Archive for March, 2015

Dow Futures Down 400 From Monday Highs After Asian Open Flash-Crash

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

After Japan’s Tankan disappointed greatly and various talking heads from Japan came out to deliver the credibility-destroying-phrase of the day: that “the economic recovery is progressing smoothly” despite all evidence to the contrary… USDJPY took a dive. And when USDJPY takes a dive, all its risk-on, carry-trade-imbibed friends take a dive. Dow futures cratered 230 points in minutes only to bounce back modestly when some enterprising sell-side analyst reminded the machines that “bad news is good news.” But that didn’t last and US equity futures are sliding rapidly in the overnight session…

Dow futures have retraced all of Monday’s 3-step-gains and are down over 400 points from the Monday highs…

and across all US equity futures, things are ugly heading into Europe…

And all because… fun-durr-mentals…

Charts: Bloomberg





A World Without The Welfare State

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted Richard M. Ebeling via The Cobden Centre,

We live in an era in which few can even conceive of a world without the welfare state. Who would care for the old? How would people provide for their medical needs? What would happen to the disadvantaged and needy that fell upon hard times? In fact, there were free market solutions and non-government answers to these questions long before the modern Big Government Welfare State.

In fact, before the arrival of modern welfare state, voluntary, private-sector institutions had evolved to serve as the market providers for many of those “social services” now viewed as the near-exclusive prerogative of the government. Unfortunately, after nearly a century of increasing political and cultural collectivism, the historical memory of the pre-welfare state era has all but been lost.

Great Britain in the 19th and early 20th centuries is an historical case study in how many of these problems were handled without political intervention in the private affairs of society.

The Friendly Societies and Mutual Insurance Protections

The focal point for many of these private-sector answers was the “friendly societies.” When they first arose in the late 18th and early 19th century Britain, the friendly societies were mutual-aid associations for insurance for the cost of funerals of workers or their family members.

But as the 19th century progressed, the friendly societies expanded their activities to encompass four primary services: 1) accident insurance that provided weekly allowances for the families of workers who were injured in their places of employment; 2) medical insurance that covered the cost of medical care and prescribed medicines for workers and their families; 3) life insurance and assistance to maintain family members in case of the death of the primary breadwinner or his spouse; and 4) funeral insurance to cover burial costs for the worker or members of his family. Later on, many of the societies also developed savings and lending facilities for members, fire insurance and loans for home purchases.

By 1910, the year before Britain’s first National Insurance Act was brought into law, approximately three-quarters of the work force of the British economy was covered by the private, voluntary insurance associations of the friendly societies. The memberships in their associations covered the entire income spectrum, from the middle- and higher-income skilled worker to the low-wage,…
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China Builds $6 Million Bridge To Nowhere

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As Beijing gets set to expand its global footprint via the launch of multinational institutions like the AIIB which are aimed squarely at disrupting the post-World War II economic order and shaking up a system that’s been underpinned by the notion of dollar hegemony for decades, it’s important that China keep up the momentum when it comes to besting the US wherever and whenever it can. Presumably that’s why the country sunk nearly $6 million and 12 months of work into building the world’s longest glass bridge that leads absolutely nowhere. The key point, apparently, is that the structure is a whopping 5 meters longer than its US competitor.

Via China.org

Workers are finishing the construction of a glass cantilever bridge in Longgang scenic area in Yunyang, Southwest China’s Chongqing municipality. The transparent structure, 718 meters above the ground, has a cantilever extending 26.68 meters from the edge, five meters longer than the Grand Canyon Skywalk. The project, with a total investment of 35 million yuan($5.6 million), started in March 2014. The bridge has a carrying capacity of 1000 tons. [Photo/China News Service]





OECD Economic Review Chair Warns, Central Bankers “Are Doing More Harm Than Good, Policy Must Be Reversed”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In Part (Part 1 here) of Hinde Capital's latest note ascribes, we go further down "The Road to Nowhere" in this excellent discussion with former BIS Economic Adviser, and current Chairman of the Economic and Development Review Committee of the OECD (and teller-of-the-truth) William White explains it all.. 

From Part 1…

"I'm not sure [European QE] is going to do anything – certainly, nothing that's good. The fundamental problem here, as I see it anyway, is that the European banking system is still broken… I think, increasingly, bankers are discomforted more than anything else (it's not just the ex central bankers but increasingly the people that are still holding the levers)… they are starting to ask whether they have somehow been backed into a place where they don't really want to be…. Unfortunately, [it] is getting bigger and bigger. There is a possibility at least that this whole exercise could end very badly."

*  *  *

Part 2…

"I fear that central bankers may have been inadvertently drawn into what they are currently doing… [QE] won't work and may have many undesired side effects that will build up over time. Many of the central bankers at Davos this year said explicitly that they were only buying time for governments to act but, seven years into the crisis, it already seems we have been waiting forever…  the effectiveness of monetary policy in terms of stimulating aggregate demand goes down with time, because you're constantly bringing spending forward from the future…  Logically, at this point, central bankers should say, "We are doing more harm than good. This policy must be reversed." But I don't see anybody actually doing it."

Via Hinde Capital, The Cobden Centre, and True Sinews

Sean Corrigan: Well, we hear this line from Mr. Carney. Without getting to personalities, of course since I don't know him – he may well be a very worthy individual – but I can't read any of his pronouncements without shuddering. He explicitly says this, doesn't he? "We need more borrowing. We need more borrowing," and then, "Oh, we will only put up interest rates gently, because with all this borrowing, we will just shock the system again the minute we do anything."

William White: Who is that you're talking about?…..

Sean Corrigan:…
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World Inflation Falls To A New 5-Year Low

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

From Gavekal Capital Blog

World Inflation Falls To A New 5-Year Low

It’s become a running theme, at least since last September, but the latest release of CPI numbers from around the world has brought our simple average World CPI proxy to its lowest level since the financial crisis. For the period ending in February, our World CPI proxy hit just 1.01% year-over-year. This is the lowest rate of change since November 2009. The year-over-year rate in our World CPI proxy has been falling for six months straight.

Oil has undoubtedly dragged down the headline CPI for many countries around the world. However, our World CPI proxy has the highest correlation (0.78) to the Citi Inflation Surprise Index which is near its lowest levels ever. 14 of the 33 countries that we track currently have a year-over-year change in consumer prices at or below 0%.

Our World PPI proxy bounced back slightly in February but still remains squarely in negative territory year-over-year (-2.43%).





If It Ain’t Broken, Don’t Fix It: Religious Freedom Act Take II

Courtesy of Mish.

Religious Freedom Act Take II

I received a number of emails in response to Indiana Legalizes Discrimination on Grounds of "Religious Freedom".

The bill, signed by Indiana Governor Mike Pence openly encourages discrimination based on sexual preference although Pence incredulously denies that claim. Pence now recognizes the need to "clarify" the legislation.

One of the better email responses came from reader Mark who wrote …

The Constitution plainly states "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof."

The Constitutional guarantee of religious freedom is sacrosanct. The only restrictions placed on religious freedom are those religious practices that harm others.

And I would say “Yes” if you wanted to post a “No Catholics” or “No Jews” sign on the front door of your business. I would also warn, in the same breath, that you may find your business surrounded by protestors and boycotted the very next day. That is the market forces at work. Even though I am neither a Catholic nor a Jew, I would not do business with someone that had that sign on their front door. That is my choice, too.

Mark

If It Ain't Broken, Don't Fix It

I replied …

"Why was there a need then to pass any bill? Pence now says the bill needs to be 'clarified'. If the bill needs 'clarification' then something in it is wrong. At best, the law was political stupidity. At worst, the legislation provides explicit and open encouragement of discrimination."

By the way, the problem with allowing a sign "Blacks Not Welcome" or "Jews Not Welcome" would be the massive protests that would undoubtedly disrupt neighboring establishments, all of which whose business would suffer while the sign was up.

In fact, it is likely the entire neighborhood of an establishment posting such as sign would be torched, with considerable and perhaps permanent damage to the property owner. …

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Imperial Collapse And A License To Kill

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Dmitry Orlov via Club Orlov blog,

The story is the same every time: some nation, due to a confluence of lucky circumstances, becomes powerful—much more powerful than the rest—and, for a time, is dominant. But the lucky circumstances, which often amount to no more than a few advantageous quirks of geology, be it Welsh coal or West Texas oil, in due course come to an end. In the meantime, the erstwhile superpower becomes corrupted by its own power.

As the endgame approaches, those still nominally in charge of the collapsing empire resort to all sorts of desperate measures—all except one: they will refuse to ever consider the fact that their imperial superpower is at an end, and that they should change their ways accordingly. George Orwell once offered an excellent explanation for this phenomenon: as the imperial end-game approaches, it becomes a matter of imperial self-preservation to breed a special-purpose ruling class—one that is incapable of understanding that the end-game is approaching. Because, you see, if they had an inkling of what's going on, they wouldn't take their jobs seriously enough to keep the game going for as long as possible.

The approaching imperial collapse can be seen in the ever worsening results the empire gets for its imperial efforts.

After World War II, the US was able to do a respectable job helping to rebuild Germany, along with the rest of western Europe. Japan also did rather well under US tutelage, as did South Korea after the end of fighting on the Korean peninsula. With Vietnam, Laos and Cambodia, all of which were badly damaged by the US, the results were significantly worse: Vietnam was an outright defeat, Cambodia lived through a period of genocide, while amazingly resilient Laos—the most heavily bombed country on the planet—recovered on its own.

The first Gulf War went even more badly: fearful of undertaking a ground offensive in Iraq, the US stopped short of its regular practice of toppling the government and installing a puppet regime there, and left it in limbo for a decade. When the US did eventually invade, it succeeded—after killing countless civilians and destroying much of the infrastructure—in leaving behind a dismembered corpse of a country.

Similar results have been achieved in other places where the US saw it fit to get


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Abewrongics: Nikkei/USDJPY Tankin’ After Terrible Tankan

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Bad news isn’t even good news anymore in Japan. A sushi-boat-load of data this evening show once again that Abenomics is failing dismally. In no particular order… Large Manufacturing Index MISS (lowest in 9 months), Large Manufacturing Outlook BIG MISS, Large Services Outlook MISS, Small Manufacturing Index MISS, Small Manufacturing Outlook BIG MISS, and drum roll please… Tankan Large Industry Capex Outlook crashes to -1.2% (from +8.7%) – the lowest in 2 years (since Abewrongics was unleashed). The response… USDJPY and Nikkei are dumping…

So much for unleashing animal spirits… Capex outlook plunges…

And bad news is no longer good news in Japan as investors lose faith…

Charts: Bloomberg





In the News, 3-31-15

From Bloomberg

Singapore Home Prices Post Longest Losing Streak Since 2004Singapore's Property

Singapore’s home prices dropped for a sixth consecutive quarter, the longest losing streak in more than a decade, as tighter mortgage curbs cooled demand in Asia’s second-most expensive housing market.

An index tracking private residential prices fell 1.1 percent in the three months ended March 31, matching the longest stretch of declines since March 2004, according to preliminary data from the Urban Redevelopment Authority on Wednesday. The URA changed the method it uses to calculate the property index from last quarter to better reflect the property market, it said in the statement. (More)

 

China Enters Stock Frenzy as Rookie Traders Open Record AccountsChina's Stock Market

To get a sense of the frenzy in China’s world-beating equity market, consider this: In a two-week span last month, the rally lured 2.8 million rookie stock pickers, almost the equivalent of Chicago’s entire population. (Read here)

Indian Nifty Futures Drop After Worst Benchmark Month in 2 Years

Indian stock-index futures dropped after benchmark gauges capped their biggest monthly loss since February 2013.

SGX CNX Nifty Index futures for April delivery fell 0.2 percent to 8,525.5 at 9:52 a.m. in Singapore. The underlying CNX Nifty Index was little changed at 8,491 on Tuesday. The S&P BSE Sensex lost 0.1 percent to 27,957.49. The Bank of New York Mellon India ADR Index of U.S.-traded shares declined 0.4 percent. Markets in India are closed Thursday and Friday for the Mahavir Jayanti and Good Friday holidays. (Continue)

 

China’s Big Stock Market Rally Is Being Fueled by High-School DropoutsAsian Stocks Drop as China Rate Concern Lingers

There’s a story that Joseph Kennedy sold his stocks on the cusp of the Great Crash of 1929 after a shoe shine boy shared trading tips with him. If even the shoe polisher is buying stocks, he reasoned, the market must be riding for a fall.

New data from the China Household Finance Survey, a large-scale survey of household income and assets headed by Professor Li Gan of Southwestern University of Finance and Economics, provides fresh insights


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This Is How Many Times Blogger Bernanke Use The Word “Debt” In A Post About Secular Stagnation

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

By now everyone, any by everyone we mean even that pillar of orthodox “economic wisdom” , McKinsey, has realized that the reason the world is blanketed in a period of secular stagnation and soon, contraction, is simple: an unprecedented, record amount of debt:

… debt which the world should have restructured as part of the resolution of the global financial crisis, however neither was the financial crisis resolved, nor was the debt overhang fixed. In fact, in all his brilliance, then Fed Chairman Ben Bernanke decided to “fix” record debt with more debt and so did all his other central bank peers leading to this:

In fact McKinsey could not be clearer, even for those central bankers who at first, or second, sight may suffer from congenital comprehension defects:

 “High debt levels, whether in the public or private sector, have historically placed a drag on growth and raised the risk of financial crises that spark deep economic recessions.”

So considering that in his latest blog post “Why are interest rates so low, part 2: Secular stagnation” none other than the abovementioned Ben Bernanke decides to tackle precisely the topic of global growth, or lack thereof, and specifically “secular stagnation”, one would think that debt would be the dominant word under discussion in Ben Bernanke’s latest Brookings Institute post.

One would be wrong. Here is the number of times Ben Bernanke used the word debt in an article that has 1299 words.

1

… or a “hit rate” of 0.08%.

This is the context:

But if we are really in a regime of persistent stagnation, more fiscal spending might not be an entirely satisfactory long-term response either, because the government’s debt is already very large by historical standards and because public investment too will eventually exhibit diminishing returns.

He is, actually, correct in this sentences. It is everything else that he is incorrect about.

For example error #1:

The Fed cannot reduce market (nominal) interest rates below zero, and consequently—assuming it maintains its current 2 percent target for inflation—cannot reduce real interest rates (the market interest rate less inflation) below minus 2 percent.

of course the Fed can reduce rates below zero: just look at all of its foundering central bank peers…
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Zero Hedge

Explosion Hits Russia's Largest Virus Lab Which Houses Plague, Smallpox, Ebola And Other Deadly Viruses

Courtesy of ZeroHedge View original post here.

A sudden explosion at a Siberian virus research center on Monday reportedly left the facility engulfed in flames, according to several Russian news outlets. 

Firefighters and other emergency personnel were dispatched to the "Vector Institute" located several miles from Novosibirsk - an emergency which was upgraded "from an ordinary emergency to a major incident," a...



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Phil's Favorites

The future of work will still include plenty of jobs

 

The future of work will still include plenty of jobs

Even though the future is unknown, Canada’s employment rate has risen steadily from 53 per cent in 1946 to more than 61 per cent today. (Shutterstock)

Courtesy of Wayne Simpson, University of Manitoba

There is now widespread anxiety over the future of work, often accompanied by calls for a basic income to protect those displaced by automation and other technological changes.

As a labour economis...



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Lee's Free Thinking

Is The Drone Strike a Black Swan?

Courtesy of Lee Adler

Pundits are calling yesterday’s drone strke a “black swan.” Can a drone strike on a Saudi oil facility, be a “black swan.”

According to Investopedia:

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the practice of explaining widespread failure to predict them as simple folly in hindsight.

I seriously doubt that no one expected or could have predicted a drone strike on a Saudi oil facility.

Call Me A B...

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Insider Scoop

New Relic Cuts 2020 Sales Guidance, Announces Changes In Management

Courtesy of Benzinga

New Relic (NYSE: NEWR) has reaffirmed its second-quarter guidance and cut its sales guidance for fiscal year 2020 from $600 million-$607 million to $586 million-$593 million.

The company’s chief technology officer, Jim Gochee, and chief revenue officer, Erica Schultz, have resigned. New Relic also named board member Michael Christenson as its chief operating officer. Christenson joins from his ...



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The Technical Traders

Metals are following downside sell off prediction before the next rally

Courtesy of Technical Traders

It is absolutely amazing how the precious metals markets have followed our October 2018 predictions almost like clockwork.  Our call for an April 21~24 momentum base below $1300 followed by an extensive rally to levels above $1550 has been playing out almost like we scripted these future price moves.

Now that the $1550 level has been reached, we are expecting a rotation to levels that may reach just below the $1490~1500 level before attempting to set up another momentum base/bottom formation.  And just like clockwork, Gold has followed our predictions and price is falling as we expected. Just look at our October 2018 chart where we forecasted the price of gold...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Kimble Charting Solutions

Bond Yields Due For Rally After Declining More Than 1987 Stock Crash

Courtesy of Chris Kimble

U.S. Treasury Bond Yields – 2, 5, 10, 30 Year Durations

The past year has seen treasury bond yields decline sharply, yet in an orderly fashion.

This has spurred recession concerns for much of 2019. Needless to say, it’s a confusing time for investors.

In today’s chart of the day, we look at a longer-term view of the 2, 5, 10, and 30-year treasury bond yields.

Short to long term bond yields are all testing 7 to 10-year support levels as momentum is at the lowest levels in a decade.

A yield rally is likely due across the board after a recent decline that was bigger than the stock crash in 1987!

If yields fail to ral...



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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

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About Phil:

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