The Market Ticker
Commentary on The Capital Markets
2016-02-08 19:11 by Karl Denninger
in Editorial , 234 references

There's a clean question on the table regarding dual citizenship for persons born in Canada prior to 1977 (when they changed their law to officially recognize dual nationality.)

Prior to that date, with few exceptions, you could not hold dual nationality with Canada.  In other words the very act of "renouncing" Canadian Citizenship means that Cruz never held US citizenship at birth because his parents had to declare his nationality at the time he was born.

There may be exceptions that were available at the time but the law now is immaterial.

The only material fact is what the law was then, in 1970, in Canada when Cruz was born.

If his parents declared US for him then he had nothing to renounce and he has a document called a Consular Report of Birth Abroad.

This is the legal equivalent of a US Birth Certificate and Cruz either has one from the time of his birth or he does not.  If he does not then he is not a US Citizen as he was never naturalized by his own admission and at birth the nation in which he was born did not recognize dual nationality.

Where is that document Cruz?  Your mother's birth certificate is immaterial.  What matters is whether you were declared a Canadian or US Citizen at birth and what documentation you have to prove it.

You see, in 1970 there was no "and" option.

Cruz either has that Consular Report of Birth Abroad, which is his legal proof of US Citizenship just as my Birth Certificate is mine, or he doesn't and he's not a citizen at all as his parents declared his citizenship as Canadian and the land he were born in prohibited dual nationality at the time.

If he doesn't have that document, of course, there's a little problem with the office Senator Cruz holds now, say much less his running for President.

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And so it begins today.

Chesapeake Energy, one of Cramer's former darlings if you remember, had been down some 30% last month.

Today it lost nearly half its tiny remaining value on reports of restructuring.  You see, this company, like so many others, took on a bunch of debt over the last few years -- and unfortunately has a $500 million note due soon.

Oh, did I mention that while they supposedly have the money it would cripple them to pay it out considering that their levered free cash flow is negative $2.52 billion and their total debt is more than five times their cash?


Of course you ought to buy companies like Amazon and Facebook because they don't have said debt load and a looming coupon payment, but they do have P/Es that remain, even after their recent selloffs, in the stratosphere.

There's really nothing like losing a third of your money in a month, then another 40% in a morning, and, to top it off, you can then rotate what's left of your formerly-large pile of cash into tech stocks at 1,000 times earnings and lose 90% of the remainder.

For anyone who has forgotten the "sell side" folks (including Cramer) are experts at leading you into this sort of self-destruction; go back and read this piece if you need to and figure out how much of your money you'd have left if you went into those names at that time, and how fast the destruction came.  Pay very careful attention to the date of that missive.....

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Come and get it!  Today's segments include three talking about the markets and job report.

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Seriously folks, read this paragraph however many times it takes until it sinks in:

The association between short-term memory declines — potentially permanent ones — and heavy pot use is very real, according to this study, and shouldn't be discounted. On the other hand, it's also quite surprising that you can smoke weed every single day for five years, and not have it impact your problem-solving abilities or your ability to focus at all.

Got that?

The study in question found that there was a correlation between heavy pot smoking (as in daily smoking from age 20 to 45) and being able to remember 2.5 fewer words (out of 15) on a short-term basis.

But.... correlation is not causation, and associative studies cannot determine causation.  The correlation is potentially concerning at some level but the fact that even under extremely heavy use they did not find problems with the ability to focus or cognition pretty-much blows a hole the size of a truck in the thesis that smoking pot "makes you stupid" and therefore as a matter of public policy there is an argument for banning it.

So here's the question for you -- why would you support or for that matter have anything to do with any politician or police officer who is willing to arrest and throw in jail someone who is engaged in consensual adult use or distribution of a substance that even when used daily and heavily for five years doesn't cause cognitive or attention (focus) problems?

Any defensible position on jailing people in this regard has gone right out the window, never mind that I have a suspicion alcohol wouldn't fare so well under this analytical criteria.

The people who ought to be in prison are the cops and politicians who have destroyed the lives of countless individuals and families via permanent criminal branding for their decision to consume something that has been on this planet for as long as we have (if not longer) and, as it turns out, is a perfectly-viable recreational means of enjoyment with few if any inherent long term negative effects when consumed in moderation.

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Last night there was a "debate", which is really a dog and pony show.

The establishment GOP once again tried to rig the contest, this time by buying up the tickets so that only about 20 Trump supporters could get into the debate for the live audience.  Given the polls that's an outrage, but not surprising.

That was a rather-ordinary display of lack of class by, well, all the other candidates, none of whom did a thing to put a stop to it or even speak against it.  Just like Cruz, who has his motto "win by any means that doesn't involve felony prison time" the GOP itself shows this to be how it believes politics should work -- and how it'll work on you once they "win."

But, then, right at the beginning of the debate something remarkable happened.  During the introductions audience applause drowned out the announcement for Ben Carson to come forward onto the stage.  He didn't hear it, and didn't proceed from backstage.  Other candidates literally walked right by him and kept going, with Bush going so far as to muscle his way past both Carson and Trump.

Oh, and why was Trump there with Carson to be muscled past?

He didn't take the stage when his name was called.  He recognized what had happened and stopped; he had been called 4th in order (the podium order, you see) and waited with Dr. Carson as Dr. Carson was supposed to proceed him on the stage.

The "moderators" realized what happened eventually, and called Carson again.  This time he heard the announcement and got his round of applause.  Then, Trump was called (a second time) and came on as well.

Folks, this wasn't scripted.  It wasn't done when the bright lights were on either; it happened before Trump came on.  It was a split-second decision on The Donald's part.

In other words Trump did the right thing by a competitor for the job even though nobody else did and nobody was watching him.

Now tell me, ladies and gentlemen, do you want a President who only does the right thing when he's under the bright lights -- and sometimes, not even then?  Or do you want a President that will do the right thing -- the honorable thing -- even when nobody is watching and the issue is not grand, but indeed quite small and even involves helping a competitor for your job.

Sometimes it's the littlest things that make clear who you should vote for -- or against.

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