by Zero Hedge - April 23rd, 2017 2:41 pm
Courtesy of Zero Hedge
As results begin to trickle in (with pollsters showing Macron leading and official French Interior Ministry showing a Le Pen lead), betting odds (according to Betfair) are now giving Macron comfortably over 80% chance of becoming France’s next President.
As the evening has gone on and the picture becomes clearer, his odds continue to increase. The market is clearly expecting a ‘Front Republicain’ to form, as it did in 2002, to rally behind Emmanuel Macron and to deny Marine Le Pen.
Of course, bookies didnt quite get Brexit and Trump right…
by Zero Hedge - April 22nd, 2017 9:05 pm
Courtesy of Zero Hedge
When future historians look back at the beginning of the 21st century, they’ll note that we grappled with many big issues. They’ll write about the battle between nationalism and globalism, soaring global debt, a dysfunctional healthcare system, societal concerns around automation and AI, and pushback on immigration. They will also note the growing number of populist leaders in Western democracies, ranging from Marine Le Pen to Donald Trump.
However, as Visual Cpitalist's Jeff Desjardins notes, these historians will not view these ideas and events in isolation. Instead, they will link them all, at least partially, to an overarching trend that is intimately connected to today’s biggest problems: the “hollowing out” of the middle class.
VISUALIZING THE COLLAPSE OF THE MIDDLE CLASS
The fact is many people have less money in their pockets – and understandably, this has motivated people to take action against the status quo.
And while the collapse of the middle class and income inequality are issues that receive a fair share of discussion, we thought that this particular animation from Metrocosm helped to put things in perspective.
The following animation shows the change in income distribution in 20 major U.S. cities between 1970 and 2015:
The differences between 1970 and 2015 are intense. At first, each distribution is more bell-shaped, with the majority of people in a middle income bracket – and by 2015, those people are “pushed” out towards the extremes as they either get richer or poorer.
A BROADER LOOK AT INCOME INEQUALITY
This phenomenon is not limited to major cities, either.
Here’s another look at the change in income distribution using smaller brackets and the whole U.S. adult population:
It’s a multi-faceted challenge, because while a significant portion of middle class households are being shifted into lower income territory, there are also many households that are doing the opposite. According to Pew Research, the percentage of households in the upper income bracket has grown from 14% to 21% between 1971 and 2015.
The end result? With people being pushed to both ends of the spectrum, the middle class has decreased considerably in size. In 1971, the
by ilene - April 22nd, 2017 12:04 am
David Brin is an astrophysicist whose international best-selling novels include The Postman (filmed by Kevin Costner in 1997), Earth, and recently Existence. Dr. Brin serves on advisory boards (e.g. NASA's Innovative and Advanced Concepts program or NIAC) and speaks or consults on a wide range of topics. His popular blog is Contrary Brin. Brin's nonfiction book about the information age – The Transparent Society – won the Freedom of Speech Award of the American Library Association. Visit David Brin's website (about, biography, books/novels, short stories).
Courtesy of David Brin
Have you heard of “Godwin’s Law?” It asserts that: “If an online discussion (regardless of topic) goes on long enough, sooner or later someone will invoke Hitler.” In practice, it is used to shame or chastise those who make any sort of comparison to the fascist hellscape of the mid-20th Century.* To be sure, an overused, hyperbolic cliché can be tiresome.**
Mike Godwin must be going crazy, right now, amid the tsunami of post-election comparisons. For the record, I do not think Donald Trump wants to, or will, become a Hitler. Parallels with Mussolini are creepy though, starting with Il Duce’s fervid rallies and relentless slogans, calling on Italians to rebuild classical glories and — translated literally— “make Rome great again.”
Sure, I’ve made my own parallels with 1933 Germany, and they remain apt. Just as the Prussian barons, or Junkers aristocrats fostered the racist-populist brown shirts as a counterweight to socialists and communists, so Fox News, Breitbart-Limbaugh-Jones and the Kochs deliberately whipped non-college white male boomers into a froth… exacerbated by their grouchiness over getting old and seeing the world change around them.
As those so-clever 1930s lords did then, today’s oligarchs stare in disbelief that a gifted shaman leaped aboard their carefully-trained beast, threw off the intended jockeys and grabbed the reins for himself.*** Back eight decades ago, at least a few of the Junkers had enough honesty to proclaim: “Mein Gott, what haf we done?” Alas, do not expect any such honor or…
by phil - April 21st, 2017 8:40 am
More and more promises.
Our man Mnuchin yesterday gave the markets a huge lift by claiming "we're pretty close to bringing forward major tax reform" and the markets went crazy but he also said that by "soon" he meant before the end of the year. That then is a really stupid reason for the markets to rally since they already rallied on it being done in Trump's first 100 days (this is day 90) but, apparently, you can cry "wolf" as often as you want and this market will rally to your cause.
Also promised yesterday was swift approval of the TrumpDon'tCare Health Plan (Part II) and this one is much more horrific than the last one as they now have a TABLE OF DOOM!!! which has surcharges for pre-existing conditions like PREGNANCY, which will set you back an additional $17,320 if you or one of your family members is prone to such things. I wish I were joking but no, that's actually the cost for pregnancy with "no or minor complications" – complications are extra:
And this analysis does not account for surcharges as a result of individuals’ previous health conditions. Scarce data exists on pre-ACA rate ups, but insurers raised premiums for individuals based on health history, not just current health status. Without pre-existing condition protections, cancer survivors now free of the disease or patients who underwent successful surgery years ago could find themselves facing significant surcharges as well.
As we've noted before, without "saving" $1Tn on health care costs, Trump can't get $1Tn worth of tax breaks for himself and his Billionaire buddies so they have to slash insurance and they do so by passing the costs on to you, the people who need the insurance. But only if you get sick so, if you're not sick – don't worry about it, right? That's the logic by which the Trump Administration is going to have you, in the Bottom 99%, hand $1Tn to the people in the Top 1%.
by clarisezoleta - April 20th, 2017 12:19 pm
PhilStockWorld.com Weekly Trading Webinar – 04-19-17
For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here
00:02:09 Checking on the Markets
00:03:22 Future Chart
00:06:54 Chakin Money Flow
00:10:57 Checking on the Markets
00:29:11 Trade Ideas
00:31:12 Market News
00:41:18 French Elections
00:44:07 China Mega City
00:50:35 Male Population in China
00:51:31 Property in China
01:09:09 Beige Book
01:14:53 Tax Reform
01:22:45 Checking on the Markets
01:24:52 Checking Portfolios
01:33:19 Butterfly Portfolio
01:44:36 Checking on the Markets
01:46:58 More Trade Ideas
Phil's Weekly Trading Webinars provide a great opportunity to learn what we do at PSW. Subscribe to our YouTube channel and view past webinars, here. For LIVE access to PSW's Weekly Webinars – demonstrating trading strategies in real time – join us at PSW — click here!
by phil - April 20th, 2017 8:31 am
"I went down to the crossroads, fell down on my knees.
Down to the crossroads, fell down on my knees.
I'm standin' at the crossroad, babe, I believe I'm sinking down." – Cream
Earnings are simply not that exciting.
The growth in earnings was SUPPOSED to come from the Financials and the Energy Sector and we've gotten so-so reports from the Financial Majors and oil just collapsed to $50.50 yesterday (a profit of $2,500 per contract for those of you who followed our morning call to short at $53!) and that can't be great for Q2 profits if we stay down here, can it?
We've been telling you for years what a complete and utter scam the oil market is and knowing it's a scam is the secret to our success. Today is the last trading day for the May contracts and they still have 25M barrels of fake, Fake, FAKE!!! open orders to get rid of – down 100,000, 1,000-barrel contracts (80%) since Tuesday's post and, lo and behold – June is up 55,000 contracts (that are also FAKE) while the other 45,000 fake orders have been distributed across longer months – in order to fake that demand down the road as well.
Since we KNOW the trading is FAKE!!!, we KNEW they had to get rid of over 100,000 May orders in 2 days and we knew that would put pressure on oil and that made a good short – it's not very complicated and we do it ALL THE TIME because, although it's a total scam – it's a very predictable one…
After today, however, we will be flipping long on oil and, in yesterday's Live Trading Webinar, we identified a great long position on the Oil ETF (USO), using July call options and, of course, we'll be looking for opportunities to go long on oil in the Futures (/CL), using our brand new oil trading range chart. Oil will be pumped back to $55-60 into July (and then we'll go short…
by ilene - April 19th, 2017 3:13 pm
Courtesy of Joshua M Brown
This is blindingly smart and fast-paced stuff from the master of Amazonology, NYU professor Scott Galloway.
Scott Galloway speaks at L2’s Amazon Clinic about how Amazon is disrupting retail. Not only has Amazon changed consumer shopping habits, it has changed the relationship between shareholders and investors. Investors are no longer satisfied with steadily growing profits; instead they seek fast growth and strong vision – even at the expense of profitability. See video for insights on the future of brand, Alexa’s effect on households.
by phil - April 19th, 2017 8:32 am
5,440 was our line in the sand.
Since March 21st we've been using that line to short the Nasdaq Futures (/NQ) as a move above that line was in no way justified without some real improvements in earnings and now, with earnings season upon us, we're still not seeing evidence yet that the market should be breaking higher.
In that same 3/21 post, we had 11,550 on the broader NYSE and now the NYSE is at 11,375 – down 175 (1.5%) while the /NQ is back at 5,415 this morning. Our Long-Term Portfolio was up 148.9% that morning and, as of yesterday's close, we're at +162%, gaining $65,402 in less than a month so we certainly aren't complaining about the extended rally and, as I said at the time, BALANCE is key and we have been using some of those profits to bulk up our hedges into earnings.
Aside from being long on the Nasdaq Ultra-Short ETF (SQQQ), we also have shorts on Nasdaq leaders Amazon (AMZN) and Tesla (TSLA) and neither one of those are doing well at the moment as more and more money has been pouring into the leading stocks while the rest of the Nasdaq has been selling off. Propping up the index leaders while selling the rest keeps the "dumb money" flowing into the Nasdaq while the "smart money" heads for the exits – leaving the dumb money to hold the bag.
The Chaikin Money Flow (CMF) is an oscillator derived from the Accumulation/Distribution Line. CMF values are calculated by adding all the A/D line values for the period and dividing this by the total volume for the period. When there is strong buying pressure with high volume, this pushes the indicator higher and strong selling pressure with reduced volume pushes the indicator lower. The Accumulation/ Distribution line either reaffirms the trend or gives a warning that the trend is about to change direction.
We had massive inflows into the markets since the election and especially since the beginning of the year but there was a drastic turn in mid-March and money was actually flowing out of the market last week. Seems to me people are getting nervous and the VIX confirms this – the only thing…
by ilene - April 18th, 2017 10:15 pm
Courtesy of Zero Hedge
A 'shocking' discovery was made when a pair of researchers at Harvard Business School decided to analyze the impact of higher minimum wages in San Francisco on restaurant failures…hint: they went up.
Entitled "Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit", this latest study on the devastating consequences of minimum wage was conducted by Dara Lee Luca and Michael Luca and concluded that each $1 increase in the minimum wage results in a roughly 4-10% increase in the likelihood of a restaurant going out of business.
In this paper, we investigate the impact of the minimum wage on restaurant closures using data from the San Francisco Bay Area. We find suggestive evidence that an increase in the minimum wage leads to an overall increase in the rate of exit.
This paper presents several new findings. First, we provide suggestive evidence that higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit, although statistical significance falls with the inclusion of time-varying county-level characteristics and city-specific time trends. This is qualitatively consistent but smaller than what Aaronson et al. (forthcoming) find; they show that a 10 percent raise in the minimum wage increases firm exit by approximately 24 percent from a base of 5.7 percent. Differences in sample and specifications may account for the differences between our study and theirs.
Moreover, as we've pointed out the past, it's the low-income workers, the ones that minimum wage hikes are intended to help, that end up getting hurt the most when misinformed liberal politicians decide to meddle in labor markets. But, as this new HBS study points out, low-income workers don't just lose their jobs when minimum wages are hiked…they also lose access to cheap casual dining options as lower-rated, cheaper restaurants are much more likely to fail when their costs are artificially raised.
Next, we examine heterogeneous impacts of the minimum wage on restaurant exit by restaurant quality. The textbook competitive labor market model assumes identical workers
by ilene - April 18th, 2017 3:43 pm