Archive for 2016

Summary Of Recent Fed Statements: Spot The Common Theme

Courtesy of ZeroHedge. View original post here.

Actually, scratch that: the one thing that becomes clear after skimming this selection of select statements by Fed committee members over the past few months, is that there is absolutely no common theme.

Seven years after the crisis, the Fed not only continues to fly blind, but the degree of disagreement among members has never been greater. Which is helpful to know 5 days before Yellen’s Jackson Hole speech this coming Friday is expected to reveal a new, less “omnipotent” Fed, one which will push for more fiscal stimulus just so the Fed has more debt to monetize the next time it has to ease, since thanks to “r-star” we now know it can hike rates at most just 1-2 times before it is forced to resume easing by way of QE as the rate of ~1% will not be nearly enough to provide the needed stimulus economic stimulus to offset the next economic contraction.

Source: Goldman Sachs





Wrong Then, Even Wronger Now: Asininity On Raising Inflation Target to Four Percent

Courtesy of Mish.

Yet another economic writer has caved into to illusion that central banks need to raise the inflation target to four percent.

In 2010, Olivier Blanchard, the former chief economist at the International Monetary Fund, offered reasons for a higher inflation target.

Wall Street Journal’s chief economics commentator Greg Ip was against the idea them, but suddenly had a change of tune. “Events have weakened the rationale against the current two percent target”, says Greg Ip.

Please consider The Case for Raising the Fed’s Inflation Target by Greg Ip.

Six years ago, Olivier Blanchard, then chief economist at the International Monetary Fund, floated the idea that central banks should target 4% inflation instead of 2%. I remember giving a colleague countless reasons why he was wrong.

It was I who was wrong. Events since 2010 have led me to conclude those objections no longer apply. The Federal Reserve should give serious consideration to raising its inflation target. Here are my original objections and how they have changed.

Wrong Then, Even Wronger Now

1. Ip Then: Central banks have invested their credibility in a 2% target. If they raise it, the public will assume they’ll raise it again, and expectations will rapidly become unanchored.

1. Ip Now: The fact that inflation has actually drifted lower despite repeated doses of unconventional monetary stimulus shows that inflation is quite inertial and not easily dislodged by questions of credibility. If anything, central banks are too credible: Investors seem to believe 2% is a ceiling, not a midpoint.

1. Mish: Inflation expectations were a joke then. They remain a joke now. Pray tell what consumers give a damn about expectations? Is the average Joe on the street concerned about “expectations” or “reality”. What’s become “unanchored” is Greg Ip’s thought process.

2. Ip Then. As inflation rises, individual prices become more volatile, which makes the economy less efficient and more prone to booms and busts.


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Multipolar World Order: Economics Vs. Politics

Courtesy of ZeroHedge. View original post here.

Submitted by Frederico Pieraccini via Stratgic-Culture.org,

International tensions have in recent years often led to conflicts between nations, leaving countries to face complicated choices. The world is under constant change, and the most direct results are political instability over vast areas of the globe combined with economic, cultural and often military confrontations. The economic priorities of cooperation and development are increasingly being sacrificed on the altar of protection of geopolitical interests. It is a return to the past where strategic interests prevailed over the economic model prescribed by modern capitalism.

Nations like Russia, China and Iran have in recent years accelerated their rise on the global arena, expanding vital aspects of this in such areas as energy supplytransit of goods, the type of currency used in trade, defense of national borders, the granting of use of airspace, military-industrial cooperation with other nations, the joint fight against terrorism, and a general defense of the principle of national sovereignty. Washington has tried in every way to prevent this growing multipolarity, desperately trying to prolong its two-decade-old unipolar world.

It is in this general climate that Beijing, Moscow and Tehran have had to engage with Western economic reactions in the process of defending their strategic interests. As a result, we have increasingly witnessed in recent years a conflict between economic convenience and politically driven policy decisions. The most difficult challenge faced by these challengers of the status quo lies increasingly in the complicated question of how to manage a situation where geopolitical interests have to fit into a global financial system largely managed and manipulated by Europeans and Americans.

Currently the international financial system, as I have written many times before, is an American affair. The dollar stands as the dominant currency in relation to other financial institutions, and the whole global economic system is mainly conducted through the American currency. But the paradigm is changing, especially in recent years, thanks to supra-national entities like the AIIB and BRICS. Inevitably the IMF’s currency basket will have to incorporate the yuan, starting the process of the slow erosion of the dollar’s dominance. The IMF, after years of wasting time trying to delay this event, will welcome from the October 1st, 2016, Beijing as an integral part of the reserve-currency system. Of course one of the most critical aspects is


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OPEC Ignites Biggest Short Squeeze In History: Hedge Funds Cut Oil Shorts By Most On Record

Courtesy of ZeroHedge. View original post here.

Ever since the February crash, when oil tumbled to 13 years lows, and when OPEC started releasing tactical headlines at key inflection points about an imminent oil production freeze (which not only never arrived but has since seen Saudi Arabia’s output grow to record levels) which we first suggested were meant to trigger a short squeeze among headline scanning HFT algos, our suggestion was – as is often the case – dismissed as yet another conspiracy theory.

Six months later, this conspiracy theory is now a widely accepted fact, and as Bloomberg reports tonight, “well-timed” OPEC talk of a potential deal to freeze output, has “forced bears” into a historic squeeze and helped push oil close to $50 a barrel, prompting West Texas Intermediate from a bear to a bull market in less than three weeks.

“This is all courtesy of some very well-timed comments from the Saudi oil minister,” said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. “They’ve been successful over the last year in jawboning the market, and this is the latest example.”

And while one can debate whether OPEC’s “headline” leaks are timed to coincide with near-record short positions on WTI, one thing is certain: the past week saw the biggest crude oil short squeeze on record as money managers cut bets on falling prices by the most ever.

According to Bloomberg, Hedge funds trimmed their short position in WTI by 56,907 futures and options during the week ended Aug. 16, the most in data going back to 2006. And, as one would expect following yet another record short squeeze similar to the one experienced earlier in the year, WTI futures rose 8.9% to $46.58 a barrel in the report week and closed at $48.52 a barrel on Aug. 19. WTI is up more than 20 percent from its Aug. 2 low, meeting the common definition of a bull market.

Money managers’ short position in WTI dropped to 163,232 futures and options. Longs, or bets on rising prices, increased 0.1 percent, while net longs advanced 56 percent, the most since July 2010. 

“This was a very short market so we were bound to get some covering,” said Stephen Schork, president of the Schork Group


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Olympic Gold Medals Have Almost Zero Gold In Them

Courtesy of ZeroHedge. View original post here.

The 2016 Rio Summer Olympic Games are already 51% over budget, with the total cost expected to be in the $4.6 billion range. With that in mind, Visual Capitalist’s Jeff Desjardins notes that the organizers have tried their best to cut costs.

One area of compromise?

The Olympic gold medals, which weigh 500g (1.1 lbs) and are 85mm (3.3 in) in diameter, are gold in name only.

OLYMPIC GOLD MEDALS HAVE ALMOST ZERO GOLD IN THEM

Today’s infographic comes from JM Bullion and it shows the real amount of metal in gold, silver, and bronze medals, along with the hypothetical cost of awarding solid gold to winning athletes.

Courtesy of: Visual Capitalist and JMBullion




“I Don’t Give A Shit About Them” – Philippines President Threatens To Quit “Son Of A Bitch” United Nations

Courtesy of ZeroHedge. View original post here.

While the US media is obsessing over what could happen to the US if the diplomatic debacle that is Donald Trump becomes president (as opposed perhaps to the pathological liar and State Department-for-hire that is HIillary Clinton), the Philippines has a living, breathing example of the worst that a person who has zero regard for the status quo or the establishment, can unleash. Or perhaps the best. We are talking about the country’s new president, Rodrigo Duterte, who most recently made headlines for calling the US ambassador to his country an “annoying, homosexual, son of a bitch“, yet whose policies, unorthodox as they may be, are working when after some 400 drug dealers were killed in the Philippine government’s “war on narco-politics”, reportedly another 500,000 turned themselves in.

In Duterte’s latest outburst, the Philippine president has threatened that the country could leave the UN, after the organization urged the Philippines to stop executing and killing people linked to drug business and threatened that “state actors” could be punished.

“Maybe we’ll just have to decide to separate from the United Nations. If you’re that rude, son of a bitch, we’ll just leave you,” Duterte told reporters in Davao, quoted by Bloomberg.

“I don’t give a shit about them,” he added. “They are the ones interfering. You do not just go out and give a shitting statement against a country.”

Calling the UN “inutile”, Duterte said the Philippines could invite China, African nations and other countries to create a rival international body. He went further, slamming the UN’s response to other global issues.

Cited by RT, Duterte said “Look at the iconic boy that was taken out from the rubble and he was made to sit in the ambulance and we saw it,” Duterte said. The picture of Omran Daqneesh, a five-year-old Syrian boy has recently gone viral around the globe. “Why is it that [the] United States is not doing anything? I do not read you. Anybody in that stupid body complaining about the stench there of death?”

The Philippine leader also slammed the US for its own human rights record, citing the string of shootings involving police and black men that have sparked protests in the U.S. “Why are you Americans killing the black people there, shooting


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WSJ: “The Clintons Really Do Think They Can Get Away With Anything”

Courtesy of ZeroHedge. View original post here.

Published Op-Ed via The Wall Street Journal,

After years of claiming that the Clinton Foundation poses no ethical conflicts for Bill and Hillary or the U.S. government, Bill Clinton now admits the truth—sort of.

If his wife becomes President, he says the Super PAC masquerading as a charity won’t accept foreign or corporate contributions. Bill will also resign from the foundation board, and Chelsea will stop raising money for it.

Now they tell us.

If such fund-raising poses a problem when she’s President, why didn’t it when she was Secretary of State or while she is running for President? The answer is that it did and does, and they know it, but the foundation was too important to their political futures to give it up until the dynastic couple were headed back to the Oval Office. Now that Hillary is running ahead of Donald Trump, Bill can graciously accept new restrictions on their pay-to-play politics.

Bill must be having a good laugh over this one. The foundation served for years as a conduit for corporate and foreign cash to burnish the Clinton image, pay for their travel expenses for speeches and foreign trips, and employ their coterie in between campaigns or government gigs. Donors could give as much as they wanted because the foundation is a “charity.”

President Obama may have banished Sidney Blumenthal from the State Department, but Bill could stash his conspiratorial pal at the foundation, keeping him on the family payroll while Sid flooded Hillary with foreign-policy advice. Her private email server was supposed to hide their email traffic—until that gambit was exposed last year. But FBI Director James Comey let Hillary off the hook on the emails, and he declined to investigate the foundation, so it looks like they’re home free.

By now the corporate and foreign cash has already been delivered, in anticipation that Hillary Clinton could become the next President. So now it’s the better part of political prudence to claim the ethical high ground.

If you choose to believe or have a short memory. Readers may recall that the foundation promised the White House when Mrs. Clinton became Secretary of State that the foundation would restrict foreign donations and get approval from the State Department.

It turned out the foundation violated that pledge, specifically


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Breaking News And Best Of The Web

Courtesy of John Rubino.

Markets directionless in anticipation of Yellen speech. Other Fed officials predicting Sept rate hike. Negative interest rates getting a lot of attention, mostly critical. Gold and silver seem ripe for correction. Trump hires new people, keeps falling in polls.

Best Of The Web

The “neutral rate” – Credit Bubble Bulletin

The decade of zero and its chaotic unwinding – Hussman Funds

The marginal buyer holds the pin that pops every asset bubble – Peak Prosperity

Negative interest rates – S&P Global

World out of whack: coming this way… demographic shock – Capitalist Exploits

Insanity, oddities and dark clouds in credit-land – Acting Man

Weekly commentary: Inflation – Credit Bubble Bulletin

The one is going to be bad… – GoldSilver

The Brexit vote and endgame time for the EU – David Stockman

Globalization is dead, but the idea is not – Automatic Earth

A crisis of intervention – Sovereign Man

Priced out of the ‘open society’ – SAXO Group

Updating government finance quasi-capitalism – Credit Bubble Bulletin

—————————————————————–

Breaking News

The Economy

8/22    Stephanie Pomboy: A grim outlook for the economy, stocks – Barron’s

8/22    Oil down 2% as rally snaps on rising crude, China fuel exports – Reuters

8/22    This US bank is about to relive the 2008 derivatives nightmare – Money Morning

8/22    Australia’s collapse in business investment, in one chart – Business Insider

8/22    Yield hunt emboldens companies to chip away loan safeguards – Bloomberg

8/22    Fischer signals 2016 rate hike with economy nearing Fed goals – Bloomberg

8/22    Germany: Citizens should load food, cash – DWN

8/22    Germans furious after Bundesbank demands people work until age 69 – Zero Hedge

8/22    S&P on why negative interest rates ‘defy normal logic’ – Financial Review

8/22    Brexit: Worst case scenario for EU – Mish


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As The Vancouver Housing Market Implodes, The “Smart Money” Is Rushing To Get Out Now

Courtesy of ZeroHedge. View original post here.

Three weeks after we suggested that the Vancouver housing bubble had popped in the aftermath of the implementation of the July 25 15% property tax in British Columbia targeting the Chinese free for all in Vancouver real estate, we got confirmation of that last week when we reported that only one word could describe what has happened to Vancouver housing in the past month: implosion.

Zolo, a Canadian real estate brokerage, which keeps track of MLS home sales in real-time and reports prices as an average rather than the “benchmark price”, showed as of last week a major correction underway in most Metro Vancouver markets. According to the website, the City of Vancouver currently has an average home price of $1.1 million, down 20.7% over the last 28 days and down 24.5% over the last three months. The average detached home is $2.6 million, down 7% compared to three months ago. 

The number of transactions has likewise slammed shut: while August is typically one of the slowest months for real estate transactions, MLS sales data from the first two weeks of the month shows what many have been hoping for during the last few years of escalating prices. According to MLS listing data, there were only three home sales in West Vancouver between Aug. 1 and 14 this year, compared to 52 during the same period last year. That’s a decrease of 94%.

In short, the Vancouver housing bubble has poppsed, and  not surprisingly the “smart money”, which rode the bubble all the way up, has duly noticed, and wants out. Immediately.

As Bloomberg reports, the Ontario Teachers’ Pension Plan is quietly seeking buyers for a minority stake in its C$4 billion ($3.1 billion) real-estate portfolio in Vancouver, including office towers and shopping malls, according to people familiar with the matter.

Cadillac Fairview, the real-estate unit of Canada’s third-biggest pension fund, is looking to raise about C$2 billion from the sale. Cadillac Fairview has hired CBRE Group Inc. and Royal Bank of Canada for the sale.

According to Bloomberg, Cadillac Fairview is the latest pension group seeking to reduce its holdings in the Vancouver commercial market, where prices have reached record highs amid an influx of foreign cash even as new supply drives up vacancy rates. Ivanhoe


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“It’s Not Some Barbarous Relic” – Trump Adviser Urges Return To Gold Standard

Courtesy of ZeroHedge. View original post here.

Submitted by Chris Matthews via Fortune.com,

Q&A with Dr. Judy Shelton, the only female economist advising the Trump campaign.

Donald Trump is no policy wonk.

He is pitching himself as the best man for the presidency based on his track record as businessman, and his ability to surround himself with the “best” people—not on his knack for writing white papers. This, of course, means that it is important for voters to understand whom he is surrounding himself with, and what sort of ideas they hold.

With this in mind, Fortune reached out to Dr. Judy Shelton, one of two economists recently named to Donald Trump’s economic advisory team, and the only woman to hold that title. Shelton is a senior fellow and co-director of the Atlas Sound Money Project, whose mission is to promote the principles of sound money and raise awareness of what they see as the inherent problems of our current monetary system. Dr. Shelton first rose to prominence when she predicted the economic collapse of the Soviet Union in 1989, two years before it transpired.

Fortune discussed with Dr. Shelton what sort of advice she is passing along to the Republican nominee and what she thinks about the biggest economic questions of the day. The interview has been edited for length and clarity.

How did you become involved with the Trump campaign?

Dr. Shelton: I have over the years advised a number of Republican candidates, going back to Jack Kemp and more recently Marco Rubio, Ted Cruz, and Ben Carson. I’ve worked for a long time with Stephen Moore and Larry Kudlow, and Larry asked me if I had some thoughts for the Trump campaign on the issues I discuss most, namely international monetary relations, currency, and trade issues. I’ve been intermittently sending Larry my thoughts in the form of memos on these issues.

Have you spoken with Mr. Trump directly?

I met him back in the early nineties at some gatherings, both social and business related. But I haven’t spoken directly with him since he’s been a candidate. I have been communicating through [Trump national finance chair] Steve Mnuchin and [economic advisor] Larry Kudlow.

Your first book was on the economic collapse of the Soviet Union: How does that experience inform how you look at the world?

Four


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Phil's Favorites

Congress is considering privacy legislation - be afraid

 

Congress is considering privacy legislation – be afraid

Courtesy of Jeff Sovern, St. John's University

Supreme Court Justice Louis Brandeis called privacy the “right to be let alone.” Perhaps Congress should give states trying to protect consumer data the same right.

For years, a gridlocked Congress ignored privacy, apart from occasionally scolding companies such as Equifax and Marriott after their major data breaches. In its absence, ...



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Zero Hedge

Key Events This Week: Trade War, EU Elections, Durables, PMIs And Fed Minutes

Courtesy of ZeroHedge

Looking at this week's key events, Deutsche Bank's Craig Nicol writes that while the unpredictable nature of US-China trade developments will likely continue to be the main focus for markets again next week, we also have the European Parliament elections circus to look forward to as well as various survey reports including the flash May PMIs which may offer some insight into the impact of trade escalation on economic data. The FOMC and ECB meeting minutes are also due, along with a heavy calendar of Fed officials speaking.

The European Parliament elections will kick off next Thursday with voting continuing into the weekend across the continent, with results expected on Sunday. With the elections surrounded by internal and external challenges for the EU, members di...



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Kimble Charting Solutions

Will S&P 500 Double Top Derail The Rally?

Courtesy of Chris Kimble.

The rally off the December stock market lows has been strong, to say the least. The S&P 500 rallied 25 percent before hitting and testing the 2018 high.

The old highs proved to be formidable resistance and ushered in some volatility in May… and a 5 percent pullback.

In today’s 2-pack, we look at that resistance level – could that be a double top? We can see similar patterns develop on the S&P 500 Index and its Equal Weight counterpart.

Both indexes are testing short-term Fibonacci retracement levels of the recent decline at point (2).

What takes place here after potential double top highs will be important. Stay tuned...



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Insider Scoop

60 Biggest Movers From Friday

Courtesy of Benzinga.

Gainers
  • Fastly, Inc. (NYSE: FSLY) shares jumped 50 percent to close at $23.99 on Friday. Fastly priced its 11.25 million share IPO at $16 per share.
  • Outlook Therapeutics, Inc. (NASDAQ: OTLK) shares climbed 37.3 percent to close at $2.10 on Friday after the stock rose over 68 percent Thursday following an Oppenheimer initiation at Outperform with a price target of $12.
  • Cray Inc. (NASDAQ: CRAY) shares rose 22.5 percent to close at $36.52 after Hewlett Packard Enterpri...


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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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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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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

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.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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About Ilene:

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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