Bill Gross's 'Short of a Lifetime' Would Mean Armageddon (Bloomberg)
The trade that George Soros and Stanley Druckenmiller pulled off in 1992 by betting against the British pound — and making $1 billion in the process — has gained legendary status. (More)
Housing Market Nears U.S. Busy Sales Season on Positive Note (Bloomberg)
Sales of previously owned homes jumped in March by the most in four years, putting the U.S. residential real estate market on firm footing heading into the busiest time of year.
Purchases increased 6.1 percent to a 5.19 million annualized rate, the highest level since September 2013, figures from the National Association of Realtors showed Wednesday in Washington. Houses were snapped up in 52 days on average, the fastest since July, and property values appreciated. (Continue)
Greek Banks Win More Emergency Cash as Talks Loom (Bloomberg)
The European Central Bank almost doubled an increase in emergency funding to Greek banks from last week before political talks shift to Brussels and Latvia over the country’s bailout review.
The European Central Bank’s Governing Council raised the cap on Emergency Liquidity Assistance by about 1.5 billion euros ($1.6 billion) to 75.5 billion euros on Wednesday, people familiar with the decision said. ELA is funding provided by national central banks at their own risk and is extended against lower-quality collateral than the ECB accepts. (More)
How ‘Safe’ Investments Could Destroy Your Portfolio (Bloomberg)
If you want a consistent stream of income when you retire, you’ve probably heard about a few familiar investment strategies. A dividend-paying stock gets you a regular cash payout from a company while letting you participate in the stock market’s upside. Municipal bonds are safely backed by governments, and their income usually isn’t taxable. (Read more)
Google Announces Project Fi Wireless Network Starting at $20 per Month (Bloomberg)
Google Inc. is taking a plunge into the $189 billion market for wireless service, creating fresh competition for Verizon and AT&T and stepping up efforts to boost sales and lure users to its Android mobile-phone software. (Continue)
McDonald’s Vows to Unveil Turnaround Plan as Slump Persists (Bloomberg)
McDonald’s Corp. Chief Executive Officer Steve Easterbrook promised to give details of his comeback plan for the struggling chain next month, following another quarter of declining sales and profit.
“We are developing a turnaround plan to improve our performance and deliver enduring profitable growth,” Easterbrook said in a statement Wednesday. “We look forward to sharing the initial details of this plan on May 4.”
Spreadsheet and Gumption Were All U.K. Trader Needed to Rig Market (Bloomberg)
It only took a spreadsheet souped up with custom enhancements to manipulate one of the world’s biggest markets with a strategy that on some days involved trading billions of dollars’ worth of stock-futures contracts.
According to the U.S. Justice Department, London trader Navinder Singh Sarao earned $40 million from 2010 to 2014. His product of choice: CME Group Inc.’s E-mini futures on the Standard & Poor’s 500 Index, the key measure of U.S. stock prices. He traded so much, the U.S. government says, that he contributed to the flash crash of May 6, 2010, that briefly drove shares into a nosedive that erased nearly $1 trillion in value. (Continue reading)
Millennials Willing to Outspend Boomers by 50% on Car Tech (Bloomberg)
Millennials are willing to spend more than 50 percent more for new technologies in automobiles than baby boomers, a J.D. Power survey found.
At an average of $3,703 a vehicle, millennials topped boomers at $2,416 and Generation X members at $3,007, the Westlake Village, California-based research firm said in a statement. The findings were presented Wednesday at an Automotive Press Association luncheon in Detroit. (Full article)
China Has a Massive Debt Problem (Bloomberg)
China has a $28 trillion problem. That’s the country’s total government, corporate and household debt load as of mid-2014, according to McKinsey & Co. It’s equal to 282 percent of the country’s total annual economic output.
President Xi Jinping’s government aims to wind down that burden to more manageable levels by recapitalizing banks, overhauling local finances and removing implicit guarantees for corporate borrowing that once helped struggling companies. Those like Baoding Tianwei Group Co., a power-equipment maker that Tuesday became China’s first state-owned enterprise to default on domestic debt. (Full article)
Blankfein Says September Rate Rise ‘Unlikely, But Possible’ (Bloomberg)
Goldman Sachs Group Inc. Chief Executive Officer Lloyd C. Blankfein said an interest rate increase by the Federal Reserve in September is “unlikely, but possible” as policy makers grapple with a strengthening economy.
The U.S. economic recovery is further along than Europe’s and probably China’s, Blankfein said Wednesday at an event in Johannesburg. If rates increase, it won’t be a source of optimism, although the cause for any tightening would be, he said, adding there haven’t been many signs of inflation. (More here)
How ‘Safe’ Investments Could Destroy Your Portfolio (Bloomberg)
If you want a consistent stream of income when you retire, you’ve probably heard about a few familiar investment strategies. A dividend-paying stock gets you a regular cash payout from a company while letting you participate in the stock market’s upside. Municipal bonds are safely backed by governments, and their income usually isn’t taxable. (More)
D.R. Horton Falls as Lower-Priced Homes Seen Gaining (Bloomberg)
D.R. Horton Inc., the largest U.S. homebuilder by revenue, fell the most in three months after saying its entry-level Express Homes division may make up a greater share of sales, putting pressure on profit margins. (Here)
Keurig’s Cold-Drink Machine May Be Hotter Than Coffee, Coke Says (Bloomberg)
A new Keurig single-serve soda maker due later this year may be a hotter item than the company’s dominant coffee brewer, Coca-Cola Co. Chief Executive Officer Muhtar Kent said.
The device, developed by Keurig Green Mountain Inc. with help from investor Coca-Cola, will allow consumers to mix individual branded soft drinks at home. Keurig will market the devices along with flavor pods that produce a carbonation-inducing chemical reaction when injected with water. Keurig Cold will complement Keurig’s home coffee brewer, which also uses pods. (Continue here)
Facebook Introduces Caller ID, Dialer App for Android Phones (Bloomberg)
Facebook Inc. is testing a new application that will act as a caller ID and allow users of the social network to block calls on their mobile phones. (Read more)
How Crisis In The Energy Sector Could Spark A Repeat Of The Subprime Bust (Forbes)
The oil and gas industry is in crisis. But while $50 oil might be good for America, is there a chance that a fever in the oil patch could cause the rest of the U.S. economy to catch a cold? It’s possible, and here’s why. Oil companies are on the hook for nearly a quarter of the overheated $1.2 trillion high-yield and leveraged loan market. (Full article)
Parasite Turns On Parasite: HFT Sues Other HFTs For "Egregious Manipulation" Of Treasury Securities (ZH, Tyler Durden)
There was a time when those who dared to call out the massive Libor manipulation conspiracy (such as what Zero Hedge did with one of its first posts in 2009) for being a massive Libor manipulation conspiracy some 4 years before the "theory" became a fact, were branded as scaremongering, fringe voices, best to be ignored. Then, of course, once the "theory" became "fact" it suddenly was perfectly obvious to everyone in retrospect.
But the bigger question, and what stumped the so-called experts, is how could something so vast, with so many moving pieces, remain a secret for as long as it did. (Read here)
Why does US healthcare cost so much? A Texas reporter takes a close look (CJR)
With what will be a yearlong, 13-part series called “Cost of Care,” the Dallas Morning News is the latest news outlet to take a long, hard look at through-the-roof American healthcare costs. Staff writer and business columnist Jim Landers, who has published six pieces in the series to date, aims to probe “how and why US healthcare spending is the highest among developed nations.” People ask the wrong question, Landers told me. Instead of asking “why,” they want to know how “they can afford it.” (Here)
A biotech startup is creating fake eyes to enhance human vision (BusinessInsider)
Our eyes are such elegant, complex, specialized organs that their existence seems almost hard to believe–Darwin himself called their evolution "absurd."
But that doesn't mean they're perfect; eyes sometimes don't focus correctly, they break down over time, and they can be extremely painful if infected, irritated, or exposed to light that's too bright. (Read more)
Sing LA LA LA and Pretend Housing Doesn’t Count – That’s How Conomists Ignore Inflation (WallStreetExaminer)
In the hall of mirrors where conomists live, there’s no housing inflation. When the prices of consumption goods rise it’s “inflation.” But when housing prices rise, it’s not inflation, it’s “appreciation.” It’s like stock prices. There’s literally no stock price inflation. There’s “multiple expansion,” or “appreciation,” but there’s no “inflation.” That’s how establishment conomists can claim there’s no inflation. They exclude the rising prices of assets. (Here)
Dear CFTC: This Is The Market Manipulating "Spoofing" Taking Place In The E-Mini Just Today (ZH, Tyler Durden)
Dear CFTC:
Thank you!
Thank you, because 6 years after we warned about the dangers from predatory HFT including such parasitic "strategies" as spoofing (or layering, which together with the DOJ you have now confirmed is illegal), quote stuffing, flash trades, momentum ignition, sub-pennying, ISOs, and countless others, you have confirmed everything we have said. (Full article)
U.S. Treasury: Can This Bubble Ever Pop? (EconMatters)
Guys like me who rely on volatility in U.S. Treasury prices have had a difficult time this past month. What’s usually a roller coaster ride in Treasury prices has been more like a kiddie ride in the amusement park. (More)
Investors question whether banks' robust profit growth will hold (Reuters)
Financial companies are among the standouts of the first-quarter earnings reporting season, but their dazzling profit growth has failed to impress investors, who are finding reasons for caution behind the headline numbers.
At a quick glance, the group appears well-positioned for outperformance. Analysts see the sector's first-quarter earnings rising 14.5 percent, Thomson Reuters data shows, with even greater earnings growth continuing all year. (Here)
Part-time 'slack' may be nearing its end as Fed debates hike (Reuters)
U.S. part-time employment is fast-approaching levels common since the 1970s in a sign that a key part of labor market slack may be almost gone, giving the Fed one less reason to delay hiking interest rates frozen near zero for more than six years.
Central bankers watch the part-time figures as a measure of labor market health. While current part-time numbers remain high compared to the hot job markets of the 1990s and early 2000s, they are closing in on the longer term average. (Read more)
Solar Summit Slide Show: The Evolution of Solar (GreenTechMedia)
Each year, Shayle Kann, SVP of Research at GTM, provides the solar industry equivalent of Mary Meeker's internet trends slide deck — providing some context for the industry and illuminating the not-so-obvious changes. This year's presentation is called "The Evolution of Solar" — and this is a summary.
Kann suggests that the solar industry will evolve even faster in the next five years than it has in the previous five (Tom Werner, SunPower's CEO, agrees). There is almost 20 gigawatts of solar operating in the U.S. today, and we could hit the 1-million-installations mark this year in a $15 billion market. (Full article)
Detroit Just Had the Single Largest Tax Foreclosure in American History (MotherJones)
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. (Read here)
