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1.27 Trillion Tuesday – China’s Bad Loans Jump 51% in 12 Months

"Cause baby, now we've got bad loans

You know it used to be mad loans 

So take a look what you've done


Cause baby, now we've got bad loans, hey!"

Bad loans at Chinese banks jumped 7% in the fourth quarter and are now topping 1.27Tn Yuan which is, fortunately, "only" $196Bn but still – that's a LOT of bad loans!  And, of course, this being China, those are just the ones they are admitting to.  If you include "special-mention" loans, where future repayment is at risk but yet to become nonperforming, the industry’s total troubled loans swelled to 4.2Tn Yuan ($648Bn), representing 5.46% percent of total advances made by banks

"The slower quarterly increase in NPLs are likely to be results of stepped-up efforts by banks to recollect loans, more aggressive write-offs, and some relaxation in their bad-loan recognition standards," said Chen Shujin, a Hong Kong-based analyst at DBS Vickers Hong Kong Ltd. "We don’t expect to see any turnaround of asset quality until the end of this year."

This is why, here at Philstockworld, we turned bearish on 2016 back in the fall (our Institutional Report Service is available here) and now, finally, other Wall Street analysts are catching up, with BAC, JPM, CS et al now dropping their 2016 forecasts by 10% to roughly our 2,000 year-end target (if all goes well) on the S&P.  Some of the others are still on drugs, with 2,200 targets but, in the case of Deutsche Bank (DB), I think it's just wishful thinking that maybe that will be enough for them to survive the year intact. 

Like the Sinatra song, DB has been up up and down and over and out and, lately, flat on their faces and the problems facing the European Banks aren't so different from those facing the Chinese banks – as they are in any economic downturn as more and more of their business loans become troubled.  

There are two major issues driving banks down this quarter, the governments seem to be running out of QE, which has been bailing them out of their mistakes for the last 7 years and, this time, the fact that the banks have refused to lend to consumers has deprived them of a base of mortgage and small loan revenue streams they can fall back on when commercial loans are in a rocky climate.  The banks have lived by the commercial loan and now they risk dying by it.

Nonetheless, this is a KNOWN risk – one I got bored talking about over a year ago and we don't even bother talking about China's FAKE economy anymore – because it's kind of obvious now.  Still, our 2,000 target for the S&P is based on the current economic climate which includes the fact that we think the Central Banksters have one more round of QE left in them before the wheels finally fall off the wagon – so we have that to look forward to! 

In fact, we discussed the BOJ intervening in Last Wednesday's Live Trading Webinar (replay here) and our trade idea at the time was to go long on the Nikkei (/NKD) at 15,700 and, after a poor start, which we used to improve our position – we soared to over 16,000 this weekend, though we got out early at 15,880 as that was very good money on Sunday night (Futures).  For the futures challenged, our options trade idea was:

We haven't done much gambling in the STP lately so let's see if we can turn $2,200 into $3,300 bucks real fast buy buying 40 EWJ March $10 calls for 0.55.  

EWJ should open this morning at about $10.75 so we're well on track to a 50% profit in just one trading session – not bad!  One of Abe's advisers called for Yentervention over the weekend and that is all it took to spark a short-covering rally on the Nikkei – exactly as we expected.  Most of these things are obvious in retrospect, the trick is to get on the right side of the trade BEFORE the news is announced…

Now we can move onto oil, the other thing that is driving the markets crazy.  Oil prices went on a tear last week, from $25 back to $30 on rumors that there would be an OPEC meeting regarding EMERGENCY PRODUCTION CUTS to stem the rising tide of surplus oil.  Remember that term – EMERGENCY PRODUCTION CUTS – because it matters.  Now, what actually happened is that, over the weekend, Saudi Arabia, Russia, Qatar and Venezuela agreed that they wouldn't INCREASE PRODUCTION LEVLES above the record-high January output AS LONG AS OTHER MAJOR OIL PRODUCERS FOLLOW SUIT VOLUNTARILY.  

I know, WOW, powerful stuff, right?  Obviously news like that sent oil prices skyrocketing, hitting a high on the NYMEX of $31.50 (which we caught this morning on /CL Futures) before falling back below the $30 mark again as people who understand words began reading the actual statements.  

We're still long on oil.  We made a very aggressive play in our Options Opportunity Portfolio (sign up here), when oil hit $27.50 – as that's a bottom we're willing to bet holds up into our July time-frame ($35+ is our target).  We certainly didn't expect to hit it this week but we'll take it if it comes.  Meanwhile, as I said on Money Talk last week, we don't expect oil to come back in any meaningful way and, to prove my point – despite very low oil prices in 2015, a record $329Bn was spent on Global Clean Energy Projects.  

$126Bn was spent on Clean Energy in 55 Emerging Markets in 2015, up 39% from the year before despite all the economic woes.  China spent $110Bn, double that of the US and Europe.  “These figures are a stunning riposte to all those who expected clean energy investment to stall on falling oil and gas prices,” said Michael Liebreich, founder of the London-based research arm of Bloomberg LP. “They highlight the improving cost-competitiveness of solar and wind power.”

New wind and solar power accounted for about half of all new generation last year. Around 64 gigawatts of new wind power and 57 gigawatts of new photovoltaics was added, representing an increase of 30 percent from to 2014.  As a result, the U.K. was by far Europe’s strongest market, despite Prime Minister David Cameron’s effort to roll back incentives for the industry. Renewables investment in the U.K. rose 24 percent to a record $23.4 billion from 2014.    

This is a macro that is not going away folks.  As wind, wave and solar conversions get more efficient, more and more of our energy use will switch to renewables and, though our grid does not run on oil (but it does run on gas, coal and nuclear), Chevy, for example, is rolling out the all electric Bolt this year, which gets the same 200 miles on a charge as a Tesla, but for about $35,000 and that's just $27,500 with electric incentives.  

Let's say that only 2M electric cars are sold in 2016.  The average driver drives 15,000 miles a year and our current fleet averages 22Mpg but worse for older cars.  That's 682 gallons of gasoline and that would be 16 barrels of oil (though it doesn't all convert to gas, of course).  2M electric cars means you don't need 32M barrels of oil which adds an extra 615,000 barrels a week to our inventory and next year, if we sell 4M electrics, as projected, now we need 2Mb/week less than we do now.  

That's bad enough but then OPEC has to worry about trucks going hybrid or, eventually, all electric or natural gas – which we don't need from them.  So oil is in a long-term decline all the way to irrelevancy but it will take decades to wind down (as did steam engines when internal combustion came along) but, eventually, it will die and poor OPEC has a 40-year supply sitting in the ground and their worry is the World may only want oil for 20 more years and then they'll be stuck with the stuff.  

So of course they will sell as much of it for whatever they can get for now and you won't get a real cutback.    

 


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  1. Not much sense getting bullish until we get over the highs of late January – 16,500, 1950 and 4300 on the Dow, S&P and Nasdaq!


  2. Phil--Didn't you say that you thought oil would be at $40 by July?

    Why do you think it will get there?

    I can't tell if you are bullish or bearish for 2016?



  3. Good morning! 

    WASHINGTON (The Borowitz Report)—In a television appearance on Sunday, the leading Senate Republican warned President Obama “in no uncertain terms” against doing anything in his remaining three hundred and forty days in office.

    “The President should be aware that, for all intents and purposes, his term in office is already over,” Mitch McConnell said on Fox News. “It’s not the time to start doing things when you have a mere eight thousand one hundred and sixty hours left.”

    While acknowledging that the President has eleven months remaining in the White House, McConnell said that he and the President “have an honest disagreement about how long eleven months is.”

    “The President believes it is almost one year,” he said. “I believe it is almost zero years. I’m not a mathematician, but I believe I am right.”

    As for how Obama should spend his remaining time in office, McConnell said, “If the President has trouble doing nothing, we will be more than happy to show him how it is done.”

    Ted Cruz is so hated that even his home state newspapers will endorse anyone but him and what they had to say about him is absolutely embarrassing.
    ADDICTINGINFO.ORG
     

     

     

    I like this – how did we ever survive?  

    Despite taking the pledge five months ago that he’d stick with the Republicans regardless of the nominee, Donald Trump nevertheless fired a warning shot Monday at the Republican National Committee – with the threat yet again of an independent run for the White House.  

    The Republican presidential front-runner also threatened to sue rival candidate Ted Cruz regarding his Canadian birth if the Texas senator does not retract alleged “lies” about Trump’s policy positions. Further, Trump called on the RNC to intervene in that fight, and said they’d be violating the “pledge” if they don’t.

    “The RNC better get its act together,” Trump said at an earlier campaign stop in South Carolina. “I signed a pledge. But the pledge isn’t being honored by them.”


  4. Good Morning!


  5. Big Chart – Can't even make the low part of the W so far – that's not bullish at all!  

    Oil/Jabob – Yes, $40 by July does not mean $35 in Feb.  So I have a generally bullish 6-month forecast but, if oil fails to form a base around $30 and shoots up, that makes me bearish on the recent action.  FUNDAMENTAL changes have to take place to get oil back to $40 and that means about 3Mbd of production coming off line.  I expect that to happen naturally, as companies cut back spending or close up shop entirely but it takes time and it has nothing at all to do with OPEC jibber jabber.  

    Oil/Jabob – Another reason not to be bullish.  They have to roll out 40Mbd for the next 5 sessions – that's a lot of pressure and April/May and June are already jammed up with 900M barrels so they are going to be pushing 1 BILLION BARRELS of fake orders into the pipeline based on hopes of OPEC cuts that don't seem to be coming.  Could get very ugly.


  6. thanks Phil..


  7. NG is continuing it's relentless sell of. Are you still for doubling down Phil?


  8. tease!

    FU oil!!!!


  9. Quiet day today… I wonder if we can find a correlation between market volume and comments on PSW. Could have a volatile week with low volume it seems.


  10. Europe well off the highs but holding flat(ish).  Germany weakest is not a good thing:

    "The bears have a problem," Deutsche Bank says

    You're welcome Jabob.

    /NG/Traderd – Yep, $2.02 is what I was hoping for on /NGK6 but, keep in mind, /NG was down below $1.80 for a bit, now $1.89 so possible we dip below $2 before this is done on the May contracts.  

    Volume/StJ – Interesting theory but today is kind of like a Monday I think – always quiet. 


  11. Dollar strong.  Should be good for /NKD (15,860 – right where we quit) if our indexes turn back up.  

    CAKE is tonight, I like them but they already bounced 10% off the lows.  We can still sell the March $46 puts for $1 and pick up the $45 ($5)/$49 ($2.40) bull call spread for $2.60 and that's net $1.60 on the $4 spread and worst case is having your CAKE at net $47.60.

    Another good one is UNG, back under $7 after testing $9 so once again we can get some fantastic prices on a long position betting natural gas doesn't stay at $2:

    • Sell 20 UNG 2018 $8 puts for $2.30 ($4,600)
    • Buy 50 UNG 2017 $5 calls for $2.30 ($10,150)
    • Sell 50 UNG 2017 $8 calls for 0.80 ($4,000)

    That's net $1,550 on $15,000 worth of spreads that are $10,000 in the money at $7 and worst case is owning 2,000 shares of UNG at net $8.775 ($17,550).  Figure nat gas won't be $1 so UNG should stay over $4 and you risk losing about $8,000 vs potential $14,450 reward – good ratio!  


  12. Barry on the side of raising the minimum wage:

    http://ritholtz.com/2016/02/historical-perspective-on-the-minimum-wage-debate/

    In 1992, New Jersey’s minimum wage had increased from $4.25 to $5.05 per hour; Card and Krueger looked at the impact of the law by surveying 410 fast food restaurants near the border between New Jersey and Pennsylvania, before and after the rise in the wages.

    The conclusion was surprising to what the dominant economic theory at the time predicted should have happened: That raising the cost of labor would reduce job growth. Yet the opposite happened, and job growth was much stronger on the side of the border where the minimum wage increased. Lots of subsequent studies confirmed this conclusion, and (for the most part) it has stood the test of time and numerous other challenges.

    The key takeaway is that modest increases in minimum wages do not hurt employment, and tend to increase economic activity.

    It was interesting the other day to hear Steve Grasso on CNBC pointing out that Wal-Mart had been underperforming since the minimum wage was hiked. And then being told that WMT had been ripping off their potential customer by Seymour in the same show. I would love to see Grasso trying to live on $8/hour! 


  13. wrote some 170 calls on TSLA this morning.  Don't think they have it in them to move there this week.


  14. It has been over 2 months since oil actually closed up to start the week…unreal


  15. Phil — do you think we go back to 25 again? unreal


  16. http://data.cnbc.com/quotes/.OVX

     

    why is the oil VIX down so much today???


  17. jabo, could you please just short oil and be happy for a change?  :)


  18. FU tom!!!


  19. now I am happy ;-)


  20. :)


  21. Jabo / Tom,

    That's funny….


  22. Wages/StJ – I can't, for the life of me, figure out how any real study could not reach that conclusion (or how rational people can think that better wages don't boost economies).  I guess if your brain redefines "economy" as meaning your personal bank balance and that person has employees…

    TSLA/Rustle – Watch out for the flying car tweet!  

    App that tells you what event is happening at your destination that's causing flights and hotels to be so expensive.

    Desktop app that records and transcribes on screen whatever the person who doesn't realize you're deep in work just asked you 5 seconds ago.

    Imagine if we spent all the time we do on holiday shopping with the actual people we're shopping for.

    Small drone that locates sound annoying you (neighbors dog, car alarm, etc) then flys over and leaves a passive aggressive note for owner.

    This is our best defense against intelligent machines right now. We're in trouble.

    Oil/Jabob – No, $25 was silly.  $27.50-$30 is a good range but anything can happen in a panic – especially with all these noodnicks jumping on the long oil bandwagon way too soon. wink

    Oil VIX/Jabob – I imagine because we're back on the 5-day average path.  

    Meanwhile, $2.02 filled on /NGK6.  /NG at $1.88 and not looking strong with Dollar just under 97.


  23. These figures are a stunning riposte to all those who expected clean energy investment to stall on falling oil and gas prices,”

    Not really stunning at all when you actually look at what "energy" means and compartmentalize it appropriately. Changing oil demand, as Phil points out, is a factor of higher mileage cars, and to less of an extent (but increasingly so), new electric cars. Natural gas is killing coal – this is unrelated to oil since the latter is not used to make electricity to a meaningful degree. Natural gas does replace heating oil though. I'm not sure why anyone mentions nuclear – we haven't made a new nuclear plant in 30 years. Note that coal is still king of US electricity production — that's how devastating massively depressed natural gas prices are — the incumbent source is still king and every company that supplies it is bankrupt. further note that oil prices have nothing to do with this. They are completely unrelated.


  24. Wages / Phil – These guys on CNBC (exception for Tim Seymour in this case) just think of the shareholders. That's their economy – WMT's income. They don't do a macro analysis of the situation, it just stops at the balance sheet!


  25. Nukes/BDC – Globally they are still being built.

    Wages/StJ – But it's Econ 101, especially in a consumer-driven economy like this one.  

    Gasoline back below $1!  


  26. Phil – On NG did you double down at 2.04 as you said yesterday or did you wait for 2.02. How many are you going for and I take it you will add at 2.00? I've got 8 at 2.43 average.


  27. WYNN – Up 25% in last two trading sessions. 


  28. Phil – gradually the fundamentals are starting to shift. Junk bonds kept this turd afloat longer than it would've otherwise been.


  29. Here's Bernie weighing in on WMT:

    And economist Robert Reich, who shows up at 4:50, nails it: 

    “Senator, I do not think that taxpayers in this country ought to be subsidizing the wealthiest family in this country or any company and any corporation that is paying its workers so little that those workers, in order to have a decent living, have got to rely on food stamps, Medicaid, subsidized housing, and so on. That is corporate welfare of the worst kind. But more broadly, let me simply say that Walmart is the largest employer in the United States. It is paying its workers, if you include its part-time workers, on average $8.80 an hour. Now, compare that to 1955, when the largest employer in the United States was General Motors and it was paying its workers in today’s dollars $37 an hour.”

    /NG/Traderd – I waited for $2.02 as I could see it coming and I think I'm done unless it goes much lower. 

    WYNN/Albo – Numbers in Macau were much better than expected. 

    Junk bonds/BDC – Good point.  Going to be a bloodbath if we stay under $35 into the summer.


  30. RUT 990 – Go baby, go!  

    Good time to get back on /NKD over 15,850, right where we left off (tight stops, of course).


  31. Cars are getting better mileage, but pound for pound, a sedan does better than an SUV, and SUV/light truck sales are heading into the record books. I bet 2016 is 18M+ given that persistently low gasoline prices were not as ubiquitous last year as they are now. If you're one of some 10M americans looking at a new car right now you're doing the monthly payment versus other expenses calculations (mostly gas), and when you can put 25 gallons in a F150 for $41 that's much different math than the $120 it cost just 2 years ago.

    Simply put, it looks like 2000 all over again.


  32. Phil – where do you think /NKD is heading? It is already @ 15,880


  33. Gold now commands a record 40.5 barrels of oil. Perception wise, this is important. Gold is essentially useless, so it has a perceived value and oil is 100% useful and has no perceived value (ping me if you know someone with an oil necklace). So this ratio paints a sort of "vix" in a way, a ratio of Useless/Useful. When these diverge, something is rotten in Denmark. For example, back in 2000 when oil was $20/bbl and gasoline was $1, gold was at $275. We are in a another low oil price super-cycle (thanks Obama, and Clinton before you) but this time gold has not seen similar price action. This may be due to debt (thanks Obama), or to the exploding money supply (thanks Obama), which are really the same thing to me (I'm not smart enough to differentiate national fiat debt from national fiat currency, and nobody has been able to explain it to me).

    Compared to money, gold is somewhat useful, it can be used to gold plate electrical connections for example, and of course it has physical scarcity, but money is TOTALLY useless in a physical sense (and 98% of it is electronic anyhow). But it is the thing the other two items (gold and oil) are priced in, so taking that irony aside, relatively speaking people would rather have much more of something totally worthless and useless (gold)  over something useful 4 TIMES more so than they would in 2009 (a 300% increase).

    1) The divergence will continue because "this time it's different." This could very well be true: we've never seen what the consequences of this M2 money supply graph before, so we really don't know what it will do. Money is less scarce. The catch is it only has increased for people that already have a lot of it (and then enter stage right Mr. Sanders). Simply put, we've never seen it before so we just don't know… outside of Zimbabwe that is.

    2) The divergence will contract through some combination of gold falling or oil prices rising.

    Hint: the answer is #1.


  34. Phil, what are the levels on the futures you are looking for?….especially considering this is expiration week? Any clarity from you is appreciated. Thanks


  35. SUVs/BDC – The new ones still get much better mileage than the old ones and I don't think Hummers are going to make a comeback.  

    /NKD/Bulls – If we can get going they can pop 16,000 and head back to 17,000 but no luck so far.

    Gold/BDC – That gold/oil thing is not a good indicator.  You could run gold/cattle or gold/housing and come up with similar correlations because they are both affected by the Dollar and other factors.  Gold is all about the money supply in the end and the next time people worry about sovereign debt, gold will fly up again – no matter what oil is doing.

    Speaking of oil – can't hold $29 and /RB more telling at 0.9775.

    Futures/Jasu – I have no expectations other than things like 1,900 on /ES has to be taken and hold or we're screwed.  Otherwise, we're looking for the same levels we looked for last Tuesday (same as the week before that).  16,150 on the Dow is a strong bounce and here we are, failing it.  1,887 is weak on /ES and here we are, 4,050 is weak on the Nas and 4,300 would be strong, Rut 1,000 is weak and 1,050 is strong.  Nikkei 16,640 is weak – not even close and DAX and NYSE 9,152 is weak (good on NYSE and DAX is right there) and 9,500 is strong (neither).

    Why is Kudlow back on CNBC?  MAKE IT STOP!!!!  Oh God, he's announcing he won't run for Senate.  Oh please Larry, don't do us any favors…  Like this guy can win?  


  36. Wow, we had a nice 4-inch snow yesterday and it was 0 degrees and today it's 50 degrees and pouring rain with 50 mph winds.  Global warming keeps things interesting at least…


  37. BDC-your "thanking" Obama for the national debt?? Where was it when he took over and where is it now? It was Bushey boys legacy of debt; remember the war that wasn't included in the budget? for his whole term? Hmmmmm. Facts are truly facts, at least numerically speaking.


  38. Phil, thanks on the futures' levels…..just wanted confirms…


  39. For after hours on LVS - "Sheldon Adelson Bets it All":  http://www.motherjones.com/politics/2016/02/sheldon-adelson-macau-casinos-lawsuit

    Sounds a bit like one season of "House of Cards".


  40. Kudlow for Senate?  No?  Maybe he found out the giant white dome is made of limestone.


  41. Obama wussed out on the debt problem. He stacked his advisory board wit GS insiders and continued to pursue voodoo economics because it was fashionable and he didn't want to rock the boat. He didn't even raise capital gains from 15%(!!!!). That is so unspeakably idiotic it is impeachable, IMO. He had 2 years before the GOP swept back into the house and senate and all he really has to show for it is the worse half of a healthcare plan (the GOP half). He shoulda grown a pair and raised taxes and redistributed wealth to the bottom 312,999,912 americans via infrastructure related job growth and the debt problem would be accelerating toward zero currently.

    The whole reason Bernie is so shockingly popular is because Obama didn't do any of these things.


  42. Phil, the national debt was $9.7 Trillion on this date in 2008 and is $19 Trillion today.  The current administration might have something to do with it.  And the proposed budget hot off the President's desk would dramatically increase deficit spending so the projected future debt looks to grow even faster.  Yes, let's stick to the facts.


  43. Phil, I injured my knee so I can't hit the Flash Gordon treadmill today – hence oil is in decline!! Sorry!!!


  44. Wow, BDC, sounds easy when you put it that way… No help from the Senate though that would not change the fillibuster rules. He now has to use executive orders and even that is being stopped in the Supreme Court. I have the feeling that Bernie would be just as handcuffed if he gets elected. We now have system that feeds on gridlock. The best of intentions are not good enough – look at how much negotiations they had to do just to pass the minimum stimulus package. It was going to be bigger, with more infrastructure but the GOP threw a tamper tantrum until we added more tax cuts!


  45. War/Pirate – Great point, Obama's decision to include war costs in the debt are what saddled him with the bigger debt than Bush – not to mention the cost of bailing out the Bush catastrophe.

    You're welcome Jasu.

    Shelly/Rexx – What a guy!  And ROFL on Kudlow!  

    Obama/BDC – You don't really believe that do you?  The entire banking system was on the verge of collapse in Jan, 2009, when he took office.  It was NOT the time to tighten up the budget.  Bush's 2009 budget, that Obama had no control over, had a $1.5Tn deficit and the 2010 budget Obama signed in June was not a good time to cut so Bush's $1.5Tn cost overrun was charged to Obama for another year. There really was not a good time to raise taxes until he had a chance in June 2012, when he was re-elected and raised taxes – knocking the deficit back down to under $1Tn but the damage was already done as far as the debt that was attributed to him but it's BS and everyone knows it except, apparently, Sibe.  

    Debt/Sibe – See above, not even worthy of discussion.  Had the Bush tax cuts been extended, we'd be another $6Tn in debt right now.  

    Treadmill/BDC – That had to be the reason.


  46. Phil /WMT heirs worth $150B and sitting on it during a recession does exactly what for society? The only difference between the Walmarts and King George III is the latter was a lot poorer in comparison.


  47. BDC/ and Obama really only had 6 months when they had 60 votes in the senate – from when Al Franken got seated (the republicans dragged that into June of 2009) until Scott Brown was seated (Feb 2010, taking Teddy Kennedy's old seat to the GOP).

    Not that I don't share your sentiment. Ido think he went too easy on the stimulus probably on the 'advice' of the  Rahm Emmanuel/Larry Summers clique. And he paid for it in the 2010 midterms.


  48. IMHO  if my choice for Prez is Trump, or Sanders I am leaving this country, because I won't vote for either. Sander's never met an NRA bill he hasn't liked and voted down the Brady bill 5 times. If this country can't try to protect our children in their classrooms and their teachers, it's not my country anymore. When Bushey allowed those assault rifles with the 30 rounds this whole country's fabric started to fray. You can't protect our children, or citizens with mindless gun nuts running the country. God forbid that you should go up against the 2 million NRA members!!! And their lobbyists!


  49. WMT/BDC – That's why there are progressive taxes.  After a person makes $10M in a year, you WANT to discourage them from making more so you tax them 70% and even 90% at a certain point so they stop and give others a chance or, if they don't – at least the Government gets most of it and puts it to good use.  This is what most Republicans don't get – the concept of ENOUGH.  While not a zero sum game the economy doesn't grow that quickly, no matter how great Bill Gates or Steve Jobs makes your life so the money they make is money that other people can't make – because it's in their pockets.  The more they take, the less there is for everyone else.

    The same goes for CEOs, actors, ballplayers, etc.  When the elite made the jump from Millionaires to Billionaires, they needed 1000x more money to "make it" and that has nothing to do with their needs – it's just a way of keeping score.  Once you have $1Bn, even at 5%, you get $1M a week to spend for the rest of your life.  What's the next Billion for or the 50 after that for some?  While the next $50Bn doesn't change Gate's life one bit – it does mean 50,000 other people can't have $1M because it's in Bill's pile.  

    That's true for Corporations too and that money, which should be productively flowing through society, sits in offshore accounts and sucks up more money through interest or speculation like a black hole and the bigger it gets, the more money it needs to suck in to sustain itself.  This is what happened with King George III et al – they literally needed all the money in the World to compete with other kings (mostly cousins) in their global game of thrones until the people finally revolted and wrote rules and progressive tax laws – which are now being broken down again by the next set of "winning" families who want it all.

    Sanders/Pirate – While I do disagree with Bernie on that issue, it's certainly no reason for me not to vote for him.  

    /NGK6 back to $2.04, that's good.  Glad I didn't wait for $2.00 – it never came.  /NKD back to 15,900 in a slow grind.  


  50. rexx – those are good points. I have a tendency to revise history…

    Pirate – stay here instead. There's already too many people who don't care.


  51. Phil – to simplify the concept: no taxes until you've built your third house in Monopoly.


  52. I like HCN down here, as a long term retirement hold. I also like a health care REIT that, in chemistry, reads as hydrogen cyanide.


  53. FCX – Up big.


  54. Cameron Edges Toward Deal to Avoid `Brexit’ With Brussels Talks

    Prime Minister David Cameron edged closer to securing an overhaul of the terms of Britain’s membership of the European Union after a series of …


  55. It was the mystery of the 2016 presidential campaign: Why wasn’t Jeb Bush, who seemed a shoo-in for the Republican nomination and has the resources to go all the way, doing better in polls and primaries? In North Charleston, South Carolina, on Monday night, I got my answer.

    Bush, who at first seemed …


  56. The U.S. Federal Reserve’s newest policymaker on Tuesday called on lawmakers to consider “bold, transformational” rules including the breaking up of …


  57. Elon Musk has a bold prediction for sustainable energy in China.

    He believes that the country’s enormous energy needs could easily be provided by solar power alone.

    The multi-industry entrepreneur is certainly no stranger to hyperbolic tech visions. Speaking with CNN’s Kristie Lu Stout onstage at …


  58. Unless you’re winning, most of life will seem hideously unfair to you.

    The truth is, life is just playing by different rules.

    The real rules are there. They actually make sense. But they’re a bit more complicated, and a lot less comfortable, which is why most people never manage to learn them.

    Let’s …


  59. The Federal Reserve left short-term interest rates unchanged at its Jan. 26-27 meeting, but offered no clear signal about the likely path for rates in coming months. Fed Chairwoman Janet Yellen, in two days of congressional testimony, cited several risks to the U.S. economy that could cause the Fed …


  60. RIYADH, Saudi Arabia — In pressed white robes and clutching crisp résumés, young Saudi men packed a massive hall at a university in the capital city this month to wait in long lines to pitch themselves to employers.

    It was one of three jobs fairs in Riyadh in two weeks, and the high attendance was …


  61. Apple to issue up to $12 billion in bonds [CHARTS]

    Apple Inc. announced on Tuesday that the company would look to sell between $10 billion and $12 …


  62. Saudi Arabia, Russia to Freeze Oil Output Near Record Levels

    Saudi Arabia and Russia agreed to freeze oil output at near-record levels, the first coordinated move by the world’s two largest producers to counter …


  63. Lightest S&P volume of 2016.


  64. 6 simple tips for losing weight without dieting

    Monday – start diet. Tuesday – break diet! Wednesday – plan to start again next Monday.

    If this is you, it’s probably time to get off the diet roller coaster and make some bigger changes to the way you eat, drink, and think about food.

    Here are six tips to help you get started.


  65. Nevada’s hundreds of laid-off solar workers could be considered their own voting bloc.The post Nevada’s Solar Industry Was Sabotaged. Here’s What …


  66. NEW YORK/BOSTON (Reuters) – Top U.S. hedge fund management firms, including Visium Asset Management, took stakes in embattled renewable energy company SunEdison Inc during the fourth quarter.

    Visium put on a new position, buying 1.3 million shares, while Sand Grove Capital Management added a new …


  67. When there is no more gold left in London to export the gold price is likely to go higher on strong global demand induced by economic headwind. At


  68. Republicans are sticking to their apparent belief that Barack Obama’s second term ended the moment Supreme Court Justice Antonin Scalia’s death was …


  69. Teaching machines ethical behavior, one crowdsourced story at a time.

    As it turns out, the key to crafting intelligent machines that won’t go rogue and slaughter us all might be some very thoughtful storytelling. Mark Riedl and Brent Harrison from Georgia Tech are trying to mold the way artificial …


  70. Hot on the heels of the hottest year on record globally, NASA reported Saturday last month was the hottest January on record — by far. January 2016 …


  71. True Cause Of Microcephaly Outbreak Found

    Two weeks ago Jon Rappaport accused pesticides of being the true cause of the Microcephaly outbreak currently being blamed on the Zika virus.

    Last …


  72. The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to


  73. Louisiana’s fortunes have sunk almost as hard as Jindal’s presidential hopes. Things are getting very, very bad

    Former Louisiana Gov. Bobby Jindal may be long gone from the presidential race, but thanks largely to his toxic cluelessness about economics and rock-ribbed faith in trickle-down …


  74. Public Policy Polling’s latest survey of South Carolina Republicans yields some shocking results for those who assume most of their fellow Americans …


  75. When BofA’s Michael Hartnett releases his monthly Fund Managers’ Survey, the one chart we always head straight to is the one laying out what the …


  76. In Volume 30 of the Japanese comic book series Doraemon, the eponymous cartoon cat is transported to a mirror-image of modern Japan: a world where, …


  77. This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

    Share!

    According to the California …


  78. More than 10,000 blacktip sharks (Carcharhinus limbatus) have been spotted off the coast of Palm Beach Country in Florida this week.

    It’s normal for the species to migrate en masse to warmer waters in the winter months, but this year they’re further north than usual, bringing them within 100 meters of …


  79. One of the nation’s most intriguing TV journalists is meticulous in his preparation. Every video clip that appears on his show is fact-checked. An …


  80. The more things change in the oil market, the more they stay the same: The agreement Tuesday between Saudi Arabia, Russia, Qatar and Venezuela to freeze oil output falls somewhere between symbolic significance and no change at all.

    So it shouldn’t be a surprise that Brent crude, which had rallied to …


  81. BNP Paribas, France’s largest bank, announced that it would no longer lend money to struggling oil and gas companies in the United States. “Given the current environment in the oil and gas markets and the short to medium term outlook, BNP Paribas has decided to halt the redevelopment of its …


  82. Just hours after the sudden death of Supreme Court Justice Antonin Scalia on Saturday, Senate Republicans vowed to block any nominee President Obama …


  83. Here’s a spoiler alert: whoever President Obama nominates to replace the late Justice Antonin Scalia, they almost certainly will not be confirmed …


  84. Chinese e-commerce giant Alibaba surprised the Wall Street when it revealed in a regulatory filing that it had quietly purchased about 33 million …


  85. The Merc With the Mouth made off with all of the money this Presidents Day holiday weekend, with a record-breaking R-rated debut.

    Now that the updated figures are in for the initial Friday-Sunday opening weekend (with solid estimates for the four-day holiday frame), we can confirm without question …


  86. FCX/Albo – Got some debt restructuring accomplished but selling a mine for $1Bn.   They are like ABX, selling off less productive assets and keeping the good stuff.  Slow process but I like them down here.

    Volume/Streth – Still reasonable compared to slow days last year.  

    994 on the RUT – I think it can, I think it can….

    Well, on the whole this was a nice, productive day for the market.  As long as we can build on it, we might turn a corner this week.  


  87. Self-driving boats that network with each other, swarms of micro-drones that a soldier can toss into the air and small bombs outfitted with technology borrowed from smartphones. They’re all among inventions being concocted by a secretive Pentagon office.


  88. Nomura Holdings Inc. plunged the most in more than four years in Tokyo trading after third-quarter net income fell and Japan’s biggest securities firm postponed a target for making overseas operations profitable.


  89. In an effort to win back customers after a series of food scandals, including a human tooth in a serving of french fries, McDonald’s Japan has come up with a surprise.


  90. The European Central Bank spent 62.4 billion euros ($68 billion) on debt in January, returning its quantitative-easing program to full strength after a winter break.


  91. Syrian opposition groups are threatening to pull out of peace talks before they’re barely off the ground as they demand an end to air strikes against rebel-held areas and other humanitarian measures, risking efforts to end five years of civil war.


  92. api # today?


  93. /NGK6 – I had to double down twice on this one. My average cost basis is now 2.07. I could sell back half now, which would put my cost basis at 2.079, then sell back the second half at 2.079 and be left with the single contract I originally wanted (but now at a much lower cost basis). Would this be the right way to recover, or should I just hold onto all of them until 2.07 and sell back to one at that point? Or go balls to the wall and hold all of them until we decide to get out of the position?


  94. Ted Cruz is the winner…

    http://www.motherjones.com/kevin-drum/2016/02/ted-cruz-new-winner-richie-rich-tax-contest

    Trump is still the winner in the budget-busting contest, but Cruz is close. His plan would increase the deficit $8.6 trillion over ten years. Overall, I have to say that Cruz is bringing his A game. If you calculate his Richie Rich Index™—percentage deficit increase plus percentage income increase for the rich—Cruz clocks in with a score of 87.4, beating out Trump by a hair. Congratulations, Ted.



  95. API/Jabob – Might be tomorrow because of holiday.  

    /NG/Cordoor – It depends on your COMFORTABLE position size.  If you started with one and wanted 2 at a better price and ended up with 4, then of course go back to 2 or at least 3 so, just in case it falls again – you have a fallback.  Greed kills – happens again and again.  Taking non-greedy exits and keeping your basis cheap lets you play a lot more often and playing often leads to the occasional jackpot.

    Speaking of jackpots – /NKD 15,970!  

    Cruz/StJ – What a dangerous guy.  Obama going off on Republicans about climate change and the Supreme Court nomination. 


  96. Cruz / Phil – Once again, these guys basically let some crumbs (3% income gains) fall of the table while their rich friends get 25% gains and they get people to vote for them. Why, because they somehow represent morality in this country? Because they will defend gun rights? So that's the deal – the middle class has to make financial sacrifices so that gay people can't get married and convicted terrorists can keep on buying guns. And for the top 1% to keep increasing their wealth while not creating any good jobs. Just insane.


  97. stjeanluc – I do appreciate some of these comic strips and jokes. Some really are funny. But some of them, like the one that includes a reference to the recount, kind of just show that the person who created them is also a member of the Center for Nakedly Partisan Priorities.

    The law required a mandatory recount because of the closeness of the voting. The mandatory recount was completed and Bush still held a lead (barely), at which point Gore wanted a second recount (by hand, but only in select jurisdictions). It was the lawsuit demanding a second, selective, by hand recount that went to the Supreme Court. At the time, many of us (who wanted Gore to win) wondered when he'd ever be satisfied with the count. He wasn't ever going to be satisfied with the count unless it either came up in his favor or the courts finally told him to stop. And I don't hold this against him really, since he was vying for one of the most powerful jobs in the world.

    Like many others, I hold the view that Bush was a complete disaster. But this doesn't change the fact that, probably (but possibly not), the counting was "fair and square." It just wasn't as black/white as this comic strip or die-hard partison Democrats make it out to be.

    Regarding the Republican bashing related to the Supreme Court appointment--and let me preface this by saying that I am not trying to defend the Republicans; I personally dislike both parties--this same sentiment existed in 2007 on the part of the Democrats when there was a risk that Bush would have the opportunity to appoint someone in his last year of office.

    Again, I'm not trying to defend Republicans here. I'm simply suggesting that we should remember all of history, not just the history that agrees with our point of view.

    I don't have a problem with Obama appointing someone right now, immediately. I also don't have a problem with Republicans trying to block it. If this had happened in 2007 and the situation were reversed, I would still not have a problem with it. The current system was designed to provide the opportunity to appoint and to block.

    But I think it is naive to think that one party is playing "party politics" more than the other party. They are both playing the same game to the same extent.


  98. Cordoor – I don't think that Jen Sorensen hides the fact that she favors liberals. I don't think that we will ever be sure of what happened in Florida. The supreme court still played a big role in the election.

    In any case, better to use humor to counter the other side's argument (even on shaky ground) than to use insults or worse like what we can see on Fox News for example. 


  99. stjeanluc – Agree


  100. Election/Cordoor – Are you aware that, in 2002, Choicepoint settled with the NAACP for violating people's voting rights in Florida which invalidated tens of thousands of black voters?  

    The class-action lawsuit alleged Florida election officials systematically kept African-Americans away from voting booths by illegally purging them from voter rolls, improperly handling their registrations so they did not appear on voter lists or by simply turning them away from polling places. The suit also alleged the private company ChoicePoint knowingly mislabeled innocent voters as felons. Under Florida law, convicted felons cannot vote.

    The Supreme Court steamrolled over the hanging chad issue that clearly made Gore the winner had they been counted correctly.  Also, you have it all a bit backwards as Florida's Supreme Court Ruled in Gore's favor and it was the SCOTUS that upheld BUSH's appeal to overturn Florida's ruling and have the bogus election stand, thus dooming the United States to the worst 8-year period in its history.

    It's amazing to me that the constant repetition of a lie, rather than damning the liars, ends up being accepted by those that follow them as the truth to the point where they no longer believe the actual truth.

    Timeline[edit]

    Due to the narrow margin of the original vote count, Florida Election Code 102.141 mandated a statewide machine recount.[30] In addition, the Gore campaign requested that the votes in three counties be recounted by hand. Florida state law at the time allowed the candidate to request a manual recount by protesting the results of at least three precincts.[31] The county canvassing board would then decide whether to recount as well as the method of the recount in those three precincts.[32] If the board discovered an error, they were then authorized to recount the ballots.[33]

    Once the closeness of the election in Florida was clear, both the Bush and Gore campaigns organized themselves for the ensuing legal process. On November 9, the Bush campaign announced they had hiredGeorge H. W. Bush's former Secretary of State James Baker to oversee their legal team,[34] and the Gore campaign hired Bill Clinton's former Secretary of State Warren Christopher.

    The canvassing board did not discover any errors in the tabulation process in the initial mandated recount.

    The Bush campaign sued to prevent additional recounts on the basis that no errors were found in the tabulation method until subjective measures were applied in manual recounts.

    The Gore campaign, as allowed by Florida statute, requested that disputed ballots in four counties be counted by hand. Florida statutes also required that all counties certify and report their returns, including any recounts, by 5 p.m. on November 14. The manual recounts were time-consuming, and, when it became clear that some counties would not complete their recounts before the deadline, both Volusia and Palm Beach Counties sued to have their deadlines extended.

    Florida Supreme Court appeals[edit]

     

    Florida Supreme Court spokesman Craig Waters

    The trial of Palm Beach Canvassing Board v. Katherine Harris was a response from the Bush campaign to state litigation against extending the statutory deadlines for the manual recounts. Besides deadlines, also in dispute were the criteria that each county's canvassing board would use in examining the overvotes and/or undervotes. Numerous local court rulings went both ways, some ordering recounts because the vote was so close and others declaring that a selective manual recount in a few heavily Democratic counties would be unfair.

    Eventually, the Gore campaign appealed to the Florida Supreme Court, which ordered the recount to proceed. The Bush campaign subsequently appealed to the Supreme Court of the United States, which took up the case Bush v. Palm Beach County Canvassing Board on December 1. On December 4, the U.S. Supreme Court returned this matter to the Florida Supreme Court with an order vacating its earlier decision. In its opinion, the Supreme Court cited several areas where the Florida Supreme Court had violated both the federal and Florida constitutions. The Court further held that it had "considerable uncertainty" as to the reasons given by the Florida Supreme Court for its decision. The Florida Supreme Court clarified its ruling on this matter while the United States Supreme Court was deliberating Bush v. Gore.

    At 4:00 p.m. EST on December 8, the Florida Supreme Court, by a 4 to 3 vote, ordered a manual recount, under the supervision of the Leon County Circuit Court and Leon CountyElections Supervisor Ion Sancho, of disputed ballots in all Florida counties and the portion of Miami-Dade county in which such a recount was not already complete. That decision was announced on live world-wide television by the Florida Supreme Court's spokesman Craig Waters, the Court's public information officer. The Court further ordered that only undervotes be considered. The results of this tally were to be added to the November 14 tally.

    U.S. Supreme Court Proceedings[edit]

    Main article: Bush v. Gore

    The recount was in progress on December 9, when the United States Supreme Court, by a 5 to 4 vote (Justices Stevens, Souter, Ginsburg and Breyer dissenting), granted Bush's emergency plea for a stay of the Florida Supreme Court recount ruling, stopping the incomplete recount.

    About 10 p.m. EST on December 12, the United States Supreme Court handed down its ruling in favor of Bush. Seven of the nine justices saw constitutional problems with the Equal Protection Clause of the United States Constitution in the Florida Supreme Court's plan for recounting ballots, citing differing vote-counting standards from county to county and the lack of a single judicial officer to oversee the recount. Five justices held there was insufficient time to impose a unified standard and that the recounts should therefore be stopped and Florida be allowed to certify its vote, effectively ending the legal review of the vote count with Bush in the lead. The decision was extremely controversial due to its partisan split and the majority's irregular instruction that its judgment in Bush v. Gore should not set precedent but should be "limited to the present circumstances". Gore conceded the election, but said he disagreed with the Court's decision.

    This ruling stopped the vote recount, allowing Florida Secretary of State Katherine Harris's certification of the election results to stand. This allowed Florida's electoral votes to be cast for Bush, making him president-elect.

    It's funny because it would never occur to me that people need to go over the facts and timeline of one of the most important political events in American history.  It was, in fact, a stolen election caused by a partisan split of the Supreme Court.   There was no doubt whatsoever that, had the recount been allowed to be completed and used, that Gore would have won the election (hence the stop action bought by Bush, not Gore).  The fact that Bush was satisfied to take the Presidency that way was the first red flag that he was, indeed, going to be a horrific leader.  

    The Democrats were furious at Gore for not pressing the issue harder but, in fact, one party does play politics a lot more than the other and THAT is why I have to vote Democrat – they aren't that much better (other than Bernie and Liz) but the other party is simply unpalatable and, in fact, a danger to our economy and our Democracy – not to mention their insane environmental position may bring about the end of all life on this planet – that's bad too…  


  101. people can't be this dumb. It's just not possible. But then here it is. Direct evidence.


  102. Phil – Allocation

    I have a 100K USD investment account in TOS.  (Retirement accounts are separate)

    I am finding it a challenge to allocate funds to LTP, STP, Butterfly and OOP portfolios. Do you have a suggestion as to a concentrated focus for these funds?  Should I use the account exclusively for OOP?

    Thanks in advance for the advice.   


  103. Phil / vote suppression – it only came out in Florida because it was enough to actually tip the balance of an election but it happens everywhere, and, since 2000 it happens MORE. Evidenced by voter suppression ID laws (a solution looking for a problem) and purged voter rolls as you indicated. These serve zero purpose except to make voting disproportionately harder for the poor and minorities to vote. When they do vote, Democrats win.

    Also, don't forget the 3,000+ jewish women that voted for the hard-right Pat Buchannan. Voter fraud is sometimes more subtle than literally kicking people off of rolls (which is a criminal act, but oh well). It can be as simple as making a confusing ballot.


  104. NKD/Phil – Any ideas for NKD?


  105. I can't believe how divided and devisive we've become. The methods have become so sophisticated and we are so polarized. I took a class on grassroots campaigning when I went to a liberty pac conference and was amazed with the methods and instead of feeling empowered I felt overwhelmed…

    Out of my long bet on the S&P, up 12% since Thursday. Learning patience AND to not be greedy. It's working! Made 12% last week on the short side. I used to wait too long and give back half my gains. Or I've just been lucky, but it sure feels like I knew what I was doing :)


  106. The coolest kids on the block will be cruising around in a mini Tesla Model S come this Summer.

    Radio Flyer, the American toy company known for its red toy wagons, partnered up with Tesla to create a kid-sized Model S. And it comes equipped with some of the perks you find in the grown-up version.

    The …


  107. Get ready for 25 years of inflation

    Japan went to negative rates, so there is lots of talk about how low negative rates around the world can go.

    And since everyone is trying to competitively devalue, it is a race to the bottom in interest rates.

    But it could get even weirder…

    Inflation Is Back

    The Fed is dumb but not unintelligent, if …


  108. The stock rose 6%.

    Warren Buffett’s Berkshire Hathaway on Tuesday disclosed a new investment in pipeline operator Kinder Morgan kmi , boosting its bet on the oil industry as crude prices hover near 12-year lows.

    Berkshire owned about 26.53 million Kinder Morgan shares worth roughly $395.9 million at …


  109. Starbucks CEO Howard Schultz says the US presidential election has turned into a “circus” and he has “grave concern” about the country’s future.

    “I think it’s turned into something none of us has ever seen before, which I would label as almost a circus of yelling bombastic attacks, of a lack of …


  110. Phil – Nice recap and adjustments to my recollection of the events of that election. I think I was something like 23 at the time, so my depth of interest would have been limited. Regardless, I don't think there's much doubt that the W presidency was terrible. 


  111. When Lamine Zarrad was not at his job as a federal banking regulator in recent months, he was spending a lot of time at Denver’s marijuana dispensaries.

    As a federal employee, he could not partake of the pot.

    He was there, instead, to pitch the shops on a start-up he has been working on in his free …


  112. The company wants to switch to the competing service used by JetBlue and Virgin America — but Gogo is digging in its heels.

    American Airlines is a lot like you: It wants Gogo’s terrible in-flight Wi-Fi to be better.

    The airline is suing Gogo after finding “materially” improved service from its rival, …


  113. Sales happened as Apple’s stock price dipped 5%.

    Several big hedge fund backers of Apple Inc aapl , including billionaire activist investor Carl Icahn and David Einhorn’s Greenlight Capital, trimmed their stakes in the fourth quarter amid a decline in the value of the iPhone maker’s shares.

    Filings …


  114. Uber is racking up tremendous losses in a high-stakes bid to make a dent in China’s car-hailing market, its CEO revealed this week.

    “We are profitable in the U.S., but in China we’re losing over a billion dollars a year,” Travis Kalanick, the CEO and cofounder of Uber, said during an on-stage …


  115. A gauge of home-builder sentiment fell in February to its lowest level since May, a sign that housing-market growth could be moderating amid rising prices, and shortages of labor and land.

    An index of builder confidence in the market for new single-family homes fell three points to a seasonally …


  116. Once upon a time, people actually got paid to lend money.

    It was something that early humans called “interest.” The way it worked was that I would loan you money and you—get this—would promise to pay me back more than that. Why would you do something so crazy?

    Because that was the only way to convince …


  117. Barclays

    Saudi Arabia, Russia, Qatar, and Venezuela have agreed to freeze oil production at the level of supply produced in January.

    But analysts aren’t exactly impressed.

    This “output freeze [is] not a game-changer for the Gulf economies,” Capital Economics Middle East economist Jason Tuvey argued in …


  118. Gonna be away this morning, might as well post now!


  119. Good morning!

    Thanks for chart, StJ! 

    Europe flying higher, up over 1.5% across the board so everything is awesome today.  Fed Minutes at 2pm so stay on your toes and a bunch of data between now and then:

     
    • MBA Mortgage Applications
    • Composite Index: +8.2% vs. +9.3% last week.
    • Purchase Index: -4.0% vs. +0.2%.
    • Refinance Index: +16.0% vs. +16.0%
    • 30 year mortgage rate at 3.83% vs. 3.97%.

    There will be another crisis. It’s just a question of whenAll eyes are trained on the meeting of G20 finance ministers and central bank governors in Shanghai later this month.

    Strategist for $1.7 Trillion in Funds Says Rout Has Room to RunDon’t be fooled into thinking the rebound in stocks means we’ve reached the bottom, says Marcella Chow, who watches the world’s markets for JPMorgan Asset Management Inc. The global strategist for the $1.7 trillion money manager says she’s on edge, her clients are panicky and she’s telling them to stash as much as 70 percent of holdings in bonds including U.S. Treasuries. Calm won’t return until China’s economy improves and central banks regain credibility with investors, she said. She’s waiting for oil to fall to as low as $22 a barrel, and in the meantime she’s battening down and trying to avoid volatility.

    This has been the worst quarter for company earnings reports since 2009

    Junk-bond market facing record refinancing cliff: Moody’sA record $947 billion of U.S. high-yield, or “junk,” debt, is scheduled to mature in the next five years, and some issuers may struggle to refinance it, Moody’s Investors Service warned on Tuesday.

     

    Japan's Economic Woes Cast Shadow on Abe's Twin Election ChoiceWith Japan’s economy shrinking, the stock market in turmoil, and a stronger yen threatening export earnings, Prime Minister Shinzo Abe’scalculus on whether to call a snap general election this summer has suddenly grown more complicated. Another win in the lower chamber along with an expected victory in the upper house vote set for the summer could allow Abe’s ruling Liberal Democratic Party to stay in power until 2020, making him the longest-serving premier since the 1970s. With ministerial blunders and economic woes eroding his support, Abe risks the opposition Democratic Party of Japan gaining ground in any double vote.

    China's Banks May Be Getting Creative About Hiding Their Losses. Chinese lenders are reacting to a regulatory crackdown on shadow financing by increasing activity in their more opaque receivables accounts, a practice Commerzbank AG estimates may result in losses of as much as 1 trillion yuan ($153 billion) over five years. Banks are increasingly using trusts or asset management plans to lend and recording them as funds to be received rather than as loans, which are subject to stricter regulatory oversight and capital limits. The German bank’s forecast is based on total outstanding receivables of around 11.5 trillion yuan. “Chinese banks haven’t provisioned for receivables and those are essentially riskier loans,” said Xuanlai He, credit analyst at Commerzbank in Singapore. “The eventual losses will have significant impact on China’s economy because you could have contagion risk in banking sector.”

    China-Based Firms Sell Convertible Debt at Record Pace: Chart

     

    Asia's Rate Cut Pressure Seen in Indonesia as Exports CollapseOnce again, Asian central banks face the burden of supporting economic growth. The collapse in Asian exports that began last year is spilling into 2016 with China and Indonesia on Monday reporting shipments fell in January. South Korea’s overseas sales shrank the most since 2009 last month and Thailand’s central bank forecast exports would remain flat in 2016 after contracting for three straight years.

    Singapore's January Exports Fall More Than Economists Estimated. The decline in Singapore’s exports deepened in the first month of the year, clouding the economic outlook before the next monetary policy decision due in April. Non-oil domestic exports fell 9.9 percent in January from a year earlier, worse than the median estimate of a 7.6 percent drop in a Bloomberg News survey and the 7.2 percent decline in December, a government report showed Wednesday. Electronics shipments slid 0.6 percent from a year earlier, and petrochemical exports plunged 18.3 percent. Pharmaceuticals rose 6.9 percent.

    The collapse in global trade is breathtaking

    50% Of Canadians Say They Are Within $200/Month Of Being Unable To Pay Their Bills

    Calgary's Housing Market Collapses While "Three-Alarm Blaze" Burns Next Door In Vancouver

    • Iran appears to be taking a tough line in talks among oil producers on restraining production, despite countries including Saudi Arabia and Russia pledging on Tuesday to freeze their output at January levels.
    • "Asking Iran to freeze its oil production level is illogical…when Iran was under sanctions, some countries raised their output and they caused the drop in oil price," Iran's OPEC envoy, Mehdi Asali, told the Shargh daily newspaper. "How can they expect Iran to cooperate now and pay the price?"
    • The news comes as OPEC President Al-Sada, and Venezuelan and Iraqi officials travel to the Islamic Republic for talks aimed at forming the first global oil production deal in 15 years.
    • Tehran exported around 2.5M barrels per day of crude before 2012; the sanctions cut that to around 1.1M bpd.
    • Crude futures -0.8% to $28.82/bbl.
    • Previously: More shipments of Iranian oil ready to set sail (Feb. 16 2016)

    Why an OPEC Output Cut Wouldn't Make Much of a Difference

    Truck-ocalypse" Hits Main Street As Daimler Fires 1,250 Amid Collapsing Demand

    • News Corp. (NWS +2.4%, NWSA +1.8%) is staying in the fray when it comes to conservative digital media. The media giant plans to launch Heat Street, a site catering to center-right and conservative audiences.
    • Former UK Conservative Party MP Louise Mensch will lead the effort, with the help of former TV producer Noah Kotch. It's coming out under the company's reorganized Dow Jones Media Group.
    • "Disagreement will be encouraged," Mensch tweeted about the stance of the site, which she also described with the word "libertarian."
    • The field is crowded. Verizon and Hearst have been talking about a digital media brand that a source described as "Vice for the red states"; meanwhile, the Fox News website claims 54.7M monthly visitors, and sites like the Independent Journal Review (19.7M), Glenn Beck's The Blaze (14.3M), and Daily Caller (6.5M) also draw sizable monthly audiences among conservatives.
    • Previously: Verizon, Hearst in talks to team up for mobile video channels (Jan. 22 2016)

    President Plans to Nominate a Successor to Justice Antonin Scalia in Next Few Weeks.Administration officials indicated Barack Obama wants a Supreme Court pick who can attract some Republican support. President Barack Obama on Tuesday said he seeks a Supreme Court candidate who “indisputably is qualified” for the job, while administration officials indicated he wants a nominee who can attract some Republican support and complicate GOP plans to push off any confirmation process until after the election.

    Rubio surges back to electrify South Carolina