Montana House Candidate Charged With Assault After “Body Slamming” Guardian Reporter

Last night we wrote about Montana’s Republican congressional candidate Greg Gianforte who reportedly “body slammed” Guardian reporter Ben Jacobs during an interview after being pressed for his opinion on the CBO healthcare score. Gianforte is the Republican candidate in today’s special election for Montana’s open U.S. House seat…but we’re sure it’s just a coincidence that this happened one day before the election.

Not surprisingly, we learn this morning that Gianforte has been officially slapped with a “misdemeanor assault” charge by the Gallatin County Sheriff’s office which carries with it a maximum fine of up to $500 and/or 6 months in jail if convicted.

Sheriff

 

According to The Hill, Gianforte’s campaign offered a slightly different version of Jacob’s story which suggests the Guardian reporter encroached on “a separate interview in a private office” and “aggressively shoved a recorder in Greg’s face.”

After asking Jacobs to lower the recorder, Jacobs declined. Greg then attempted to grab the phone that was pushed in his face. Jacobs grabbed Greg’s wrist and spun away from Greg, pushing them both to the ground.

 

It’s unfortunate that this aggressive behavior from a liberal journalist created this scene at our campaign volunteer BBQ.

That said, eyewitness accounts from local Fox News reporters who were on the scene for their scheduled interview seem to debunk Gianforte’s rendition of the altercation.

“Gianforte grabbed Jacobs by the neck with both hands and slammed him into the ground behind him,” said Fox reporter Alicia Acuna.

 

Acura and others “watched in disbelief as Gianforte then began punching the man, as he moved on top the reporter and began yelling something to the effect of ‘I’m sick and tired of this!'” she said.

Meanwhile, Democrats are already demanding that Gianforte withdraw from the race in which voting has already begun.

“Greg Gianforte must immediately withdraw his candidacy after his alleged violent assault of an innocent journalist,” said Tyler Law, spokesman for the Democratic Congressional Campaign Committee (DCCC). The group also launched an 11th-hour Facebook ad campaign highlighting the episode in hopes of swaying voters heading to the polls Thursday.

For those who missed it, here is audio of the altercation released by Jacobs last night:

 

Of course, Gianforte was originally expected to win Montana’s only house seat by wide margin…we’ll know in about 12 hours whether the Jacob’s incident will change that outcome. 

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Libya Insists On Keeping Oil Output Cut Exemption

Libya has insisted that it remains exempt from the oil output reduction deal that OPEC today decided to extend by another nine months, to March 2018. According to Libya’s ambassador to Austria, who represented the country at the cartel’s meeting, it is still producing less than half of its “original production quota.” Libya, along with Nigeria and Iran, was exempted from the original agreement, struck in November 2016, as its oil production was affected by factors other than the global glut that sank prices in 2014.…

Libya Insists On Keeping Oil Output Cut Exemption

Libya has insisted that it remains exempt from the oil output reduction deal that OPEC today decided to extend by another nine months, to March 2018. According to Libya’s ambassador to Austria, who represented the country at the cartel’s meeting, it is still producing less than half of its “original production quota.” Libya, along with Nigeria and Iran, was exempted from the original agreement, struck in November 2016, as its oil production was affected by factors other than the global glut that sank prices in 2014.…

Uneven Inflation: The Protected Are Fine, The Unprotected Are Impoverished Debt-Serfs

Authored by Charles Hugh Smith via OfTwoMinds blog,

Welcome to debt-serfdom, the only possible output of the soaring cost of living for the unprotected many who are ruled by a hubris-soaked, subsidized Protected Elite.

The Consumer Price Index (CPI) measure of inflation is bogus on a number of fronts, a reality I’ve covered a number of times: though the heavily gamed official CPI is under 2% for the past four years, the real rate is 7% to 12%, depending on whether you happen to live in locales with soaring rents/housing and healthcare costs.

The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016)

Revealing the Real Rate of Inflation Would Crash the System (August 3, 2016)

The Disaster of Inflation–For the Bottom 95% (October 28, 2016)

But the other reality is that inflation is not evenly distributed throughout the economy or populace: many people have little exposure to the crushing inflation of healthcare and higher education. For these people, inflation is a non-issue or a minor impact on their wealth, income and lifestyle.

Those fully exposed to the skyrocketing costs of healthcare insurance and higher education are being reduced to impoverished debt-serfs.

The key factor here that is missed in the official CPI is the relative size and impact of each cost input. Televisions, for example, have plummeted in price as LCD screens have become commoditized.

But how often does a household buy a new TV? Every four years? Every five years? And how big a difference does a $50 or $100 drop in the cost of a new TV make in their lifestyle?

Items that decline in price are modest slices of household budgets, while items that are soaring higher every year are big-ticket expenses that dominate household budgets. So a new TV drops in price by $100. If you buy a new TV every four years, that’s $25 savings per year. Big Freakin’ Deal: that deflationary price “bonus” means you can buy one extra pizza.

Meanwhile, households exposed to the actual cost of healthcare insurance are absorbing increases of $5,000 or more annually. $5,000 increases every year add up: $5,000 + $10,000 + $15,000 + $20,000 = $50,000 was extracted from the household budget over the four-year period.

The household paying the unsubsidized cost of higher education is paying tens of thousands of dollars more for the same marginal-value education. Where a four-year college degree once cost the equivalent of a new car (i.e. $30,000), now it costs the equivalent of a house in many parts of the U.S. ($120,000 and up).

So a retiree with a small fixed-rate mortgage in a state with Prop 13 limits on property tax increases who qualifies for Medicare may complain about modest increases in co-pays for office visits and medications totaling a few hundred dollars annually, a young self-employed couple might be facing thousands of dollars in rent increaess, healthcare insurance costs, childcare expenses and so on–each a big-ticket item with a crushing impact on household spending and debt.

Households protected from actual big-ticket inflation by subsidies or luck (i.e. buying a house 30 years ago when prices were a fraction of today’s prices) have no experience of real inflation. Only the unprotected, unsubsidized households struggling to pay rising rents, soaring college tuition and fees and skyrocketing healthcare insurance premiums have an unmediated experience of the real inflation ravaging the the U.S. economy.

If you’re on Medicaid, Medicare or your premiums are mostly paid by your employer, you have no idea of the system’s actual costs. The self-employed aren’t subsidized, so we are exposed to the full inflation rate of healthcare, in which the costs of medications are jacked up by 4,000% because, well, Big Pharma has a free hand, thanks to our pay-to-play “democracy”.

Getting that often-worthless diploma now requires debt-serfdom, enforced by your private-profit-are-guaranteed, losses-are-dumped-on-the-taxpayers federal government. Needless to say, the government is hear to help you–help you become a debt-serf whose serfdom enriches state-cartel cronies.

We’re supposed to accept that because TVs are cheaper,the rate of inflation is near-zero. Meanwhile the unsubsidized costs of big-ticket items are rising by thousands of dollars annually.

My insightful colleague Lance Roberts prepared this devastating chart that shows how debt-serfs deal with soaring prices–they borrow more to fill the widening gap between what they earn (stagnating) amd the cost of living (skyrocketing).

The inside-the-Beltway crowd that dominates Washington and the overpaid technocrats that dominate our financial skimming machine are both protected from the true ravages of inflation, so our corporate media never mentions the impact on the unprotected. Our job is to shoulder the higher prices by taking on more debt.

Welcome to debt-serfdom, the only possible output of the soaring cost of living for the unprotected many who are ruled by a hubris-soaked, subsidized Protected Elite.

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RBC Explains What The Hell Is Going On: “Prudent” Fed & Chinese Intervention

A “prudent” Fed (and China’s “National Team”) have spurred a risk-on rally, as RBC’s head of cross-asset strategy Charlie McElligott notes the market’s ‘Pavolovian’ response to Fed’s ‘dovish hints’ contained within the Minutes – despite simultaneously staying ‘on message’ with hiking / tapering commentary – prompts a “QE of old” response: stocks and Treasuries bid, while the USD faded.

China further perpetuates the ‘risk rally’ via apparent market interventions:

1.       Intervention in FX markets to strengthen the Yuan overnight, with speculation of a number of Chinese banks selling Dollars in the onshore market overnight which drove the Yuan higher.

 

2.       Chinese “National Team” stock market inventions as well, with sharp-turns higher off of an initially weaker equities opening and again-weaker industrial metals.   Major reversals off lows saw nearly all domestic markets close at highs (Shanghai Prop +2.8%), while Hong Kong’s Hang Seng closed at highs since July 2015, with Chinese real estate developers leading.

Initial (and expected) ‘sell the news’ on the snoozer OPEC outcome, as they extend the output cut 9 months per expectations—which disappointed the ‘bullish surprise’ camp which anticipated more OPEC-‘gaming’ of the market, thinking it was possible for a deeper-cut in conjunction with the consensus extension.

This move lower in crude is notable if it were to escalate the current rollover in ‘inflation expectations’ (10Y BE’s below 200dma) which continue to show as the largest price drivers of risk-assets and major rates markets currently per the QI factor PCA model—although should be noted that both SPX and HYG (US HY proxy) are both deeply OUT OF REGIME with low r-squareds / low explanatory power.

Due to my much-discussed “Chinese deleveraging / Fed tightening / ECB pivoting ‘less dovish’” trifecta, we are seeing good buying in cash USTs and receiving in swaps (strong 5Y auction as well) keeping rates pinned despite the ongoing risk-asset rally.

Rates in-turn continue to dictate factor-behavior in equities -> inability for yields to move higher means ‘growth’ and ‘anti-beta’ continue to drive leadership, while ‘value’ is dead as a doornail until rates can move higher again.

Credit and multi-asset fund feedback: sitting with very high cash / look-alikes as they feel they aren’t being compensated to take on significant additional risk at such brutally-tight spreads here.  Positive spin is that they are constructive but wanting a selloff to deploy this cash, meaning there is still ammo for a ‘buyers are higher / tighter’ chase.  Note: IG desk seeing net client SELLING in secondary this week (big notional) to fund the calendar as issuance train ‘rolls on.’

COMMENTARY:

FED DOVISH-HAWKISHNESS: The Fed has once again managed to ‘thread the needle’ as it pertains to the market perception of the minutes release yesterday.  Despite maintaining messaging showing that the June meeting is ‘on track’ for the next hike, in conjunction with voicing confidence on back-half balance-sheet tapering–both in line with consensus—the FOMC too was able to communicate a ‘still cautious’ bias simultaneously, regarding the obvious flattening trajectory of the recent growth story.  Essentially, the minutes read to many as if there was actually HEIGHTENED DEBATE surrounding rate increases.

“Members generally judged that it would be prudent to await additional evidence indicating that the recent slowing in the pace of economic activity had been transitory before taking another step in removing accommodation.”

Similarly, there was debate on still-soft PCE price inflation forcing a “gradual approach to tightening,” as some recent communications could be viewed as too hawkish, which in turn was contributing to softer long-term inflation expectations per business surveys (TALK ABOUT ‘REFLEXIVITY’…geeeeeez guys):

“Some participants noted that core PCE price inflation had been running below the Committee’s objective for overall inflation for the past eight years and that it was important to return inflation to 2 percent, or that the public’s longer-term inflation expectations may have fallen somewhat, and that a gradual approach to tightening could help return expectations and inflation to 2 percent. One participant cited results of a District survey of businesses indicating that more than one-third of respondents saw the Federal Reserve as more likely to accept inflation below its 2 percent objective than above; that participant interpreted the survey results as suggesting that the Committee’s communications about the symmetry of its inflation objective had not completely taken hold, a concern also mentioned by a couple of other participants….”

Specifically, the Fed eased concerns surrounding the ‘one-two’ punch of hiking in conjunction with balance-sheet tapering efforts via implementation of a ‘cap’ that would be lifted every three months upon commencement of said BS run-off.

So once again, the Fed’s HAWKISH actions (‘on message’ with June hike and taper commencement for Fall / Q4) perversely created a DOVISH market response, with ‘real rates’ (5Y TIPS yields as proxy) actually EASING almost 6bps from prior the meetings release to overnight lows.

As such, we saw a “QE of old” market-reaction: stocks AND USTs higher against lower USD.  #havecake #eatittoo

CHINESE INTERVENTIONS: Fast forward then to the Asian session, where the Yuan surged the most in four months as Chinese banks were speculated in the onshore market selling Dollars.  Shortly thereafter domestic equities markets experienced massive reversals higher as well—most notably in financials, where state-backed funds have previously been mandated with buying shares to support the market.

What followed: The CSI 300 ‘financials’ sub-index turning from -30bps on the open to closing +3.8%; the ChiNext (smallcap) index erased a decline of -1.8% to finish ‘up’ on the day; and the benchmark Shanghai Comp is now +3.0% off the Wednesday ‘post Moody’s downgrade’ lows.  Solid effort, folks.

CSI 300 FINANCIALS SEE A 5.6SD MOVE OVERNIGHT (RELATIVE TO YTD RETURNS):

TREASURIES ‘STRONG LIKE BULL’: Rates are again unable to move higher, with longs building in cash/ futs and receiving in swaps.  The larger theme has been the “Chinese deleveraging / Fed tightening / ECB pivoting ‘less dovish’” story, with the contribution of course from the much-discussed softer US data and now, a ‘less hawkish’ interpretation of yesterday’s Fed minutes—especially as it relates to the ‘pace’ of tapering.

Add in the US consumer ‘papercuts’ mounting (AZO, AAP, LOW and TIF earnings or soft comps all notable in recent days) and there ya go. 

EQUITIES FACTOR PERFORMANCE CONTINUES TO BE ENTIRELY-BASED AROUND INABILITY OF RATES TO MOVE HIGHER: Repeat after me—barbell of long ‘growth’ / long ‘anti-beta’ continues to drive leadership, while ‘value’ remain almost completely at the mercy of rates, with ‘cyclicals’ (Energy, Financials, Industrials, Materials) currently stuck as four of the six worst S&P sectors quarter- and year-to-date.

GROWTH’ AND ‘ANTI-BETA’ LEADING AGAIN YESTERDAY AGAINST LAGGING ‘VALUE’ IS REPRESENTATIVE OF THE YTD THEME—BECAUSE RATES ARE STUCK LOWER DUE TO FADING ECONOMIC EXPECTATIONS: Growth, quality, anti-beta / low volatility / defensives lead against value, small caps and cyclicals lagging.

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Sean Hannity Takes “Abrupt Vacation” Amid Advertiser Boycott

Is Fox News about to lose its last remaining “old school” anchor holdout? 

According to Philly.com, Hannity is taking “a couple days off amid a growing advertiser boycott” over Hannity’s pursuit of the Seth Rich story – an parallel to Bill O’Reilly’s final days – and so far, seven advertisers are said to have pulled out of Hannity’s show. 

Cars.com was the first advertiser to announce it was pulling ads, telling Buzzfeed News on Wednesday afternoon that “we’ve been watching closely and have recently made the decision to pull our advertising from Hannity.” It was followed by exercise bike company Peloton (which just closed a $325M Series E round financing), Leesa Sleep; mattress retailer Casper, insurance company USAA; home security equipment maker Ring and Crowne Plaza Hotels, all of which announced they would be redirecting their ad buys from Hannity’s shows.

Meanwhile, the Five host Kimberly Guilfoyle, who has confirmed speaking to the White House about potentially replacing press secretary Sean Spicer, will be filling in on Hannity on Thursday and Friday.

Kimberly Guilfoyle

Preempting speculation about a possible permanent departure, Hannity announced on Twitter the vacation was his annual Memorial Day getaway, and said “Uh oh My ANNUAL Memorial Day long weekend starts NOW. Destroy Trump/Conservative media breathless coverage starts! Did Hannity do last show?”

Uh oh My ANNUAL Memorial Day long weekend starts NOW. Destroy Trump/Conservative media breathless coverage starts! Did Hannity do last show?

— Sean Hannity (@seanhannity) May 25, 2017

According to Philly.com, it is unclear if Hannity will still host his syndicated radio show on Thursday and Friday, which airs at 6 p.m. in Philadelphia on 1210 WPHT.

In any case, as noted above, so far the timeline of events surrounding Hannity is strikingly similar to how events unfolded for former Fox News host Bill O’Reilly, who following a New York Times report that revealed O’Reilly paid five former Fox News personalities $13 million to settle claims of sexual and verbal harassment, took an abrupt vacation amid a growing exodus of advertisers from his show. Despite assurances from the network that the vacation was pre planed, Fox News fired O’Reilly eight days later.

In interviews with Philly.com, Fox News contributor Julie Roginsky slammed the network, calling it “really egregious” to allow Hannity, Gingrich and others to discuss the death of Seth Rich.  “We know the facts. Wikileaks was in collaboration with the Russians,” Roginsky said.“How do we know this? Because the entire intelligence community said that the Russians were the ones who hacked into these emails. This is not in dispute.”

Well, actualy it is because 5 months later the so called entire intelligence community hasn’t presented one schred of evidence yet as Ron Paul has repeatedly, patiently, and lofically pointed out.

What is not in dispute, however, is that if Hannity were to also leave Fox – the last of the original anchor line-up that boosted Fox News to the top of the ratings charts – the Nielsen chart of Rupert Murdoch’s organization, already in tailspin, will move from the upper left to the bottom right, to quote Gartman, as traditional viewers continue to bail for alternative outlets.

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Stocks Are Now At #2, Next Up #3 (the Big Breakdown?)

As we expected, the market is now turning in a big way.

When markets peak and begin to break down, they never simply collapse. Instead they first break through support and then stage a bounce. The reason for this is due to investor psychology: the bulls don’t initially throw in the towel, but instead “buy the dip.”

It is when the bounce fails to break to new highs that you have confirmation that the top is in.

So the pattern is:

1)   A breakdown below support

2)   A bounce back to retest former support

3)   The REAL collapse.

The markets are now on stage #2. And #3 is just around the corner.

We expect stocks to fall HARD within the next week or so. This bounce will be the final gasp to maintain the rally. The next downside target is 2,300 at the red circle.

And if things really getting messy we could go to 2,125 relatively quickly.

We offer a FREE investment report outlining when the bubble will burst as well as what investments will pay out massive returns to investors when this happens. It’s called The Biggest Bubble of All Time (and three investment strategies to profit from it).

We made 1,000 copies to the general public.

As I write this we are down to the last THREE.

To pick up your FREE copy…

CLICK HERE!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

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Catalonia Threatens Spain With “Financial Bloodbath”

Authored by Don Quijones via WolfStreet.com, 

Catalonia’s independence would set off Spain’s debt time-bomb.

On Monday El Pais published leaked excerpts from what it claims to be the Catalonian regional government’s road map to independence. The secret document includes a plan for the region to unilaterally break away from Spain should its citizens be prevented from holding a referendum on independence in the fall.

It provoked a fierce backlash from Madrid. “This proposal is an unacceptable attempt to blackmail the state,” Spain’s Prime Minister Mariano Rajoy said in a hastily convened press conference. Spain’s defense minister María Dolores de Cospedal likened the plot to a coup d’état. In the meantime, Madrid continues to refuse to even entertain the idea of allowing a referendum on Catalan independence, despite the fact that in just about every survey of the last few years 80% of Catalans, including many unionists, have requested one.

It would mean the loss of 25-30% of Spain’s gross domestic product (GDP), says Spain’s Minister of the Economy, Luis de Guindos. And that’s something the government “will never let happen.”

But Catalonia knows it has a card up its sleeves: its tick-tocking debt bomb. Catalonia can no longer issue its own debt and depends on the central government’s national liquidity fund (FLA, for its Spanish acronym) for about 60% of its funds. As ratings agency Fitch warned in April last year when it sent Catalonian debt even deeper into junk territory, the region has grave liquidity problems that will require “proactive management” and “close collaboration with the central state ” — something that’s clearly not on the cards any time soon.

At the same time, Spain’s public debt continues to grow, recently bursting through 100% of GDP. Even with historically low interest rates (gracie, Signor Draghi), the price of servicing government debt can spiral out of control. Between 2011 and 2015 Spain’s central government spent €121 billion – the equivalent of 12% of annual GDP – on interest payments.

As Catalonia’s finance minister, Oriol Junqueras, recently noted, Rajoy’s government has already burnt through the €65 billion social security fund surplus it inherited in 2011 and is now using a toxic blend of tax funds and public debt to finance the country’s widening pension deficit, which is forecast to reach between €10 billion and €15 billion a year.

In other words, Spain’s deficit, already one of the largest in Europe, is going to remain high for the foreseeable future, despite all the threats of multi billion-euro fines emanating from Brussels. As the widely renowned Columbia University Professor of Economics (and fervent Catalan separatist) Xavier Sala i Marti recently pointed in an interview on Catalan television, all of the debt, including the debt owed by the Catalan regional government, is in the name of the King of Spain:

It’s (Spain’s) debt. They already have a debt load of 100% of GDP. If Catalonia declared independence tomorrow, and Spain were to say “you’re going to be kicked out of the EU for three generations” and everything else they threaten us with, we’d just say to them, “well, these little papers of debt (bonds), you can have them for the next three generations.” All of a sudden, they’d have a much smaller GDP and a much larger debt overhang (around 125%)… A debt-to-GDP ratio of 125% would not be feasible. Spain would not be able to pay the debt they owe the Spanish banks, the biggest holders of Spanish bonds. And that would ruin them, triggering a financial bloodbath.

Such an outcome has also been postulated by the U.S. rating agency Moody’s: in effect, any default on Catalonia’s debt would be interpreted by the markets as a Spanish default. In other words, whence goeth Catalonia, goeth Spain.

And right now, Catalonia’s government seems determined to stage the mother of all showdowns with the central government in Madrid: a financial fiasco for both sides. Catalans are a notoriously prudent, cautious people. As such, it’s fair to assume that at least some of what lies behind the regional government’s recent escalation of tensions with Madrid is bluff and bluster.

But a big bluff can sometime set one down a very dangerous path from which it can be difficult to extricate oneself. The Catalan government may be hoping that threatening to declare independence unilaterally, or even following through on the threats, will finally push the Spanish government into having to compromise. But it’s a massive gamble.

In some parts of Catalonia, including Barcelona (from where I’m writing this article), public support for independence appears to be on the wain. But for many nationalists in the Catalan government, turning back with so little of substance to show pro-independence voters after promising them so much may not be an option.

As for Rajoy’s government, its staunch defense of the country’s territorial unity is a vital vote winner for its core supporters. And right now, with new corruption scandals engulfing senior members of Rajoy’s People’s Party breaking every week or two, these are votes it can ill afford to lose, especially with new snap general elections growing increasingly likely.

In other words, the prospects of a win-win solution being found in the coming months are by now slim. The chances of a lose-lose outcome are growing by the day. Does this mean that Spain, the Eurozone’s fourth largest economy, is on the verge of breaking up? Probably not. But to prevent that from happening, Madrid may end up having to take drastic (and deeply symbolic) actions, including invoking article 155 of the constitution, which will effectively put an end to all forms of Catalan self governance. And that could merely serve to strengthen the resolve of Catalan separatists while further polarizing divisions within Spain’s richest region. By Don Quijones.

When locals can’t afford to live there anymore, they get restless. Read…  The Backlash to Spain’s New Property Boom Has Begun

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