Author Archive for Zero Hedge

Mauldin: Americans Don’t Grasp The Magnitude Of The Looming Pension Tsunami

Courtesy of ZeroHedge. View original post here.

Authored by John Mauldin via MauldinEconomics.com,

Total unfunded liabilities in state and local pensions have roughly quintupled in the last decade.

You read that right—not doubled, tripled, or quadrupled—quintupled. That’s nice when it happens on a slot machine, not so nice when it’s money you owe.

You will also notice in the chart that much of that change happened in 2008.

Why was that?

That's when the Fed took interest rates down to nearly zero, meaning it suddenly took more cash to fund future payments.

According to a 2014 Pew study, only 15 states follow policies that have funded at least 100% of their pension needs. And that estimate is based on the aggressive assumptions of pension funds that they will get their predicted rate of returns (the “discount rate”).

Kentucky, for instance, has unfunded pension liabilities of $40 billion or more. This month the state budget director notified local governments that pension costs could jump 50–60% next year.

That’s due to a proposed reduction in the system’s assumed rate of return from 7.5% to 6.25%—a step in the right direction but not nearly enough.

Think About This as an Investor: How Can You Guarantee 6–7% Returns These Days?

Do you know a way to guarantee yourself even 6.25% average annual returns for the next 10–20 years? Of course you don’t. Yes, some strategies have a good shot at doing it, but there’s no guarantee.

And if you believe Jeremy Grantham’s seven-year forecasts (I do: His 2009 growth forecast was spot on), then those pension funds have very little hope of getting their average 7% predicted rate of return, at least for the next seven years.

Now, here is the truth about pension liabilities. Let’s assume you have $1 billion in funding today. If you assume a 7% compound return—about the average for most pension funds—then that means in 30 years that $1 million will have grown to $8 billion (approximately).

Now, what if it’s a 4% return? Using the Rule of 72, the $1 billion grows to


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WSJ Turns On Antifa: Violent, Black-Clad Protesters Are “Dividing The Left”

Courtesy of ZeroHedge. View original post here.

Since Bay Area TV anchor Frank Somerville published an honest description of "the hate" he experienced from "violent, clad in black" protesters while trying to document a right-wing rally in Berkeley, the liberal media has decidedly turned against AntiFa – the loosely organized band of black-clad thugs who show up to “counter-protest” at conservative events and demonstrations around the country. WSJ's report describes the group as the left-wing equivalent of the fascists and white supremacists that AntiFa claims to oppose – characterization that the media has so far been reluctant to embrace.

This week, The Wall Street Journal has jumped on the bandwagon, publishing a deeply researched history of the group, and interviewing other leftist organizers who’ve criticized the group for being too violent and damaging the credibility of the left. 

In one scene, WSJ recollects how Antifa protesters viciously attacked a small crowd of right-wing demonstrators who showed up last month’s “No to Marxism” rally in Berkeley, even though the rally had been canceled. Using clubs and wooden shields emblazoned with “no hate,” groups of around half a dozen beat and chased their outnumbered “adversaries” out of the park.

As one long-time liberal activist in Massachusetts noted, Antifa’s tactics are dividing the resurgent leftist movement that has coalesced around opposition to President Donald Trump.

AntiFa “doesn’t represent us,” she told WSJ

“The antifa tactics are testing the liberal movement that has galvanized in opposition to Mr. Trump—creating a rift among its leaders, organizers and demonstrators about whether to denounce a radical fringe, some of whose antidiscrimination objectives, if not tactics, they share.

James Hannon, a psychotherapist and seasoned liberal organizer in Massachusetts who marched at a recent Boston rally against racism, said elements of the antifa movement that use confrontational tactics allow others to blur the line between leftist groups and the hate groups against which they protest.

“The social justice, the peace movement, the left or just progressives really have to start calling out the antifa and say, `Hey, hey, hey, you don’t represent us,’ ” said Mr. Hannon, 67 years old. “’We’re surrendering a moral high ground.’”


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“Pizza Price Parity”: Where Is Pizza Most And Least Expensive In America?

Courtesy of Zero Hedge

By Priceonomics.com

Between 2007 – 2010, a USDA study estimated that 1 in 8 Americans ate some form of pizza on any given day. That number climbs to about 1 in 4 for males and 1 in 5 for females when looking specifically at Americans age 12 to 19. There’s no escaping it; pizza is engrained in our diets.

Pizza is not only a pillar of the American diet, but also of our culture.

Through saturation of TV, movies, and now the internet, it has entered the zeitgeist. How do you make characters as strange as the Teenage Mutant Ninja Turtles more relatable? Make them love pizza. Right now, you can search on Amazon to find pizza sweatshirts, pizza pool toys, and pizza cologne. Even new disruptive and trendy technological innovations need their connection to pizza. That’s why there’s a pizza cryptocurrency and drone pizza delivery.

We noticed that pizza prices and availability can vary dramatically across the United States. We analyzed data from Priceonomics customer, Datafiniti, a data company that has digitized menus across America. Which states and cities have the most pizzerias? How much can you expect to pay for pizza across the country?

Starting with this business data, we searched for restaurants serving pizza. This data set gave us thousands of different listings to comb through for more detailed location and menu information. To control for differences in price because of toppings and sizes, we needed a standardized item for evaluation, so we found the price of a large plain pizza in each restaurant record. This baseline allowed us to compare prices across cities and states more accurately.

So, where can you find the most places serving pizza? Accounting for population, you can find the most pizza places concentrated in the Northeast, particularly Connecticut, Massachusetts, Rhode Island, and New Jersey. At the city level, the trend is not as clear, with Orlando, FL, Buffalo, NY, and Minneapolis, MN taking the top three spots. 

How much will you pay for a large cheese pie? Median prices range from $7.25 to as much as $15. Despite only looking at plain cheese pizza, there are subtle stylistic differences that likely lead


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Of Penguins And A Nuclear Iran: Will Trump Scrap “The Deal”?

Courtesy of ZeroHedge. View original post here.

Netanyahu: "Penguins have no difficulty recognizing that some things are black and white."
 

Trump: "I have decided…I'll let you know."
 

Rouhani: "Iran's defense capacities are only a deterrent."

President Trump has been notoriously hard to read when it comes to high stakes foreign policy issues. On Wednesday he told the media, "I have decided" concerning whether he'll scrap the Iran nuclear deal, though not actually indicating what he's decided. But will the US really unilaterally pull out? Like with Trump's backing off of regime change in Syria even after bombing the country last April, will Trump's bark be harsher than his bite on the Iran nuclear deal?"

In his UN General Assembly speech on Tuesday Israeli Prime Minister Benjamin Netanyahu had little to say on the Palestinian issue but as was expected blasted the Iran nuclear deal. President Trump, speaking earlier that morning, reiterated his words that the UN-backed deal is "an embarrassment" while echoing Bush's "axis of evil" rhetoric, calling out Iran as a "rogue nation" along with North Korea and Venezuela. Multiple observers reported a visibly elated Netanyahu, who in his address seized on the momentum to say of Trump's speech that, "none were bolder, none more courageous and forthright than the one delivered by President Trump today," and added, “together we can seize the opportunities for peace, and together we can confront the great dangers of Iran.”

Trump hinted as he's done many times before that the six nation brokered deal negotiated under Obama, would be nixed. Trump said of Iran, “We cannot let a murderous regime continue these destabilizing activities while building dangerous missiles, and we cannot abide by an agreement if it provides cover for the eventual construction of a nuclear program,” and continued further with,  “I don’t think you’ve heard the last of it, believe me.”  

Spoof image of the Israeli Prime Minister's presentation at the UN which went viral inside both Iran and Israel soon after he made reference to penguins in the speech: "You laugh, but penguins have no difficulty recognizing that some things are black and white, are right and wrong." Via Twitter

Trump went so far as to invoke rhetoric which sounded


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Could Kurdish Independence Spark An Oil War?

Courtesy of ZeroHedge. View original post here.

Authored by Zainab Calucuttawala via OilPrice.com,

As the date of the Kurdish independence referendum approaches, oil industry moguls should be concerned about an oil production war between Iran and headless Iraq.

The Kurds are expected to vote on their political status in late September. A vote in the affirmative would mean that Iraq would lose a chunk of its northern areas, which includes the crucial Kirkuk oilfield and its surrounding reserves.

The latest news from the election committee shows that the Kurdistan Regional Government (KRG) is doing the most it can to increase international participation in the election. On Monday, authorities announced that they had removed a key requirement for diaspora voters participating in the elections. Kurds participating in the e-voting platform will no longer be required to present a ration card to be able to cast their vote through September 25th. Iraqis who have been living abroad for several years, even decades, no longer hold a valid version of the United Nations-conferred identification. The new provision just requires that voters prove their current Iraqi citizenship via relevant documentation.

In roughly one week, the election authority will count votes and announce the political and territorial future of Iraq. It has been a rocky 100 years for the country since the 1916 Sykes-Picot agreement divided Asia Minor on an imperialist paradigm, without regard for cultural variations within the territory.

Believe it or not, soon after Sykes-Picot, Iraq became a kingdom ruled under a Hashemite monarch related to the current king of Jordan. In 1958, the Iraqi army overthrew the monarchy in a development known as the July 14 Revolution, which brought the rebel leader Abd al-Karim Qasim to power and pulled Iraq closer to the Soviet Union.

Decades of Ba’athist leadership later, the U.S. government toppled Saddam Hussein’s regime in Baghdad, based on a diplomatic campaign that insisted the Iraqi military had been hiding weapons of mass destruction. Since then, reconstruction has been the name of the game in Iraq, but the past few years of conflict with the deadly Islamic State has made it difficult for Baghdad to focus on creating a prosperous future for its citizens.


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Prosecutors Unveil Full Details Of Anthony Weiner’s Pedophilia

Courtesy of ZeroHedge. View original post here.

Earlier today we reported that as part of the government's sentencing memorandum (published at the bottom), federal prosecutors asked that disgraced former Congressman Anthony Weiner, and the man Hillary Clinton has quietly added to the nearly infinite list of reasons why she lost the presidential election, be sentenced to about two years in prison for engaging in sexting with an underage, 15-year-old girl. Prosecutors filed paper in Manhattan Federal Court on Wednesday in advance of Weiner’s sentencing. In the document, prosecutors asked that the judge use the sentencing as an opportunity to send a message to other perverted politicians:

The Government respectfully submits this memorandum in connection with the sentencing of Anthony Weiner, which is scheduled for September 25, 2017, following his guilty plea to transferring obscene material to a minor. Although the defendant’s self-destructive path from United States Congressman to felon is indisputably sad, his crime is serious and his demonstrated need for deterrence is real. The non-custodial sentence that Weiner proposes is simply inadequate; his crime deserves time in prison. For the reasons set forth below, the Government respectfully requests that Court sentence Weiner to a term of imprisonment within the range of 21 to 27 months.

Weiner's sentencing will take place almost exactly a year after the New York Post published a story about him sexting with another woman who wasn’t his wife. Weiner said he would plead guilty in May after prosecutors brought charges following revelations that he also sexted with the 15-year-old, whom he met over Twitter. Both the girl and her father told the Daily Mail that Weiner knew she was underaged when they were corresponding.

And just to make sure that Weiner does end up in jail, the US Attorney for the district of New York, Joon Kim, laid out in vivid – and gruesome detail – the circumstances of his pedophilia. As taken from the prosecutor memorandum:

In the evening of January 23, 2016, a 15-year-old girl (the “Minor Victim”) initiated contact with the defendant by sending him a direct message on Twitter. Over the next several hours, the Minor Victim and Weiner exchanged a series of messages, ranging from the mundane to the provocative. Early in the exchange, the Minor Victim revealed


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The Everything Bubble Is Ready To Pop

Courtesy of ZeroHedge. View original post here.

Authored by Jared Dillian via MauldinEconomics.com,

It wasn’t always this way. We never used to get a giant, speculative bubble every 7–8 years. We really didn’t.

In 2000, we had the dot-com bubble.

In 2007, we had the housing bubble.

In 2017, we have the everything bubble.

I did not coin the term “the everything bubble.” I do not know who did. Apologies (and much respect) to the person I stole it from.

Why do we call it the everything bubble? Well, there is a bubble in a bunch of asset classes simultaneously.

And the infographic below that my colleagues at Mauldin Economics created paints the picture best.

I don’t usually predict downturns, but this time I bet my reputation that a downturn is coming. And soon.

When there’s nothing left but systemic risk, everyone’s portfolio is on the line.

To that end, I’ve put together a FREE actionable special, Investing in the Age of the Everything Bubble, in which I discuss ways to prepare for the coming bloodbath (download here).





Spot The Moment Inflation Turned Exponential

Courtesy of ZeroHedge. View original post here.

In the aftermath of a surreal Janet Yellen press conference, in which the Fed chair admitted that Fed "no longer understands" the "mystery" that is inflation, we did our best to explain to Yellen that the reason why the Fed's search for inflation has been fruitless, is because for nearly a decade it has been looking in the wrong place: the "real economy" where the Fed's impact has been negligible, as opposed to "asset prices" where the Fed has unleashed near hyperinflation.

Sadly, we doubt the Fed will understand what the above chart means.

Which of course, is ironic, because it was the Fed's arrival in 1913 that was the catalyst for inflation to snap and unanchor from 700 years of patterns, and to mutate from gradually upward sloping to spike exponentially over the past 100 years. Furthermore, as Deutsche Bank's Jim Reid writes, nothing will change, and Inflation remains the most likely outcome "until a new global financial system found." Incidentally, he adds the latter because even chief credit strategists of major banks have come to the same "tin foil" conclusion we unveiled in 2009, namely that the existing financial and economic (if not social) system is doomed as long as an unconstrained fiat regime, which creates ever greater and greater asset bubbles, remains.

Here is Jim Reid:

The chart below shows median global inflation first from 1209 (left) and then from 1900 (right). Inflation took on a totally different persona after the start of the twentieth century. The charts are again on a log scale to allow us to easily see the near exponential increase in inflation over the last 100 years or so, especially relative to what occurred before. Note that had we used the median instead of the average, the chart would look almost absurd given the extreme levels of hyperinflation seen in several countries over the last century. The data behind the right hand graph is based on a full set of 24 countries where we have inflation data back to 1900. Prior to this, many countries have data that goes back several decades with some back through the centuries. For the series back to 1210 we have included data as


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Myth of the Infrastructure Cure-all

Courtesy of ZeroHedge. View original post here.

Every year the American Society of Civil Engineers (ASCE) comes out with a report card on the condition of America’s infrastructure. We got a D+ this year. According to them, “Deteriorating infrastructure is impeding our ability to compete in the thriving global economy, and improvements are necessary to ensure our country is built for the future.”

They calculate that every family in America will lose $3,400 a year because of infrastructure deficiencies. If the problem isn’t fixed, they say, GDP will lose $4 trillion a year by then (2025) and 2.5 million jobs will be lost. They recommend an additional $1.1 trillion of spending on transportation (roads and bridges) over the next 10 years to correct this problem.

President Donald Trump says that we need to spend $1 trillion to “transform America’s crumbling infrastructure into a golden opportunity for accelerated economic growth and more rapid productivity gains.”

Liberals and conservatives alike get teary-eyed when they hear this. They think that massive spending, especially on roads and bridges, will “put people back to work” and make America more productive.

Here is the reality: America’s infrastructure is not crumbling, massive spending won’t create any permanent jobs, and productivity is not suffering because of our infrastructure. These are economic myths that lobbyists, infrastructure contractors, and the ASCE perpetuate to get fat contracts. 

Let me back up for a moment and say that, yes, our transportation system, for example, is an important factor in productivity and inefficiencies could harm productivity. Los Angeles is a glaring example of inefficiency since it again was the


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Yellen Admits The Fed is Dependent on Stock Price Levels When Determining Rate Hikes, Inflation is a Mystery

Courtesy of ZeroHedge. View original post here.

A few short years ago, it was considered tinfoil hat conspiracy theory to say that the goals of the Fed and their QE programs were to boost stock prices, real estate prices, and basically almost every other asset class. Then slowly, years later, the MSM and others began to realize that it was the truth. You even had the likes of former Fed Governors saying so, Richard Fischer, Thomas Hoenig, Charles Plosser, and Jeremy Stein. So fast forward to today, where during the FOMC press conference, Yellen said "Fed is taking into account movements in asset prices in deciding rate hikes." Wait what? As a reminder, in June of 2016, Yellen said that the Fed does not target stock prices, and 1 year later is saying that they do. This is not the first time, nor will it be the last, in which the Fed has lied to the American people and backtracked on previous statements. Yet no journalist in the room dared to ask her about such a statement. 

But, that wasn't the most insane thing that happened during today's presser. Yellen earlier in the presser had said that weak inflation was a mystery to her and the Fed, and that they do not fully understand inflation. To put the stupidity of such a statement into perspective, the Fed, which employs thousands of Ph.D economists and dictates monetary policy, just openly admitted they literally have ZERO clue about economics.  Another small bit that caught my attention, was that as Yellen was concluding her prepared remarks, in which she talked about the wind-down of stimulus and the balance sheet and how great the economy was, her final statement in her prepared remarks was "as we stated in June, the committee would be prepared to resume reinvestment's if a material deterioration in the economic outlook were to warrant a sizable reduction in the federal funds rate." Pure comedy once again.  But no worries, stocks  finished the day higher, back at fresh record highs, with a fresh new high print for the Shiller PE at 30.70, and the VIX below 10 at 9.78. All is well. 





 
 
 

Zero Hedge

The Real Threat Remains - Brandon Smith Warns "Do Not Be Fooled By The Fed's Magic Show"

Courtesy of ZeroHedge. View original post here.

Authored by Brandon Smith via Alt-Market.com,

I remember back in mid-2013 when the Federal Reserve fielded the notion of a "taper" of quantitative easing measures. More specifically, I remember the response of mainstream economic analysts as well as the alternative economic community. I argued fervently in multiple articles that the Fed would indeed follow through with the taper, and that it ...



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Phil's Favorites

"Pizza Price Parity": Where Is Pizza Most And Least Expensive In America?

Courtesy of Zero Hedge

By Priceonomics.com

Between 2007 - 2010, a USDA study estimated that 1 in 8 Americans ate some form of pizza on any given day. That number climbs to about 1 in 4 for males and 1 in 5 for females when looking specifically at Americans age 12 to 19. There’s no escaping it; pizza is engrained in our diets.

Pizza is not only a pillar of the American diet, but also of our culture.

Through saturation of TV, movies, and now the internet, it has entered the zeitgeist. How d...



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Digital Currencies

Can cryptocurrencies like Bitcoin survive scrutiny from central banks?

 

Can cryptocurrencies like Bitcoin survive scrutiny from central banks?

Courtesy of Nafis AlamUniversity of Reading

William Potter/Shutterstock

The future of money looks very different in the world of cryptocurrencies. There is a growing consensus among businesses, investors and countries (Venezuela in particular) that these alternative forms of online money are going to dominate payments in the next decade. There may be agreem...



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ValueWalk

Tagging Fake Articles Is Failing To Combat Fake News

By Rupert Hargreaves. Originally published at ValueWalk.

So-called “fake news” and not in form of The Onion (which is obvious satire) has been around in one form or another for hundreds of years. The world’s first daily newspapers, which were printed in London’s Fleet Street in the early 1700s, were full of stories and hearsay designed to influence readers and drum up sales. However, the readership of these papers was relatively limited compared to the size of the audience available to online publications today.

]]> Get The Timeless Reading eBook in PDF

Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

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Insider Scoop

Wall Street Weighs In On Adobe's Mixed Earnings Report

Courtesy of Benzinga.

Related ADBE 15 Biggest Mid-Day Losers For Wednesday 5 Biggest Price Target Changes For Wednesday ...

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Chart School

Minor Changes: Yesterday's and Weekend Comments Remain Valid

Courtesy of Declan.

I don't want to overplay today's action as little changed in the broader scheme of things. Days like today are welcomed and help shape up swing trades for those trading in near term timeframes.

The tight doji in the S&P could be used for a swing trade; buy a break of the high/short loss of low - stop on flip side. High whipsaw risk but look for 3:1 risk:reward and maybe trail stops if deciding to go with partial profits.


Tech averages are still set up for a breakout. While not an ...

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Members' Corner

"Citron Exposes Ubiquiti Networks" But TNN Says "Not So Fast"

What do you think? (There's a comment section below )

"CITRON EXPOSES UBIQUITI NETWORKS" 

Does Ubiquiti Networks (NASDAQ:UBNT) actually have real products that sell to consumers? Of course! So did Valeant and WorldCom, but that does not stop its financials from having every indication of being completely fraudulent.

Citron will detail a series of alarming red flags and detail how Ubiquiti Networks is deceiving the investing public.

Read the full report here.

******

Rebutal by The Nattering Naybob, ...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Biotech

Can low doses of chemicals affect your health? A new report weighs the evidence

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

Can low doses of chemicals affect your health? A new report weighs the evidence

Courtesy of Rachel ShafferUniversity of Washington

Assessing the data. LightField Studios/shutterstock.com

Toxicology’s founding father, Paracelsus, is famous for proclaiming that “...



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Mapping The Market

The App Economy Will Be Worth $6 Trillion in Five Years

Courtesy of Jean-Luc

This would be excellent news for AAPL and GOOG to a lesser extent although not inconsequential:

The App Economy Will Be Worth $6 Trillion in Five Years 

In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie. What explains the growth? More people are spending more time and -- crucially -- more money in apps. While on average people aren't downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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