Archive for April, 2017

North Korea Threatens To Sink “Doomed” US Nuclear Submarine

Courtesy of ZeroHedge. View original post here.

North Korea threatened to sink a US nuclear sub currently deployed in South Korean waters if the US take provocative action, responding to a statement from Donald Trump that the president won’t be “happy” if Pyongyang conducts another nuclear test.

After the US deployed a nuclear-powered submarine and an aircraft carrier to South Korean waters amid high Korean tensions, Yonhap reported that North Korea on Sunday threatened to sink the submarine, accusing America of stepping up military intimidation.

“The moment the USS Michigan tries to budge even a little, it will be doomed to face the miserable fate of becoming a underwater ghost without being able to come to the surface,” the North’s propaganda website Uriminzokkiri wrote in a vivid article. North Korea’s nuclear deterrent will assure that American aircraft carriers, nuclear submarines, and other military hardware will be “shattered into pieces of molten metal” if they threaten Pyongyang, the article read.

The North warned – once again using its dramatically vivid jingoist language – that “whether it’s a nuclear aircraft carrier or a nuclear submarine, they will be turned into a mass of scrap metal in front of our invincible military power centered on the self-defense nuclear deterrence.”

“The urgent fielding of the nuclear submarine in the waters off the Korean Peninsula, timed to coincide with the deployment of the super aircraft carrier strike group, is intended to further intensify military threats toward our republic,” the website further claimed. According to the article, recent statements from the Trump administration indicate that Washington is close to implementing a strategic scenario in which an actual military confrontation is a real possibility.

Earlier on Sunday, Donald Trump told CBS that he “will not be happy” if North Korea conducts another nuclear test. When asked to clarify, the US president said: “I would not be happy. If he (North Korean supreme leader, Kim Jong-un) does a nuclear test, I will not be happy.”

“And I can tell you also, I don’t believe that the president of China, who is a very respected man, will be happy either,” Trump said, adding that he believes Xi Jinping was also “putting pressure” on North Korea to bring a halt to its nuclear tests.

CBS host John Dickerson then directly asked Trump whether US military action was possible, the


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Brian Rogers, T Rowe Price: Doubt Everything, Believe Nothing – Be Wary Of “It Stocks”

By The Acquirer’s Multiple. Originally published at ValueWalk.

One of the funds that we watch closely here at The Acquirer’s Multiple – Stock Screener, is T Rowe Price.

T Rowe Price recently announced that its Chairman and CIO Brian Rogers would retire in March 2017, but would continue on the Board as a non-executive chair. Rogers joined T. Rowe Price as a portfolio manager in 1982. Previously, he served as portfolio manager of the U.S. Large-Cap Equity Income Strategy and the Equity Income Fund for 30 years, beginning with their inception in 1985. From 1994 to 2003 he was the first manager of the U.S. Value Equity Strategy and the Value Fund, and he was a founding member of the team managing the U.S. Large-Cap Value Equity Strategy from 2000 to 2015. He was elected to the firm’s Board of Directors in 1997, joined the Management Committee in 2003, and was named Board chair in 2007.

Recently, Rogers did an interview with WealthTrack in which he shared some of the most important investing lessons that he has learned over the past 30 years. While all of these lessons are insightful the one that struck a chord with me was – Doubt Everything, Believe Nothing and Avoid the “It Stocks”. Rogers is referring to investing in the latest highly publicized companies where a lot of the valuation has already been factored in, it’s a must watch for all investors.

PublicDomainPictures / Pixabay

This original article was posted by Johnny Hopkins at The Acquirer’s Multiple.

The post Brian Rogers, T Rowe Price: Doubt Everything, Believe Nothing – Be Wary Of “It Stocks” appeared first on ValueWalk.

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Trump On Election Hacking: “Could Have Been China”

Courtesy of ZeroHedge. View original post here.

One day after his “100 Day” rally in Harrisburg, president Trump “Faced the nation” on CBS, and suggested that China may have hacked the emails of prominent Democrats to meddle with the 2016 presidential election, countering the view of U.S. intelligence officials who have said Moscow is behind the hacks (that said, there have hardly been any new WaPo and NYT reports on the issue since Trump launched his Syrian attack).

Trump first made the allegation on the eve of the Nov. 8 presidential election, when he said that China could have hacked the emails of his rivals.

“If you don’t catch a hacker, okay, in the act, it’s very hard to say who did the hacking,” the president said in an interview with CBS “Face the Nation.” “(It) could have been China, could have been a lot of different groups.”

Trump on election hacking: “It’s very hard to say who did the hacking. With that being said, I’ll go along with Russia. Could’ve been China” pic.twitter.com/Yitp5YqdTs

— Face The Nation (@FaceTheNation) April 30, 2017

Over the past 6 months, Trump has been dismissive of Intel Community allegations that Moscow hacked the emails to help Trump win the election. During the Sept 26 presidential debate with Clinton, Trump said China was one of many actors that could have been behind the hack, including “somebody sitting on their bed that weighs 400 pounds.” Like Russia, China is a longstanding cybersecurity adversary of the United States.

Curiously, Trump’s refocusing on China as a potential hacker comes as a time when the White House has pivoted away from improving relations with Russia, which according to Putin spokesman Peskov have “never been worse” and has instead moved to mending and improving ties with Beijing, having softened its criticism of Chinese trade policies as Washington seeks Beijing’s support in diffusing military tensions with North Korea.

As a reminder, before Trump was elected, he pledged to improve relations with Moscow. As Reuters notes, Russia has denied any involvement in the hacks. Lawmakers are currently investigating whether Trump’s campaign team had ties with Russia.





Italy Warns Sudden Collapse Of Alitalia Would Lead To “Great Shock” For The Economy

Courtesy of ZeroHedge. View original post here.

That Italy has a bank solvency problem will not come as a surprise to anyone who has been following events in Europe for the past 7 years.

Just yesterday, Italian daily La Stampa reported that four months after the third government bailout of Italy’s third largest bank in as many years, the Italian government may have to inject even more cash than planned into Monte Paschi, the world’s oldest and apparently always insolvent bank.

Stampa cited the outcome of an ECB inspection, focusing on uncertainties from the bank’s planned bad loan reduction. The Italian daily noted that the ECB had communicated results of its inspection to the bank last week, noting that losses are now expected to be well above those calculated until now. Specifically, while the proposed €8.8BN recapitalization would be sufficient to take the bank’s CET1 above the required regulatory level, it would not be sufficient to meet the ECB SREP requirements, raising the risk the government will have to contribute more than the €6.6BN currently envisaged.

But while Monte Paschi continues to be a perpetual drain of taxpayer funds, the most imminent threat facing the Italian economy comes not from the banking sector, but from its just as troubled national airline carrier. Last week, Alitalia said it had exhausted all options after workers voted against job cuts aimed at salvaging the cash-strapped Italian airline, pushing it toward administration for the second time in a decade.

According to Bloomberg, a €2 billion recapitalization tied to the savings plan is effectively dead and Alitalia would start appropriate “legal procedures” as funds run out, the Rome-based airline said. Chairman Luca Cordero Di Montezemolo “formally” communicated to the Italy aviation authority that the carrier decided to start the process of naming a administrator, the authority said on its website last Tuesday.

The decision to appoint an administrator is the first step for being placed in a legal reorganization process, making it almost impossible a last-minute rescue of the carrier as it exists today.

Meanwhile, unlike Italian banks which get bailed out any time there is even a modest threat of a bank run, typically with ECB assistance, Italy has said it won’t nationalize Alitalia whatever the circumstances. Abu Dhabi-based Etihad, the carrier’s


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Russian Oligarch Suffers 50% Loss On Singapore Real Estate Sale

Courtesy of ZeroHedge. View original post here.

While the Canadian housing bubble – driven by Chinese hot money – continues to grow (although its latest near-death experience courtesy of Home (Lack of) Capital Group may have finally pierced a stake through its heart), housing markets elsewhere are suffering from some serious wobbles. Take Singapore, for example, where recently a 4,069 sq ft at Seascape in Sentosa Cove was sold at a $6.6 million loss. The loss works out to 52% or 10% annualised over a holding period of 6.6 years.

The unlucky seller: a Russian oligarch. According to The Edge Property, the previous owner, a Russian national bought the unit from the developer at $12.8 million or $3,146 psf in June 2010. The unit was put up for mortgagee sale at an auction conducted by JLL in January 2017 at an opening price of $6.8 million but did not find a buyer. It was subsequently sold at $6.2 million or $1,524 psf by private treaty. According to JLL head of auctions Mok Sze Sze, the buyer is an investor.

It’s not the first dramatic repricing of Singapore real estate. So far, four other private non-landed homes have been sold at losses above $5 million, based on the matching of URA caveat data as at Feb 17.

Previously, a 4,133 sq ft unit at Seascape was sold at a $5.2 million loss. The unit was bought at $11 million or $2,661 psf in December 2011 and sold at $5.8 million or $1,403 psf. The loss works out to 47% or 17% annualised over a three-year holding period. The seller was also liable for a 4% or $232,000 Seller’s Stamp Duty.

Before that, a 3,757 sq ft unit at St Regis Residences Singapore in prime District 10 was sold at a $5.02 million loss. The unit was bought at $13 million or $3,461 psf in July 2007 and sold at $7.98 million or $2,124 psf. The loss works out to 39% or 24% annualised over a 1.8 year holding period.

In September 2001, two separate 8,740 sq ft units at Ardmore Park in prime District 10 were sold at losses of $8 million and $5.5 million. The larger loss accrued to the unit bought at $18.5 million or $2,117 psf in Feb 2000 and sold at


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Chuck Akre: How To Identify Compounding Machines | Talks at Google

By The Acquirer’s Multiple. Originally published at ValueWalk.

One of our favorite investors here at The Acquirer’s Multiple – Stock Screener is Chuck Akre.

Akre is the Managing Member, Chief Executive Officer and Chief Investment Officer at Akre Capital Management. Akre has been in the securities business since 1968. He founded Akre Capital Management in 1989 and relocated the business to Middleburg, Virginia, in 2002, where it still resides.

Akre is famous for his investment approach which he believes is perfectly captured by the visual of a “three-legged stool.” Akre says, “This metaphoric three legged stool describes what we look for in an investment: (1) extraordinary business, (2) talented management and (3) great reinvestment opportunities and histories. I have an old three-legged milking stool in our conference room and it is clear by looking at it that it is sturdy and durable.  We believe our stool is just as sturdy and durable based on our many years of experience!”

One of the best resources for investors is the series of presentations at Google by a number of investing gurus called Google Talks. One of our favorites is Akre’s presentation in which he discusses identifying businesses that are compounding machines, it’s a must watch for all investors:

stevepb / Pixabay

This original article was posted by Johnny Hopkins at The Acquirer’s Multiple..

The post Chuck Akre: How To Identify Compounding Machines | Talks at Google appeared first on ValueWalk.

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Why Bubbles Are Like Porn

Courtesy of ZeroHedge. View original post here.

Authored by Anthony Saunders via Confounded Interest blog,

Supreme Court Justice Potter Steward said in 1964 in the Jacobellis v. Ohio case, 

“I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [hard-core pornography]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.”

Asset bubbles too are difficult to define, but I know it when I see it.

Take Robert Shiller’s P/E Ratio measure for stocks. There was a Roaring ’20s bubble which burst in 1929 (Black Tuesday), there was the infamous Dot.com bubble. On March 10, 2000, the NASDAQ Composite peaked at 5,132.52, but fell 78% in the following 30 months.

Now we are seemingly in yet another stock market bubble and almost at the P/E Ratio level of the Roaring ’20s bubble (but not near the dizzying heights of the Dot.com bubble … yet).

Stocks do seem awfully “frothy.” But what about home prices? The Case-Shiller 20 composite home price index has grown 43.6% since February 2012.  While home prices are not growing as fast as they did during the home price bubble of the last decade, they are going at a rate that is twice as fast as earnings (wage) growth.

These certainly look like asset bubbles. If it looks like a bubble and acts like a bubble, it probably is a bubble.

“Shhh. Don’t say the word “bubble!”





What’s Going on with Retail (and it’s not the weather)

By Brian Langis. Originally published at ValueWalk.

Interesting comments on page 15 from Steven Roth, the Chairman’s letter of real estate investment trust Vornado Realty. Here are his comments:

Disruption in retail is the topic du jour, the eye of the storm so to speak (both retail tenants’ and retail landlords’ stocks have been battered), so it is appropriate that we get into a fulsome discussion of retail this year.

In the be-careful-what-you-wish-for department, we made the prescient call four years ago that retail was in secular decline and acted on that by selling our malls,(17) spinning our strips into Urban Edge Properties, while retaining and even growing our flagship street retail in Manhattan.

 

By Nicholas Eckhart from Elyria, Ohio, United States of America (Former Sears Trotwood) [CC BY 2.0], via Wikimedia Commons
So what’s wrong with retail:(18)
·
The U.S. is grossly over-stored. ICSC publishes 24 square feet of shopping center space per capita.(19)
·
The struggles and failure (or near failure) of many household names in the anchor and chain store business.
·
Traffic in shopping centers, while difficult to measure, is clearly declining and has been for years and so that makes a trend.
·
Shopping preferences and how we shop have changed, especially among millennials.
·
Most brands have become ubiquitous and, therefore, less differentiated and important.
·
Price and on sale is the only strategy which seems to work.
·
And then, of course, there is Amazon and the Internet.

I do not believe we can grow our way out of this mess. I


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Eric Peters: If Rates Ever Rise Above 3.5% “It Would Spark Massive Defaults”

Courtesy of ZeroHedge. View original post here.

Earlier today in his weekly note, One River CIO Eric Peters explained that in their attempt to overturn the natural order of the global economic “ecosystem”, what central banks have done is “stunning, unprecedented… and arrogant”, and as a result it is only a matter of time before another “peak instability” moment emerges as “it stands to reason that our volatility-selling machine will break one day. We saw a glimpse of this in 2008-09.”

And yet, as Peters concedes in a follow up note, those same central bankers don’t have any other option but to kick the can because as the CIO notes, any attempt to break the current ultra-low rate regime would “spark massive defaults.”

Incidentally, those are the same defaults that should have happened during the “near systemic reset” of 2008/2009 but the Fed, in all its wisdom, decided to kick the can at the cost of trillions in global excess liquidity, and while it bought itself some time – in the process unleashing a global deflation wave thanks to zombie companies that should not exist yet do, and every day try to undercut each other on pricing – nearly ten years later it has discovered that it has no way out, for one simple reason: there is now too accumulated debt.

Here is Peters “modelling” out why the Fed is stuck with no way out:

When debt expands constantly relative to GDP, there’s a limit to how high interest rates can rise without causing massive defaults,” said the Model. “There’s nothing inherently wrong with defaults, they can cleanse a system, but a rise in US defaults from today’s 2.5% to 6.0% would boost unemployment by 3%.

America’s economy is leveraged to the financial system, which includes non-capitalized liabilities; entitlements, pensions, healthcare. “US total debt/GDP is 300%, but if you include these non-capitalized liabilities, it’s more like 800%.”

“These non-capitalized liabilities rise as both interest rates and economic growth decline,” continued the same Model.

“Low growth produces less income, and low rates supply less investment returns on pensions. Which means companies need to set aside more money to pay the liabilities.” It’s a slow-moving economic death spiral.

“The Neo-Fisher Model posits that we can escape this trap by increasing interest rates. Which will


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An End to Credit and Debit Cards Starting in India?

Courtesy of Mish.

India’s crackdown on cash caused chaos as 86% of the money in circulation vanished overnight. Banks could not cope with the increase in demand. Consumers did not turn to credit cards or debit cards as expected.  Instead, consumers turned to mobile apps.

Massive Growth of Mobile vs Dying Cards

A number of mobile payments are still small but growth is such that the Wall Street Journal asks Could India’s Cash Blitz Kill Off Cards, ATMs?

The value of mobile money transactions has more than doubled since the nullification of 86% of India’s cash in circulation in November, while those made with credit and debit cards has fallen, and check purchases have barely budged. Mobile payments still make up only a small percentage of overall transactions, but their surging popularity is being noticed.

At this rate, cards and automated teller machines could be redundant in India by 2020, predicted Amitabh Kant, head of NITI Aayog, the government’s economic policy-making body. India’s government, along with removing paper money, has encouraged electronic payments by loosening regulations and adding infrastructure.

Abdul Aziz Ansari had never accepted anything but rupees at his fish stand in a Mumbai suburb. When notes dried up during the cash crunch last year, his sales plummeted. His business looked set to fail, until he signed up for Paytm.

Still, the value of mobile-wallet payments remains lower than checks and cards, but they are catching up to credit cards. In February, mobile payments totaled 69.11 billion rupees ($1.07 billion), significantly behind checks at 6.4 trillion rupees and debit cards at 2.3 trillion rupees but approaching credit cards at 286 billion rupees.

The Reserve Bank of India has been easing rules and building the infrastructure needed to simplify payments. Last year, it started allowing more types of companies to offer digital wallets and has created a new payment system that allows people to connect their identification numbers, phones and bank accounts, providing them with one number for transfers to merchants or other people.

“Your mobile is not just going to be your wallet, it will be transformed into a bank,” Prime Minister Narendra Modi said at an April event promoting mobile money. “This can be the base of financial revolution for the world.”

India’s mobile-wallet leaders said they are adding millions of new users every month.

The


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Kimble Charting Solutions

Are Bank Stocks Sending Bullish Message To Investors?

Courtesy of Chris Kimble

Just as the health of the banking sector is a big deal to the economy, it’s equally important to the S&P 500 (SPY) and broader stock market.

Although the bull market has grinding higher, it’s awaiting confirmation from the banks and banks stocks.

Today’s chart is of the S&P 500 Bank ETF (KBE) and shows how the banks are at an important juncture in time and price.

KBE (the bank ETF) is testing the upper end of a falling channel, offering bulls an opportunity for a breakout – see point (2).

The banks were at a similar juncture nearl...



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Zero Hedge

Africom Confirms Russian Air Defense System Shot Down US Drone Over Libyan Capital  

Courtesy of ZeroHedge View original post here.

U.S. Africa Command (Africom) has confirmed that an unarmed American drone over the Libyan capital last month was shot down by Russian air defenses, reported Reuters.

Africom dropped three headlines via Reuters in the overnight, revealing how the surveillance drone was shot down over Tripoli. 

  • EXCLUSIVE-U.S....



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Insider Scoop

KalVista Shares Sink On Failed Mid-Stage Study Of Diabetic Macular Edema Drug

Courtesy of Benzinga

Shares of thinly-traded micro-cap biotech Kalvista Pharmaceuticals Inc (NASDAQ: KALV) are seen moving to the downside Monday.

What Happened

Massachusetts-based KalVista, which focuses on developing small molecule protease inhibitors, said a Phase 2 study that evaluated its KVD001 in patients with diabetic macular edema, who were poor responders to previous treatment with anti-VEGF t...



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Phil's Favorites

Where The Rich Are Getting Richer - Mapping America's 200 Wealthiest Counties 

Courtesy of ZeroHedge

Wealth inequality has erupted across the country over the last decade as the Federal Reserve's policy of ramping asset prices to the moon has widely failed to distribute wealth evenly. If you want to figure out where all the money went on a geographical basisBloomberg has published a new report that shows the 200 wealthiest counties in the US. 

It's no secret by now that asset holders (those who own real estate, stocks, bonds, classic cars, wine, and fancy artwork) were the largest beneficiaries of the Fe...



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Digital Currencies

The Road To Retirement: Millennials Put Their Faith In Bitcoin But Goldman Says Go With Gold

Courtesy of ZeroHedge View original post here.

"Drop Gold" - the ever-present tagline of Grayscale's Bitcoin Trust TV commercial - appears to be working its magic on a certain cohort of society.

2019 has seen assets under management in GBTC soar...

Source: Bloomberg

And for Millennials, according to the lates...



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Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



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Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 

Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices.

The cycle below shows prices are ready to move in the months ahead (older chart re posted).


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Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

 

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein

Excerpt:

Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

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

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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

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

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.

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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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