The Day Earth Was Murdered
Paul Craig Roberts
“Change you can believe in” disappeared in the early days of the Obama regime as the same Washington insiders filled the new government’s ranks. David Brooks sung the praises of those who made change impossible: “the best of the Washington insiders, Achievetrons who got double 800s on their SATs.”
Following two days of utter chaos in Washington D.C., the Republicans in the House have finally called it quits and laid to rest, at least for now, efforts to repeal and replace Obamacare. The bill was pulled shortly before voting was set to begin at 3:45PM EST.
'Reflation'-themed fund-flows are fading fast (with equities, cyclicals outflows accelerating), and 'higher rate beneficiaries'-linked bond flows (bank loans, HY, inflation protected) slowing to multi-month lows. As RBC's head of cross-asset strategy, Charlie McElligott notes, their model shows the ETF inflow story is no longer a price-driver of short term stock market pricing... "it's a new regime."
McElligott notes the following three key themes remain:
The Fed's most recurring lament over the past 8 years, ever since the Financial crisis, is that there has been no measurable inflation in the US economy when using such conventional indicators as CPI, even though according to recent measurements by PriceStats real inflation, not the BLS' seasonally-adjusted, goalseeked and politically convenient mutant, is now running at a blistering 3.6%, the highest in five years.
Back in the summer of 2015, Deutsche Bank mistakenly paid $6 billion to a hedge fund client by mistake in a “fat finger” trade on its foreign exchange desk. The embarrassed bank recovered the money from the US hedge fund the next day, and quickly accused junior member of the bank’s forex sales team of being responsible for the transfer in June while his boss was on holiday. AS the FT then reported, instead of processing a net value, the person processed a gross figure. That meant the trade had “too many zeroes”, said one of the people.