Hedgeye’s Keith McCullough explains something about the jobs report that’s important, will Trump follow through on prescription drug prices, Pacific Legal Foundation takes on first amendment rights at the polls, Rep. Thomas Massie sounds the alarm on gun control, Sen. Rand Paul introduces Audit the Fed, incredible speech by Virginia House Del. Nicholas Freitas on guns, interview of revered investment visionary Kiril Sokoloff, and Twitter gets grilled by Sen. Ted Cruz about Project Veritas undercover investigation.

Hedgeye: Keith McCullough: You Need to Know This Ahead of the Jobs Report

“Wage growth is the latest of late-cycle indicators.” Hedgeye CEO Keith McCullough explains in the video clip above from The Macro Show. Simply put, if you’re looking for signs that the end is near(er), keep an eye out for any uptick in wages.

Hedgeye: Will Trump Really Take On Big Pharma?

After President Trump beat the drum on reducing prescription drug prices during this year’s State of the Union address, some were skeptical about how serious the administration would be on fulfilling that promise.

Well, that initiative became a little “more real” after the president followed up on a prior promise and spooked global markets with a proposed 25% import tariff on foreign steel imports and 10% tariffs on aluminum.

Hedgeye Health Policy sector head Emily Evans explains that if Trump actually follows through on his prescription drugs idea, it would have drastic effects on the entire pharmaceutical industry.

“We took a good look at some of the policies coming out of the White House that suggest the Republican dominance of the government in Washington is not going to amount to a free pass
for the pharmaceutical industry after all,” Evans says in the video above.

Pacific Legal Foundation – Defending Liberty and Justice for All

I’m always entertained by “conservatives”. They loudly proclaim that they love the Constitution, America, Freedom, and want less government. Ask them if they’ve ever heard of the Pacific Legal Foundation…. Blank Stare. The statists use the courts all the time to restrict your freedoms, maybe, just maybe, you ought to support the one organization on the right that does more for Freedom and smaller government than any politician in WADC.

Great promotional video.

Pacific Legal Foundation: The Fight for the 1st Amendment is Never Over – Minnesota Voters Alliance v. Mansky

Thomas Massie warning on gun control

I posted this on it’s own post the other day, but worth a view if you missed it.

Hey, Congressman Graves, this is how you stand up for Liberty and use social media appropriately.

Sen. Rand Paul Discusses Audit The Fed – March 6, 2018

The Fed and monetary policy is THE MOST important topic we should be discussing.

2018 03 02 Delegate Nick Freitas Speech on Floor of House of Delegates

If you haven’t seen this yet, you should. It’s amazing.

Kiril Sokoloff’s Big Picture | Founder and Chairman of 13D Global Strategy & Research on Real Vision

This is an incredible interview. While a lot of this is about investing, there are some real nuggets in it about life and other stuff. Sokoloff has been deaf since he was a teenager.

Revered investment visionary Kiril Sokoloff, founder of 13D Global Strategy & Research, encapsulates the big picture trends better than anyone and Raoul Pal gets the chance to sit down with the legendary thinker to peer into the future of technology, including China’s quantum computer advantage, which has the potential to be the ultimate disruption, with an unhackable new form of internet, as well as long-term challenges facing the US like health and demographics.

Ted Cruz Grills Twitter Policy Director Over Project Veritas Videos in Senate Hearing

In a January 17th, 2018 Senate Committee hearing, Texas Senator Ted Cruz questions Twitter’s Public Policy Director Carlos Monje regarding Project Veritas’ undercover video investigation that exposed Twitter’s “shadow banning” of accounts on ideological grounds.

 

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What is this? Scroll down to the bottom to read why I started doing this.

Most Important Articles of the Week:

The tyranny of algorithms is part of our lives: soon they could rate everything we do by John Harris

The choices we make over the next 5-10 years about data privacy and algorithms is going to large implications for Liberty. I’m beginning to be concerned that we are not going to make the correct choices.

Alarming Advances Made In Digital Media Manipulation from CBS New York

“It’s very concerning because as people get better with this software we’re able to not just use celebrities, they’re able to use a neighbor in a video and compromise that person,” FITECH Senior Vice President Duarte Pereira said.

The Death of Civility in the Digital Age by Mark Oppenheimer

But then, as I walked my actual dog in the chilly after-midnight air, having my nightly chat with myself, my initial cheeriness wore off, replaced by a sense of puzzlement, then sadness. What kind of world was this? Here was an educated fellow; he held a responsible job, and in my field no less; he had edited works by friends of mine and done a good job; he spoke respectfully enough on TV, where he appeared regularly as a political commentator; he was a husband, a father, presumably a law-abiding citizen. I have one good friend who regularly encounters this editor at their house of worship and says that he is amiable and courteous. I wouldn’t be surprised if in real life he’s a true mensch, who brings chicken soup to the sick neighbor upstairs in 7Q. And yet, as I knew now, he said things like “Go fuck yourself” to strangers on Twitter.

The Great Jobs Collision by John Mauldin of Mauldin Economics

You will not recognize the world in 15 years.

Last month Karen’s group issued a magnum opus report called “Labor 2030: The Collision of Demographics, Automation and Inequality.” I’ve written on all three of those subjects, but Karen teases out the connections among them in ways I’ve not seen elsewhere.

First, the bad news: Bain thinks automation will eliminate up to 25% of US jobs by 2030, with the lower-wage tiers getting hit the hardest and soonest. That will be devastating, and it’s not that far away. Remember 2006? Right now, you are halfway between then and 2030. Time flies, and this time it won’t be fun. Interestingly, though, Bain predicts that the manpower needed to build out the technology that will ultimately eliminate all those jobs will be enough to keep us all working until 2030. The Bain team is a tad more optimistic than I am. But they have their reasons.

Environment

The Ninth Circuit Just Allowed Children To Sue Trump Over Global Warming by Michael Bastasch

Stories like this make me feel so hopeless. The judiciary continues its movement to become the most powerful branch of our government. Tragically, the left has figured this out all too well.

Economics/Finance

The Strategic Investment Conference Live Blog

One of my favorite sources of investment and market analysis is Mauldin Economics. Mauldin has an impressive investment conference every year called the Strategic Investment Conference. I’m not quite wealthy enough to justify a ticket and the trip, so I get stuck with the Live Blog every year. It’s more than worth the price of entry.

Why American Workers Aren’t Getting A Raise: An Economic Detective Story by Jonathan Tepper

Interesting look at wages. Lots of statistical evidence that supports the narrative that wealthy CEOs are getting quite richer than the average worker. He hangs his hat a little too much on unions as a solution. I’m not a fan of them, but this definitely challenged my thinking a little.

Goldman Interviews Paul Tudor Jones, Gets Retelling Of The Battle Of The Little Bighorn from The Heisenberg Report

Great interview of billionaire investor Paul Tudor Jones about the Fed and what’s on the horizon for the markets.

“Let me describe to you where I think Jerome Powell is right now as he takes the reins at the Fed. I would

liken Powell to General George Custer before the Battle of the Little Bighorn, looking down at an array of menacing warriors. On the left side of the battlefield are the Stocks—the S&P 500s, the Russells, and the NASDAQs—which have grown, relative to the economy, to their largest point not just in US history, but in world history. They have generally been held at bay and well-behaved, but they are just spoiling to show their true color: two-way volatility. They gave you a taste of that in early February. Look to the middle and there waits the army of Corporate Credit, which is also larger than ever relative to the economy, as ultra-low rates have encouraged it to gain in size, stature, and strength. This army is a little more docile right now, but we know its history, and it can be deadly when stressed. And then on the right are the Foreign Currency Fighters, along with the Crypto Tribe, an alternative store of value that only exists because of the games central banks are playing; the opportunity cost of Crypto is so low, why not own some? The Foreign Currency Fighters have strengthened by 10% over the past year. Compounding the problem, they have a powerful, ascending leader, the renminbi, to challenge the US dollar’s hegemony as the reserve currency. All of these forces have been drawn to the battlefield because of our policy experiment with sustained negative real rates. So Powell looks behind him to retreat. But standing there is none other than Inflation Nation, led by the fiercest warmongers of them all: the Commodities. He might take comfort that he is not alone on the battlefield. But then he looks over at the Washington, DC, fiscal battalion and realizes they are drunk on 5% deficit beer. That’s what Powell is facing, whether he recognizes it or not. And how he navigates this is going to be fascinating to watch.”

I especially liked this comment. I’m a saver, I’m so sick of being punished by low rates. It’s absolute bullshit. People need to be taught a lesson for their irresponsible spending. Real economic growth comes from SAVING not spending:

Today, we need a Fed chair who is proactive, not reactive. Policy-wise, that means moving as quickly as possible to raise rates and restore appropriate risk premia so as to promote the long-term, efficient allocation of capital. While this will hurt a bit in the short run, it is better than the intergenerational theft that is being perpetrated now with the combination of low rates and high deficits.

EIA’s Shocking U.S. Oil Production Predictions by Robert Rapier

Overall interesting, but I couldn’t get over this:

It’s not just crude oil pipelines that are an issue. Along with oil comes associated natural gas. In some cases, producers have no outlet for this gas, so they flare it. But there are various legal limits to flaring. This week, I heard about a producer who is having to reduce production because they are bumping up against their permitted limits for flaring.

We desperately need more automobile manufacturers to push LNG automobiles and an infrastructure to support it. We literally are just burning the stuff off because there’s too much of it. That’s nuts.

What is it, really? by Rusty Guinn

Psychology and philosophy are critical tools for the investor. But in addition to being particularly ripe fields for bullshit, they also suffer from one of the same tendencies that plagues investors: people get so hung up on terminology and conventions that they start saying and doing dumb things. As always, the shrewd investor avoids that behavior himself and for his clients and capitalizes on it in others.

The Full Employment Mirage by Patrick Watson

Judging by the official 4.1% unemployment rate, US workers appear to be doing pretty well. Unlike a few years ago, almost everyone who wants a job has one. That’s an improvement.

Having “a job” isn’t the same as having a good job, of course, one that pays enough to cover your needs and lets you feel worthy and productive. Those are more elusive, although the situation is far better than it was during the recession.

But these conclusions come from data that looks at averages, and few people are average.

I thought about this because recently I’ve been helping John Mauldin write about the problems with economic data. That low unemployment rate is a key reason the Federal Reserve plans to hike interest rates three times this year (some people even think it will be four times).

That could be a serious mistake because millions of people aren’t as secure and stable as the unemployment rate implies.

The Fed should know this… because the Fed itself says so.

Housing Liquidity Crisis Coming: Debt Deflation Follows by Mike Mish Shedlock

A liquidity crisis in housing is on the way. Non-banks are at the center of the storm.

Angry Analytics by Jared Dillian of Mauldin Economics

Interesting contrarian take on interest rates. The argument makes sense. Rates can’t rise too much because it’ll put too much pressure on the budget.

The $233 Trillion Dollar Dark Cloud Of Global Debt by Alex Deluce of The Gold Telegraph

Mind-boggling amount of debt. Can someone please explain to me who in the hell is going to repay it?

The Next Enron? The End of Cheap Debt by Daniel Lacalle

Debt is one of two things, consumption denied or consumption brought forward. All debt is not bad as long as the consumption it is moving can be productively discharged.

Subsidies always encourage debt, and the green energy space will soon find out just how painful that is when interest rates rise and consumption was brought forward in an unproductive way.

The past eight years of massive liquidity and low rates have not helped deleverage, and many companies have used this period to increase imbalances and create complex debt structures. In fact:

  • Corporate net debt to EBITDA levels is at record highs. About 20% of US corporates face default if rates rise, according to the IMF.
  • The number of zombie companies has risen above pre-crisis levels according to the Bank of International Settlements (BIS).

This is particularly evident in the renewable sector where, even in the years of high liquidity and low rates, bankruptcies soared.

Health/Science

No-frills micro hospitals with as few as 8 rooms emerge as a new way to cut health-care costs by Berkeley Lovelace, Jr.

I saw one of these over in Kansas recently, just thought it was interesting. Smart idea.

The Foreign-Policy Implications of Aging by Patrick Cox

Extending healthspans would solve the financial problems posed by demographic aging all over the world, and that will reduce domestic instability everywhere. When that will actually happen is another question, though. At this point, it’s impossible to predict with any accuracy.

Hidden inside biotech laboratories, breakthroughs are happening right now that could allow it to happen very soon. My concern is that political forces, including international conflict, will interfere with the deployment of these revolutionary biotechnologies—but that’s not a prediction.

Scientists Are Getting Closer to a Pill That Can Mimic The Effects of Exercise by Marlen Cimons of The Washington Post

Interesting…

Media

TheBlaze announces new editorial policy regarding mass murders 

More news companies need to do this.

TheBlaze policy on mass murder coverage.

1. We will always refer to the killer as just that.  Killer, murderer or mass murderer.  Never ‘Shooter.’   Millions of Americans are shooters but few are killers. We will also not refer to these events as ‘mass shootings’ but rather mass murders or mass killings.  This applies to acts of terror.   They are not to be called suicide bombers but rather suicide killers or the like. We will not reveal the killer’s name or otherwise add to their fame.

2. We will NEVER publish a murderer’s propaganda or manifesto.  If it is vital to the story, we will provide a summary that indicates “according to social media postings, the killer seems to have been motivated by a belief in X,” but we will not reprint their own words or include their videos. This also applies to terrorism.  We must as a society understand how we can avoid the next killer or terrorist, but we never want to give the killer the platform, justification, attention or fame, he or she was seeking.

3. We will always hide, blur or obscure the faces of the killers with exception of “AT LARGE” killers or suspects.  We will do everything in our power, to remove much of the motivation of infamy.

Politics

Sessions greenlights police to seize cash, property from people suspected of crimes but not charged by Sari Horwitz

I can’t stand Jeff Sessions. Asset forfeiture is rife with abuse.

Social Media Freeway by Ben Garrison

The war against the free speech of the right will end badly for silicon valley.

How “Offended, Emotionally Shaken” Lawmakers Responded To This Viral Gun Speech By Nick Freitas by Daisy Luther

You may not have ever heard of Nick Freitas before, but I have a feeling we’ll all be hearing a lot about him soon. At first glance, this may seem very political, very Republican vs. Democrat.

But it’s not. It’s about logic versus emotion.

It’s about an eloquent defense of the Second Amendment and the reason that the gun control debate is stalled. And the response to this speech underlined everything that was said.

It’s about people who got so upset about historical [sp] facts that they had to leave the room instead of engaging in a discussion.

Democrats Release Tax Hike Plan by Ryan Ellis

I’m insanely frustrated with the Republicans, I’m sick of the irresponsible spending. So, of course, the Democrats solution is more spending and higher taxes.

Stupid.

Trump administration studying policy on death penalty for drug dealers by Teri Webster

And more stupid ideas from the Trump administration…

Geopolitics/Foreign Policy

‘Descent Into Hell’: China Warns of Potential War With US Over Taiwan by James Holbrooks

There’s no confusing this message. Beijing is saying that a military dustup between Taiwan and mainland China has the potential, by law, of drawing in the United States. The aforementioned “descent into hell” is quite literally a reference to war.

Lindsey Graham: Fighting A War With North Korea Would Be “Worth It” by “Tyler Durden”

Another one I can’t stand.

In any war in North Korea, Graham should be immediately drafted, put on the front lines, and given a broken gun.

US Meddling in Foreign Elections: A CIA Tradition Since 1948 by Wayne Madsen

The histrionics of much of the left and establishment right about Russia is a little comical in the context of the behavior of America for the last 70 years.

Do I want Russia meddling in an American election?

No.

Do I want America meddling in foreign elections?

No.

See, that’s called intellectual consistency.

Susan Rice gave ‘stand down’ orders to intel officers working on counterattack to Russian meddling by Chris Enloe of TheBlaze.com

Despite it being the midst of the 2016 presidential election, Susan Rice, national security adviser to former President Barack Obama, ordered national security officials to “stand down” when they were planning a counterstrike to Russian meddling in the election.

The revelation was made public this week in the upcoming book “Russian Roulette: The Inside Story of Putin’s War on America and the Election of Donald Trump” by reporters Michael Isikoff and David Corn.

LOL… So, we’re supposed to be furious and outraged at Russia and Trump, and the people in power who could’ve stopped the meddling or done something about it stood by and did nothing. I’m sure that wasn’t politically motivated at all.

Social Media

Facebook Sees 24% Drop In Average Time Spent On Site by “Tyler Durden”

Good.

Society/Culture

Millennials and the Scary Support of Socialism & Communism by Alex Deluce

Sigh…

According to the latest findings from the Victims of Communism Memorial Foundation, 50 percent of today’s American millennials view socialism or communism as the ideal political ideology. Half of them have found their heroes in dictators such as Joseph Stalin, Mao Zedong. Lenin, Che, and Kim Jong Un.

The country that grew into the wealthiest on earth through capitalism is showing alarming signs of turning away from its roots.

Much of this trend is due to historical illiteracy and a failure to teach an entire generation about the destruction that have been perpetrated by previous communist regimes. At the same time, they are uninformed about the failures and desperations experienced in current communist countries, such as Venezuela and Cuba. Today’s millennials are hard-pressed to even define socialism and communism. They feel at odds with capitalism and simply feel any alternative would be better, although many haven’t started working or become a part of the workforce thanks to the pro wall street policies practiced by the Federal Reserve.

Democrats howl after Florida Senate and House outlaw ‘free speech zones’ on college campuses by Dave Urbanski

Score one for free speech.

Oregon couple’s final days captured in intimate aid-in-dying video by Kaiser Health News

As shocking as this may be to some, I’m actually a supporter of legalizing doctor assisted suicide. It’s your life, you own it, not society.

This is an interesting discussion about the topic.

Technology

PALANTIR HAS SECRETLY BEEN USING NEW ORLEANS TO TEST ITS PREDICTIVE POLICING TECHNOLOGY by Garret Beard & Alex Castro

Someone has been watching too much Minority Report…

It’s not hard to believe that James Carville (yeah, that James Carville, the bald-headed guy that worked for the Clintons) was involved in bringing this to the people of New Orleans. Of course it was hid from the people for six years. Again, I repeat, what we do with data privacy is going to have big implications for Liberty. I’m all for making our country safer, but not at the expense of privacy.

What Am I Listening to on Audible (audio books)?

In Order to Live: A North Korean Girl’s Journey to Freedom by Yeonmi Park

Human rights activist Park, who fled North Korea with her mother in 2007 at age 13 and eventually made it to South Korea two years later after a harrowing ordeal, recognized that in order to be “completely free,” she had to confront the truth of her past. It is an ugly, shameful story of being sold with her mother into slave marriages by Chinese brokers, and although she at first tried to hide the painful details when blending into South Korean society, she realized how her survival story could inspire others. Moreover, her sister had also escaped earlier and had vanished into China for years, prompting the author to go public with her story in the hope of finding her sister.

I just finished…

A Man for All Markets: How I Beat the Dealer and the Market by Edward O. Thorp

The incredible true story of the card-counting mathematics professor who taught the world how to beat the dealer and, as the first of the great quantitative investors, ushered in a revolution on Wall Street.

Thoughts: There’s a lot to like about this book. I think it would have been better suited to have read it in paper. A lot of the investment stuff was a little more technical and I would have liked the ability to review it. From a story standpoint, Thorp’s experiences in Vegas are quite interesting. He’s an interesting guy who did some pretty incredible things with mathematics.

3/5 Stars

What is The Weekly Reads?

I read a ton throughout the week. It’s my personal belief that one of the biggest problems with America is we live in a time of information overload, but most people take little if any time to actually read the information that’s out there. Instead most people read headlines, might skim articles, and then fall back on what they think they know which really is little and is mostly emotionally driven.

Overload isn’t necessarily a bad thing if you know what you’re looking for. There’s so much great content out there, it’s literally the greatest time to be alive if you like to learn.

Anyway, I read so much I never have found a good way to share it, and I’m starting to get a little tired of social media. It’s really not a good way to disseminate information to others as it leads to echo chambers and promotes people not reading. Many would just rather argue about the headline. So, I thought using my blog would be a great way to catalogue my week of reading, offer others a chance to pick and choose some articles from here that might interest them, and filter out what I think is and isn’t important from what I’ve read.

How do I read so much?

I thought I might share what I think to be one of the greatest tools ever made. You hear lots of negatives about how smartphones have ruined mankind for eons, but any tool is only as good as the person using it.

The greatest app ever made in the history of all apps is called Pocket. You can check it out over at GetPocket.com.

Pocket is, as the name suggests, a place for you to pocket everything you come across online, then you can come back and read it. The killer feature of Pocket is that the app will actually read articles to you. On Android, it uses Google’s text-to-speech function and reads the article back at a rate that you choose. So, when I’m doing laundry, housework, going to the store, laying down to go to sleep, you get the idea, I have my Bluetooth headset on and I’m actually “reading” the articles I don’t have the time to sit and front of a computer and read.

I call it “leading”.

It’s allowed me to consume an insane amount of information over the last two years. According to Pocket, I’m in the top 1% of all users of the app. In 2017, I read 2,862,158 words which equated to 61 books.

I’ve also started using Audible which is an audiobook app, and I still try to find time when I can to read an old fashioned paper book. I tend to listen to Audible when I drive as I don’t like to fidget with my phone and it keeps me away for using it unnecessarily.

I get it. You’re busy. So am I. I still find time to read, a lot. It just looks a little different than it used to.

 

Two important and fundamental things to remember about the anti-gun crowd:

The end always justifies the means.

They never let a good crisis go to waste.

One of the few good Republican congressmen, Rep. Thomas Massie, explains below.