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Thursday, March 28, 2024

Today’s News, 4-20-15

From Bloomberg:

The Republican Schism Over Taxes (BloombergView)

<p>Let's not get carried away.</p> Photographer: Mario Tama/Getty Images

Since the fall of the Berlin Wall in 1989 eliminated the threat of global communism, the one glue that held together Republicans has been cutting top marginal tax rates to promote economic growth.

That Velcro is cracking.

The Republican presidential candidate Marco Rubio has proposed a huge tax cut. The centerpiece would be a new $2,500-per-child credit. This family-centric provision would amount to a $1.5 trillion tax reduction over 10 years. The top individual rate would be reduced to 35 percent from 39.6 percent, and it would kick in at a lower income level than the current 35 percent rate does. (More)

MGM Dissident Litt Says Casino Operator Overbuilding Again

Jonathan Litt, who’s pushing MGM Resorts International to put its properties into a real estate investment trust, stepped up his criticism of the casino company and accused a director of retaliating against one of his board nominees. (Continue)

Ibovespa Advances as Vale Climbs Amid Chinese Economic Stimulus

The Ibovespa rose for the first time in three days as Chinese stimulus measures fueled optimism that Brazil’s exporters will benefit from growth in the nation’s biggest trading partner.

Iron-ore miner Vale SA rallied. State-controlled oil producer Petroleo Brasileiro SA contributed the most to the index’s advance after approving financing of 4.5 billion reais ($1.5 billion) with Banco do Brasil SA. Homebuilder Direcional Engenharia SA slumped after saying cancellations exceeded contracted sales in the first quarter. (More here)

Hong Kong Stocks a Seller’s Market With $3.4 Billion Dumped

As mainland Chinese investors rush to buy Hong Kong stocks, backers of some of the city’s biggest companies are doing the opposite. (Read more)

                               Flood of Chinese money triggers Hong Kong selldowns

Swiss Franc Antics Threaten Banks’ Grip on Currency Trading

The grip of the world’s biggest banks on the $5.3-trillion-a-daycurrency market is under attack.

After the Swiss National Bank stunned the world in January by abandoning its price cap on the franc, some banks sought to reduce their losses by trying to renege on transactions. Dealers including Bank of America Corp., Barclays Plc and Goldman Sachs Group Inc. approached customers about changing some trades, according to people familiar with the discussions. (Continue)

London's Financial-Services IndustryLondon’s Financial Vacancies Up 19% in March, Survey Shows

Job vacancies in London’s financial-services industry increased by 19 percent in March as firms sought employees to manage additional compliance and governance demands from regulators, a recruitment survey showed. (Read here)

‘Furious 7’ Zooms Past $1 Billion, May Augur Record Summer

“Furious 7,” the epic car-chase film featuring the late actor Paul Walker, cruised to a third straight win in U.S. and Canadian theaters and raised the possibility of record-breaking audiences this summer. (Full article)

Obama: 'No Greater Threat' to Planet than Climate Change

Global warming certainly has one politician's attention. 

In his weekly address President Obama cited climate change as Earth's single biggest threat. 

“Today, there’s no greater threat to our planet than climate change,” Obama said. “Climate change can no longer be denied or ignored.” (Read more)

Norway Strikes Biggest Property Deal Betting on U.S. Warehouses

Norway’s sovereign-wealth fund made its biggest real estate investment yet, teaming up with Prologis Inc. to buy warehouse properties in 17 U.S. states for $5.9 billion. (More)

<p>Beyond the mall cop.</p> Photographer: FREDERIC J. BROWN/AFP/Getty ImagesSegway's Second Chance in China (BloombergView)

Segways are a revolutionary mode of transportation embraced by mall cops and helmeted tourists, but seemingly very few others. Some cities have banned them. A U.S. president has toppled off of one. And in 2010 the company’s (then) owner accidentally drove his off a cliff. Yet despite these setbacks, and sales that have never approached expectations, Ninebot, a Chinese Segway competitor, announced last week that it was purchasing Segway for an undisclosed sum. (More here)

China Coal Power PlantHere’s What China Closing Coal-Power Plants Means for Emissions

China’s recent scrapping of small coal plants will avoid the release of as much as 11.4 million metric tons annually of climate-warming carbon dioxide, helping the country cut emissions for the first time in more than a decade. (More)

Investors Who See ‘Froth’ in Market Go All In for Oil

Joseph Gladbach and his fellow bankers at Jefferies Group field three to five calls a day from investors eager to park their millions in energy stocks or bonds in the worst down cycle in 30 years. (Read more)

                                Cash is King for Shale Producers

Nasdaq MarketSiteThe $320 Billion Bogey Needed to Placate U.S. Stock Market Bulls

Few have benefited more from the U.S. bull market that started in 2009 than technology companies, and none are being counted on more by investors to deliver the earnings needed to keep it going.

As a group, the computer and biotechnology stocks that make up the Nasdaq 100 Index have seen their market value jump by $3.3 trillion since March 2009, more than any other industry. Now they’re on the hook to generate $320 billion in profits this year, more than technology companies ever made at the height of the Internet craze. (Continue)

<p>Time to look ahead.</p> Photographer: Kostas Tsironis/Bloomberg11 Acts Toward a Greek Tragedy (BloombergView)

With negotiations faltering, the rhetoric intensifying and a daunting payment schedule ahead, there is mounting concern that the latest disagreements over Greece may be more than just another stage in the prolonged repeated game involving that country's debt drama. (Full article)

Volcker Urges Merging Regulators to Bolster Financial Oversight

Five years after giving his name to a rule designed to restrict trading by Wall Street banks, Paul Volcker is pushing for another change that would put at least one top regulator out of business. (Read more)

Brazil Swap Rates Rise to April High on Faster Inflation Outlook

Brazil’s shorter-term swap rates climbed to their highest levels in April after a faster inflation forecast from economists added to speculation that the central bank will raise borrowing costs by another half-percentage point. (Continue)

Verizon, AT&T Seen Trailing T-Mobile in Wireless User Growth

Verizon Communications Inc. and AT&T Inc. will post first-quarter results this week that will probably show wireless subscriber growth trailed smaller rival T-Mobile US Inc., a milepost passed only once before. (More)

                                T-Mobile Tops Rivals in 1Q User Growth

Cessna Citation Private JetEurope’s Used Jets Luring U.S. Bargain Buyers With Strong Dollar

Europe’s slow growth and sinking currency have meant boom times for Kevin McCutcheon, an American who buys used private jets to resell in the U.S.

He’s bought six aircraft in Europe and is negotiating for a seventh, a Cessna Citation in Germany, in less than two years. He’s finding plenty of bargain shoppers back home. Small and midsized U.S. companies and wealthy individuals are buying up Europe’s second-hand jets as that region’s economic woes spur owners to put their Falcons, CJ3’s and Excels on the market. (More here)

China Adds Solar Power the Size of France in First Quarter

China’s solar installations in the first quarter were almost equal to France’s entire supply of power from the sun.

China connected 5.04 gigawatts of solar capacity to grids in the three months ended March 31, the National Energy Administration said in astatement on Monday. The Asian nation now has a total 33 gigawatts of solar-power supply. (Read more)

Kaisa Group Holdings Ltd.What a Default on Kaisa’s Dollar Debt Could Mean for Creditors

Kaisa Group Holdings Ltd. may miss $52 million of interest payments on two of its offshore bonds, becoming the first Chinese real estate company to default on its U.S. currency debt.

With the notes’ sale documents containing cross-default clauses that would allow other creditors to call in their money, this could spell more trouble for the heavily indebted Shenzhen-based developer. Here’s what is happening and what to expect. (Full article) 

Breaking Down the Next Big Political Fight on Obama's Trade Deals

The benchmark gauge of Indian equity-option prices climbed to a six-week high as stocks fell for a fourth straight day amid caution over quarterly earnings. (More)

Dudley: Growth Rebound Should Support Rate Rises in 2015

Federal Reserve Bank of New York President William C. Dudley said he’s relatively optimistic a growth rebound will warrant raising interest rates in 2015, though he’s “not reasonably confident right now” inflation will climb.

“I believe that the growth prospects for the U.S. economy over the remainder of 2015 will improve,” Dudley said in a speech at theBloomberg Americas Monetary Summit in New York. “When, hopefully, the data support a decision to lift off later this year, it does not mean that U.S. monetary policy will be tight.” (More)

<p>Why is he smiling?</p> Photographer: Andrew Harrer / BloombergCharting Greece's Frightening Future (BloombergView)

Greece and its creditors would do well to step back and survey the wreckage as they enter yet another week of brinkmanship: Data on capital flows suggest they've undone years of confidence-building in a matter of months. (Read here)

JSW Steel Said to Target Record Sales as Demand Surges in India

The benchmark gauge of Indian equity-option prices climbed to a six-week high as stocks fell for a fourth straight day amid caution over quarterly earnings. (Read more)

Draghi Says ECB Stimulus Prepared Ground for Euro-Area Pickup

Mario Draghi said the “extraordinary” range of European Central Bank policy actions will facilitate a pickup in euro-area economic growth and inflation. (Here)

IMF Managing Director Christine LagardeFed Crisis-Liquidity Function Reviewed for Potential Use by IMF

IMF member nations are discussing how to expand the lender’s mandate to include keeping markets liquid during a financial crisis, a role played by a group of major central banks led by the Federal Reserve in 2008.

The International Monetary Fund’s main committee of central bank governors and finance ministers is working on ways for the fund to provide a better financial “safety net” during a crisis, said Singapore Finance Minister Tharman Shanmugaratnam, who last month finished a four-year term as chairman of the panel. Singapore remains a member of the International Monetary and Financial Committee. (More here)

Chinese Stocks Drop as H Shares Tumble on Concern Gains Overdone

China’s stocks fell from the highest levels since 2008 and Hong Kong’s benchmark index sank the most in four months amid speculation recent gains were overdone. (Read here)

China Swap Rate Drops to Lowest Since 2012 on Reserve-Ratio Cut

China’s interest-rate swaps declined to the lowest level since 2012 after the monetary authority cut the amount of cash banks must set aside as reserves in an effort to boost economic growth. (More)

Key Attendees At The Spring Meetings Of The World Bank And International Monetary FundHot Topics From the Weekend's IMF Meetings 

It's springtime in Washington, and that means several things. The sun shines on the National Mall, tulips bloom on the White House lawn, and central bankers and finance ministers from around the world meet to discuss the global economy in all its glory and disarray. If you weren't following the International Monetary Fund and World Bank's April 17-19 meetings, here's what you missed.  (Continue)

Carstens Won’t Rule Out Keeping Mexico Rates Low After Fed Move

Mexican central bank Governor Agustin Carstens doesn’t rule out keeping interest rates at a record low even after the Federal Reserve begins to tighten, given slow growth and inflation in Latin America’s second-largest economy.

He also said the country will benefit from faster growth in the U.S., and that the peso is undervalued as investors focus on the outlook for higher U.S. rates rather than Mexico’s economic potential. (Full article)

From Around the Web:

The Continuing Depopulation of Detroit (NakedCapitalism)

Unlike so many industrial innovations, the revolving door was not developed in Detroit. It took its first spin in Philadelphia in 1888, the brainchild of Theophilus Van Kannel, the soon-to-be founder of the Van Kannel Revolving Door Company. Its purpose was twofold: to better insulate buildings from the cold and to allow greater numbers of people easier entry at any given time.

On March 31st at the Wayne Country Treasurer’s Office, that Victorian-era invention was accomplishing neither objective. Then again, no door in the history of architecture — rotating or otherwise — could have accommodated the latest perversity Detroit officials were inflicting on city residents: the potential eviction of tens of thousands, possibly as many as 100,000 people, all at precisely the same time. (Continue)

Red revival (Economist)

JAPANESE voters went to the polls last weekend in local elections that set few pulses racing: turnout was the lowest on record and the Liberal Democratic Party (LDP), the dominant partner in Japan’s ruling coalition, cruised to victory predictably, winning over half the nation’s prefectural assembly seats. But another political success did surprise: the Japanese Communist Party (JCP) emerged as the country’s largest opposition at the local level.  (More)

Chinese easing no shot in the arm for Asian shares (FT)

China's decision to stimulate its economy by freeing up cash held by banks has failed to spark a rally among Asian markets on Monday.

The Shanghai Composite slumped as much as 1.1 per cent in early trading, although it later recovered. Hong Kong's Hang Seng was down 0.4 per cent. (Read here)

Bang goes retirement (Economist)

AT SIXTY, Zhang Chaoshou has only distant memories of his young life in the countryside. He has been working in and around the centre of Chongqing, a province-sized municipality in south-western China, for more than 30 years. As he shovels cement under a fierce sun, he says he will keep working as long as he is able. “Can’t retire,” he says. Like millions of others his age, he cannot afford it. His state pension is just 93 yuan ($15) a month. (More)

A record amount of electrical and electronic waste hit the rubbish tips in 2014, with the biggest per-capita tallies in countries that pride themselves on environmental consciousnessMountain of electrical waste reaches new peak (BusinessInsider)

A record amount of electrical and electronic waste hit the rubbish tips in 2014, with the biggest per-capita tallies in countries that pride themselves on environmental consciousness

Paris (AFP) – A record amount of electrical and electronic waste hit the rubbish tips in 2014, with the biggest per-capita tallies in countries that pride themselves on environmental consciousness, a report said Sunday.

Last year, 41.8 million tonnes of so-called e-waste — mostly fridges, washing machines and other domestic appliances at the end of their life — was dumped, it said. (Continue)

Greece is going to miss its own bailout deadline and the money is rapidly running out (BusinessInsider)

Greece has got another crucial week ahead, and the government now looks likely to miss its own self-imposed deadline of April 24 for accessing bailout cash. (More here)

Netflix Is Betting Its Future on Exclusive Programming (NYTimes)

It is April 9 just before midnight in the war room of Netflix’s headquarters here, where the smell of popcorn fills the air and a team of engineers, social media experts and other specialists starts counting down the seconds until the new “Daredevil” superhero series goes live on the streaming service.

At the stroke of 12, applause breaks out in the room. Flutes of Champagne are passed around as the Netflix team checks that the series is available for binge watching across devices in more than 50 countries around the world. (Read here)

Crude oil drips from a valve at an oil well operated by Venezuela's state oil company PDVSA, in the oil rich Orinoco belt, near Morichal at the state of Monagas April 16, 2015. REUTERS/Carlos Garcia RawlinsOil extends gains on lower U.S. rig count, Chinese stimulus (Reuters)

Oil prices rose on Monday, extending last week's gains as a drop in the number of U.S. rigs drilling for crude pointed to lower supply later in the year, while China's latest stimulus measure also underpinned the market.

U.S. oil drilling rigs fell for a record 19th straight week to the lowest since 2010, data from Baker Hughes showed. (Continue reading)

Laid-Off Walmart Workers Head to Labor Board (NYTimes)

A group representing Walmart workers laid off after the abrupt closing of five stores last week planned to seek an injunction on Monday from theNational Labor Relations Board that would require the retailer to rehire all 2,200 affected workers.

Walmart said that the closings were temporary and were prompted by plumbing issues at the five stores, in California, Texas, Oklahoma and Florida. Officials at the retailer said they would do their best to rehire the workers at other stores or at the five stores once they reopened. (Full article)

You Will Cry Forever at This Emotional Speech Taylor Swift's Mother Just Gave About Her (Cosmopolitan)

If you missed the Academy of Country Music Awards on Sunday, you missed one of the most touching awards show moments ever, thanks to Taylor Swift's mother and her emotionally-charged speech. (Read more)

Investors Grow Wary of Emerging-Market Debt (WSJ)

Emerging-market bonds are being submerged in investors’ worries.

Facing rising corporate defaults from Brazil to China to Ukraine, some portfolio managers are selling debt issued by emerging-market companies. (More)

John Oliver Explains Just How Shady Drug Companies Really Are (UpWorthy)

The bottom line: If you thought drug companies were primarily about making sick people less sick, that's … just … nope.

In 2013, the top 10 pharmaceutical companies racked up nearly $90 billion in pure profit and spent a whole heck of a lot more to market their drugs than they did actually researching and developing them. And the year before that, they spent precisely six times as much pushing their products on doctors and other health care providers than they did running those hilariously terrible ads in newspapers and on late night TV. (Here)

1-Crusades-Iran-Israel‘God Told Me to Do It’: The Dangers of America’s Lunatic Right (GlobalResearch)

These are truly insane times.

Aside from the odd grumblings about being a “Christian nation,” here in Britain we are mostly divorced from strong religious themes in our politics. Not so in the US, and I’m not talking about Prayer in Schools here either. (Read more)

BuzzFeed Says Posts Were Deleted Because of Advertising Pressure (NYTimes)

An internal review by BuzzFeed last week found three instances when editors deleted posts after an advertiser or employees from the company’s business side complained about their content, according to a memo sent to staff members on Saturday by the news and entertainment website’s editor in chief. (More)

ae0cfd04f54dc410VgnVCM200000d6c1a8c0____-Gulf Oil Spill Iconic Images-1.jpg5 years after BP's oil spill, an undaunted industry pushes drilling even deeper into the Gulf (FoxBusiness)

Five years after the nation's worst offshore oil spill, the industry is working on drilling even further into the risky depths beneath the Gulf of Mexico to tap massive deposits once thought unreachable. Opening this new frontier, miles below the bottom of the Gulf, requires engineering feats far beyond those used at BP's much shallower Macondo well. (Read more)

Oil Drillers Plot Survival Plan (WSJ)

American oil drillers, battered and bruised by the steep drop in crude prices, are descending on Houston this week to plan their survival.

Thousands of industry executives gather in Texas every year for IHS CERAWeek, but this spring’s confab has a decidedly different tone. (Here)

Holy Kaw - Josh 's cop (34)Here’s the “Batman vs Superman” trailer (finally)  (HolyKaw)

A day after the “Batman vs Superman” trailer was leaked online, Warner Brothers released it to the public. It doesn’t tell much of anything about the plot, but it definitely looks awesome. (Continue)

China Floats QE Trial Balloon, PBoC May Launch LTROs (ZH, Tyler Durden)

A little over a month ago we suggested that QE in China may take the form of local government debt purchases by the PBoC. As a reminder, China is allowing local governments to refinance a portion of their ~17 trillion yuan debt pile by swapping it for lower yielding bonds. As a percentage of GDP, local government debt has grown to 35% and because a sizeable amount was accumulated off balance sheet via shadow banking channels, it carries relatively high interest rates. (More)

                                     

The Coming Emerging-Market Debt Squeeze (Project-Syndicate)

Consider the following scenario, one that has played out time and again in emerging-market countries. Local banks and firms go on a borrowing binge and pile up dollar-denominated debt – debt that pundits consider perfectly sustainable, as long as the local currency is strong. Suddenly, something (an increase in United States interest rates, a drop in commodity prices, a domestic political conflict) causes the local currency to drop in value against the dollar. The debt burden, measured in domestic currency, is now much higher. Some borrowers miss interest payments; others are unable to roll over principal. Financial mayhem ensues. (Continue reading)

bill fleckensteinFLECKENSTEIN: 'How are you supposed to actively short stocks in this environment?' (BusinessInsider)

In January 2014, veteran short-seller Bill Fleckenstein said he was readying a new fund to bet on falling stock prices. More than a year later, he's still waiting to launch that fund.

Despite lackluster U.S. economic data, a world grappling with slow growth, concern that Greece and Ukraine could default on their debts, the U.S. stock market has been more than resilient. Even after a selloff on Friday, major indices are less than two percent from all-time highs and volatility measurements have been close to their lowest levels for 2015. (More)

Rise In Traveling Hookers, Depressed Gambling, Booze Sales Bode Poorly For US Economy (ZH, Tyler Durden)

Retail sales rounded out their worst 3-month run since Lehman last month and even as April’s print showed the biggest sequential rise in nearly a year, sales still missed expectations affording us the opportunity to point out yet another “since Lehman” moment as retail sales haven’t missed for four consecutive months since the end of 2008. This really shouldn’t come as a surprise to those who are paying attention because as we’re fond of pointing out, America’s “non-supervisory” employees (who make up more than three quarters of the workforce) are suffering fromdeclining wage growth and with wage growth now an almost perfect predictor of consumer spending, one would expect retail sales to take a hit. (Read more)

                                     

NG_StarTalk_104Neil deGrasse Tyson: Politicians Denying Science Is ‘Beginning Of The End Of An Informed Democracy’ (ThinkProgress)

What will you be doing on Monday, 4/20, at 11 p.m.?

Perhaps watching the premiere of acclaimed astrophysicist and author Neil deGrasse Tyson’s new show StarTalk. Tyson, who may be best known for hosting the reboot of Carl Sagan’s Cosmos series in 2014, will now be appearing weekly on the National Geographic Channel in what may be the first late-night science talk show. Along with a trusty cast of comedians and science-minded folks like Bill Nye, Tyson hopes the adaptation of his popular podcast to a broadcast format will make getting a regular dose of science as pain-free as possible. He thinks that by embedding it between pop culture discussions and entertaining asides, the science will go down easy, and even leave you wanting more. And he’s right. (Continue here)

Screenshot_336Ben Graham Centre 2015 Conference – Presentations (ValueWalk)

The Ben Graham Centre for Value Investing at the Ivey Business School at WesternUniversity held a conference on Value Investing on April 15, 2015 at theFairmont Royal York in downtown Toronto. (More)

Looking For Income? 4 Non-Bond Strategies To Consider (Forbes)

If you can recall when Bruce Springsteen, Michael Jackson, and Madonna burst onto the music scene, you may remember (perhaps with the same nostalgia) double-digit yields on government bonds. Well, those days are long gone. And even when the U.S. central bank eventually starts raising interest rates, they will still be far from the double-digit levels of several decades ago. (Read more)

The IMF has a warning on volatility in global markets that's 'not for the faint-hearted' (BusinessInsider)

It’s been well telegraphed by the US Federal Reserve that they are looking to normalize monetary policy at some point this year. The question is, could it still spark a renewed bout market volatility, despite the best efforts of Fed officials? (More)

Hydrogen Fuel Cell Cars Return for Another Run (NYTimes)

FOR decades, hydrogen has been the Dracula of automotive fuels: Just when you think a stake has been driven through its zero-emissions heart, the technology rises from the grave.

In 2015, even with gasoline cheaper than it has been in years, hydrogen is back to haunt those who insist that battery electric vehicles are the long-term solution for reducing fossil fuel consumption and carbon dioxide emissions. (More)

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