Some people have impeccable timing. Even if by accident, there are occasions when what they say or write comes out in almost perfect sequence. At the end of August 2014, UC Berkeley economist J. Bradford DeLong wrote an article for Project Syndicate that argued in favor of proper categorization. The lack of recovery was so drastic that the economist community and indeed the world at large needed to come to terms with what was actually taking place; and that was not anything like what was being described especially at that time.
To have such a Keynesian of prominence make such an indictment like that may seem somewhat surprising, as it has been they who have most objected to classifying this economy as anything but robust. Some of it is surely political, or at least loyalty to the good standing monetarist/Keynesians (neo-Keynesian, saltwater-ists, or whatever they call themselves these days) at the Federal Reserve, where no economist shall direct any disparaging comments toward the palace. But to DeLong, the issue had never been about recession at all:
Cumulative output losses relative to the 1995-2007 trends now stand at 78% of annual GDP for the US, and at 60% for the eurozone. That is an extraordinarily large amount of foregone prosperity – and a far worse outcome than was expected. In 2007, nobody foresaw the decline in growth rates and potential output that statistical and policymaking agencies are now baking into their estimates.
By 2011, it was clear – at least to me – that the Great Recession was no longer an accurate moniker. It was time to begin calling this episode “the Lesser Depression.”
As I wrote above, the timing was perfect at the front edge of the “rising dollar.” The economy of greater eurodollar shortage and inflexibility has served, in this context, to demonstrate the claim. Rather than sail off into the Hollywood sunset as Bernanke and then Yellen assured us, the economy instead went the other way, and not just here. Further, subsequent data revisions have shown that it was folly all along to believe that 2014 was anything other than the anomaly; and a fictional one beside.
The idea of calling it the “Lesser Depression” makes good sense
There are three key findings to emerge from yesterday’s dump of leaked DNC emails released by Wikileaks:
There had been a plot designed to smear Bernie Sanders and to hand the Democratic nomination to Hillary on a silver platter
There has been repeated collusion between the DNC and the media
There has been questionable fundraising for both Hillary Clinton and the DNC
First, a quick recap for those who missed the original report, yesterday Wikileaks released over 19,000 emails and more than 8,000 attachments from the Democratic National Committee. This is what the whistleblower organization reported:
WikiLeaks releases 19,252 emails and 8,034 attachments from the top of the US Democratic National Committee — part one of our new Hillary Leaks series. The leaks come from the accounts of seven key figures in the DNC: Communications Director Luis Miranda (10770 emails), National Finance Director Jordon Kaplan (3797 emails), Finance Chief of Staff Scott Comer (3095 emails), Finanace Director of Data & Strategic Initiatives Daniel Parrish (1472 emails), Finance Director Allen Zachary (1611 emails), Senior Advisor Andrew Wright (938 emails) and Northern California Finance Director Robert (Erik) Stowe (751 emails). The emails cover the period from January last year until 25 May this year.d
Subsequently, the Romanian hacker known as Guccifer 2.0 (who has denied he works with the Russian government), who has already released hundreds of hacked DNC emails previously, told The Hill he leaked the documents to Wikileaks.
An initial read of the thousands of emails in the data dump reveals top officials at the Democratic National Committee privately plotting to undermine Bernie Sanders’s presidential campaign, confirming a long-running allegation by the Sanders campaign who has claimed that the DNC and Chairwoman Debbie Wasserman Schultz had tipped the scales in favor of Hillary Clinton during the party’s presidential primary. They also reveal instances of media collusion as well as various questionable instances of fundraising.
Plotting Against Bernie Sanders
In an email from early May, DNC CFO Brad Marshall wrote about a plot to question Sanders’s religion. While not naming the Vermont senator directly, it talks about a man of “Jewish heritage” Marshall believes to be an atheist. It makes reference to voters in Kentucky and West Virginia, two states that
It appears the “doom-and-gloom” reality-check that President Obama (and Hillary Clinton) prefer to ignore, is working. Between FBI Director Comey’s shocking decision over Hillary’s emails and the Convention Bump, Trump appears to have hit enough correct notes with his polarizing speech to give him enough of a bounce to be virtually tied with Hillary in the latest Reuters poll.
Just before Republicans opened the convention on Monday, Trump had trailed Clinton by nearly 10 percentage points in the poll. But as Reuters reports, Trump has pulled nearly even with Democratic rival Hillary Clinton for the first time since May, according to a Reuters/Ipsos poll taken over the course of the Republican National Convention in Cleveland this week.
The July 18-22 national online poll found that 41 percent of likely voters supported Clinton, while 38 percent supported Trump. Given the poll’s credibility interval of about 4 percentage points, Trump and Clinton should be considered to be about even in the race.
Party conventions are partly meant to introduce the candidate to the country, and nominees tend to get a boost in opinion polls afterward. In 2012, then-Republican nominee Mitt Romney rose by about 5 percentage points in the Reuters/Ipsos poll after his party’s convention.
The last time Trump drew about even with Clinton was in mid-May, after his last two rivals for the Republican nomination dropped out of the race and party leaders started to get behind his campaign.
Perhaps, as we suggested yesterday, the American people is fed up withe being told how ‘exceptional’ the world is when they ‘feel’ anything but, as Liberty Blitzkrieg’s Mike Krieger notes, while ‘the other side’ will project his speech this week as nothing but unsubstantiated fearmongerings, Trump appeared to saved the best for last. The entire last five minutes of his speech were brilliant and what most people will remember when they think back on it. Here’s what he said:
In this journey, I’m so lucky to have at my side my wife Melania and my wonderful children, Don, Ivanka, Eric, Tiffany, and Barron: you will always be my greatest source of pride and joy. My Dad, Fred Trump, was the smartest and hardest working man I ever knew. I wonder sometimes
About one month ago we read that risk parity and volatility targeting funds had record exposure to US equities. It seems unlikely that this has changed – what is likely though is that the exposure of CTAs has in the meantime increased as well, as the recent breakout in the SPX and the Dow Jones Industrial Average to new highs should be delivering the required technical signals.
The bots keep buying… Illustration via carolublog.wordpress.com
All these strategies are more or less automated (they may be tweaked from time to time, but essentially they are simply quantitative and/or technical strategies relying on inter-market correlations, volatility measures, and/or momentum). Active fund managers by contrast are said to be skeptical of the market rally, but it should be stressed that the evidence for this is purely anecdotal.
The vast bulk of trading is nowadays automated. We recently read that in 2015, 23% of the entire year’s equity trading volume was accounted for by the top 100 ETFs (h/t to Brent Johnson of Santiago Capital). These are passive investments – in other words, they are brainless.
In addition to this, some 50% of volume is probably attributable to high frequency trading, and the above mentioned black box strategies presumably account for a good chunk of trading volume as well. This raises an interesting question: how many trades are still made by someone who actually thinks about what he is doing? Does it even matter whether active fund managers are skeptical or not?
It looks pensive in this image, but does it actually think? We don’t believe so…
What prompts us to wonder about this is the following chart. It shows the so-called “smart-dumb money confidence spread” calculated by sentimentrader, which tries to show what historically good and bad market timers are doing with their money. Its construction involves mainly real money gauges (for instance options and futures positioning data, short selling data, odd lot purchases, etc.) rather
It was only a matter of time. And it is now official. Two Navya Arma shuttles arrive in the Confluence district in September.
These shuttles driverless, 100% autonomous and fully electric task will be to carry passengers between the leisure division and Confluence shopping and the tip of the peninsula, up to the GL Events seat.
Navya Arma has “lasers that sweep space, cameras and precise GPS”. The Navya should be able to circulate in the Lyon area starting early September, from 7:30 to 18:30. Despite the absence of a driver, the shuttle can reach 25km/hour, safe for passengers or pedestrians.
Navya Arma Video
Some may scoff at 25km/hour (roughly 15.5 mph) but not me. For starters, the shuttle operates in city traffic, with pedestrians, not in interstate highway traffic that in most respects is much easier (no bicycles, no kids playing in the street, no stop signs, no stop lights).
Finally, I point out this is 2016. Where will the technology be eight years from now? Six? Even four?
Autonomous truck naysayers, please get a grip on reality.
At least 80 people were killed and 231 injured when a huge blast rocked a mass demonstration by members of the mainly Shia Hazara minority in the Afghan capital, Kabul, on Saturday. The attack was claimed by terrorist group Islamic State: “Two fighters from Islamic State detonated explosive belts at a gathering of Shi’ites in the city of Kabul in Afghanistan,” said a brief statement on the group’s Amaq news agency.
A freelance journalist working for BBC Afghan said blood and body parts were everywhere, with debris strewn around.
It was the deadliest bombing in Kabul since April, when more than 60 people were killed in an attack on offices used by the security services. That was considered the worst single incident of its kind in Kabul since 2011. The government had received intelligence that an attack could take place, and had warned the march organizers, a spokesman for Afghan President Ashraf Ghani told The AP.
Graphic television footage from the site of the attack showed many dead bodies lying on the bloodied road, close to where thousands of Hazara had been demonstrating over the route of a planned multimillion dollar power line. The protesters, mostly ethnic minority Hazaras, were marching to demand that their impoverished home province be included in a major new electricity line, according to The Associated Press. The attack succeeded despite tight security which saw much of the city
center sealed off with stacks of shipping containers and other obstacles
and helicopters patrolling overhead.
If the attack is confirmed as the work of Islamic State, it would represent a major escalation for a group which has hitherto been largely confined to the eastern province of Nangarhar.
It would represent ISIS’ first attack in the capital Kabul and would be the deadliest attack in Afghanistan yet.
The attack targeted the Hazara minority who have often complained of discrimination. The Persian-speaking Hazara, estimated to make up about 9 percent of the population, are Afghanistan’s third-largest minority but they have long suffered discrimination and thousands were killed under Taliban rule. The Taliban, a fierce enemy of Islamic State, had issued a statement denying
What was initially said to be a coordinated attack killing 9 and wounding 27, involving up to three gunmen has since been attributed to a lone, 18-year-old German-born male student with both German and Iranian citizenship, identified moments ago as David Ali Sonboly. As authorities try to piece together the motive behind the latest mass killing, the third one in Europe in the past 9 days, and one which targeted mostly other young people, the emerging picture is that of a mentally disturbed young man with an obssession for killing sprees, and who had undergone psychiatric treatment.
German ARD said that there are “no indications” so far that the gunman was motivated by religious or political views.
The gunman was not a refugee, Munich police chief Hubertus Andrae told a news conference on Saturday. He added that the gunman shot dead nine people and then committed suicide with a 9mm Glock semi-automatic pistol, and that 300 rounds were found in his backpack. The victims’ ages were 15, 15, 14, 14, 14, 17, 19, 20, and 45, the latter of whom was female.
The gunman had been receiving psychiatric and medical care to help him cope with depression, but there is no information on his psychiatric status, the police said adding that it will take some time to find out if he was under the influence of drugs or alcohol. His body was found about 1km (half a mile) from the mall.
The first alleged picture of David Ali Sonbolul was released moments ago by Germany’s Bild.
Friday evening’s attack at the Olympia shopping mall also left 27 people injured, including children. Seven of the dead were teenagers. Three victims were from Kosovo, three from Turkey and one from Greece.
Unlike the most recent attack which took place in Wuerzburg – also in Bavaria – on Monday, where a 17 year old Afghan refugee attacked train passengers with an axe, and who had left both a suicide note and a video pledging his allegiance to ISIS, this time crime scene investigators have found no evidence pointing to Islamic State-related links in
The global rally in equities Moderated last week. The average gain of the eight indexes on our world watch list was a respectable 0.41%, down from the previous week’s steroidal 3.87% average. Hong Kong’s Hang Seng was the top performer with a 1.41% advance. At the other end, the chronic laggard Shanghai Composite fell 1.36%.
A Closer Look at the Last Four Weeks
The tables below provide a concise overview of performance comparisons over the past four weeks for these eight major indexes. We’ve also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the comparative performance over time.
Here is an overlay of the eight illustrating their comparative performance so far in 2016.
Here is a table of the 2016 performance, sorted from high to low, along with the interim highs for the eight indexes. Four indexes are in the green year-to-date, up from three from last week, with Hong Kong’s Hang Seng making the crossover. China’s Shanghai continues to merit the dubious distinction of biggest loser YTD.
The Global Bear Market Perspective
The column chart is sorted by the least to worst declines from previous peaks as of the week’s end. Seven of our eight watch list indexes had dropped into bear territory (a 20% decline), the S&P 500 being the sole exception. As of the latest close, four of the eight are in the bear zone, unchanged from five last week, with the Nikkei just a tad away from rising above the bear benchmark.
A Longer Perspective
The chart below illustrates the comparative performance of World Markets since March 9, 2009. The start date is arbitrary: The S&P 500, CAC 40 and BSE SENSEX hit their lows on March 9th, the Nikkei 225 on March 10th, the DAX on March 6th, the FTSE on March 3rd, the Shanghai Composite on November 4, 2008, and the Hang Seng even earlier on October 27, 2008. However, by aligning on the same day and using a log scale vertical axis, we get an excellent visualization of the relative performance. We’ve indexed each of the eight to 800 on the March 9th start date. The callout in the…
The U.S. financial system continues to disintegrate even though most Americans hardly notice. The system is being gutted from the inside out… much the same way a chronic disease weakens a patient even before any symptoms are felt. However, we are already experiencing painful symptoms as U.S. economic indicators continue to weaken.
These are just some of the recent headlines pointing to BIG TROUBLE AHEAD. However, the U.S. financial system is in dire shape due to the SUBPRIMING of the entire economy. Today, anyone can purchase a car for little or nothing down and finance it for 84 months. The U.S. housing market is also in the same predicament.
While the economy and home prices have both rebounded, some people have expressed concern we are headed for a repeat housing bubble. As of January 2016, home prices were rising at a rate twice that of inflation, according to the S&P/Case-Shiller U.S. National Home Price Index.
What’s more, Fannie Mae and Freddie Mac have unveiled programs to allow first-time homebuyers to make a purchase with only 3 percent down. Plus, some lenders are using alternate credit scores, which may make loans available to those who can’t get one under conventional credit scoring methods.
So, here we are heading down the same path as we did prior to the 2008 U.S. Investment Banking and Housing collapse. However, this time around its both a Subprime Auto & Housing problem. But, that is just part of the Subprime mess.
Artificial measures to stave off a downturn will only make it much worse.
Describing what he called the “crack-up boom”, Ludwig von Mises, the great Austrian economist, said:
The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation – which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system.
Or the banks stop before this point is reached, voluntarily renounce further credit expansion, and thus bring about the crisis. The depression follows in both instances. (emphasis added)
Although it would be the wiser policy, there is no evidence that the world’s central bankers have the wisdom, either individually or collectively, to select the second alternative. More specifically, they lack “the courage to act” (as Ben Bernanke’s recent, self-congratulatory memoir was so ironically titled); they and their political, big finance and big business cronies are afraid to swallow the “d-pill”, the economic medicine named “depression”.
A good, old-fashioned, pre-1929 depression (like the short-lived, eleven-month depression in 1920-1921, before the days of “modern” central banking and “enlightened” Keynesian intervention “cures”) is the only tonic that can clear out the malinvestment built up since the beginning of the fiat money era. That era began in August of 1971. That is when Richard Nixon, informed that U.S. gold reserves were precipitously declining as a result of President Johnson’s March 1968 action to reduce the gold reserve ratio from 25 percent to zero, “temporarily” suspended the convertibility of the U.S. Dollar into gold. That “temporary” measure has been in effect for forty-five years.
Finally freed from the constraints of what they could not print (i.e., gold), central bankers and their cronies in government, finance and big business were given a license to debase all formerly hard currencies. (Such currencies were “hard”, as they were linked, via the Bretton Woods arrangement, to the dollar, which was backed by gold.) And debase they did: they replaced real investment capital (i.e. actual savings) with cheap, invented credit; they replaced market-derived price (of money) discovery, i.e., market-derived interest rates, with central-bank-proclaimed interest rates.
The price of gas is on the rise again—up five percent globally in the last three months. But cost per gallon alone doesn’t give a complete picture of how big a bite gasoline takes out of an average driver’s paycheck. We ranked 61 countries by three economic measures to see who has the most affordable gas, and who feels the most pain at the pump.
While most of the attention post-Brexit has been on the UK, we are far more concerned about Europe. Markets and the economy operate in a feedback loop, and the performance of European banks relative to the stock market points to a fall in lending ahead in Europe. Banking stocks provide a one year lead on lending growth in Europe. The dire trading of banks will do little to improve the debt-deflationary dynamic ...
The global rally in equities Moderated last week. The average gain of the eight indexes on our world watch list was a respectable 0.41%, down from the previous week's steroidal 3.87% average. Hong Kong's Hang Seng was the top performer with a 1.41% advance. At the other end, the chronic laggard Shanghai Composite fell 1.36%.
A Closer Look at the Last Four Weeks
The tables below provide a concise overview of performance comparisons over the past four weeks for these eight major indexes. We've also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the compara...
By Jacob Wolinsky. Originally published at ValueWalk.
Relypsa Inc (NDAQ:RLYP) — to be acquired by Galenica AG (VTX:GALN) for $32 per share in cash is soaring this morning up about 58 percent at the time of this writing in early morning. On the other hand shares of Galenica are down on the announcement by about 8 percent. What are the details of the deal? Here is what the sell side analysts are saying about the pharma news.
Relypsa Inc (NDAQ:RLYP) bid – analysts react
Relypsa will be acquired by Galenica for $32 per share, a 59% premium over the last closing price. We have thought that Relypsa would likely be acquired at some point, given the opportunity to grow Veltassa to be a significant commercial brand, ...
Companies around the world are exploring blockchain, the technology underpinning digital currency bitcoin. In this Blockchain unleashed series, we investigate the many possible use cases for the blockchain, from the novel to the transformative.
Most people agree we do not need to know how a television works to enjoy using one. This is true of many existing and emerging technologies. Most of us happily drive cars, use mobile phones and send emails without knowing how they work. With this in mind, here is a tech-free user guide to the blockchain - the technology infrastructure behind bitcoin...
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After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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