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Freedom Isn’t Free: It Costs Taxpayers $700 Billion Per Year

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By Tyler Durden

Submitted by Ryan McMaken via The Mises Institute,

In his article on conscription today, Ron Paul writes:

Some proponents of a military draft justify it as “payback” for the freedom the government provides its citizens. Those who make this argument are embracing the collectivist premise that since our rights come from government, the government can take away those rights whether it suits their purposes. Thus supporters of the draft are turning their backs on the Declaration of Independence.

In his use of the Declaration of Independence, Paul is likely referring specifically to Jefferson's core argument found in the second paragraph:

[…Persons] are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it. [Emphasis added.]

These lines are so often blithely and casually quoted that they've become cliché. Nevertheless, a mindful reading of the text shows there is a specific logical argument here:

1. Humans have rights, including life and liberty. (The list provided by Jefferson is explicitly stated to not be an exhaustive list of rights.)

2. The rights do not come from governments, but from some other source that precedes governments and are separate from them.

3. Governments exist for a specific purpose: to secure rights.

4. The governments are instituted by the governed, and the legitimacy of the government depends on the consent of the governed.

5. If the government fails to secure rights, the governed are entitled to abolish or alter the government.

Although the text of the Declaration likely strikes many Americans as rather prosaic, it represents a historically radical strain of thought within the liberal tradition that significantly limits the prerogatives of states.

Civil Government Has a Very Specific Purpose

Predating Jefferson by centuries, the liberal ideas behind the Declaration go back even to medieval Thomist thought which regarded civil government as an institution designed to accomplish very specific ends. Thus, the state was limited in its authority to those specific activities necessary to achieve the ends.

Later, British liberals like John Locke limited civil governments to the realm of protecting “life, liberty, and property.”

In practice, therefore, institutions for policing and security (i.e., military and law enforcement institutions) exist for a single purpose: to secure property rights. If these institutions fail at their jobs, or if the governed withdraw their consent for any reason, military and law enforcement institutions cease to be legitimate.

Property Precedes States and their Military Power

This bourgeois liberal emphasis on property hints at other implications for the liberal view of the state: the state only has value insofar as it protects the property that is the state's raison d'etre. Without property, states and their agents — namely, military personnel — have no legitimate value or function.

In this way then, the liberals …read more

Source: Freedom Isn’t Free: It Costs Taxpayers $700 Billion Per Year

    

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Breaking Down Warren Buffett’s Rosy Outlook For America

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By Tyler Durden

Submitted by Simon Black via SovereignMan.com,

There’s something about being insanely rich that people will believe every word that comes out of your mouth no matter how bizarre.

And no, I’m not talking about Donald Trump. Warren Buffett is an even better example.

As one of the richest men in the world, Buffett’s opinions carry almost Biblical impact, even when they might be completely ridiculous.

Just a few days ago, for instance, he quipped that drinking Coca Cola is better for him than eating broccoli.

He’s also famously expressed contempt for owning gold, suggesting instead that people should simply own a US stock market index fund (like the S&P 500) and hold it for 50 years.

Curiously, though, gold has vastly outperformed both the S&P 500 and Dow Jones Industrial Average over the past half-century.

While the S&P 500 index is up 24.3x in that period and the Dow Jones Industrial Average is up 18.2x, gold has appreciated 36.6x.

Even when taking into account the effects of dividends, fund expenses, cash drag, taxes, etc. the evidence still doesn’t support Buffett’s assertion. Yet people believe him.

But perhaps one of Buffett’s most popular opinions is that America is simply awesome and will only get better.

He’s spoken and written extensively in his annual reports that America is the #1 place to be in the world, that the massive opportunity in the Land of the Free will only get better, and that the United States has “never been greater”.

Buffett is right that the United States is an amazing place.

It was founded as a land of opportunity where hard work, risk taking, and a little bit of luck resulted in incredible prosperity.

And some of those elements do still exist.

But Warren Buffett’s outlook on the United States is underpinned by an assumption that the next 50 years will look like the previous 50 years.

That’s clearly not the case.

When Warren Buffett’s company Berkshire Hathaway was rapidly expanding in the 1960s and 1970s, the US government’s debt level was low and the dollar was strong.

Since then there have been MILLIONS of pages of regulations created in the Land of the Free, trillions of dollars worth of debt accumulated, and countless dollars conjured out of thin air.

Buffett is well known for having a very long-term view on things. For him, the typical holding period for owning stocks is ‘forever’.

And that’s a great outlook to have when the fundamentals are in your favor, i.e. if you own shares of a great company with honest, competent management.

But you can’t hold the view that in the long-run everything will always be better.

15 years ago Yahoo, Motorola, and Nokia were three of the top technology companies in the world.

Apple was still years away from launching the iPhone. Few people had heard of Google. And Mark Zuckerberg was still in high school.

But these circumstances changed. Quickly.

Nations and economies also change. History is very clear on this point: wealth and power shift.

Just because a country might be at the top today doesn’t mean it will be that way forever, especially when …read more

Source: Breaking Down Warren Buffett’s Rosy Outlook For America

    

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Stocks Slump, Dollar Jumps After China Sends Message To Fed

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By Tyler Durden

But but but Tim Cook said AAPL was “optimistic” about China!!!

China started the shenanigans by devaluing the Yuan fix by the most since the August collapse…sending a loud and clear message to The Fed – if you normalize rates (and strengthen the USD) we will unleash 'wealth-destroying' volatility…

The message is being heard among the pajama traders…

European stocks stumbled once again as Italian bank risks surge…

“Most Shorted” stocks fell for the 2nd day in a row – the biggest 2-day drop in 3 months…

Trannies & Small caps bearing the brunt of the most shorted weakness…

With Nasdaq leading the way (down over 6% year-to-date), S&P 500's 2-day tumble has plunged it back to the verge of red for 2016 (joining Small Caps yesterday). Gold (up 20.7%) and the Long Bond (Up 7.8%) remain the best performers year-to-date as The Fed rate-hike appears to have sparked a flight to safety not a rush to recovery…

Just as S&P 500 cash nears 2043.94 (remember 2100?), VIX was smashed lower to save the world…

But Bonds & Bullion remain 2016's biggest gainers…

As perhaps fear of the “W” remains…

It seems we better get Tim Cook on CNBC again tonight…

Financials continue to slide and Energy stocks ended notably lower despite a small green close in crude…

HYG (high Yield bonds) broke back below their 200DMA..

Treasury yields ended the day lower by in a very narrow range

The US Dollar rose again (2nd day on a row after 6 straight days lower) led by commodity currency collapse (CAD/AUD down over 2% on the week)..

Crude managed a panic-bid into the NYMEX close to end green but in general commodities weakened with the stronger USD (copper, iron ore, rebar were hammered)

Charts: Bloomberg

…read more

Source: Stocks Slump, Dollar Jumps After China Sends Message To Fed

    

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Jobs’ favorite project from 1996 is officially dead

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One of Steve Jobs’ favorite projects, WebObjects, has officially been killed by Apple.

…read more

Source: Jobs’ favorite project from 1996 is officially dead

    

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Abby Wambach hired by ESPN

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Abby Wambach, retired U.S. Women’s Soccer star, has been hired by ESPN to serve as an analyst and podcast host.

…read more

Source: Abby Wambach hired by ESPN

    

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Saxo Warns Further Upside For Crude Hard To Achieve After Market "Change Of Focus"

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By Tyler Durden

The dollar's gyrations remain a key source of inspiration for traders with the fundamental focus continuing to switch between falling US and rising OPEC production, according to Saxo Bank's Ole Hanson.

The nervousness and negative price action seen this week was triggered by a change in focus from falling US production towards the rising supply from others, especially within OPEC. Having seen calendar 2017 almost hit $50 last week the realisation that further upside may be hard to achieve may has helped trigger increased demand for protection.

The speculative net-long remains very elevated so just a small change in the fundamental or technical outlook can trigger increased demand for hedging.

This has been reflected in the options skew on WTI crude which during the past week has seen increased demand for put options.

The skew or “smile” shows that the cost of out-the-money puts has risen by close to 5% this week while OTM calls have risen by less than 2%

Furthermore, as OilPrice.com's Rakesh Upadhyay notes, the 70% rise in crude oil prices from the lows of $27.1 per barrel to a high of above $46/b in a matter of three months is being driven by speculative activity—make no mistake about it. The speculators have latched on to every bit of rumour and news to bid prices higher, and this has nothing to do with the real fundamentals.

However, speculation can boost prices only to a certain extent in the short-term. After this, the fundamentals take over. The extent of speculation is enormous, though the daily production of oil in the U.S. is around 9 million b/d, the WTI crude oil contract trades more than 100 times the produced quantity, as highlighted in this January 2016 post.

The trading volume is generated by the algo traders, day traders, and scalpers who are in and out of their positions many times a day. Due to their enormous volume, they set the direction of prices in the short-term.

However, these traders are neither involved in the production nor do they take physical delivery of oil; they are usually active only in the near-term contracts until expiry; after which the users of oil take deliveries.

The oil producers have used the sharp rise to hedge part of their production for 2016 and 2017 as reported by The Wall Street Journal.

(Click to enlarge)

However, Citi Research points out that the oil producers have hedged only 36 percent of their estimated production for 2016, compared to 50 percent in the previous years.

If prices creep up further, the producers will not only hedge more, they are likely to increase production to mend their balance sheet.

Pioneer Natural Resources has hedged 50 percent of its expected 2017 output and has conveyed its intention to add five to ten horizontal drilling rigs if prices recover to $50/b, with a positive outlook for oil fundamentals. Earlier on, too many U.S. shale …read more

Source: Saxo Warns Further Upside For Crude Hard To Achieve After Market "Change Of Focus"

    

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Ed Henry takes time off from Fox after reported affair

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Fox News says chief White House correspondent Ed Henry is “taking some time off” following a tabloid magazine’s report about an extramarital affair. …read more

Source: Ed Henry takes time off from Fox after reported affair

    

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"Extremely Dangerous" IED Found Under Bridge In Texas

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By Tyler Durden

In recent weeks ISIS has been become far more brazen in its threats against US targets, and just last week released out a “hit list” which allegedly had the personal details of 3,600 New Yorkers whom it “wanted dead.” And while it is unknown if there is a terrorist link, the threat may have hit closer to home for residents in Rosebud, Texas when the McLennan County Sheriff’s office and a bomb squad used a water cannon to breach a suspicious device found under a bridge Tuesday night.

According to KCEN TV, the Bureau of Alcohol, Tobacco, Firearms and Explosives blasted water on the container found just outside Rosebud off Farm to Market Road 1963. Rosebud, about 40 miles southeast of Waco, is home to about 1,400 people.

Flammable liquid and shotgun shells were found inside the container, according to Sheriff Parnell McNamara. He said the IED was designed to blow shrapnel and would have been “extremely dangerous” had it gone off.

“Someone had made this to create lots of damage and harm,” McNamara said.

There were no injuries. The liquid was being sent to a lab for analysis.

No motive or suspects were named as the investigation continued early Wednesday. If this was indeed the work of some local terrorist organization, we are confident it will promptly take credit for the attempted bomb.

kcentv.com – KCEN HD – Waco, Temple, and Killeen

…read more

Source: "Extremely Dangerous" IED Found Under Bridge In Texas

    

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More bad news for Priceline. Outlook stinks

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One week after its CEO was ousted for an inappropriate relationship with an employee, Priceline warned that its results for the second quarter would be below expectations. The stock tanked. …read more

Source: More bad news for Priceline. Outlook stinks

    

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"Bankers Will Choose To Fly Instead Of Die" – Why Bill Gross Thinks Helicopter Money Is Imminent

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By Tyler Durden

By Bill Gross Of Janus Capital

Culture Clash

A respected reporter recently asked me what were a few important things I had learned from all this and all of that during the past decade and I surprised myself and perhaps him by answering that I now realized that younger generations – the Xers and Millenials – were far different generations from my own. “How so?” he asked. They are ephemerally connected as opposed to hardwired, I replied. They hold history less dear and appreciate freshly baked inclusiveness more; they are inclined to move on instead of settle and build, perhaps because employer loyalty has weakened as well; they are more temporary residents than architects. But they are the future.

The challenge for me as a Boomer, I said, was to understand this, yet not sacrifice my generation’s heritage that had made these evolving differences possible. This generation gap, I continued, was just that – a far distance from one side of a chasm to the other. And yet, I thought, (having concluded the interview) culturally we were much the same: making positive, sometimes obsessive contributions at work; loving our families, our pets. No chasm there to bridge. A common culture. But common cultures themselves morph and sometimes quickly so, producing substantial gaps from one figurative day to the next. Most humans who walked this Earth were alive inside a culture that was constant for centuries, yet now it seemed that technology was mutating standards like a cytoplast or perhaps at worst – a cancer cell. Who could say whether this new life form was positive or negative? Who could say that an older generation was any less an ideal than the succeeding one? My experience of the divide between Boomers and Xers is like that; I recognize that youth will be served, but not always for the better.

Yet, if I (you) understood that to be somewhat true, what should I (you) do differently? How to live a life – this Shakespearian brief candle? Should I listen to the beat of a bass drum instead of an ancient tom-tom? Would I dare dance to strange new music with a different step? “Forward” is my futile response. Forward – with difficult questions. John Denver expressed it succinctly, “If there’s an answer, it’s just that it’s just that way”.

Change propels economies as well as cultures, and sometimes before we are even aware of it. We listen to Trump and Bernie, then Cruz and Hillary as if one of them might be the mythical Wizard of Oz, guiding us down that yellow brick road to reinvigorate growth. They all try to emulate the Wizard of course. “Change you can believe in” was Obama’s mantra and then there was Clinton’s “I come from a city called Hope” and so on. Eisenhower was probably the last honest politician. “I like Ike” was his promise for the future, and I think many voters actually did – like Ike. But back then and certainly now, it was the economy that …read more

Source: "Bankers Will Choose To Fly Instead Of Die" – Why Bill Gross Thinks Helicopter Money Is Imminent

    

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