years.
The risk associated with America's pension ponzi schemes have largely been overlooked by investors to date because so long as they can meet annual benefit payments then plan administrators can just continue to 'kick the can down the road' and pretend that nothing is wrong.
Of course, that strategy ceases to work when the pensions actually run out of cash...which could happen sooner than you think...and when it does, America's retirees will suddenly find themselves about $5-8 trillion poorer than they thought they were.
Illinois State Official: "We Are In Massive Crisis Mode, This Is Not A False Alarm"
by Tyler Durden Jun 17, 2017 6:59 PM
http://www.zerohedge.com/news/2017-06-17/illinois-state-official-we-are-massive-crisis-mode-not-false-alarm
Last week we reported that as Illinois, a state which now faces over $15 billion in backlogged bills, struggles over the next two weeks to somehow come up with its first budget in three years ahead of a June 30 fiscal year end, and faces an imminent ratings downgrade to junk - the first ever in US state history - traders finally puked, sending the yield on its bonds surging after a judge ruled at the start of the month that the state is violating consent decrees and previous orders, and instructed the state to achieve "substantial compliance with consent decrees", further pressuring its financial situation.
In a last ditch attempt to resolve the ongoing budget impasse and prevent a potential crisis, which may culminate with an eventual default by the distressed state, yesterday the WSJ reported that Illinois Gov. Rauner ordered lawmakers to return for a special session this week, but the two sides still seem far apart. Republican Gov. Bruce Rauner ordered the special session starting Monday, as the backlog of unpaid bills reaches $15.1 billion.
“Everyone needs to get serious and get to work,” he said in a video announcing the session that his office posted on Facebook.
As reported previously, the state Transportation Department said it would stop roadwork by July 1 if Illinois entered its third consecutive fiscal year without a budget - the longest such stretch of any US state - while the Powerball lottery said it may be forced to dump Illinois over its lack of budget. For now, state workers have continued to receive pay because of court orders, but school districts, colleges and medical and social service providers are under increasing strain.
And yet, despite the sharp selloff in Illinois GO bonds which some had expected could force the two sides to reach a bargin, neither the Democrat-led legislature, nor Republicans governor Bruce Rauner appear closer to a consensus. Which probably explains today's Associated Press "shock piece" exposing just how serious the situation could become in under two weeks absent a resolution. It focuses on state Comptroller Susana Mendoza - who has had the unenviable job of essentially sitting at the kitchen table trying to figure out how to pay the bills - who is warning that the previously discussed new court orders in lawsuits filed by state suppliers that are owed money mean her office is required to pay out more than Illinois receives in revenue each month. That means there would be no money left for so-called “discretionary” spending - a category that in Illinois includes school buses, domestic violence shelters and some ambulance services.
“I don’t know what part of ‘We are in massive crisis mode’ the General Assembly and the governor don’t understand. This is not a false alarm,” said Mendoza, a Chicago Democrat.
“The magic tricks run out after a while, and that’s where we’re at.”
As AP sums it up, "it's a new low, even for a state that’s seen its financial situation grow increasingly desperate", a state which has a website dedicated to tracking the daily amount in overdue bills...
... and has the lowest credit rating of any state.
Lawmakers from both parties have acknowledged Illinois needs to raise taxes to make up for revenue lost when a previous tax hike expired, leaving the state on pace to take in $6 billion less than it is spending this year — even without a budget.
That, however, is being blocked by Rauner, who wants Democrats to approve changes he says are needed to improve Illinois’ long-term financial health before he’ll support a tax increase. Among them are "term limits for lawmakers, a four-year property tax freeze and new workers’ compensation laws that would reduce costs for employers." Democrats have balked at the full list, saying they’re willing to approve some items on Rauner’s list, but that what he’s demanding "keeps changing or goes too far and would hurt working families." Senate Democrats also note that they approved a $37 billion budget with $3 billion in cuts and an income tax increase in May. The House has not taken up that plan.
In a scenario reminiscent of ongoing events in insolvent Greece, state funding has been reduced or eliminated in areas such as social services and higher education. Many vendors have gone months without being paid. And increasingly, they’re filing lawsuits to try to get paid. As discussed last week, the courts already have ruled in favor of state workers who want paychecks, as well as lottery winners whose payouts were put on hold. Transit agencies have sued, as has a coalition of social service agencies, including one that’s run by Rauner’s wife. Health care plans that administer the state’s Medicaid program also asked a federal judge to order Mendoza’s office to immediately pay $2 billion in unpaid bills. "They argued that access to health care for the poor and other vulnerable groups was impaired or “at grave risk” because the state wasn’t paying providers, causing them to leave the program."
As one after another deadline looms, on June 7, Judge Joan Lefkow ruled that Illinois isn’t complying with a previous agreement to pay the bills and gave attorneys for the providers and the state until Tuesday to work out a level of payment.
Meanwhile, comtroller Mendoza says whatever that amount will be, it will likely put Illinois at the point where 100 percent of revenues must be paid to one of the office’s “core priorities,” such as those required by court order. And if this lawsuit doesn’t do it, the next court ruling against the state will.
In other words, the already insolvent state is about to be slammed with another deluge for bills which it can't pay. Then, she’s not sure what will happen, other than more damage.
“Once the money’s gone, the money’s gone, and I can’t print it,” Mendoza said, perhaps envious of the residents of the Marriner Eccles building who have never faced a similar predicament.
hey bw, first time I ever really gave it any thought was when my father, 30-40 years ago, was ranting that the gov there was obviously making promises that could not possibly be kept, but they don't care because it gets them elected. ugg. kicking that can.
here we are hating that interstate 73 is actually being built in some parts between here and Chicago, being a direct link for all kinds of crime coming here in myrtle beach. been talking about it for 20 years, now some states have started building.
locals here like being the usa's biggest tourist attraction without a major hwy to it, but it looks like a straight path to Chicago is heading our way, just from 95 to mb would be traffic nightmare that we have pretty much avoided all these years. double ugg.
Housing starts disappoint for 2nd-straight month - fall to 8-month low
Jun. 16, 2017 8:47 AM ET|By: Stephen Alpher, SA News Editor
https://seekingalpha.com/news/3273990-housing-starts-disappoint-2nd-straight-month-fall-8-month-low
•May housing starts fell to a seasonally-adjusted annualized rate of 1.09M - down 5.5% from April, and well short of expectations for 1.23M.
•That rate is also down 2.4% on a year-over-year basis.
•Stripping out multifamily, single-family housing starts in May of 794K were down 3.9% M/M, and up 2.3% Y/Y.
•Building permits fell 4.9% M/M and 0.8% Y/Y to 1.168M.
•Full report
•Treasury yields have edged a hair lower since the print, with the 10-year yield now flat on the session at 2.16%. TLT, TBT both flat premarket
•Now read: Federal Reserve Watch: What's Important? »
•May housing starts fell to a seasonally-adjusted annualized rate of 1.09M - down 5.5% from April, and well short of expectations for 1.23M.
•That rate is also down 2.4% on a year-over-year basis.
•Stripping out multifamily, single-family housing starts in May of 794K were down 3.9% M/M, and up 2.3% Y/Y.
•Building permits fell 4.9% M/M and 0.8% Y/Y to 1.168M.
•Full report
•Treasury yields have edged a hair lower since the print, with the 10-year yield now flat on the session at 2.16%. TLT, TBT both flat premarket
•Now read: Federal Reserve Watch: What's Important? »
Matt King Is Back With A Dire Warning: "A Significant Un-balancing Is Coming"
by Tyler Durden Jun 16, 2017 11:37 AM
http://www.zerohedge.com/news/2017-06-16/matt-king-back-and-reveals-biggest-threat-facing-market-two-charts
Earlier this week we discussed a chart from Citi's Hanz Lorenzen, which we said may be the "scariest chart for central banks" and showed the projected collapse in central bank "impulse" in coming years as a result of balance sheet contraction, and which - if history is any indication - would drag down not only future inflation but also risk assets. As Citi put it "the principal transmission channel to the real economy has been... lifting asset prices" to which our response was that this has required continuous CB balance sheet growth, and with the Fed, ECB and BOJ all poised to "renormalize" over the next year, the global monetary impulse is set to turn negative in the coming year.
Today, after a nearly three month absence, our favorite market strategist, Citi's Matt King is back with a note which confirms our suspicions.
In "Markets un-balanced" he warns that "the Fed’s planned balance-sheet reduction, coupled with ECB tapering, seems likely to destabilize markets sufficiently that we think they will be unable to complete it." And yet there is a paradox: since by definition central-bbanker intervention has broken the market, and thus its discounting abilities, King warns that the repricing may not take place until it is too late to step back: "our models suggest markets are unlikely to react until the reductions in purchases are actually implemented. This is in stark contrast to the widespread presumption of immediate and full discounting."
Here we can only ask rhetorically that if only believes that markets are indeed "broken" by central bank intervention, why would anyone assume that their key function - discounting - is still viable.
Here is King with his take, previewed here earlier in the week, on the biggest threat facing the market:
As we’ve noted in the past, in recent years asset price moves have displayed a high degree of correlation with central bank liquidity additions. Central bank buying has reduced the net amount of securities (in DM) the market needs to absorb, both this year and last, to near zero; we think this has played a critical role in propping up valuations at elevated levels.
Next year looks very different. We project that the private sector will have to absorb c.$1tn of securities – the highest number since 2012. The main driver for this is our anticipated reduction in ECB purchases from €780bn this year to €150bn in 2018. The faster pace of Fed balance sheet reduction we can now expect cements our impression that next year will see a big shift away from the current status quo. Assuming that Fed balance sheet reduction begins in September, the US market will have to absorb a further $450bn of supply in addition to the gap left by the ECB
His overarching question is one we have asked on various occasions: if balance sheet reduction is potentially so disruptive, why are the central banks so intent on it? He provides the following answers:
1.First, the ECB has a particular problem in that it must either taper or abandon the capital key, otherwise it runs out of bonds to buy owing to its (admittedly selfimposed) 33% issuer-and-issue limit.
2.Second, central banks generally seem to be in denial about the magnitude of the effect their purchases are having on markets. They acknowledge the general rise in asset prices, but fail to appreciate the sheer extent to which investors have become obsessed with “the technicals" and are buying despite a lack of belief in fundamentals or valuations.
3.Third, central banks tend to presume their impact is concentrated locally; we think it works globally.
4.Fourth, central banks tend to assume that it is the stock of QE that is stimulative, when all our models suggest that it is the flow (or even the change in the flow).
5.Fifth, central banks still cling to the textbook model in which the market discounts all available information ahead of time, meaning that by the time they actually come to do their reduction, provided they’ve telegraphed it beforehand, the effect is already priced in. Unfortunately they seem to have neglected the textbook footnote that states that markets function this way only when they are deep and liquid. That might have been a reasonable description of pre-crisis markets; it seems a deeply unreasonable assumption for post-crisis markets in which leverage is constrained and one set of buyers have come along and absorbed virtually all of the world’s net new issuance.
6.Sixth, most central bank studies of the effects of QE have concentrated on assessing its impact on government bond yields. We think this is hard to measure. On the one hand, central bank purchases clearly push prices up and yields down. On the other, if the purchases raise inflation expectations (as they are supposed to do), they push prices down and yields up. We think it is much easier to see the effects in equities and credit – via the very ‘portfolio balance’ effect which the central banks were aiming for – but few people look for it there.
Which brings us to the two charts in question:
As such, rather than theorize, we just plot global central bank purchases against changes in credit spreads and equities. We find an effect that is strong, global, and contemporaneous. Asset prices have rarely been able to pre-empt future changes in the pace of purchases, even when these have been announced in advance, over the last seven years. We think this is unsurprising when one set of buyers is so completely distorting the market.
Finally, here is King on what can tip over the current stable market regime into one of selling:
Our metric of the increase in central bank security holdings globally has fallen from the peak last year (Figure 5), but it is still running at a level that in the past has been consistent with stable to slightly appreciating risk assets (Figure 6). So, as we argued last week, a faster-than-expected pace of Fed balance sheet reduction won’t necessarily disrupt the current benign market paradigm for the time being. Over time, though, we struggle to see how the market will be able to adapt to the scaling back of support from the Fed and the ECB without a significant adjustment in valuations. If the effect is as large as it has been historically, the implied market disruption is sufficiently large that we think they will need to rethink their plans.
So for now, we see credit (and risk assets more broadly) caught between two equilibria. On the one hand, there is the reigning paradigm of the central banks compressing risk premia near current levels, with a shortage of investable assets fuelling a widespread and potentially self-reinforcing reach-for-yield regardless of the underlying fundamentals. On the other, spreads are forced to confront the scaling back in central bank support, widening rather rapidly to pre-CSPP levels. The asymmetric risk/reward in € credit leaves it particularly vulnerable: even with the low volatilility in recent months, spread breakevens against realised vol remain near historic lows.
What might flip us from the first to the second? As far as European credit is concerned, ECB communication is likely to remain the most significant driver. Notwithstanding Constancio’s comment this week that a decision on tapering will have to be taken by “autumn, but certainly before the end of the year”, there’s still little to suggest that the ongoing debate between the hawks and doves in the Governing Council is shifting in the hawks’ direction. But, given how tight spreads are to fundamentals and, even more importantly, the ultimate trajectory of central bank support, we remain confident that the next major move for credit will be towards wider spreads.
But, given the uncertainty over timing, positioning for the spread widening we anticipate without giving up too much carry in the meantime is critical. In our latest outlook presentation, we argue that the best hope for doing this is to increase exposure to market segments where beta is priced most cheaply, while reducing elsewhere. With the ECB reducing purchases only next year and the Fed set to get off to a slow start, it seems possible recent market strength persists a while longer. And yet the Fed’s hawkishness this week to our minds adds to the likelihood that in markets a significant un-balancing (or perhaps that should be re-balancing?) is coming.
The Blow-Off Top Is Here: Second Largest Weekly Inflows To Wall Street In History
by Tyler Durden Jun 16, 2017 9:55 AM
http://www.zerohedge.com/news/2017-06-16/blow-top-here-second-largest-weekly-inflows-wall-street-history
For confirmation that the market is now in its "blow off top" phase, contrary to claims that the market keeps "climbing a wall of worry" and that the "money on the sidelines" refuses to enter, look no further than the latest BofA "flow show" in which Michael Hartnett reports that capital markets just saw their biggest week of equity inflows since the US election ($24.6bn), another chunky inflow to bonds ($9.0bn), which combines to "the second largest week of inflows to Wall Street ever (largest was $35.5bn in Dec'2014)."
Unfortunately for active managers, the news was anything but good because for another week in a row, the big winner was ETFs with $26.3bn equity ETF inflow vs $1.7bn outflow from equity mutual funds, while fixed income saw 4.8bn bond ETF inflows vs $4.2bn into bond mutual funds; seven equity ETFs (SPY, IVV, IWM, VO, VTI, XLF, VUG) & one bond ETF (EMB) had inflows >$1bn
Another winner according to BofA: "yield": investors are still piling into "high-yielding" fixed income product with inflows to IG, HY, EM debt = $35bn past 4 weeks, fastest pace since Feb'15 (Chart 2)
Other observations:
Deflation>inflation in bonds: government bonds (deflation asset) see largest inflows in 20 weeks ($1.0bn) but TIPS (inflation asset) saw outflows ($0.1bn) for 4th week in five
Trump trade rotation: rotation to YTD "Trump losers" of value, small cap, financials this week as tech inflows ebb...
Tech's redemption-less wreck: nasty tech sell-off (SOX -8.4%, EMQQITR -7.3%, QNET -6.5% peak to trough) coincided with lower tech inflows but no redemptions…as noted before tech "euphoric" YTD (Chart 1), hence violent reaction to Fed policy shift
"Robin Fed": Fed hiked, announced balance sheet reduction this week to subdue Wall St speculation, not to rein-in Main St boom; Fed now acting to reduce inequality via lower asset prices; wants tighter financial conditions (loose vs history; Chicago Fed - Chart 3)
End of an Era: central banks have spent $10.8tn on financial assets since Lehman, have bought massive $1.5tn YTD inciting Icarus trade and return of tech & high yield leadership; central banks will be sellers of assets in coming years (Chart 4)
New theme...global synchronized monetary tightening: Fed, China, Canada, UK, ECB...we are in the beginning of a synchronized monetary tightening in H2
Humpty-Dumpty: won't spark immediate bear market...EPS, inflation, cash, credit positives remain; but this inflection point in monetary policy will become negative in coming quarters; Icarus trade likely followed by Humpty-Dumpty (a "big top" or big flash crash) later in year...finally volatility is a buy
thanks gfp, i'll add ipix tomorrow and keep an eye on it, it just seemed that every time ctix would get hammered, it would magically bounce back near a buck. but that is from memory, not looking at an actual chart which will tell the story in more detail.
thanks again and take care.
Powerball To Dump Illinois Over "Lack Of Budget"
by Tyler Durden Jun 15, 2017 1:40 PM
http://www.zerohedge.com/news/2017-06-15/powerball-dump-illinois-over-lack-budget
As if Illinois didn't have enough to worry about between an imminent downgrade to junk (as soon as July 1), soaring debt costs, insolvent pension funds, and roads that may soon resemble the lunar surface, today in the latest insult to a relentless series of injuries, the lottery itself is about to dump Illinois.
According to the Sun Times, the Multi-State Lottery Association, the organization that runs the Powerball lottery and Mega Millions games, will drop Illinois at the end of June without a budget agreement. Since Illinois has been unable to compromise on a budget for the past two years, and not even the threat of being the first US state in history of being "junked" has prompted a compromise, it most likely means that Illinois resident have just two more weeks of "get rich quick" opportunities, before they are cut off from the rest of America.
Speaking on Thursday, Illinois Lottery spokesman Jason Schaumburg confirmed that the games will be dropped without a state budget. He said the association has had discussions since 2015 about dropping Illinois, but this is the first time the group has taken action. He called it “another example of why the General Assembly needs to deliver a balanced budget to the governor." Alas, if the recent surge in Illinois GO debt yields...
.... or the threat of a default in the face of almost $15 billion in unpaid bills has failed to convinced the General Assembly, we doubt this will.
“Its unfortunate. Powerball was the only thing that I would buy, because I knew that it would pay out,” said Anthony Martinez, who lives in the Logan Square neighborhood. “With the Illinois budget crisis, it’s not a guarantee that Illinois’ going to actually pay out on your lottery winnings.”
According to the Sun Times, the state reported $99.4 million in Mega Millions sales and $208 million in Powerball sales within the 2016 budget year. It’s unclear how much revenue the state got from the sale of those tickets.
The Multi-State Lottery Association is a non-profit, government-benefit association owned and operated by its 36 member lotteries. All profits are retained by the state lottery and are used to fund projects approved by the state legislatures, according to the association. The Illinois Lottery isn’t part of the association.
Powerball is offered in 44 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. Mega Millions is offered in 44 states, along with the District of Columbia and the U.S. Virgin Islands.
Then again, removing the temptation of some of the high-profile lottery games is “not necessarily a terrible thing." Woodlawn resident Shaneen Murray said many people waste money on the lottery that they probably could be spending on other things.
“Maybe people can save money, or put their money toward something better,” she said. And, as we explained previously, she is absolutely correct.
As we explained in January 2016, the Powerball and various other state lotteries are nothing but a tax, if entirely voluntary, on America's poor.
The full explanation is below:
Why The Powerball Jackpot Is Nothing But Another Tax On America's Poor
What Seems To Be Is Always Better than Nothing
Summary: American adults spent an average of $251 on lottery tickets. With a return of 53 cents on the dollar, this means the average person threw away $118 on unsuccessful lotto tickets – not a great investment. So why are we spending so much? Well, lotteries are a fun, cheap opportunity to daydream about the possibility of becoming an overnight millionaire (or in this case billionaire), but on the flip side people tend to overestimate the odds of winning. Lower-income demographics spend a much greater portion of their annual earnings on lottery tickets than do wealthier ones.
Since lotteries are state-run, that effectively means that the less affluent pay more in taxes (albeit by choice) than broadly appreciated. And even winning the lottery doesn’t guarantee financial success. More than 5% of lottery winners declare bankruptcy within 5 years of taking home the jackpot. Despite their drawbacks, though, lotteries are no doubt here for the long haul – in states that have lotteries, an average of 11% of their total revenues come from lottery ticket sales, and the number is even as high as 36% in 2 states (West Virginia and Michigan).
Consider the following credit-card-advertisement style sequence of statistics:
?Lottery ticket sales in the US in 2010: $59 billion
?Average spending per person: $191
?Average spending per adult: $251
?Chance at hitting the jackpot: (Apparently) priceless.
I have never bought a lottery ticket and honestly don’t even know how. And as far as I’m aware, I don’t know anyone who spends north of 200 bucks a year playing the lotto. The only lottery my friends play is the NYC marathon lottery, where they’re gambling for maybe a 1 in 13 chance to fork over $255 for the privilege of slugging out 26 miles through the city’s streets. Not quite hitting the jackpot in most people’s minds.
But someone, somewhere is buying all those tickets. In Massachusetts, where the lottery is more popular than in any other state, people spend an average of $634 a year on Mega Millions, Powerball and the like. Delaware comes in at number 2 with $504 spent per person, while Rhode Island ($469), West Virginia ($388) and New York ($357) round out the top 5. North Dakota brings up the rear with per capita lottery spending of $34. You can see the full list in the table following the text.
It’s difficult to pinpoint exactly who is investing so much money in a product that provides poor returns, but numerous studies show that lower-income people spend a much greater proportion of their earnings on lotteries than do wealthier people. One figure suggests that households making less than $13,000 a year spend a full 9 percent of their income on lotteries. This of course makes no sense – poor people should be the least willing to waste their hard-earned cash on games with such terrible odds of winning. (http://www.dailyfinance.com/2010/05/31/poor-people-spend-9-of-income-on-...).
Why bother? Well, one answer is obvious enough and applies to just about everyone who plays. For a buck (now $2 for Powerball) we have a cheap opportunity to daydream what could happen if we suddenly won millions of dollars. But lotteries return 53 cents to the dollar. So why are poor people irrationally buying tickets when the probability of winning is so slim? One study by a team of Carnegie Mellon University behavioral economists (Haisley, Mostafa and Loewenstein) suggests it isn’t being poor but rather feeling poor that compels people to purchase lotto tickets.
By influencing participants’ perceptions of their relative wealth, the researchers found that people who felt poor bought almost two times as many lottery tickets as those who were made to feel more affluent. Here’s how they did it:
?Participants were asked to complete a survey that included an item on annual income. One group was asked to provide its income on a scale that began at “less than $100,000” and went up from there in increments of $100,000. It was designed so that most respondents would be in the lowest category and therefore feel poor.
?The other group, made to feel subjectively wealthier, was asked to report income on a scale that began with “less than $10,000” and increased in $10,000 increments. Therefore most participants were in a middle or upper tier.
?All participants were paid $5 for participating in the survey and given the chance to buy up to 5 $1 scratch-off lottery tickets. The group who felt wealthier bought 0.67 tickets on average, compared with 1.27 tickets for the group who felt poor.
Lotteries essentially target and encourage lower-income individuals into a cycle that directly prevents them from improving their financial status and leverages their desire to escape poverty. Yes, that’s a bit harsh, and yes, people have the right to make their own decisions. Even bad ones… Also, many people tend to significantly overestimate the odds of winning because we tend to assess the likelihood of an event occurring based on how frequently we hear about it happening. The technical name for this is the Availability Heuristic, which means the more we hear about big winners in the press, the less uncommon a big payday begins to seem.
Not that hitting the jackpot is guaranteed to substantially improve the winner’s life. Economists at the University of Kentucky, University of Pittsburgh and Vanderbilt University collected data from 35,000 lottery winners of up to $150,000 in Florida’s Fantasy 5 lottery from 1993 to 2002. Their findings are as follows:
?More than 1,900 winners declared bankruptcy within 5 years, implying that 1% of Florida lottery players (both winners and losers) go bankrupt in any given year, which is about twice the rate for the broader population.
?“Big” lottery winners, those awarded between $50,000 and $150,000 were half as likely as smaller winners to go bankrupt within 2 years of their win, however equally likely to go bankrupt 3 to 5 years after.
?5.5% of lottery winners declared bankruptcy within 5 years of bringing home the jackpot.
?The average award for the big winners was $65,000 – more than enough to pay off the $49,000 in unsecured debt of the most financially distressed winners.
Lottery players tend to have below-average incomes, so they are probably less accustomed to budgeting when they receive a windfall. There’s also a psychological term called Mental Accounting that explains how people might treat their winnings less cautiously than money they’ve worked for. Money has come into their possession through luck, which similar to bonus payments, often induces an urge to purchase unnecessary items.
But whether you think state lotteries are awful or great, there’s another word for them: essential. In both West Virginia and Michigan, for example, lottery sales accounted for 36% of total state revenues in fiscal year 2010, and on average state with lotteries take in 11% of total revenues in the form of lotto ticket sales. We’ve included the full list in a table following the text. There are still 7 states that don’t have their own lottery systems, so the national average would be lower.
A couple of closing thoughts on what this all means:
?Don’t make investment decisions when you are feeling poor. The study we cited earlier clearly shows that you are likely to buy more “lottery tickets” (think of that as a metaphor for any long shot investment) when you feel less affluent than those around you.
?Lower income individuals likely pay more in “Taxes” than most economic commentators realize. Assuming that the 80/20 rule applies to lottery participation, the bulk of that $59 billion in annual receipts likely comes from 20-25 million less affluent households. That would be about $47 billion from this demographic, or roughly $2,400 per household. Yes, I get the notion that this money is handed over in the hope of a payoff. An ill-advised and mathematically unlikely hope, as it turns out. But does that mean it doesn’t count as a societal contribution?
?Maybe the U.S. needs a national lottery. Yes, these games don’t necessarily encourage the best financial planning among the less affluent. But there is no denying that playing the lottery is entirely voluntary. There are probably some anti-gaming factions in government who wouldn’t like this approach, to be sure. But there’s also no doubt that the Federal budget could use the money. And, hey, you never know…
Rachel Maddow Denies Show Had Contact With VA Shooter; Segment Does Not Re-Air on Show Repeat
by Jeff Poor14 Jun 20172,305
http://www.breitbart.com/video/2017/06/14/rachel-maddow-denies-show-contact-va-shooter-segment-not-re-air-show-repeat/
Wednesday on MSNBC’s “The Rachel Maddow Show,” host Rachel Maddow reacted to news that James Hodgkinson, the now-deceased alleged shooter in an incident that has resulted in five people hospitalized, including House Majority Whip Rep. Steve Scalise (R-LA), was a fan of her program.
Maddow referenced a Hodgkinson letter to the editor that appeared in the July 29, 2012 edition of the Belleview (IL) News-Democrat, but denied having received correspondence Hodgkinson.
“[H]e once submitted a letter to the editor that cited statistics about political donations that he says he heard on this TV show because he said he watched this TV show,” she said. “I should tell you we went through our correspondence today as soon as we got his name, as soon as we got that detail about him. We didn’t find evidence he ever sent anything to this show or tried to contact us at all.”
During the re-air of her program at 12 a.m. ET, the segment did not air. Instead, the opening segment was a replay of a May 26 segment about allegations of President Donald Trump and his associates having ties with the Russian government.
Putin Offers Asylum To "Leaker" Comey
by Tyler Durden Jun 15, 2017 9:11 AM
http://www.zerohedge.com/news/2017-06-15/putin-offers-asylum-leaker-comey
Vladimir Putin trolled the US on Thursday, when speaking in a live call-in show with the Russian nation, the Russian president likened Comey to Edward Snowden, who was granted asylum in Russia in 2013, and scoffed at James Comey's disclosure of his conversations with U.S. President Donald Trump, saying the move has made Comey eligible for political asylum in Russia.
"It looks weird when the chief of a security agency records his conversation with the commander-in-chief and then hands it over to media via his friend," Putin was quoted by Russia's Tass. “This is strange. What is the difference then between the FBI director and Mr. Snowden? He is not a head of the special services, but a human rights activist.”
The trolling concluded when Putin said that "by the way, if he (Comey) is subject to any sort of persecution in connection with this, we will be ready to give him political asylum in Russia. And he should know about this."
Putin also said that Comey has so far presented no evidence to prove that Russia had meddled in the U.S. presidential election, saying Washington had tried to influence Russian elections for years.
"I am not familiar in detail with the testimony given by former FBI director Comey," Putin said during a question and answer session with citizens. "Again, he gave no evidence of this (Russian meddling)."
The remarks reflected Putin's growing annoyance of being the bete noir of the US media, and with the congressional and FBI investigations into links between Trump campaign officials and Russia, which have shattered Moscow's hopes for improving ties with Washington, much to the delight of the US Military-Industrial Complex and, of course, NATO. Predictably, the Russian president once again reiterrated his denial of meddling in the U.S. election, saying that Russia has openly expressed its views and hasn't engaged in any covert activities.
Continuing the combative mood, Putin then turned the tables on the US, saying it was the US which has sought to influence Russian elections by funding NGOs as part of its aspirations for global domination. "Turn a globe and point your finger anywhere, you will find American interests and interference there."
"And what about constant U.S. propaganda, constant U.S. support of America-oriented non-government organisations by giving them money directly? Isn't it an impact on our minds? Isn't it an attempt to influence how we should behave during election campaigns? This continues year after year," he said.
He added that many heads of state around the world had told him of similar U.S. meddling in their internal affairs. But they would not voice their concerns openly, fearing to "spoil relations" with Washington. As for Russia, "we have an opinion of our own, we express it openly. But this is not any sort of underground subversive activity", Putin said.
* * *
On a conciliatory note, Putin added that Russia still hopes for normalization of ties with the U.S. During the question and answer session, Putin said he did not consider the US to be an enemy of Russia and claimed he wanted a "constructive dialogue" with Washington. He said Moscow and Washington could cooperate in efforts to prevent the proliferation of weapons of mass destruction and pool efforts to tackle the North Korean nuclear and missile problem. He said the two countries could also cooperate in dealing with global poverty and efforts to prevent climate change.
Putin also noted that Moscow hopes that the U.S. could play a "constructive role" in helping settle the Ukrainian crisis, an offer which we doubt will be favorably met by the Pentago.
* * *
During a tightly choreographed marathon TV show, an annual affair that lasts hours, Putin said that Russia has climbed out of recession despite continuing Western sanctions, adding that the restrictions have forced the country to "switch on our brains" to reduce dependence on energy exports. He lamented yesterday's Senate decision Wednesday to impose new sanctions on Russia as a reflection of Western efforts to "contain" Russia, but insisted that the measures have only made the country stronger.
As reported yesterday, the Senate voted to punish Moscow for interfering in the 2016 election by approving a wide-ranging package of sanctions that target key sectors of Russia's economy and individuals who carried out cyberattacks. The Senate bill follows up on several rounds of other sanctions imposed by the United States and the European Union over Russia's annexation of Ukraine's Crimean Peninsula and its support for pro-Russia insurgents in eastern Ukraine.
Putin argued that Russia has done nothing to warrant the Senate's move, saying it highlights the West's policy of containing Russia and also reflects domestic infighting in the United States. "It's evidence of a continuing internal political struggle in the U.S.," he said.
Russia has responded to the U.S. and EU sanctions by halting most Western food imports, a move that has helped increase Russian agricultural output.
Russian farmers have pleaded with the Kremlin to keep the import ban even if the West lifts its sanctions, but Putin said that if "our partners lift the sanctions against our economy, we will respond in kind."
Discussing the economy, the Russian leader claimed that the "crisis is over," pointing at modest economic growth over the past nine months, low inflation and rising currency reserves. Putin said that a slump in oil prices had been a more important factor in Russia's economic slowdown than the sanctions. Importantly, Putin acknowledged that the Russian economy hasn't yet shed its dependence on exports of raw materials, but noted that non-energy exports have been growing.
Putin also recognized that people's incomes have fallen and 13.5 percent of Russians now live below the poverty line, currently equivalent to $170 per month.
* * *
Most of the questions during the show were about low salaries, decrepit housing, failing health care and other social problems. As in the past, Putin chided local officials for failing to provide due care for people and ordered them to quickly fix the flaws. Even before the show ended, local officials rushed to report that they are looking into the problems.
Putin also offered a glimpse into his closely guarded private life, saying he has two grandchildren whose privacy he wants to respect.
Putin, who in 2013 announced on state television that he was divorcing his wife, has two daughters in their early 30s who haven't been seen in public for years and became the subject of rumors. One of Putin's daughters was reported to be in charge of a lucrative project to build a Silicon Valley-like community under the auspices of Moscow State University.
Putin said during the show that both of his daughters live in Moscow and "work in science and education." He said one of his grandchildren goes to pre-school and the other, a boy, has just been born. He said he doesn't want to give details about his family for fear of hurting their privacy.
hey gfp, do you know what is going on with ctix?
I have started looking at as corx play .5-.6 to buck plus, seems like many times, but has disappeared from my stock quote sceen, reporting only0.00 last .83, for days
take care
Gregg Jarrett: Trump should demand Mueller quit as special counsel
By Gregg Jarrett Published June 15, 2017 Fox News
http://www.foxnews.com/opinion/2017/06/15/gregg-jarrett-trump-should-demand-mueller-quit-as-special-counsel.html
Now Playing
Rpt: Mueller investigating Trump for obstruction of justice
The Washington Post is reporting that Robert Mueller is now investigating President Trump for obstruction of justice, examining not only the president’s alleged statement to Comey in their February meeting, but also the firing of FBI Director James Comey.
If true, this development makes the argument even more compelling that Mueller cannot serve as special counsel. He has an egregious conflict of interest.
The special counsel statute specifically prohibits Mueller from serving if he has “a personal relationship with any person substantially involved in the investigation or prosecution.” The language is mandatory. He “shall” disqualify himself. Comey is substantially involved in the case. Indeed, he is the central witness.
The two men and former colleagues have long been friends, allies and partners. Agents have quipped that they were joined at the hip while at the Department of Justice and the FBI. They have a mentor-protégé relationship. The likelihood of prejudice and favoritism is glaring and severe.
So, it is incomprehensible that the man who is a close friend of the star witness against the president… will now determine whether the president committed a prosecutable crime in his dealings with Mueller’s good friend. Mueller cannot possibly be fair in judging the credibility of his friend versus the man who fired him.
Is the special counsel now motivated to retaliate against the president for ending Comey’s career at the FBI? Will he be tempted to conjure criminality where none actually exist?
Even worse, are Mueller and Comey now “colluding” by acting as co-special prosecutors to bring down the president? By meeting in advance of the Senate Intelligence Committee hearing, did they plan Comey’s testimony to depict Trump in the most incriminating light? These are legitimate questions that invite serious concerns.
Mueller has a reputation for honesty and integrity. But even scrupulously honest people can be influenced in ways they do not recognize themselves. It is the human condition. Which is precisely why there are legal and ethical rules which demand recusal based on prior personal relationships.
This conflict of interest is manifest. It is not fair to President Trump as the reported subject of the investigation, and it is certainly not fair to the American public. They deserve a legal process that is utterly devoid of partiality and bias. Even the appearance of a conflict requires recusal under the law.
In all matters, prosecutors are forbidden from presiding over a case in which they have a personal relationship with a key, pivotal witness. This is the kind of disqualifying mandate which, if violated, can and should result in disbarment proceedings against a lawyer. Mueller is violating not only the special counsel statute, but the Canons of Ethics and its successor, the Code of Professional Responsibility, which govern the conduct of lawyers.
Compounding the conflict is the debate over whether Comey himself committed crimes. He admitted in his testimony that he leaked the memo reflecting his alleged conversation with President Trump. It is a felony to convert government property (the memo) to personal use and then “convey” it to someone outside the government without authorization.
Moreover, Comey’s non-disclosure contract promises he will not disclose the very kind of information he leaked to the media. Doing so, subjects him to “criminal sanctions and personal liability in a civil action” for money damages. It matters not that he is no longer at the FBI. His agreement is a binding, enforceable and actionable contract regardless of Comey’s job status.
Will Mueller be tempted to ignore the evidence against his friend and choose not to investigate and/or prosecute Comey? This is yet another flagrant conflict of interest that compels Mueller’s immediate departure from the case.
Acting Attorney General Rod Rosenstein, who appointed Mueller, is the only person who can fire the special counsel. But he, too, has a conflict of interest if Mueller’s investigation now includes Comey’s firing. Inasmuch as Rosenstein is the person who composed the memo that formed the basis for Comey’s termination and may have had conversations with the president about the reasons for firing Comey, Rosenstein now becomes an important witness.
He cannot serve as Mueller’s boss at the Department of Justice while simultaneously acting as a witness in the case being investigated by his appointee.
The only solution is for both men to voluntarily resign from the case. In the alternative, Rosenstein should fire Mueller and then recuse himself from the case. In either scenario, another top official at the DOJ would take charge of the case and appoint a new special counsel – this time an impartial one who is not hopelessly conflicted.
If Robert Mueller truly embraces a fidelity to the law and all its attendant principles of legal ethics, he will step down as special counsel.
What is stunning about all these obvious conflicts of interest is the conspicuous silence. Where is the outrage? Why are we not hearing a cacophony of demands for Mueller’s resignation?
President Trump should demand it. And so should the American people.
Gregg Jarrett is a Fox News Anchor and former defense attorney
Unable To Pay Bills, Illinois Sends "Dear Contractor" Letter Telling Firms To Halt Road Work On July 1
by Tyler Durden Jun 15, 2017 10:10 AM
http://www.zerohedge.com/news/2017-06-15/unable-pay-bills-illinois-sends-dear-contractor-letter-telling-firms-halt-road-work-
Authored by Mike Shedlock via MishTalk.com,
The state of Illinois has not passed a budget for close to three years.
Arguably it’s just as well because Illinois budgets for decades have been nothing but a moth-eaten collection of lies, one time deficits repeated endlessly, and financial wizardry statements designed to disguise Illinois’ real problems: failure to rein in spending coupled with a very business unfriendly environment.
As Illinois’ bond rating careens towards junk, Illinois Unpaid Bills Jumped to $14.3 Billion. Today, the state told contractors to halt roadwork other than that required for safety.
Dear Contractor
I do not have a link, but here is the letter in image form.
This does not raise much alarm in Illinois has these kinds of letters went out last year as well. It’s simply business as usual in Illinois.
My IDOT contact, who wishes to be left unnamed, reports …
Hello Mish
Last year when they did this the extra work bill to the state cost millions of taxpayer dollars. At the last minute, the shutdown was averted but not until the shutdown measures were employed and thus extra cost was due to contractors and consultants.
Look out for the Road Builders Association to come out with an estimate of what it will cost this time around after the letter today.
Last year, the supplier for paper and toilet paper had not been paid and thus various offices were reportedly cut off of supply. IDOT employees were going to have to work from home due to the potential unsanitary conditions.
Five Illinois Universities Rated Junk
Yesterday, the Illinois Policy Institute reported MOODY’S DOWNGRADES 7 ILLINOIS UNIVERSITIES, 5 ARE JUNK.
Everybody wants to blame the downgrades on the state’s current budget impasse. The stalemate of nearly two years has led to cuts in state appropriations to Illinois universities. But the universities’ financial difficulties started before the state’s budget gridlock and are largely of their own making. Illinois colleges and universities have long overspent on bloated bureaucracies and expensive compensation and benefits, prioritizing administrators over students.
For years, university and college officials across the state have hiked tuition to pay for administrative hiring sprees, generous executive compensation and out-of-control pensions. Their spending priorities distorted university finances long before the budget impasse began.
The number of administrators in Illinois’ universities grew by nearly a third (31.1 percent) between 2004 and 2010. At the same time, faculty only increased 1.8 percent, and the number of students only grew 2.3 percent.
Illinois Tuition Fees
Retirement Costs Soars
Blame Who?
It is easy to blame Governor Rauner, but he is last on my list. Illinois has been in trouble for decades. The state’s only solution has been to tax, and tax, and tax.
That is precisely the same position as Chicago Mayor Rahn Emanuel.
The result is easy to predict.
Illinois’ Economic Growth is Worse than During the Great Depression
Illinois’ total state economic activity has increased by only 4 percent since 2007, which is lower than the U.S.’ 10 percent GDP growth during the worst decade of the Great Depression according to the Illinois Policy Institute.
Illinois Employment
Feed Me
Illinois Debt Backlog
It took $31.6 billion of new tax revenue to reduce the backlog of bills by $1.3 billion. But the complete picture is much worse as Illinois’ pension debt rose more than $25B from 2010 through 2015.
Failed State
1.On June 4, 2017, Politico reported How Illinois became America’s failed state.
2.The Heratige Foundation beat Politico to the idea by a mile with its September 28, 2015 analysis Illinois: The Anatomy of a Failed Liberal State.
3.The Chicago Tribune is behind the times with its January 3, 2017 analysis, Illinois in danger of becoming a failed state.
Illinois is not in danger of becoming a failed state, it is a failed state. I have been talking about this for years.
Five Desperately Needed Reforms
1.Municipal bankruptcy legislation
2.Pension reform
3.Right-to-Work legislation
4.End of prevailing wage laws
5.Workers’ compensation reform
Number one on my list of Illinois reforms is bankruptcy legislation. It is the only hope for numerous Illinois cities whose hands are also tied by union-sponsored prevailing wage laws.
Despite massive gains in the stock market since 2009, Illinois pension plans have gotten deeper and deeper into the hole.
Even a modest pullback in the stock market will sink numerous Illinois pension plans. I expect much worse than a modest pullback.
Tax hikes are not the answer. Reform is the answer, and bankruptcy reform is at the top of the list.
Required Pension Contributions to Double or Triple
Inquiring minds will also wish to consider Required Pension Contributions of California Cities Will Double in Five Years says Policy Institute: Quadruple is More Likely.
The same fate or worse faces Illinois.
Madigan Sponsored Problem
The problem is on Speaker Madigan’s side. He insists on tax hikes first and reforms second.
Governor Rauner has held out and I support that policy. Once the governor agrees to tax hikes, no reforms will ever take place.
Illinois is Bankrupt
Illinois is essentially bankrupt. Unfortunately, there is no provision for states to declare bankruptcy.
States can default, however, and default is an easy prediction for Illinois’ public union pensions.
bw, do you know who this :Legend" is?
they have all these underlings on texting and bragging back and forth, reminded me of enron, but curious as to who this person is.
===welcome back from knee surgery, hope that all went well.====
remember sitting in traffic at tollbooths for much of my last trip up to chirack, miles of high barbed wire fencing in ft. wayne i think, real inviting.
take care
so far my low on hdge is 8.68, still dollar cost averaging, slowly. not bread money.
it's like the doughnut test
1st one GREAT
2nd one is GOOD
3rd is a little much
4th is a little to much
5th, 6th, 7th, each has less effect
so goes the ppt, they just don't know it yet.
I see no result except a convention of states that the constitution allows for with 32, the exact number of rep goveners right now. still would take 38 states to revise constitution, but the 32 state get together would send chills down all those rat hole sob's like the ones working to allow communists to work openly in the California government.
glad i'll be gone before we go euro path, least hope so.
take care.
=== like they did last year when the domain name system was transferred to a UN related organization. ====
===couple weeks left in office, one of the most un-American subversives I have ever seen, now clearly, somewhat anyway...ha====
take care
got few facts wrong on the 60's and 70's, more like 90's,
but story still up on zerohedge, near top
http://www.zerohedge.com/news/2017-05-17/vix-spikes-most-8-months-breaks-above-key-technical-level
jist was right at 17 days , 70% higher than ever recorded.
glad to see you decided to stay....ha
1st thing I do every day is check for windows updates before opening browser.
lots of nasties everywhere, I use zonealarm, set to manual, and then in 4th colume set all to "X" under "allow incoming from internet" then set browser security to NOT ALLOW DOWNLOADS, then malwarebytes pro, avast, and keep those updated, and of coarse never click on links from anybody. still might get something but iv'e had good luck last 20 years or so. ops, almost forgot I use ccleaner to clean out the crap with every use.
bigworld, thanks for patch idea, I just don't trust them not to release the incorrect amounts, to controlling. glad knee went well, years ago my mom's boyfriend, in his 80's said the only thing he regretted about his was he didn't do it earlier.
read on zerohedge last night that the vix was at 17 days straight, I think below 11, happened with a top of ten days several times in 2006-2008. and few times with runs of less than 10 days in the 60's and 70's. BUT 17, YIKES. sleep.
take care. hope the big dumb computer box starts cooperating....
hey gfp, have to sound off about the opioid "histeria."
in 1997, i was told I would never work again, due to no cartilidge left in my L5, lower back.
I told the pa to please not talk to me so negatively in the future, and I had every intention of finding a way to work.
I had what I consider to be the best bone man in Myrtle Beach, and he told me that with what I have, if it was him, he would absolutely NOT have surgery, as he had seen people back for 4-5-7 surgeries to try and correct the first one as bones continue to decay around first surgery. Common with my condition of DDD, or degenerative Disk Disease. (very common) He said no surgery until I was faced with a wheel chair and to come up with a plan with my doctor to deal with it.
SO, with my doctors help, I started 2 businesses, with 2-4 locations every summer, summer businesses, about 4 months a year, for 11 years.
I had been on opioids for 20 YEARS, always using my regular doctor, or one of his pa's that knew me and my history once my doctor retired/got sick/stopped practicing.
So I tried to keep that link back to my original doctor, actually that relationship reached back into the 1980's. But moved onto one of his employees that knew me from being employed by him. I made sure not to doctor shop, always using the same pharmacy.
I started on Darvaset, a drug that had been on the market for 20 years before being pulled. I was on it for years and could work the 12 hour days needed, standing, behind a photo counter, using tricks of bring 2 or 3 pairs of shoes and changing them throughout the night. Darvaset worked well for me for several years, then stopped working so well and they tried me on vicodin. I felt like I could not sell and interact with our customers on that so I went back to Darvaset and sucked up the pain.
I also went to physical therapy for 11 YEARS, two or three times a week, lucky for me they were located way to my main location that myself and 2 kids manned. In fact the daughter of one of those therapists worked for me for 4 or 5 years. I had up to 20 kids working for me every summer and paid them 10 bucks an hour when the min wage was 6.xx. It was worth it to me as I would have to close a location for the night, thereby risking my business with the owner of that location, so I paid them well with the understanding that I would fire them for just one mistake of not showing up. Only had to do that once or twice over all those years as 10-11 bucks an hour was good money back then for a 15 year old.
Anyway, it was great to have found a way to only have to work 4-5 months a year. When I no longer could stand up for such long periods, I tried and let the kids run the locations but kids will be kids, and that didn't work with out me there to growl at them.
So, working with one of the pa's that knew me and linked back to my original doctor, I went on a weak dose of vicodin. I bought this place out here, 4 acres, big house, lots of work, great life. Had it down so for years my pa would write a script for pain medicine with 5 refills, or six months total. I went to the doctor twice a year.
They never did have a replacement for Darvacet when they took it off the market, then they started this can only write a handwritten script for 30 days, and a max of 3 individual scripts at once, no more pa's, docs only. It was a pain in the ass, butt they kept writing them for me, now i was having to go to doc 4 times a year.
then my pa, moved to an urgent care place and I had the choice of trying the doctor over there with a meeting, or keeping the doc who had been writing my scripts for a few years, without knowing me but relieing on my 2 inch file that included info from the mayo clinic in jacksonville, fl, confirming my bone docs reports for 1997.
moving to her urgent care center sounded like doc swapping to me, so i decided to stay where i was. on my first visit with new pa, she came into the room with two pieces of paper stapled together, not my 2 inch file. she gave me a script for one months worth of vicodin and said this would be the last one i would get, AND HAD ALREADY DISCUSSED IT WITH THE DOC IN THE HALL BEFORE SHE EVEN MET ME. that's how crazy the whole thing is, they have been scared into NOT writing any scripts, and send folks like me off to "pain managment" centers so they don't have to treat us, just pass the problem off.
I should mention that once when I thought I might have a rare type of bone cancer, I want off all my meds overnight, for about 30 days and a trip to the mayo clinic. I lost a little sleep the first night and was fine after that. I am doing fine this time except my quality of life is about 50% of what it was been since 1997. I can barely cut the lawn without the pain being excruciating in my lower back. Simple pool chores have become impossible and darn hard. I feel like I have aged 30 years. For me those pills were life changing for the better, I once went a year using pills I had saved up in freezer when we couldn't locate where a pa had gone and didn't want to start over, or doctor shop.
I should mention that they have NO ANSWER for a replacement drug for pain, just nothing. We have had to consider moving to a med pot state, but I don't like that stuff, least didn't as a kid.
now it therabeads hot pack to start every day on my lower back, and all day trying not to hurt it, where if it started hurting before, I would just take a magic pill, and the pain would be gone.
the figures you see on tv include herion and lots of other nasty stuff, lumped into "opioids" you like offbeat stuff, look at how all this started when the THIRD most powerful man in the country lost his 20 something, just a guess, drug addict, son, to opioids. That's when they started the government war on medicines that had been on the market 20 plus years, first saying it was the aniceptimene that was mixed with the drugs, and then just going all out against them using every media outlet at their disposal, giving us ligitimate users, without dependcey issues, (remember a years worth of ones that I had frozen, not exactly like a dependant would do, they would take every last one they could, rather than when they needed it. Now I get what feels like an ice pick, same feeling I had back in 1997, sticking in my back 24x7. no way to live.
I have no interest in going to a pain management clinic, scam for pills, already know there is no cure, just managment between doctor and patient, that worked fine, my doc knew i don't drink so he didn't have worry about me mixing stuff with the medicine, until the government, after the speakers kid/blood dies did we start down this road where i already felt like a drug addict going to my pa the last few years, now they are getting letters from the fda and cdc, WITH NO OTHER OPTIONS FOR US.
hi, i am from the government and i am here to help,
Run the f away fast.
bw, didn't i read several days ago that the 3x gold fund that is "based" on gdxj had suspended purchases, saying, in effect that there was not enough inventory to support the huge amounts that had been pouring into it, from something like 1 billion to 5 billion ?
i thought gdxj would get hammered the next day, but it wasn't too bad as it seemed to just move with price of gold.
anyway, guessing it was on zerohedge, or maybe here....
gfp, thx for updates on flo, my ave in price is 15.xx if memory serves, plus div, very happy.....don't own too much too much, but your post on low price due to some union spat made a lot of sense, wish i had started with larger position and now i am not adding.
my old pcl, now wy, is up about 50 some percent after 20% boost with merger and it pays near 4% at locked in price, i think. wondering how the new 20% canadian import softwood would impact prices but haven't gotten over to dew's board for updates as have been busy lately....but it didn't crash...
anyway, take care....
you had me at "wood alcohol." EOM
Thanks gfp,
i had read, and lost the link, to that story. So i forwarded your's to the three girls.
many thanks.
If these people wouldn't say they want to kill us so often, like every time they open their mouths, then I wouldn't be so concerned to show power.
Without power we get Iran "agreement," North Korea mindlessness, and isis jv team.
Now plenty nervous with 1.2 million armed folks in NK, but don't really see a choice, they keep saying they want to kill us.
As far as I am concerned as soon as a country says they want us dead, well then, they are fair game, and certainly before they actually get the capability.
I don't see the other's "religion," as an actual "religion," it is an ideology in my mind. you get killed if you try to leave it, women are treated like they were 2000 years ago, they want to exterminate, in the most inhuman way, anyone who does not agree with them.
It is kill them there, before they backdoor their way here.
Anyway...............
Guys, I think it is way to early to give up hope.
It was 3:45am, russia was given time to get their folks out of there. no ww3.
iran and north korea constantly say they want to destroy us. one of them already has nukes, the other not far behind.
we can be like bo and retreat from the world stage, or we can let folks know that we will defend ourselves, and stop saying we are sorry for being who we are. it is either that or get run over, killed, nuked, invaded, however you want to look at it.
we are all going to meet the same end, every humans endpoint is zero. we can try to lead or get lead.
never thought of myself as a neo con, but i am the son of a retired lt. c., and have an uncle who was attache of defense for the swiss for a while. i don't think he ever fully trusted to gov, even though he severed his country most of his life and is now in arlington.
no one saw the japs coming to destroy our pacific fleet in 1941, and more will come, if not slowly from the inside, than emp, or nukes, they don't need reason, just sense weakness.
eat or be eaten, it is the way of the world, like it or not.
smile, enjoy these good times while we can, family, fresh air, little things.
anyway...................
=== the most obnoxious big mouth of them all. ===
around 1985 or so, i was driving just off of Buselton ave in phila when howard stern made a joke over the radio on a story that had just been in the papers about some black women that had been kept captive in a phila basement, raped, tortured, and eaten.
his joke was about fried chicken. i pulled the car over and dry heaved out the open door, just sick. i mean this had just actually happened to several people.
his quest for shock jock knew no bounds back then. can't stand him to this day.
i am sure there is a recording of it somewhere, about 6:30=7am, coming back from run.
Michael Savage’s long, strange trip
==interesting cali background===
How a Jewish kid from the Bronx went from swimming naked with Allen Ginsberg to spewing the ugliest bile on talk radio.
DAVID GILSON SKIP TO COMMENTS
Michael Savage's long, strange trip
At first glance, Michael Alan Weiner seems like an improbable candidate to be America’s angriest, most vicious conservative radio host. Born 60 years ago in the Bronx, Weiner has lived in Northern California for most of his adult life, making a living as an herbalist and nutritionist. He communed with Fijian traditional healers, got married in a rain forest and studied ethno-medicine at the University of California at Berkeley. He swam naked with Allen Ginsberg, dreamed of being the next Lenny Bruce and wrote a rambling novel about a half-mad alter ego. His son’s middle name is Goldencloud. For years, he made a name cranking out a pile of books on alternative medicine, recommending bizarre remedies such as using vitamin C to stop AIDS and kicking cocaine with coffee enemas.
These days, Weiner’s more interested in purging the body politic. Using the pseudonym Michael Savage, he’s launched a one-man mission to save America from its enemies at home and abroad, which on any given day includes liberals, gays, academics, the homeless, the Clintons, immigrants, feminists, CNN, the American Civil Liberties Union, Muslims and other minorities. Broadcasting three hours a day, five afternoons a week, from a rented studio in downtown San Francisco, he gives voice to the right wing’s darkest fantasies. He muses about launching preemptive nuclear strikes on the Middle East (“I wish to God the hatches were open and the missiles were flying!”), suggests gunning down illegal immigrants (“If we had a government, we’d blow them out of the desert with airplanes!”), dreams of dispatching with “commies, pinkos and perverts” and other undesirables (“I say round them up and hang ’em high!”) and even paraphrases a remark attributed to Nazi leader Hermann Goering (“When I hear someone’s in the civil rights business, I oil up my AR-15!”)
Woe be unto those who label him racist, sexist or homophobic — or even worse, threaten his livelihood. When an Oregon group started a boycott of his advertisers last summer, he became downright apoplectic. “I’m more powerful than you are, you little hateful nothings!” he screeched, before intoning darkly in his trademark New-Yawk accent: “I’m gonna warn you again: If you harm me — and I pray that no harm comes to you — but I can’t guarantee that it won’t.” Just last week, Savage fumed about the “brownshirt groups” who dare to criticize him: “You stinking rats who hide in the sewers! … You think I’m going to roll over like a pussy? You’re wrong!”
Such vitriolic ranting is over the top, even by the ever-declining standards of talk-radio decorum. Yet, in this time of war fever and hyperpatriotism, inflammatory rhetoric draws conservative ditto-heads and liberal rubberneckers alike, and that translates into big ratings. Since launching “The Savage Nation” on San Francisco’s KSFO 560 AM more than eight years ago, Savage has gone from being just another right-winger with a big mouth, a hyperinflated ego and a sizable chip on his shoulder to becoming the nation’s fifth most-popular talk-radio personality, a host with enough leverage to land Vice President Dick Cheney as a guest. His book, “The Savage Nation: Saving America From the Liberal Assault on Our Borders, Language and Culture,” has been perched at the top of the New York Times bestseller list for over a month, and now he’s slated to get his own program on MSNBC.
Michael Weiner’s long and circuitous road has taken him from being a scientist and entrepreneur, through stints as a hipster, novelist and aspiring comedian, to becoming the personification of straight white male rage. Today he likes to play up his unconventional career path, to an extent. He’s the kind of guy who never lets anyone forget he has a Ph.D. His Web site reminds visitors that he is a “World Famous Herbal Expert” and the author of 18 books. But just as his gap-toothed grin has been replaced by a row of airbrushed pearly whites on the front cover of his new book, he gives his audience a whitewashed version of his past. The real story is far more interesting, not just for its ironies and contradictions, but for the often disturbing clues it provides about the man now so well known as Michael Savage. He’s gone through at least one political makeover. He’s turned on old friends, or they’ve turned on him. If his semi-autobiographical novel is any guide to his own life, he’s keeping a few skeletons in his closet.
In the end, the picture that emerges from his books, from interviews with past and current associates, and from his radio show is that “The Savage Nation” is just the latest undertaking of a man who’s spent his life trying to get the world to notice him.
Savage’s office said he was too busy preparing for his TV show to be interviewed for this article. Earlier interview requests by phone and e-mail prompted an irritated phone call from a woman named Janet, who announced that Savage would not speak with me. Asked if she was his wife — who happens to be named Janet — she said she was not. “I am not affiliated with him,” she insisted. “I’m just a fan.” After a few minutes of testy back and forth, she suggested that it would be unfortunate if my e-mail address and phone number were somehow posted across the Internet.
Savage has come a long way since he emceed school assemblies at P.S. 42 in the Bronx. His father, a Russian Jewish immigrant, made a living selling antique bronzes on Orchard Street. An imposing figure who died of a heart attack in the early 1970s, he is the frequent subject of his son’s on-air stories. Speaking at a convention sponsored by the trade magazine Radio & Records in March 2001, Savage recalled getting his first lesson in politics — and cynicism — from his dad. “[H]e explained politics to me very clearly. He said, ‘You see, this is how the world works … In this beautiful country of ours there are two bands of thieves: the Republicans and the Democrats.'”
Though Savage waxes nostalgic about such father-and-son moments, it appears that his parents were no Ozzie and Harriet. “I was raised on neglect, anger, and hate,” he writes in “The Savage Nation.” But growing up with little parental approval or praise was a good thing, he says. “Frankly, that’s why I’m driven the way I am.”
Savage, who now decries “propaganda about America being the Land of Immigrants,” isn’t ashamed of his own immigrant parents. However, his Jewish upbringing is strictly taboo. And he often makes Joseph Lieberman, Barbra Streisand and Larry King the butt of stale ethnic jokes. Brad Kava, radio columnist for the San Jose Mercury News and a longtime Savage critic, thinks Savage’s ambivalence toward Jews is a misguided attempt to pander to conservative Christians. “He’s Jewish, but he always acts like he’s Christian,” he says. In his book “The Savage Nation,” for example, he complains of an anti-Christian bias in America. When Kava, who is Jewish, “outed” Savage several years ago, Savage reported him to the Anti-Defamation League. Dr. Robert F. Cathcart, a longtime friend of the talk-show star, speculated in a telephone interview that Savage says little about his background so that he appears more “neutral” when he discusses Israel or religious topics.
Everyone who has ever known Michael Weiner seems to agree that he has always been a big talker. One of his classmates from Jamaica High School in Queens, which Weiner graduated from in 1959, recalls him as a garrulous character: “He was on the short side, and he was intense — a fast talker, and always hatching some scheme or other.” “The fellow I knew was a natural comic and as reliable as a clock,” remembers another classmate, who says the teenage Weiner was “non-political.” His yearbook page notes his participation in the Chemistry Lab Squad, school government, and the Rifle Squad, presaging his interest in science, politics and firearms.
Weiner was also something of a dreamer, and he hoped to follow in the footsteps of his hero, the naturalist Charles Darwin. After getting a biology degree from Queens College, he went as far west — and as far from home — as possible, winding up in Oahu, Hawaii, where he earned master’s degrees in anthropology and botany from the University of Hawaii. Throughout the late 1960s and early 1970s, he traveled to Tonga, Fiji and other South Pacific island nations to study traditional herbal medicine. His new wife, Janet, and their young son, Russell Goldencloud, often accompanied him on his travels. Local healers warmly welcomed him, and he became passionately convinced that their expertise could be used to cure modern ailments. Thus began a quest to salvage– not savage– this “ethnic wisdom” before Western influences destroyed it. His research on the sedative kava kava and other Fijian medicinal plants served as the basis for his doctoral work at U.C. Berkeley. His 1978 dissertation, on file in the U.C. Berkeley library, shows his degree was in nutritional ethnomedicine. However, the bio in the back of Savage’s book and on his Web site says it was in epidemiology and nutrition science.
In 1974, Weiner moved to the San Francisco Bay Area. His family first settled in Fairfax, a sleepy town in Marin County that Michael Savage would lambaste three decades later as “un-Fairfax,” hometown of “Taliban Rat Boy” John Walker Lindh. From there, he started making trips into San Francisco to hang around the North Beach literary scene. According to Stephen Schwartz, who was then a left-wing activist and writer, Weiner carried an unusual letter of introduction. “He had met Allen Ginsberg in Fiji,” he recalls. “He had this photograph of himself swimming naked with Ginsberg.” Poet and biographer Neeli Cherkovski says Ginsberg and Lawrence Ferlinghetti, the owner of City Lights Bookstore, introduced him to Savage in 1976. “All I knew was that he was this hip guy who’d been traveling in the South Seas, finding ways to use tropical plants to help end diseases,” he recalls. The two became friends. “We had a lot of fun times. He’s very smart, intelligent and very lively,” says Cherkovski, who is now writer-in-residence at San Francisco’s New College. Weiner told Cherkovski that he dreamed of becoming a stand-up comic in the mold of Lenny Bruce and they talked of doing a comedy routine together.
But he didn’t make the big splash he had hoped for. Schwartz says Weiner’s increasingly bizarre behavior eventually alienated him from the North Beach crowd. “After he had been there a while, his personality began to change. He became much more aggressive. He would collar you and demand that you eat with him, listen to him,” he says. According to Schwartz, Weiner openly carried a gun and made public scenes when he ran into his former friends and acquaintances. “He would come into Cafe Trieste and start yelling at me that I was a nobody and he was a somebody.”
Today, Savage still has few kind words for his old lefty literary friends. In “The Savage Nation,” he writes off City Lights as “that once-famous communist bookstore” and rips into an unnamed beat poet, calling him “latrine slime.” “Now he just screams at us in the streets,” sighs Ferlinghetti, who once went to Hawaii with Weiner and his family. He views Weiner’s reincarnation as Michael Savage as “total opportunism,” the crowning achievement of someone who was “always looking to make a fast buck” and “always trying to think up new schemes to get famous.”
Weiner did have a knack for combining the promise of herbal medicine with good old-fashioned hucksterism. From his home, he started vanity projects such as the Fund for Ethnic Medicine and the Alzheimer’s Research Institute, which he plugged on his book jackets and in letters to the New York Times. He concocted feel-good beverages like Tea of Life and Herbal-Seltzer and sold a line of herbal supplements from a Web site called Herbs That Heal. Visitors to the now-defunct site were welcomed with photographs of Weiner collecting herbs in the South Pacific, soulfully soaking in the culture of what Michael Savage belittles as the “turd world.” The 1992 edition of “The Herbal Bible,” published by his wife’s imprint, Quantum Books, modestly noted that its author was “credited with starting the herbal revolution.”
He was also a prolific writer, churning out 18 titles in 20 years. “[D]on’t assume for a minute that they were junk books and marginally published,” he snaps in “The Savage Nation.” “They weren’t. They were top of the line. They were the Rolls-Royce of the field.” “Earth Medicine — Earth Foods” and “Weiner’s Herbal” are well-respected references and are still cited widely on herbal and homeopathic Web sites. Most of his books, with their glorified lists of plants and their properties, are about as dry as a handful of powdered dogwood root (which, according to Weiner, makes a good tonic for treating fevers). But buried in the details is a sprinkling of flaky affirmations and kooky assertions.
For example, in “Plant a Tree: a Guide to Regreening America,” Weiner wrote dreamily about our “plant allies” and suggested that every state appoint its own “tree czar.” “Dictators seem to like trees,” he ruminated. “Who knows what a benevolent, nature-loving tyrant might do for the retreeing of America?” In “The Way of the Skeptical Nutritionist,” he ventured that a person’s ideal diet should be determined by his or her ethnicity. “Getting Off Cocaine: 30 Days to Freedom” promised blow addicts “an alternative plan for getting ‘high’ — legally and naturally!” The treatment involved ingesting a daily cocktail of Sudafed, vitamins C and E, and amino acids, as well as self-administering the occasional coffee enema. “Use a good quality coffee,” Weiner advised. “Not decaffeinated or instant.”
Michael Savage’s homophobic rants against what he calls “anal rights” were foreshadowed by the 1986 book “Maximum Immunity.” In it, Weiner glommed onto some of the wilder ideas about AIDS that were circulating at the time. He called for mandatory nationwide AIDS testing and suggested using massive doses of vitamin C to slow down and even reverse the disease’s progress. When he was done suggesting cures, he looked for scapegoats. He demanded that gays “accept the blame” for the rise of AIDS, then grumbled, “Those who practice orgiastic sex, with many partners, and use street drugs are not likely to respond to reason.”
“Maximum Immunity” also hinted that its author was dealing with some heavy issues of his own. In one passage, Weiner wrote about his decision to take up jogging so that he might avoid his father’s untimely fate. Everything went well until he started hearing things. “An inner ‘voice’ began to demand, ‘Stop … I can’t take this anymore.'” he wrote. Fearing a “nervous collapse,” Weiner traded his running shoes for a bike and soothed his jangled nerves by curling up on the sofa with a mug of passionflower herbal tea and ingesting “megadoses” of vitamins. Feeling much better, he concluded: “I learned to calm the inner debate that had threatened to drown me in madness!”
Such extreme mood swings are regular occurrences on “The Savage Nation.” Even the phrase “I can’t take this anymore!” (usually shouted at full volume) has become a Savage catchphrase. James Hilliard, who produced “The Savage Nation” at KSFO for nearly three years in the late 1990s, says that talk radio provided Savage with an outlet for his unpredictable temperament. As he recalls, “The show was really driven by Michael’s mood. At times, he could be very quiet, mellow, low-key, and then be a maniac on the air.”
This maniacal tendency, and the roiling emotions that fueled it, were laid bare in “Vital Signs,” Michael Weiner’s first and only book of fiction, published in 1983. A collection of confessional, stream-of-consciousness stories, it follows the exploits of Samuel Trueblood, who just happens to be a 40-ish New York Jew, an herbalist and writer with a tumultuous personal life, a substantial assortment of inner demons and a bit of a Napoleon complex. “I am physically not tall, but my eyes burn with fire,” he states. “Two black fires of Hell.” Trueblood narrates a series of misadventures, from procuring an illegal backroom abortion for his fiancée to beating the stuffing out of an abusive cop.
Trueblood describes his life as one long search for inner peace. He blames much of his discontent on his “childhood beneath tyranny,” during which he was cowed by his bullying father. Trueblood describes how his father mocked him with “brutal jokes and chides, ‘gentle’ kidding: ‘You’re not a fag, are you Sam?’ the little man would say each time the boy dared wear a colorful shirt or flashy trousers.” Unable to shake his dead father’s disapproving influence, the adult Samuel is tortured by feelings of weakness and inadequacy. “I am filled with fears,” he admits, “nearly all the time feeling I am about to become totally insane.”
Even after moving to mellow Marin County, becoming a successful herbalist and starting a family, Trueblood remains plagued by his “underlying sadness.” Not even trusty passionfruit tea can bring him off this bummer. In one passage, he almost loses it in front of his wife and two young children:
“Inner voice screaming at me for years, first rational, then crazy, telling me to do mad things. Every form of relief tried, painting, psychotherapy, running, diet, vitamins, etc., etc. Almost uncontrollable now. Impulses to stab children, strangers, wife, self with scissors.”
Eventually, Trueblood seeks solace in chasing skirts. (Though he admits to being drawn to “masculine beauty,” he confides that “I choose to override my desires for men when they swell in me, waiting out the passions like a storm, below decks.”) While his wife stays home with the kids, he beds a young “cockswell” with a “dykish haircut” and skin “[s]ofter than that Northern Indian prostitute in Fiji whose covering was as soft as that of my own penis.” And so it goes for another 50 pages.
No doubt the anti-abortion, anti-gay, pro-family Michael Savage would disapprove of such a perverted excuse for literature, with all its gratuitous references to illegal abortions, repressed homosexuality and shameless philandering. But it’s impossible not to notice the similarity between Trueblood, the tormented seeker, and Savage, a man whose “inner voice” precipitated an existential crisis over jogging. Neeli Cherkovski says that the chapter in “Vital Signs” about Trueblood’s father is based on Weiner’s own life, recalling that he went with the author back to the Bronx to see the site of his father’s store. But Cherkovski won’t speculate about the rest. “I think he [Weiner] is a person who had a lot of wild experiences,” Cherkovski says. “He tested a lot of waters.” Even the book’s dedication, to Weiner’s wife, suggests that he wasn’t making everything up: “Who would listen to such tales and live with he who lived them but she, the unshakably faithful Janet.”
For most of the 1970s and 1980s, Weiner focused on curing people’s illnesses, not society’s ills. “For 10 or 15 years, I was the revered herbal doctor,” he recollected at the Radio & Records convention. “I was Mr. Nice Guy Nutritionist. Nobody knew my politics. I was talking about healing and I’d go to health food conventions and I’d give speeches about vitamins and herbs. Nobody ever saw this as controversial … They liked me!”
But beneath the surface, Weiner was becoming more and more conservative. Stephen Schwartz, who went from being a self-described Trotskyite to neoconservative and is now senior policy analyst at the Foundation for the Defense of Democracies, says that Weiner was a “typical left liberal” in the 1970s. Neeli Cherkovski, who is gay, notes that Weiner was not homophobic when they first met. However, he says Weiner’s shift rightward coincided with his increasing aversion to gay activism. Robert Cathcart, who’s been close to Weiner since the mid-1980s, says he’s always known his friend as an outspoken conservative, at least in private.
Since Weiner’s conservative leanings took a hard right turn, he’s complained that he was held back because of his race, gender and political beliefs. He currently gripes that no institute of higher education would hire him, despite his qualifications. “I discovered I could not gain a professorship even after applying many times,” he writes in “The Savage Nation.” “My crime? I was a white male.” The résumé he has presented over the years tells another story. On air, he’s mentioned that he was once affiliated with Harvard. On the back of his books, he has boasted of being a faculty member at U.C. Santa Cruz, a visiting scholar at the Hebrew University School of Pharmacy and a senior research fellow at the University of Heath Sciences at Chicago Medical School. He’s also claimed to have done “important research” for the National Cancer Institute at the National Institutes of Health. Not bad for someone who’s been blacklisted from the ivory tower.
The last straw apparently came in 1994, when publishers rejected Weiner’s latest manuscript, “Immigrants and Epidemics,” which contended that infectious diseases such as T.B. were being brought into the U.S. by Southeast Asian immigrants. Fed up, Weiner rented a recording studio in Sausalito and produced a mock talk show with his wife and a couple of buddies playing callers. Michael Savage was born.
In his new job, Savage employed all the self-promotional tricks he had picked up while going from Charles Darwin wannabe to world-famous herbal expert. In early 1996, he applied to become dean of the U.C. Berkeley Graduate School of Journalism. Unable to appreciate the journalistic qualities of Savage’s radio program or his 18 books, his alma mater denied him an interview, instead hiring China scholar and journalist Orville Schell. Savage sued Berkeley with the help of a conservative legal fund started by David Horowitz (who wrote approvingly of the case in Salon), accusing it of discriminating against a conservative in favor of a man he has called a “front for the communist Chinese mafia.” The case never went to trial. During the run-up to the 2000 election, Savage laid claim to the phrase “compassionate conservative,” and said he planned to sue George W. Bush for intellectual property theft. Like many of Savage’s threats of imminent litigation, this one soon faded away. But sure enough, he had self-published a book called “The Compassionate Conservative Speaks” in 1995 and, ever the savvy businessman, had trademarked the term in 1998.
Even Savage’s two kids were swept up in his relentless drive for publicity. His Web site advertised Rockstar, a liver-cleansing beverage marketed by his son that enables its drinkers to “party like a rock star.” Last spring, Savage told his listeners about a third-grade teacher in San Diego, Calif., who had saved a child from choking, and demanded that the state school superintendent give her an official commendation. “If she was a minority teacher and picked up a paper clip on the floor, then a commendation would be in order,” he sniped. He neglected to mention that the “hero teacher,” Rebecca Lin Yops, was in fact his daughter, who had changed her last name after her recent marriage.
Armed with his natural loquaciousness and a kill button, Savage’s love affair with the sound of his own voice deepened. Obsequious fans obliged him by calling him “Doctor Savage,” prompting him to expound his theories on how gays and immigrants spread disease and were corrupting the nation. “It’s the greatest revenge there is, having a talk show,” he crowed in “The Compassionate Conservative Speaks.” And as his rhetoric became ever more grandiose and outrageous, his ratings — and political clout — grew. “The Savage Nation” became the Bay Area’s No. 1 drive-time radio program. Savage lunched with Democratic San Francisco Mayor Willie Brown and started landing big-name conservative guests such as Benjamin Netanyahu and Vice President Dick Cheney, who, apparently unaware of the show’s usual host-centered format, commended Savage for “providing a forum where we can have a good discussion.”
Looking for a way to leverage his newfound influence, Savage founded the Paul Revere Society, a political club whose goals have included the imprisonment of antiwar activists for sedition, loyalty oaths for immigrants and the eventual establishment of “a haven for compassionate conservatives” called “Revere-Town.” A fee of $40 gets new members a Savage Nation baseball cap and an anti-affirmative action pamphlet called “The Death of the White Male.” There’s also the promise that one day they might get to meet the founder and executive director in person. But given Savage’s reclusiveness, they may have to wait a while. The group’s last major event took place in November 2000, when it held its fifth annual “Compassionate Conservative Convention” in San Rafael, not far from Savage’s home. Since then, Savage made himself available to fans only at dinner parties, and only after they forked over more than a hundred bucks. Meanwhile, according to papers filed with the IRS, this nonprofit “educational organization” took in over $150,000 in donations in 2001 and expects to take in $250,000 this year.
The success of “The Savage Nation” and its spinoffs is the culmination of a lifelong quest for attention, fame and money. And that raises the question of whether Michael Savage is just a persona created to milk conservatives and taunt liberals. Robert Cathcart thinks his old friend intentionally exaggerates his politics and personality to get a rise out of his audience. “It’s showmanship,” he says. “He makes enemies of everybody. He doesn’t believe half the stuff he says. On air, he’s the ultimate type-A personality, but he quiets down at home.” Former “Savage Nation” producer James Hilliard concurs. “I think Michael does have an excellent sense of putting on a show,” he says. “I think he learned or was told at an early point that this is an entertainment medium, and he thought of himself as an entertainer.”
However, as Savage rips into another hapless caller or gets exercised about the latest liberal atrocity, it often feels like he’s crossed the line between public shtick and personal catharsis. On the air, he lets everything hang out, truly living up to the warning of “psychological nudity” advertised at the beginning of every show. This is what makes “The Savage Nation” so simultaneously maddening and fascinating — as Savage heads over the brink one more time, you have to wonder whether someday he’ll go over for good. Cathcart and Hilliard are right when they say the show is not just about politics. But it’s not just about entertainment, either. It is about one man grappling with his ambitions and fears while America listens. For Michael Weiner, talk radio is the ultimate talking cure.