The Epidemic of Fake Analysis


COMMENT: Mr. Armstrong; I want to thank you for your work on Europe. We hear nothing from European analysts but up-up-and away and it makes one wonder if that is not fake analysis just like the news. Nobody seems to be talking about how retail sales are declining in Europe and even my mother, who is 90, said it is because they tax us too much.

Keep up the analysis. We need someone to tell the truth who is not told what to report here in Europe.

PF

REPLY: Yes, that has always been the NUMBER ONE problem in analysis. A famous bank has analysts but they cannot speak truthfully for the ECB will pick up the phone and they are silenced or fired. BTW, your mother is spot on. They keep raising taxes and hunting money and then wonder why there is deflation. Ah! The illogical thoughts of those in power.

The retailers in the Eurozone had posted the second monthly decline in sales falling 5% in August. This was the sharpest drop in one month since October 2015 when the ECM turned. It does not speak well as we head into 2020. The official news reported was that European Economists came out and forecast in response that sales will increase of 3% next year.

During the holiday season in August, which is traditionally the best month of gasoline sales, reported a stunning fuel sales decline by 9%. This is reflecting the growing concern about terrorism as people are showing a distinct decline in travel.

Our problem is that we have career politicians. This infects everything. They are only concerned about their reelection so they manipulate the analysis to deny that there are problems. All we hear is constant complaints about the quality of analysis. The shocking trend is now central banks want to just subscribe to Socrates because even they are fed up with what you call “fake analysis” that is getting really bad.

Was Paddock an Anti-Trump Motivated Shooter?


A number of emails have come in about Paddock. There are pictures floating around of someone who looks like Paddock at anti-Trump rallies. This is by far not confirmed and is highly speculative. Nevertheless, the timing cyclically when someone would be triggered to act in this manner would be about January 12th. Targeting the Country Western rather than Pop music festival may also be a speculative indication that he was for some reason an anti-Trump advocate if one assumes the Country Music crowd voted for Trump rather than the Pop Music crowd. None of this is confirmed, but it is also doubtful anyone would provide such confirmation for it would be a political time-bomb.

From an analytical perspective, should these aspects be remotely correct, they would cyclically support the time frame. We would not see the media admit that that was his motive and the government might also try to suppress such a motive. We will have to see. Tying this to politics may be too radioactive. Nevertheless, such cyclical timing in these type of events you look back 8.6 months.

The assassination of President McKinley took place on September 6th, 1901, which was also about 8.6 months after the Presidential election in November 1900.

My Opinion on Stephen Paddock


I’m a former Green Beret from back in the day, pre-Tet Vietnam, where I was WIA in combat at a Special Forces camp on the Cambodian border in late 1967, so I was trained by the US military on the use of many different weapons, explosives, tactics and guerilla politics; therefore my opinion on the Stephen Paddock massacre in Las Vegas is more than idle speculation. When searching for motivation one must always consider Occam’s razor; meaning the simplest solution or answer is almost always right. To begin any analysis one must start with the facts. So what are the known facts found on the broadcast news media and searches on the web?

On September 30 in Las Vegas 58 concert attendees were killed by gun fire and another 527 were injured. The gunfire was rapid and appeared to come from the 32nd floor of the Mandalay Bay resort and casino. Police breached the room and found Stephen Paddock dead. Cell phone videos taken by concert attendees clearly indicated rapid fire interrupted by short periods of silence (changing magazines) and there were clearly two windows broken out on the upper floors of Mandalay Bay. The weapon reports, I heard, were not from a military full automatic rifle and were either from a well trained shooter or from the use of a bump stock add-on to a regular civilian semi automatic rile that allowed rapid fire similar to that of a military rifle.

The news reported the following.

The suite Paddock had rented had two rooms and both rooms had windows knocked out and shooting platforms established.

There were 23 weapons found in the room including semi-automatic rifles and handguns as well as thousands of rounds of ammunition and related items such as scopes and firing positions and 12 bump stocks, a simple device that allows a semi-automatic rifle to fire at a slightly faster rate of fire then individual trigger pulls but not as fast as a military automatic rile or a machine gun. There were IP cameras set up outside and in inside the room; we are told they were not set to record.

Shortly after the shooting ISIS claim Paddock had converted to ISLAM several month ago and was one of them; and news reporters indicated that ISIS claims of this kind were credible although not 100% accurate.

Additional searches of his car and homes found more weapons, ammunition and explosives. Places were Paddock purchases some of his weapons told investigators that there was nothing unusual about Paddock and apparently all of what he purchased was done legally.

Other information indicated that Paddock traveled to multiple cities and stayed in hotels where concerts were held. That he had a girl friend originally from the Philippians and that he and his girl friend had visited Las Vegas regularly averaging a couple of times a month over the past several years.  That he and his girl friend had traveled to the Philippians and that he sent his girl friend to the Philippians prior to the shooting and he transferred to her at least $100,000 to buy a home.

However we were also told that:

Paddock was a 64 year old retired accountant.

Paddock was a multi millionaire apparently from property speculation and gambling.

Paddock owned multiple properties and owned an airplane.

Paddock had no known strong opinions either religious or political.

Paddock had no known weapons or explosives training.

A few days after the shooting we were told that there was nothing found at any of Paddock’s residences that indicated he was researching weapons or explosives. We were also told there was nothing in his medical records that indicated a severe mental problem. Professional profilers told us that he fit no known existing profile of any other mass shooting perpetrated.

On Fox News Sunday with Cris Wallace in an interview with Stephen Wynn, who resides and owns several hotel/casinos in Las Vegas,  indicated the following. In 2015 he had professionals review his properties security procedures and major changes were made to minimize the chances of what happened and the Mandalay Bay  resort. Steve told Chris that his employees never saw anything from Paddock or his girl friend that gave any concerns to them of any kind. Steve did make one comment that neither Paddock or his girl friend ever had a drink at his properties and that Paddock was mid level gambler and never owed the casinos any money and that he always paid his bills. Wynn also started the Paddock was a very logical and methodical man that gave no sign of mental illness.

There is only one scenario that fits the principle of Occam’s Razor.

Additional facts:

The Philippians has areas controlled by groups such as ISIS and ISLAM has a major presence in the Philippians. Paddocks girl friend is from the Philippians.

According to Wynn, Paddock and his girl friend never drank; Muslim’s are not permitted to drink alcohol.

In my opinion there is no way Paddock taught himself everything that he knew that permitted him to pull of this shooting without leaving a trace. So he had to have help.

Within Islam, in particular to recent converts, it is taught that all good Muslim (men) do their best to be like Mohammad their founder. Mohammad practiced violent jihad and was a War Lord  that conquered most of Arabia before he died. Therefore an act like this would guarantee him Islamic heaven.

Therefore:

The only reason for Paddock to do what he did is that his Girl friend converted him to Islam and that they trained him in what he needed to know in the Philippians over the past several years. He did not stay in a Wynn property since he know their security would have caught him.  If he was a Muslim he would have believed that doing this would take him to heaven and he was 64 years old so what happens after death would be and issue.

So since the ISIS claim is credible and the rest of the facts support them I believe that his conversion to Islam gives us the motivation to do what he did and this theory is in compliance with the principles in Occam’s Razor.

The deep state does not what this to be known as they would prefer that guns in the US could be eliminated or at minimum tightly controled so they have minimized the link to ISIS to promote their confiscation of all guns. This is also supported by actions of the Obama administration and all progressives. The progressives to what to find a way to get rid of the Bill-of-Rights as it does make it harder for them to change our form of government. Which they are doing with the Black Lives Matter BLM narrative and the more recent knelling at sports games when the flag and national anthem are played.

The deep state may not have participated in what Paddock did but they certainly could have tried to take advantage of the shooting.

 

 

 

Why Do Some Hate Intelligence?


COMMENT: “La bave du crapeaud n’atteint pas la blanche colombe.” (slime toad does not reach the white dove)
“Ce qui dérange les gens, c’est l’intelligence, les insectes attaquent seulement les lampes qui brillent.” (what bothers people is intelligence, insects attack only the shinning lamps.)
Thank you for all your enlightenment.
MF

REPLY: Yes they killed Socrates for being intelligent. There are too many who prefer to blame other for their shortcomings. The Romans called it the goddess Fortuna who could change your fate on a whim. Today, they con-cock conspiracy theories to pretend they are really right, but there is some evil force that has prevented them from proving they are correct.

They hate intelligence the same as they hate others who have more material wealth than they do. This is the typical emotion politicians tap into for class warfare. We go to school to learn. When you attack intelligence, it is typically the sign that they are incapable to learning and prefer to blame everyone else for their own failures

Paddock & Las Vegas Massacre


A lot of people have been writing in asking if I have any comment as to motive concerning the Stephen Paddock who massacred people on a wholesale basis in Las Vegas. Typically, there is some sort of event that triggers someone to act in this manner. He bought his girlfriend a ticket and sent her home, then wired her a $100,000 to buy a house there. She later told police she took it as a sign he was breaking up with her.

The latest is that Paddock had also researched possible attack locations in Boston and Chicago. He was possibly targeting the most recent Lollapalooza festival in Chicago, which was held Aug. 3 to Aug. 6 in Grant Park. The music there is more pop such as Lorde, whose music is not country.

Jason Aldean, who was on stage at the time of the shooting, is an American country music singer since 2005.

 

So the type of people that attend country concerts are generally a different crowd than those who attend pop concerts. So on the surface it does appear he was targeting a specific type of music goers.

Paddock bought 33 guns in the past year. I would look to see what took place in his life around January 12th. That might provide some answer.

Some People Really Hate Me – There Must Be Always an Opposite


COMMENT: You know some people hate you for your comments and views.

REPLY: I am fully aware of that. Life is a journey which is a question to understand why we are even here. What is this thing we call life? What makes the word tick?

Experience is the great teacher in life. It is what shapes us into who we are. I have worked around the world, lived in London, my favorite city, Tokyo, Hong Kong, and Sydney. I have probably spent one-third of my life in Europe. I love the diversity and the culture in Europe. It pains me to see the EU function as it does and try to eradicate those differences.

My teacher has been the computer. That is what I hope to leave behind. Take it or leave it. I fully understand it is usually kill the messenger when you do not like the message. I cannot change the world and I am the fool if I try.

To make a cycle function, there must be two opposites. Nobody can be everything to everybody. Of course some people will hate my guts. Some were sad I was not in Vegas one email said from Madrid. That is life. I would certainly prefer to go out that way than slowly in diapers.

Governments Will Act


What is going on in Spain is the blueprint what what other governments will do. The Spanish people themselves outside of Catalonia are deeply divided. Many see this as offensive and others see the government as offensive. We are looking at the breakup of the USA as well and do not forget the civil war to prevent separatists in America. The real issue is that people ban together for creating society and civilization and then government abuses its power and the process of decline begins. This is throughout history and it really does not matter what culture or country. It is all the same.

Spain’s Constitutional Court, the puppet of Rajoy, on Thursday ordered the suspension of Monday’s session of the regional Catalan parliament. Rajoy is demonstrating that government will not tolerate losing power. You can always write a law and claim it is unconstitutional to separate. That does not make it legal, moral, or ethical.

Reuters reported: “The suspension order further aggravated one of the biggest crises to hit Spain since the establishment of democracy on the 1975 death of General Francisco Franco. But Spanish markets rose on perceptions the order might ward off, at least for now, an outright independence declaration.”

The structure of the EU in attempting to federalize Europe required a single federal debt. That is what they failed to do so you ended up with a half-baked cake. This is why we have the problems in Europe as we do. But make no mistake about it, this is a political problem and what happens in Europe will be a contagion as it was in 1931. This will eventually cause major problems politically in the States as well.

Justics Scalia I greatly admired. However, his letter on the separatist movement in the USA said that the civil war decided there was no right to separate. I disagree with that opinion, but that is my opinion.

There are those who object to my writing about Catalonia from the Madrid side. They create a list of hateful names directed at me personally and then say I know nothing of Spain. They are making the same mistake as government. They assume that government and Rajoy is Spain. The people are the sovereign of Spain – not Rajoy nor his Constitutional Court. If you cannot see that government is supposed to be “elected” by the people, they are not to be the ruler of the people as some monarch, they you have missed the entire point of history. You can hate me all you want, but it is your life you are surrendering to government and that of your posterity.

We have a choice. We either understand that government when unchecked will go too far and surrender as sheep, or we stand up and try to make the future better for our posterity.

I strongly urge that you read just  Common Sense written by Thomas Paine.

Spain is merely the blueprint. Watch carefully, for all governments will act the same

Global Warming Taxes – Or Just Another Excuse?


Now that the German elections are finished, Merkel now comes with the tax hikes. This shows the contempt for the people assume that they are just stupid so do nothing before and election, then raise the taxes after. According to a report, Germans should not expect about a 50% tax increase on electricity. As the Bild newspaper reported on that the Federal Association of Energy Consumers will raise the taxes significantly all in the name of causing people to save the planet while government lines its pockets.

The Bull Market – This time It Really Is Different


This current Bull Market has indeed been the most hated in history. Typically one expects complete euphoria as new highs are made. However, this bull market is really different this time. This rally is by no means the product of euphoria. While the majority of analysts have been calling for a crash since 2010 and every new high was supposed to be the last, this cannot be compared to the Roaring 20s.

If we lift the rug and look closer, you will start to put the pieces together. There has been a bond and property rally over the past seven years whereas rates were rising into the 1929 high and property burst in 1927 with the Florida Land Bubble. This is not even similar to the roaring Dotcom Mania of 2000. The PE Ratio was significantly higher in both instances.

Government bonds have moved even to negative yields at times in Germany and creditors have demanded insane levels of credit to buy housing in the States opposite of the free lending going on in Europe as banks are desperate for yield.

Rarely has high-end property prices around the world soared so high. We have seen this is London, Toronto, New York, Miami, Vancouver, Hong Kong and Sydney to mention just a few. The price of the average American house remains still 20-50% off from 2007 levels depending on where you look.

Rare coins, art, and antiques have soared around the globe. Add to all this the craze, we have  cryptocurrencies and BitCoin going nuts. Yet the entire bull market of the Roaring ’20s was 97 months. We passed that mark in April 2017. This is also the longest bullish trend suggesting there is something else afoot.

So exactly what is going on? Do we really have a bull market in EVERYTHING? Well the answer is yes and no. If we look closely at the high-end property market, much of the sales are for CASH – not leveraged. This too is highly unusual. Historically, such asset bubbles have been funded by banks. Yet the bitter experience has shown that debt-funded asset bubble implode taking the banks with them. The assets collapse in value because the banks need cash with withdrawals. The leverage magnifies the cash on the way up, and on the way down, assets crash to rebalance against the actual supply of cash.

For this reason, banks must be able to withstand such a contraction and the theory is to raise bank capital. That means raising bank capital to meet “stress tests” imposed by the various government authorities. The European Banking Authority (EBA) published the list of public sector entities (PSEs) that may be treated as regional governments, local authorities or central governments in the area of credit risk, in accordance with the Capital Requirements Regulation (CRR). This list will assist EU institutions in determining their capital requirements for credit risk. The problem with all of this “stress test” criteria is the fundamental assumption that government debt is risk free. In particular, the EBA includes those PSEs that are treated as regional governments, local authorities or central governments due to their reduced risk level. As a result of this treatment, exposures to the PSEs included in the list will qualify for the same risk weight as for the respective regional government, local authority or central government. The assumption that government debt is superior to private debt backed by assets underscores the real risk on the horizon.

The bull market in everything is really a global realization that government is in trouble. We are looking at money getting out of banks and government to REDUCE the risk of government as we move forward.  So this time it is different. Normally, we have one sector at a time in a bubble, commodities, stocks, real estate, tangible assets. We normally do not see a bull market in everything unless there is a wave of movement away from government.

 

EU is becoming a No-Go-Zone for Business


The European Union has ordered AMAZON to pay about 250 million euros ($294 million) in taxes to Luxembourg, saying it was given an unfair tax advantage from 2003 because it paid less than they would have paid in France or Germany. The EU is retroactively changing taxes. This is a sure fire way of telling companies to get out of Europe. If no matter where you build your plant, if you would have been paying a higher tax in France or Germany, the EU says that is not fair and you have to pay more in BACK TAXES.

In restructuring companies, taxes were always NUMBER ONE after Country Risk. The EU has just made Country Risk paramount. Honestly, I would have to advise companies NOT to set up shop inside the EU. Best to go to the UK and pay any tariff than to be retroactively taxes because the EU is broke. This is introducing a whole new risk into the mix. The EU is becoming a no-go-zone for business.

It is now too risky to business in Europe for they are changing the rules retroactively.