The Dow and S&P declined slightly and the Nasdaq and Russell rallied slightly. Not bad for a week that normally produces a -2% loss.
The S&P added another year to raise the totals to 22 of the past 25 years for post June expiration losses but it was by the narrowest of margins with the S&P declining only 0.1% for the week. Historically this week normally loses about 2.1%.
The Nasdaq ended up with a decent gain of +30 points for the week to close at a new 14-year high. The Russell squeezed out a gain despite the big drop on Tuesday. The rebound over the last three days recovered +21 points of that Tuesday drop from three month highs.
Volume was ridiculously low with only 2.8 billion shares on Wednesday and well under the average of 5.9 billion. Thursday picked up slightly to 5.0 billion and Friday soared to 8.64 billion as a result of the Russell index rebalance.
I am really happy about the Russell rebound when the rebalance pressures normally push it lower as the week progresses. This should be positive for next week when follow up buying on the new stocks will help lift the index higher.
Friday's economics were lackluster and limited. The final revision of the June consumer sentiment rose slightly from the initial reading of 81.2 to 82.5. The current conditions component improved slightly from 94.5 to 96.6 and the expectations component declined slightly from 73.7 to 73.5. Since the revision was minimal the report was ignored.
Agricultural prices for June declined -2.9% compared to a -0.9% drop in May. Investors should have been thrilled after the +7.1%, +4.7% and +3.6% rises in Feb, Mar and April. The biggest decline was a -9.8% drop in food grains and -7.6% drop in feed grains and hay. This means it will be cheaper to feed livestock and those prices should decline from record levels.
Fruit prices rose +6.1% driven by higher orange prices and commercial vegetables rose +11.3%. That was offset by a -3.3% decline in dairy and -4.1% decline in poultry and eggs. Meat animals declined -0.8%. Retail food prices have been rising at the fastest rate in years and any weakness will be appreciated. The 2012 drought is still impacting meat and grain prices as farmers rebuild their herds with a cautious eye. Many were hurt significantly when the drought killed hay fields and they were forced to sell their cattle cheap rather than buy expensive feed.
The agricultural report is normally ignored by equity traders but commodity traders do pay attention.
Next week is a short week with July 4th falling on Friday. However, we will have three critical reports. The national ISM Manufacturing for June is Tuesday and most analysts are only expecting a minimal rise. There are quite a few expecting a negative surprise. The regional manufacturing reports have been weak and that should translate into the national numbers.
The Factory Orders for May are out on Wednesday and those are expected to decline from 0.7% to 0.3% and could potentially go negative. This will impact GDP calculations for Q2, which are already declining.
The big reports for the week are the ADP Employment on Wednesday and Nonfarm Payrolls on Thursday. The ADP forecast is for new jobs to rise from 179,000 in May to 205,000 in June. The range of estimates is from 190,000 to 240,000.
The Nonfarm forecast is for a decline from 217,000 jobs in May to 213,000 in June. The range of estimates on the Nonfarm report is from 199,000 to 290,000. Clearly there is a wide disagreement in expectations.
There is a lot of confusion surrounding the employment numbers. Some of the regional reports have shown improving metrics and some have shown a decline in the employment components. Whatever numbers are reported next week will be important. The Nonfarm needs to remain in the 200,000 range to continue the Fed's current economic growth scenario. If jobs begin to decline from that 200,000 range there is going to be a lot of revisions to economic growth forecasts.
I can't let last week expire without rehashing the negative GDP revision. Initially the government said growth rose a miniscule +0.11% in Q1. Investors were lukewarm on the report and the market actually rose slightly. In the next revision they said growth declined -0.98% and investors still shook it off as a negative weather event and the S&P rose +32 points over the next six days.
Last week the government's final report showed growth declined -2.9% in Q1 and way below the first couple of estimates and the market rallied again. Eventually economics will matter. Analysts again tried to blame the weather but the cracks in the argument were growing. Some even went back to see how the GDP reacted to past spells of cold winter weather. Oops! They found out that winter actually comes every year. In most cases the GDP was not materially impacted and the weather excuse began to fall apart.
The -2.9% decline was the lowest quarter since Q1-2009 and the biggest downward revision to Q1 since 1976. It was the largest contraction in Q1 in 32 years. The combined GDP growth for the last four quarters fell from +2.6% to only +1.5% and lower than the trend of +2.0% for the last five years.
Corporate profits fell -9.1% in Q1 after rising +2.2% in Q4. This is the lowest level in four years! Final sales declined -1.3% and the largest drop since Q1-2009. Consumer spending contributed only 0.7 points and significantly below the prior estimate at +2.1 points. Total consumer spending growth fell from +3.1% to +1.0%. Foreign trade reduced the GDP by -1.5 points and it would be hard to blame that on the weather.
Analysts blamed not only the weather and the drop in consumer spending but also the decline in unemployment insurance benefits and slower inventory accumulation. Investment spending declined for the first time since 2012 and the decline in net exports was the first drop in three quarters.
Six weeks ago analysts were predicting a snapback in the economy in Q2 with GDP estimates well over 3.5% with most in the +4.0% range and some analysts suggesting we could have a +5% quarter. Fast forward to today and those estimates are crashing. A +2.0-2.5% number was being circulated but after the weak personal income and spending numbers on Thursday I heard some estimates in the high +1% range.
Some analysts who were projecting that big snapback in Q2 are now reversing those projections because of the latest data showing a lack of rebound in May and June.
Obviously the Q2 estimates are going to be all over the map for the next month and we don't get the first official government estimate until the end of July. If that number comes in under 2% with the potential for further downward revisions as in Q1 the market and the Fed are going to be doing some serious soul searching. Recessions typically appear every 5-7 years and we are moving into year six of this recovery. However, the slow pace of the recovery could actually extend the length of the cycle. Nobody is expecting negative growth in Q2 but we do have a very good chance of slowing growth over the rest of 2014.
The prior week the Fed lowered its GDP estimates for the full year to +2.2% from +2.9%. In order to hit that new number we would have to have GDP over 3.9% for each of the next three quarters. This is not likely to happen. This means the Fed is going to be forced to lower projections again to something in the +1.8% range. The IMF just cut U.S. GDP estimates to +2% for the full year.
I guess if the Q2 GDP disappoints we can blame it on the World Cup and two weeks of lost productivity.
It was another summer Friday ahead of a holiday week and if it were not for the Russell reconstitution the volume would have been very low. Quite a few traders will be off all next week and that means very light volume. Art Cashin said the already low volume may be the result of the charges against Barclay's for running a dark pool to benefit high-frequency traders. Art speculated that the low volume may be due to high-frequency traders sitting out right now while they decide how the trading environment is changing as a result of the Barclay's attack and the pledge by SEC Commission Chair Mary Jo White. She has pledged to change high-frequency trading rules later this year.
Art also said he was worried about the low volatility. "You will hear a good deal of people saying that this much calm and complacence in the market will spring out in a negative fashion." The earnings warning by Dupont (DD) is fueling concerns that Q2 earnings may be weak.
Dupont warned on Thursday that full year earnings would sink to $4.00-$4.10 down from $4.20-$4.45 compared to analyst estimates of $4.30 and they could take a charge of 20 cents due to restructuring. They lowered current quarter earnings estimates to $1.28 compared to analyst estimates of $1.46. Dupont said seed sales had slowed and herbicide sales were weak. Dupont blamed it on the weather but that suggests they are forecasting weather issues for the rest of the year as well. If it was just weather why are they restructuring? I think this is another example of the weather being used as a "kitchen sink" excuse.
I don't want my weekend commentaries to be a weekly shout out for Amazon but that is the way it is working out. Late Friday news broke that Amazon may be ready to take aim at GrubHub and launch a local takeout-delivery service. It would be an extension of the Amazon Local daily deal service similar to Groupon. TechCrunch first reported the news after the feature was turned on briefly for testing and then quickly taken back down. There were rumors Amazon could be looking at acquiring Peach, a takeout service in Seattle, Maryland and Virginia or Caviar, which operates in San Francisco, Chicago, Washington DC, New York and Boston with gps tracking of customer orders.
Deutsche Bank analyst Karen Short also warned on Friday that Amazon could quickly disrupt the grocery store business with its Amazon Fresh grocery delivery business. They have been testing that service in Seattle, Los Angeles and San Francisco. Short warned they could already be building out the local infrastructure and easily just turn it on at some point in the future. Existing grocery stores could lose several percentage points of market share very quickly and with only a 1% profit margin this could represent a 10% EBITDA dollar loss.
Amazon just keeps launching weekly efforts to conquer the world. Two weeks ago it was the local services market place to compete with Yelp and Angie's list. A couple weeks earlier it was the Fire TV. Last week was the Fire Phone. Where will it all end?
Manitowoc (MTW) said it was in talks with activist investment fund Relational Investors about a proposal to breakup the company. Relational has an 8.5% stake in Manitowoc. The company primarily manufactures two things, cranes and food service freezers and ice makers. Relational believes the company would perform better as two separate companies. The MTW CEO said they would consider the Relational proposal. Jefferies upgraded the stock and raised the price target to $33. Shares of MTW spiked +11% to close at $32.92.
Green Mountain (GMCR) rallied +4% after Argus upgraded the company from hold to buy. They based the upgrade on solid revenue and earnings improvements for the rest of 2014 and throughout 2015. The analyst expected 2014 revenue growth of 10% with an increase in the sales of K-cups and brewers. The firm raised the price target to $140. The K-cup product is a gift that just keeps on giving for Green Mountain.
Carlos Slim's holding company, Inmobilaria Carso, told America Movil's board it will acquire AT&T's 8.3% stake, which includes 24% of the voting shares. The value of the stake is roughly $6 billion. AT&T has to sell the stake to avoid a conflict of interest when it buys DirecTV, which competes with America Movil for pay-TV customers in Latin America. The deal will provide AT&T with another $6 billion in cash as it tries to raise $48.5 billion for the DirecTV acquisition. AT&T also said it reached an agreement to sell $2 billion in receivables to a group of banks led by Citigroup. Part of the deal was to sell $1.6 billion in future installment payments for phones for $800 million in cash and the balance to be paid out over time. The company also expects to receive $2 billion for some asset sales in Connecticut before year end. Shares of AT&T barely moved on the news.
Allergan (AGN) rose another 2% after the company agreed with Bill Ackman's Pershing Square Capital Management not to trigger the poison pill as a result of Ackman's request for a special shareholder meeting. Ackman wants to replace several board members in an effort to take over the company in conjunction with Valeant (VRX). Ackman said he was pleased to reach the agreement without the assistance of the court. Ackman had sued Allergan over the poison pill provisions. Ackman said to call the special meeting they would need support from about 25% of Allergan shareholders and they were about halfway there. Valeant has offered $54.2 billion for Allergan. That is the latest offer after they raised it twice. Ackman owns 9.7% of Allergan. The poison pill triggers at 10% ownership. The pill allows existing shareholders with less than 10% positions to buy large amounts of stock at a steep discount in the event of a hostile takeover. This would massively dilute any potential acquirer's position. I think the end is in sight for Allergan.
Barclay's (BCS) recovered slightly on Friday with a +2% rebound but the damage is far from over. On Thursday the New York attorney general filed a 30 page complaint against Barclay's alleging fraud in the way the bank handled the dark pool. He claims Barclay's lied to brokerage customers while partnering with high-frequency trading firms. Instantly money managers and brokers shunned the LX dark pool and Barclay's stock fell more than -6%. Banks and brokers that immediately disconnected from the LX pool included Deutsche Bank, Royal Bank of Canada, Sanford Bernstein and Investment Technology Group. Goldman Sachs, Morgan Stanley and JP Morgan had previously halted connections to the pool before the AG complaint. The AG said Barclay's horded orders for stocks to make it more lucrative for the high-frequency traders. While they did this they continually assured investors they were protecting their interests when in fact they were selling the order flow to the pool participants.
The constant stream of negative news about high-frequency trading and dark pools is not going to give investors a lot of faith about the stock market. The Flash Boys book several weeks ago ignited another firestorm on whether the markets are rigged.
I believe the days of high-frequency trading as we know it today are numbered. There are too many regulators smelling blood in the water and they are circling the participants trying to figure out how to charge them with wrongdoing. Eventually they will find the key and the industry will have to change.
Retail investors already believe the market is rigged against them even though HF trading has narrowed spreads to unbelievably low levels and provided extra liquidity even in low volume markets. This uneasiness about the market is part of the reason we are seeing equity outflows. The Investment Company Institute said investors pulled money out of equities in the week ended June 25th making it the eighth consecutive week of outflows. More than $20 billion flowed into bond funds over the same period.
Retail investor interest in the equity market is sagging for multiple reasons. CNBC viewership is tanking along with investor interest in the market. Viewership is at the lowest level since 1997. On Friday the 20th Jim Cramer's Mad Money show had only 2,000 viewers in the targeted 25-54 demographic. Cramer has been spreading himself all over the various CNBC time slots trying to capture viewers for his nightly show. Apparently it is not working. Mad Money may be going dark soon unless something changes quickly.
In the "you have got to be kidding" department Caesar's Entertainment (CZR) with a massive $23 billion in debt, loans and bonds near default with creditors nipping at their heels, said it was ready to invest $5 billion developing a casino in Japan. Caesar's said it would have no trouble financing the project. This is from a company where the debt is rated at nine levels below investment grade.
Japanese lawmakers began debating a bill this month to legalize casinos. Japan is the world's third largest economy and they are in serious trouble. They need extra revenue and economic activity. Their debt to GDP is the highest of any industrialized country. Prime Minister Shinzo Abe said they would try to pass a law ending the ban on casinos in an effort to boost tourism along with the Tokyo Olympics in 2020.
Caesar's said they could finance it but they would also consider selling shares in Japan through a public listing to finance the casino project. Wynn Resorts and MGM Resorts have also said they intend to sell shares for planed resorts if casinos are approved. Getting three major casinos approved, designed, permitted and built by 2020 would still be a challenge. CLSA Ltd said the Japanese casino market could be worth $25 billion a year by 2025.
I applaud Caesars for attempting this project because it would be a lucrative market. However, they need to come up with a plan to pay down their existing debt before the creditors start taking over properties. Just this week Caesars said they were shutting down the Showboat in Atlantic City to reduce capacity in the East Coast gambling hub. Caesars acquired the Showboat in 1998. Caesars has four properties in Atlantic City including the Showboat, Caesars, Bally's and Harrah's out of the 11 total casinos there. The Atlantic Club shutdown in January and the newest casino Revel AC filed for bankruptcy for the second time in two years. They told employees they were shutting down in August if no buyer is found. Penn National Gaming cancelled plans for a casino citing the deteriorating demand in the area.
One decision down, one to go. Alibaba plans to list on the NYSE under the ticker BABA and will be the third largest tech company on the NYSE based on their $168 billion valuation. Only IBM and Oracle would be larger. Ba means 8 in Chinese and is considered a lucky number. BABA would be 88 and they would like to begin trading on August 8th. According to recent rumors the company is looking to sell a 12% stake worth about $20 billion.
The Nasdaq has been fighting an uphill battle for large IPOs after the botched Facebook IPO. Of the ten technology IPOs in Q1 the NYSE won 7 of them. This shows the reversal of fortunes for the Nasdaq. From 2001-2011 the Nasdaq won 122 tech IPOs and the NYSE only 42. Since January 2012 the NYSE has won 45 while the Nasdaq scored 35. Facebook was the largest for the Nasdaq and represented about 50% of the dollar volume of the 35 listed.
The next question will be the pricing. Nobody has a clue how they are going to price their shares and because of the high demand they could issue more shares or raise the price. When this IPO does happen it is going to suck a lot of air out of the market. The money for that $20 billion IPO is going to come out of other shares. Investors will lighten up on their existing positions to buy BABA. The real winners here will be Yahoo with a 24% stake and SoftBank (SFTBY) with a 34.4% stake. Yahoo is going to sell half of its stake but SoftBank said they would not be sellers in the IPO. Softbank only invested a little less than $200 million in the Alibaba stake in 2000, which is now estimated to be worth $50 billion. Softbank is one of only three companies to post more than a one-trillion yen profit in 2013. The other two were Toyota and NTT DoCoMo. Softbank owns stakes in more than 1,300 tech companies.
The S&P is up +4.7% in Q2 and is only one day away from completing the longest stretch of quarterly gains since 1998. We would have to see a major crash on Monday to turn the S&P negative for the quarter. The S&P has traded for 50 consecutive days without a 1% move and that is the longest stretch since 1995. The U.S. market has gone for two years without a 10% correction and in any playbook that is pressing our luck.
The key to keeping this streak alive is going to be earnings growth or more importantly revenue growth for Q2. The earnings over the last several quarters have been engineered from stock buybacks and cost cutting. Revenues are barely rising. We need to see the revenue growth surge to really get investors excited.
If the Q2 earnings are simply another quarter of earnings rising by a couple pennies and revenue flat to barely positive and a new round of stock buybacks announced we could see some negative reactions.
TrimTabs.com said announced buybacks in Q2 slowed to $92.7 billion, down from $138.5 billion in Q1. This will be the lowest in seven quarters. Buybacks in June have declined to $11.5 billion and the lowest level since May 2012. Only four companies have announced buybacks of more than $1 billion in June. On the flipside TrimTabs said companies are selling new shares at the fastest rate since Q3-2013. This always happens at new market highs.
Here is the $64k question. Did they stop the buybacks because they ran out of money or because they expect to buy the stocks back cheaper in the future? I would vote for a combination of the two. With the markets at new highs stocks are not cheap. That means you can buy back less and your money does not go as far. Also, with stocks at new highs going into summer there is always the potential for a correction.
Lastly, since we know Q1 was a weak quarter for sales and profits and Q2 may not be much better there is the possibility companies have elected to save cash to get them over the next soft patch as we head into the midterm election weakness.
The S&P closed at the high of the day at 1,960 after a late day buying spurt thanks to the Russell rebalance. Support at 1,950 was tested twice last week and penetrated both times but traders bought both dips. That should have been enough to reinforce that level as future support. The next battle is the closing highs at 1,962 on both the 20th and 23rd. We are really close to making a new high and buyers don't appear to be diminishing despite the arrival of summer. Next week's extremely low volume could easily allow a major move to develop and after testing 1,950 it could be to the upside.
The 50-day average is now 1909 and rising pretty sharply. This is short term support. The longer term support is the 125-day average at 1,867. The S&P returns to this average about once every 2.5 months. The last touch was on April 15th making Monday 2.5 months. We are due for another retest of that level.
The Dow was the weakest index last week with a -95 point decline for the week. It would have been worse than that but the Dow rebounded +80 points in the final minutes of trading. On the bright side the short term uptrend support held.
The daily chart shows strong resistance at that 17,000 level and the range between that resistance at 16,700 and uptrend support is narrowing. The longer term trend is clearly higher but the Dow is struggling after the +171 point gain the prior week. Every day that passes we move further into the summer doldrums but we still have the Q2 earnings cycle to provide lift over the next three weeks. That assumes a lack of serious earnings warnings next week when companies hope everyone will be at the beach.
The Nasdaq is clearly in breakout mode. The strong resistance band from 4,344-4,371 is history and should now be support. The Nasdaq closed at a 14 year high and the internals for the last several days were bullish.
The Nasdaq and the Russell should be positive over the next couple of days as leftover buying from the rebalance pushes the indexes higher. Apple appears to be over its post split depression phase and should contribute to a higher Nasdaq.
The Russell indexes confounded historical norms and actually rose for the week rather than decline on pre rebalance selling. This is very positive for next week because there is always some leftover buying as fund managers level out their positions to fit the new Russell weightings.
Because of the order on close buying the volume on the NYSE spiked from 400 million shares at 3:50 to 1.485 billion at 4:05. This spike confounded some chat rooms where ignorance of reality prevailed. They were calling it everything from a fat finger trade by the Fed to a rumor of ISIS pulling out of Iraq. A lot of information rockets across the Internet but quite a bit of it is worthless. Always consider the source of the headline.
The Russell 2000 still has strong resistance at 1,194 and several levels just above that. The Russell is not likely to be breaking out to new highs over the next week but I would not complain if I am wrong.
In theory the markets should rise the next two days as a result of lingering rebalance buying as fund managers finish their portfolio adjustments. It will be a very low volume week with several high profile economic reports. The Manufacturing ISM on Tuesday will be the first hurdle but after the market rallied on a -2.9% contraction in GDP I don't know what it would take to push the market lower.
The payroll reports on Wednesday and Thursday are also critical but as long as the numbers don't deviate from expectations by a huge amount the market will probably take almost anything in stride. The expectations for 7% earnings growth or better in Q2 and the continued paint drying pace of the QE taper should keep the markets positive. I always cringe when I write things like "should keep the markets positive" because that is a clear kiss of death for the rally. Let's hope this time the market is not listening.
There is not much in this section this week. The news flow was pretty stagnant except for Iraq, the Ukraine and the world cup. I have already run out of words on Iraq and Ukraine and I have nothing to say about the World Cup. However, Nike (NKE) normally declines in the weeks after the event on a sell the news drop. They rise into the event and then decline afterwards.
July is the best month in Q3 for the markets. Of course August and September are so bad it makes July the clear winner. Since 1950 July has averaged a minor +1.2% gain on the S&P. July 2009 and 2010 were so strong they boosted the average from near zero to that 1.2% average. Of course two years does not make a trend. Midterm election Julys are normally negative with the Dow and S&P ranking as only the 5th best month of the year but the Nasdaq ranks as the 11th and the Russell 2000 the 12th or the worst month of the year for the Russell.
The Stock Trader's Almanac pointed out that June is the end of the Nasdaq's 8th best months string that runs from November through June. We are heading into the four worst months for the Nasdaq. The Investors Intelligence sentiment rating has seen the bullish sentiment at more than 60% for four consecutive weeks and reached a multi-year high two weeks ago. Similar readings were seen in August 1987, December 2004 and October 2007 and at the end of 2013. The CBOE equity put-call ratio declined to 0.47 last week and the lowest since January 2011 representing extreme complacency.
Here are two interesting charts showing the Fed has no clue where they are going. They have consistently missed on their projections for economic growth, stimulus and inflation. Blind Leading the Blind
Two major banks in Bulgaria were the focus of depositor runs after two men started publishing bogus news on the Internet and warning people to withdraw their deposits or lose them. The government had to take over Bulgaria's fourth largest lender Corporate Commercial Bank (CorpBank) after tens of thousands of customers stormed the bank's locations demanding their deposits. Two days ago the third largest lender First Investment Bank warned the government they were seeing a surge in large scale cash withdrawals and were short of funds. If only two men can cause the collapse of two of the top four banks in Bulgaria in only a week's time what could a terrorist group of hundreds do to the financial system in any country? I think we have just seen the first in a new wave of terrorist attacks. I am sure the various individual groups like Al-Qaeda and the government sponsored groups from places like North Korea and China were awakened by the headlines and this will be on their playlist in the future.
Most Americans will believe anything they read on the Internet and it would be very easy for several hundred terrorists with smartphones to flood the Internet with warnings about our banks. Individuals should take this as a warning and keep some cash at home just in case.
Customers waiting for cash ar BankCorp
NATO Secretary General Anders Fogh Rasmussen, a person that rarely comments on energy matters, told the London based think tank Chatham House on June 19th that Russia was secretly backing some European anti-fracking environmentalists in order to stop Europe from joining the shale-gas revolution. By outlawing fracking it keeps Europe from producing its own energy and keeps them dependent on energy from Russia. Rasmussen claimed NATO allies had detected Russian manipulation at work in the "sophisticated information and disinformation operations" within Europe's well-organized anti-fracking groups. As punishment for the Ukraine refusing Russian involvement Gazprom raised gas prices to the Ukraine in April by 80%. Russia has used its gas exports to Europe as a political lever numerous times over the last decade. It is no surprise that they would resort to funding environmentalists to keep the gas flowing. Last year alone Gazprom spent more than $6 million on Washington lobbyists and they have far less to gain here than in Europe.
Got water? In most of the U.S. we are fortunate to have plenty of water. That is not true in the rest of the world. More than 2.5 billion people don't have fresh water that is safe. In March Australia opened a futures exchange that deals in water. Since March 1.6 million dollars representing about 16.5 billion liters of water have changed hands. While that may be a drop in the bucket as far as fresh water goes it is the start of commoditization of water. Recent droughts in the American west and in Texas have shown lawmakers in those areas the need to prepare for significantly larger water storage plans. I think it is only a matter of time before water futures are going to be traded in the USA. In the southwest water rights are hard fought and are deeded down for generations. Without irrigation water there are no crops.
A Mexican military helicopter crossed the border into Arizona and fired two shots at two border patrol officers sitting in a marked patrol car. Reportedly the military copter was assisting Mexican federal police on the ground in a drug operation on a ranch in Altar, Sonora when they were shot at by criminals. How or why the helicopter strayed into the U.S. and why they fired upon the marked patrol car is unknown. The Mexican government contacted the local U.S. authorities and apologized for the incident. The helicopter flew within 15 yards of the patrol car when the shots were fired sometime after midnight. Later in the day when reporting of the event started exploding across the news wires the Mexican government changed their story saying there was no event and no Mexican helicopters were involved in the operation.
In January two heavily armed Mexican soldiers were confronted inside Arizona by border patrol agents and a standoff ensued but no shots were fired. In 2011 more than 30 uniformed soldiers in military vehicles crossed the Rio Grande into Arizona and were eventually confronted by border patrol and they returned to Mexico. The agents said the foray into Arizona was "inadvertent." They just accidentally crossed the Rio Grande River and wandered for an hour in Arizona. I guess they don't have maps or GPS devices. They should have asked the drug smugglers for directions.
Washington D.C. police were ordered to return to work this weekend in an "All Hands on Deck" initiative to fight an expected onslaught of summer crime. The unions have filed paperwork challenging the "all days off cancelled" order by the Police Chief. The all hands on deck command has been used seven times since 2007. Apparently criminals don't take off during holiday weeks.
A blackout hit most of Venezuela on Friday just as President Maduro was speaking on TV. Various excuses were given for the nationwide blackout and all of them due to natural causes or blamed on deteriorating equipment. In December power went off during another Maduro speech and it was due to gunmen attacking power transmission lines to cut the power. The real problem is 15 years of socialist policies that have collapsed the economy and left the country unable to pay for anything including utility maintenance. Maduro has suffered through three months of public disturbances demanding his resignation because of economic conditions. He said the protests were a U.S. backed attempt to overthrow him. The rule for dictators is to always blame the USA to deflect protests against yourself.
President Obama requested $500 million to arm the rebels against President Bassar Assad in Syria. The problem there is that most of the rebels left in Syria are ISIS fighters. To clarify this imitative he said the U.S. wanted to train and arm the "moderate factions" among the rebels. Good luck with that litmus test to find "moderate rebels." Hi, we are giving out guns. Are you a moderate?
In the truth is stranger than fiction department the Banghazi terror suspect captured on film waving a rifle with the embassy in flames behind him has pled not guilty in front of a federal judge in Washington DC. Ahmed Abu Khatallah, has given numerous television interviews to all the major U.S. networks while he was free in Benghazi in which he described the event. Officials said he was talkative and cooperating on his slow ride to the U.S. aboard the U.S.S. New York before he was read his Miranda rights. One official said the conversations "continued" after he was Mirandized. I am sure once he has an attorney assigned those conversations will cease. Officials say any information he revealed before he was Mirandized could not be used and would not be admissible in court. Would somebody explain to me why a terrorist overseas has any Miranda rights in the USA? If the president can legally fire Hellfire missiles from drones at terrorists without reading them their rights why does this one have rights?
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"This is no longer conjecture. We cannot simply turn a blind eye to data that is weak and argue that all bad news is good news for stocks. At some point, bad news is bad news. At some point, volatility will rise from the ashes of complacency."
Michael A. Gayed