Archive for the ‘Uncategorized’ Category

Trump’s Trickle-Down Populism

 

Trump’s Trickle-Down Populism

Courtesy of Robert Reich

Last Thursday President-elect Donald Trump triumphantly celebrated Carrier’s decision to reverse its plan to close a furnace plant and move jobs to Mexico. Some 800 jobs will remain in Indianapolis.

“Corporate America is going to have to understand that we have to take care of our workers,” Trump told The New York Times. “The free market has been sorting it out and America’s been losing,” Vice President-elect Michael Pence added, as Trump interjected, “Every time, every time.”

So what’s the Trump alternative to the free market? Bribe giant corporations to keep jobs in America. 

Carrier’s move to Mexico would have saved the company $65 million a year in wages. Trump promised bigger benefits. The state of Indiana will throw in $7 million, but that’s just the start. 

Carrier’s parent company, United Technology, has military contracts that just last year generated $6.8 billion of its $57 billion in revenue – creating a yuge Trump card that makes $65 million look like peanuts. If Trump comes through with the military buildup he’s promising, United Technologies could reap a bonanza. You can bet that figured into the deal.  

In addition, United Technologies has more than $6 billion parked abroad where tax rates are low. It will make a bundle if Trump follows through with a plan to allow global corporations to bring that money home and pay a rock-bottom tax rate.

In other words, Trump will get corporate America to take care of “our workers” by bribing them with government contracts, tax cuts, and relief from regulations. The art of the deal is to Increase corporate profits, and assume that corporations will reciprocate with good American jobs. 

It’s “trickle-down” economics dressed in populist garb.

But it won’t work. As long Wall Street continues to push corporations to maximize shareholder returns, American workers will continue to lose good-paying jobs to foreign workers or to homegrown robots. 

Payrolls are the biggest single cost on most companies’ balance sheets, so cutting jobs and wages will continue to be the easiest way to boost profits and share prices.

If Donald Trump were serious about reviving good jobs in America, he’d give workers


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News You Can Use From Phil’s Stock World

 

Financial Markets and Economy

Renzi Resigns Following Crushing Referendum Defeat: Beppe Grillo, Marine le Pen, Matteo Salvina Tweets (MishTalk)

Italian prime minster Matteo Renzi went down in flames in a crushing defeat of a referendum he sponsored.

Sergio Mattarella, Italy’s president, has a choice. President is largely a symbolic position but what happens next is up to Mattarella.

The president may ask Renzi to hang on in a caretaker role, there could be snap elections, there could be a fourth technocrat government. Renzi was the third consecutive appointed technocrat prime minister.

Vancouver Housing Tax Pushes Chinese to $1 Million Seattle Homes (Bloomberg)

Just a few days after Vancouver announced a tax on foreign property investors, Seattle real estate broker Lili Shang received a WeChat message from a wealthy Chinese businessman who wanted to sell a home in Canada and buy in her area.

Euro Slips With Asian Stocks While Bonds Rise as Italy Votes No (Bloomberg)

The euro retreated with riskier assets, while bonds advanced, amid concern the failure of Italy’s referendum on constitutional reform will destabilize the country, emboldening anti-Europe and nationalist forces.

South African Economic Recovery Key to Ward Off Junk Rating Risk (Bloomberg)

South Africa’s chances of repeating its escape from a junk credit rating in 2017 are in the balance as focus intensifies on tepid economic growth and simmering political tensions.

A hot new hedge fund just had a monster month (Business Insider)

A hot new hedge fund had a great November.

Trump's plan to rethink free trade agreements could have a silver lining for the environment (Business Insider)

President-elect Donald Trump has placed himself in staunch opposition to environmentalists by denying climate change and threatening to dismantle the EPA. But there’s one area in which the two sides agree: both oppose the Trans-Pacific Partnership.

Here's what Wall Street's top performers expect from their bonuses this year (Business Insider)

Fixed income, currencies, and commodities traders are back in the ascendancy on Wall Street.

The FICC business is expected to


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Chart o’ the Day: Unemployment Plunges

 

Chart o’ the Day: Unemployment Plunges

Courtesy of 

The guys at Bespoke Investment Group ask the question “Is this as good as it gets?” regarding the unemployment rate in this past week’s November Non-Farm Payrolls. It’s the lowest level for the indicator in 9 years.

joblessrate

They note that what went on economically, immediately following that August 2007 print, was not especially fun.

One dimension worth considering is the fact that Labor Force Participation is still much lower than is typical at this stage in an expansion. Wage growth, while good, is also not great yet. This leaves room for the economic recovery to continue beneath the surface, even while the headline unemployment rate doesn’t drop much lower than where it is today – which is pretty low.

Source:

Low Jobless Rate: Is This As Good As It Gets? (Bespoke)





News You Can Use From Phil’s Stock World

 

Financial Markets and Economy

$38 Billion Finnish Fund Moves Assets to U.S. as Europe Founders (Bloomberg)

One of the Nordic region’s biggest asset managers is adjusting its portfolio to reflect a lack of confidence in Europe and a growing faith in the prospects of a U.S. boom.

Dubai Stocks Rise Third Day as Key Indicator Signals More Gains (Bloomberg)

Dubai stocks were the biggest gainers across Gulf markets after oil, the region’s main source of revenue, capped its best week since 2009.

Australia Losing AAA Rating Is Inevitable, Hewson Says (Bloomberg)

It’s only a matter of time before Australia loses its AAA credit rating as the nation’s budget falls further into deficit, according to John Hewson, a former Liberal Party leader and central bank economist.

Philippines Asks for $81 Million Cyber Heist Probe Results (Bloomberg)

The Philippines asked Bangladesh for the results of its investigation into a $81 million cyber heist as it commits to help the Bangladesh central bank recover stolen reserves, Finance Secretary Carlos Dominguez said in a statement.

Green cities: Why invest in sustainable cities? (CNN News)

(CNN) - More than two-thirds of total investment in infrastructure in the next 15 years will be made in cities. It's no wonder, as people are flocking to cities around the world. By 2050, around 66% of the global population likely will live in urban areas. In Africa alone, there will be nearly 800 million more people living in cities than today.

Hacks at Russian central bank have cost 2 billion rubles (CNN)

The Bank of Russia confirmed the cyberattacks and the extent of the losses to CNNMoney on Friday.

Hackers had tried to steal 5 billion rubles, but the central banking authority managed to stop them and redirect the funds, according to central bank security executive Artiom Sychev.

One group of traders is looking forward to a big bump in bonuses (Business Insider)

The rates business has been the standout performer on Wall Street in 2016, with revenue at $21 billion for the first nine months of the year, 


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A Big Swirling Italian Mess

 

A Big Swirling Italian Mess

Courtesy of John Mauldin, Mauldin Economics

“Move to Italy. They know about living in debt: They don’t care.”

– John Lydon

“Italians were eating with a knife and fork when the French were still eating each other.”

– Mario Batali

Italians are headed to the polls this Sunday (and thus this letter is reaching you a little earlier than usual) – but no one is quite sure what is on the ballot. On the surface, the voters are considering whether to approve constitutional reforms that should make the government operate more effectively (or not, depending on your point of view). But many people think the real question is whether the current government should stay in power and whether Italy should remain yoked to the Eurozone.

Coming up with an answer isn’t necessarily helpful when you can’t even agree on the question. However Italians vote, it may take some time to figure out exactly what the result means to Italy, the Eurozone, the EU, and the global economy. I am fairly confident that the ultimate outcome won’t be good, no matter what they choose. The problems are deeper than simple structural reform can cure.

Before we wade into the weeds on this topic, please understand, I love Italy. I love the culture, the people, the food, the beautiful art and architecture, and the heritage the country has bestowed on all of Western civilization. Some of the best moments of my life happened in Italy. I wish nothing but joy to the country and all its people. But politically and economically, Italy is an ungovernable mess heading straight for a Greek-style banking and debt crisis – but with an Italian flare.

Viewed from a historical perspective, this prospect shouldn’t surprise anyone. The territory we now call Italy was a shifting collection of smaller city-states for centuries. They came together as a Republic only after World War II, so they still have some issues to sort out. Creating a stable banking system is high on the list. But Italy can’t have that until it has a stable political system, which has been elusive: Italy has had 65 different governments in the postwar era. They last just over a…
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The Misinformation Machine

 

The Misinformation Machine

Courtesy of George Monbiot

Donald Trump’s staff are drawn from an opaque network of corporate-funded thinktanks and fake grassroots campaigns

By George Monbiot, published in the Guardian 30th November 2016, Frightened by Donald Trump? You don’t know the half of it.

Yes, Donald Trump’s politics are incoherent. But those who surround him know just what they want, and his lack of clarity enhances their power. To understand what is coming, we need to understand who they are. I know all too well, because I have spent the past 15 years fighting them.

Over this time, I have watched as tobacco, coal, oil, chemicals and biotech companies have poured billions of dollars into an international misinformation machine, composed of think tanks, bloggers and fake citizens’ groups. Its purpose is to portray the interests of billionaires as the interests of the common people, to wage war against trade unions and beat down attempts to regulate business and tax the very rich. Now the people who helped run this machine are shaping the government.

I first encountered the machine when writing about climate change. The fury and loathing directed at climate scientists and campaigners seemed incomprehensible until I realised they were fake: the hatred had been paid for. The bloggers and institutes whipping up this anger were funded by oil and coal companies.

Among those with whom I clashed was Myron Ebell of the Competitive Enterprise Institute (CEI). The CEI calls itself a think tank, but looks to me like a corporate lobbying group. It is not transparent about its funding, but we now know it has received $2 million from ExxonMobil$5 million from a group called the Donors Trust (which represents various corporations and billionaires), $800,000 from groups set up by the tycoons Charles and David Koch, and substantial sums from coal, tobacco and pharmaceutical companies.

For years, Ebell and the CEI have attacked efforts to limit climate change, through lobbying, lawsuits and campaigns. An advertisement released by the institute had the punchline “Carbon dioxide: they call it pollution. We call it life.”

It has sought to eliminate funding for environmental education, lobbied against the Endangered Species Act, harried climate scientists and campaigned in favour of mountaintop removal by coal companies. In


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Animal Spirits Can’t Be Modeled

 

Animal Spirits Can’t Be Modeled

Courtesy of 

Bloomberg:

Prior to Nov. 8, analysts were issuing dire warnings about what could befall markets across the globe should Donald Trump pull off a surprise upset in the U.S. presidential election.

Fast forward to three weeks after the election, and the U.S. stock market is continuing to hit record highs. And even while analysts are scrambling to decode the impact the President-elect’s campaign promises will have on their respective sectors, they’re assuming a vastly different tone.

The media is interested in the question of how The Street’s chief strategists can now be selling President Trump as a reason to be so bullish after telling us that President Trump was likely to lead to a crash or correction.

The answer to this question is sentiment, which always follows price. Prices went up, so sentiment changed. What once was bearish and scary is now bullish and exciting.

Animal spirits have been awoken in the US stock market. It may not last long, but it’s undeniable. The initial burst of re-certainty after the election consolidated, and in its wake, a new leg higher emerged – mostly predicated on the idea of massive tax cuts and stimulus plans. If only the President had the ability to wave a wand and make both things happen all at once…

But Wall Street’s seers are pumped. Part of it is the fact that it’s so nice to have a new story to tell that doesn’t involve the Fed or stock buybacks and dividends. Part of it the same old fear of being left behind. And part of it is wishful thinking. Which is not necessarily a negative.

Savita Subramanian’s Equity and Quant research team at BAML note that we’ve just seen the biggest jump in sell-side sentiment in a year:

In November, the Sell Side Indicator — our measure of Wall Street’s bullishness on stocks — jumped by 1.6ppt to a six-month high of 51.5, its biggest increase in over a year. As a result, the indicator is close to breaching the threshold that would trigger a “Neutral” signal, after spending the last six months


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Comment by jabobeast

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  1. jabobeast

    last question--do you think Italy will vote yes?







Comment by biodieselchris

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  1. biodieselchris

    "Duh" article of the day.







Comment by News:

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  1. News:

    “Everybody has a way of interpreting them to be the truth, or not truth,” said Trump surrogate Scottie Nell Hughes<p>Team Trump seems to genuinely believe that facts don’t matter.<p>During an appearance on The Diane Rehm Show <i></i>on Wednesday, Donald Trump surrogate Scottie Nell Hughes tried to defend the …







 
 
 

Phil's Favorites

Exit Stage 3 Delayed; Another Technocrat; Bank Bailout Coming; What About Beppe Grillo?

Courtesy of Mish.

Italy’s president, Sergio Mattarella, asked Renzi to stay on as prime minister. Renzi agreed to do so until a budget is in place, likely later this week.

The vast majority of the population wants an immediate election, but Mattarella wants another technocrat.  Voter be damned, Italy’s 4th consecutive technocrat prime minister is coming up. I am available, and waiting a call.

The first mission of the new technocrat will be to pass legislation that will make it much harder for Beppe Grillo’s Five Star Movement (M5S) to get into power. Voters be damned again.

Exit Stage 3 Delayed

Please consider Renz...



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Zero Hedge

'Footloose' Comes To Brussels - Europe Unleashes "Dance Tax"

Courtesy of ZeroHedge. View original post here.

"Everybody cut loose".. but be prepared to pay for it in Europe. As Martin Armstrong notes, if you dance in a bar in Brussels, you must pay a tax!

The patrons of Bonnefooi, a cafe in the center of Brussels, last week received a visit from a City inspector.

The inspector asked them to pay the ...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Dow Sets Record as Bank Stocks Rally, Investors Shrug Off Italy (Bloomberg)

U.S. stocks climbed and the Dow Jones Industrial Average set a record as a rally in financial and technology shares reversed a dip in early trading after Italian voters rejected a constitutional referendum.

Japan's Labor Shortage Is Worst in the Leas...



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ValueWalk

Holidays gift ideas for every category of male

By Jacob Wolinsky. Originally published at ValueWalk.

Black Friday and Cyber Monday are over but with the Holiday season coming up and my wife always says it is pretty difficult to shop for men, so we thought we would make a guide. The good news is there is still time and (sometimes a need) to get a gift for your husband (shout out to our very loyal and dedicated for our 6 female readers), or yourself, son, father etc. Not every man wants the same type of gift – some like athletic items, home improvement stuff – not only do we have a list but we have a short video for those who prefer that format. See our Holidays gift ideas list be category below followed by the video. Note each item on the list can be found on ...



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Promotions

Phil's Stock World's Las Vegas Conference!

 

Come join us for the Phil's Stock World's Conference in Las Vegas!

Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017.            

Beginning Time:  8:00 am Sunday morning

Location: Caesar's Palace in Las Vegas

Notes

Caesar's has tentatively offered us rooms for $189 on Saturday night and $129 for Sunday night. However, we have to sign the contract ASAP. We need at least 10 people to pay me via Paypal or we may lose the best rate for the rooms. (Once we are guaranteed ten attendees, I will put up instructions to call the hotel for individual rooms.)

The more people who sign up,...



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Members' Corner

Once In A Lifetime?

Courtesy of Nattering Naybob.

Summary
Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:
  • Dec 4th Italian Constitutional Referendum
  • Referendum Result; Market Reaction
  • Political Reaction; Opposition Party Reaction
Last Time Out
Since the end of World War II, 71 years have passed during which, the "perfect" balance has resulted in 63 different Italian governments, or more often than most change shoes.  Instead of being a real second legislative check, that balance is seemingly a weapon of mass distraction and instrument of political vetoes whi...

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OpTrader

Swing trading portfolio - week of December 5th, 2016

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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Kimble Charting Solutions

Inflation indicator testing multi-year breakout cluster!

Courtesy of Chris Kimble.

Some tools are used to measure inflation or lack of. Some look at the price of Crude Oil, Doc Copper or the Commodities Index (CRB) to determine if inflation or deflation is in play. Since 2011, most commodities have created a series of lower highs and lower lows and for many, it has been easier to make the case of deflation than inflation, is in play.

Below looks at another tool, that is often used to determine if inflation or deflation is in play. This tool we are referring too is the TIPS/TLT ratio-

CLICK ON CHART TO ENLARGE...



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Chart School

Weekly Market Recap Dec 4, 2016

Courtesy of Blain.

The week that was…

The market needed a pause after the frenetic post election rally, and it finally arrived this week.  The pullback was mild as bulls would like.  This week’s “fear of the week” was Italy’s political referendum which happened today… and was rejected.

Italian voters were asked in a referendum to approve changes to the country’s constitution, which have been called the most sweeping since the end of World War II. The proposed reforms would cut the Senate’s size by two-thirds and reduce powers held by the country’s 20 regional governments. Italian Prime Minister Matteo Renzi believes the changes will aid efficiency in parliament.

The reforms could also “make it easier to implement important legislation (such as measure...



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Digital Currencies

Largest US Bitcoin Exchange Is "Extremely Concerned" With IRS Crackdown Targeting Its Users

Courtesy of ZeroHedge. View original post here.

Last Thursday we reported that in a startling development seeking to breach the privacy veil of users of America's largest bitcoin exchange, the IRS filed court papers seeking a judicial order to serve a so-called “John Doe” summons on the San Francisco-based Bitcoin platform Coinbase.

The government’s request is part of a bitcoin tax-evasion probe, and se...



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Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...



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Biotech

Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...



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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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