Archive for July, 2017

William Shatner Slams SJWs – Says ‘Snowflakes’ “Stand For Inequality” And “Misandry”

Courtesy of ZeroHedge. View original post here.

William Shatner, the actor who famously portrayed Captain James Kirk in the original 1960s run of Star Trek spoke out against his progressive critics, claiming that SJWs “stand for inequality” while defending his use of terms like “snowflake” and “misandry” – a phenomenon that angry feminists insist has been extinguished in modern society.

Shatner, a Canadian citizen who’s publicly empathized with the far-right and President Donald Trump, has repeatedly feuded with Trekkies who feel that he has turned away from the show’s culturally-progressive message (Star Trek made television history by broadcasting television’s first interracial kiss, between Shatner and castmate Nichelle Nichols). The actor often calls out examples of what he considers to be unwarranted attacks on men.

SJW's can have political views but it's usually where they need to be superior in socio-economic terms. https://t.co/lLfPj6w6gV

— William Shatner (@WilliamShatner) July 31, 2017

And this is your failure of logic. SJWs stand for inequality, where they are superior to any one else hence my use of Misandry and Snowflake https://t.co/8uBGuFFM7a

— William Shatner (@WilliamShatner) July 31, 2017

All of that is true. I also use words like snowflake and misandry. What's your point sunshine? https://t.co/3Z0Zj1USIX

— William Shatner (@WilliamShatner) July 31, 2017

Shatner’s signature was notably absent from a February letter sent by the original Star Trek cast condemning President Donald Trump’s “racism and bigotry."

At least one liberal critic accused the actor of “tarnishing” Star Trek’s legacy with his “alt-right language,” according to Gizmodo.

"‘It seems that Shatner has not so much misunderstood the source material than turned away from it,’ Manu Saadia, author of Trekonomics: The Economics of Star Trek.

‘Star Trek is the lone TV show that has carried the torch of equality, progress, and utopia in popular culture. To see one of its most famous ambassador using alt-right language should be a wake up call to


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Hong Kong Interbank Rates Spike To Highest Since Lehman

Courtesy of ZeroHedge. View original post here.

For only the third time since Lehman, the price of liquidity in the Hong Kong Dollar interbank markets has exploded higher.

Overnight HKD Hibor soared over 60 basis points to 0.71407% in Monday trading – the highest since October 2008…

Note that the two previous spikes were around year-end, so this is unusual in both its velocity and size.

Of course, the narrative of a panic in Asian liquidity is not a good one for supporting risk assets and so the spike is being dismissed as a one-off due to several factors (as Bloomberg reports)…

Monday’s rise in Hong Kong dollar overnight interbank rate was due to major fund providers being more cautious in lending at month-end, and because of demand from some market players, a Hong Kong Monetary Authority spokesperson writes in an emailed reply to questions from Bloomberg. Interest rates subsided when fund providers responded by lending out more Hong Kong dollars. Relatively large movements in short- dated interest rate Monday was probably a result of thin market conditions ahead of the month-end. The market continued to function normally.

Monday’s sudden spike in HKD overnight funding cost is probably due to short-term funding activities, likely for I Squared Capital’s purchase of Hutchison Telecom’s unit and HSBC share buyback announcement, says Angus To, deputy head of research at ICBC International Research.

Rate likely to drop soon as HKD liquidity remains ample in general, To says in a phone call.

So just ignore the fact that the HKD liquidty markets just exploded due to month-end (well it hasn't before – see chart) and some M&A (there's been no M&A in the last 9 years?)… it's probably nothing.





A Few Charts and a Few Thoughts

 

A Few Charts and a Few Thoughts

Courtesy of 

Last night, David Schawel pointed out that the worst year for the Barclays Aggregate Bond Index was -2.9%. I’ve written in the past that a bad year for bonds is a bad week for stocks, but I was still surprised to learn just how shallow the worst calendar year was.

1

You might say, well duh, bonds have been in a bull market for thirty years. Fair, so let’s look back at the period from 1950-1981, when the ten-year rate went from 2% to 15%.

A portfolio of five-year notes (20%), long-term government bonds (35%), long-term corporate bonds (30%) and one-month t-bills (15%) returned 2.7% a year for this 32 year period. Not great- especially after inflation, but these are returns you could live with, when you consider that stocks returned 10.8% a year over the same time.  The chart below shows the ten year screaming higher (red) and the growth of $1 (black). Here’s proof that rates can rise without bonds going to zero.

2

I’m not trying to dismiss people’s concerns over bonds. At low rates, it makes sense to prepare for the fact that future returns won’t be as large as they have been in the past. But, and this is the important part, stocks will always represent the biggest risk to your portfolio. And by risk I don’t mean permanent loss of capital, but rather the wild swings that cause you to run for the hills. That’s risk.

The chart below shows how much more volatile stocks have been historically than long-term government bonds (these bonds are highly sensitive to interest rates).

3

The losses investors have felt from high quality bonds were nothing compared to stocks, and they did not show up on their statements…

4

The real losses were caused by inflation. If you bought long-term government bonds in 1940, forty years later, your dollar was worth $0.37, and you weren’t made whole until 1991!

5

If you’re scared about bonds getting killed, take a look at the next two charts. The image below shows the ten worst years for long-term government bonds, and…
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Here’s The Real Reason The Fed Is Making Absurd Monetary Decisions

 

Here’s The Real Reason The Fed Is Making Absurd Monetary Decisions

Courtesy of John Mauldin, Outside the Box, Mauldin Economics

I have often written about the Fed's abysmal track record in managing the economy. Here Lacy Hunt and Van Hoisington of Hoisington Investment Management explain the reasons for the Fed's consistently poor track record.

They start by considering the Fed’s “dual mandate,” which sets “the goals of maximum employment, stable prices and moderate long-term interest rates.” (And yes, that is actually three goals, not two.)

But a problem arises, the authors note, “because considerable time elapses between the implementation of the monetary actions designed to follow the mandate and when the impact of those actions take effect on broader business conditions.”

The time lag can easily be three years or longer, with the result that policy changes often end up being pro-rather than countercyclical. To make matters even worse, “the economic risks from adherence to this dual mandate are now much greater than historically due to the economy’s extreme over-indebtedness, poor demographics and a fragile global economy.”

But I’ll let Lacy Hunt and Van Hoisington unpack the idea themselves.

Hoisington Quarterly Review and Outlook, Second Quarter 2017

By Dr. Lacy Hunt and Van Hoisington

The Fed’s Dual Mandate

“Dual mandate” is one of the most commonly used phrases in U.S. central banking. The current Chair of the Federal Reserve often mentions it in both speeches and testimony to Congress. Not surprisingly, this is an extremely hot topic in monetary economics, and execution of this mandate has profound significance.

The mandate originated in The Federal Reserve Reform Act of 1977. This legislation identified “the goals of maximum employment, stable prices and moderate long-term interest rates.” Ironically, these goals have come to be known as the Fed’s “dual mandate”, even though there are actually three goals. The manner in which the Fed operates in following these goals has had and will have dramatic effects on economic activity. In this report we consider:

  1. What is the causal link between the mandate and the Fed’s capacity to act in a counter-cyclical fashion?
  2. How has


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Treasury To Issue Half A Trillion Dollars In Debt In Q4

Courtesy of ZeroHedge. View original post here.

In the first warning sign that the US Treasury is burning through more cash than previously expected, at 3pm today the Treasury Department announced that in its latest forecast of end-of-September cash balance it anticipated only $60 billion of cash on hand, nearly half the $115 billion it forecast in its previous report in May, according to the Department’s marketable borrowing estimates. The treasury also expects to borrow $96 billion in net marketable debt in the current quarter, down from $98 billion forecast previously.

This drawdown in cash, and jump in government outlays, was to be expected following the latest Monthly Statement from the Treasury which showed a surge in government outlays, which hit a record high $429 billion in June, for reasons discussed previously.

However, the second, and more troubling warning sign was that in its initial forecast of calendar Q4 marketable borrowing needs, the Treasury now expects a near record $501 billion in net marketable debt to be issued from October through December. This amount will be nearly equal to the actual marketable debt borrowed in the last 4 quarters, which amounts to $527 billion. The full sources and uses can be found here.

Also, as shown in the chart below, this amount of upcoming quarterly issuance will be just shy of the previous record hit in the months of the financial crisis, and represents a dramatic change in the recent direction of declining borrowing.

Source: Reuters

One reason for this surge in Q4 debt issuancem coupld with the low level of borrowing in 3Q suggests the debt ceiling will be a “significant limiting factor on auction sizes” as it doesn’t allow for upsizes or provide space for new tenors, Jefferies economists Ward McCarthy and Thomas Simons write.

They also adds that the borrowing announcement suggests coupon sizes will increase in 4Q, since it’ll be difficult to put together “a feasible auction calendar” that increases borrowing by more than $500b “focused entirely in bills,”

Treasury said it expects to borrow $96b in 3Q, with quarter-end cash balance of


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Trump Axes Obama’s MyRA Retirement Accounts After $70mm Of Taxpayer Funds Wasted

Courtesy of ZeroHedge. View original post here.

During his January 2014 State of the Union address Obama announced the creation of a new financial product that would allow American workers, those without access to retirement accounts anyway, to directly participate in the U.S. Treasury's debt ponzi on a tax-deferred basis. The accounts were cleverly named MyRA and were intended to be a substitute for people who didn't have access to an employee-sponsored 401k…with one little catch…money deposited in the accounts could only be invested in U.S. government bonds. Here's an excerpt from Obama's speech at the time:

Let’s do more to help Americans save for retirement. Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401ks. That’s why, tomorrow, I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It’s a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in. And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little to nothing for middle-class Americans. Offer every American access to an automatic IRA on the job, so they can save at work just like everyone in this chamber can…

To summarize, a MyRA was, more or less, an IRA without the investing flexibility as you could only invest in a massive government-sponsored ponzi scheme.

Shockingly, as the New York Times points out today, the accounts turned out to be a massive disaster costing taxpayers $70 million, or roughly 2x the amount of money that was invested in the 20,000 accounts that were actually opened and funded. 

President Barack Obama ordered the creation of the so-called starter accounts three years ago, and they became available at the end of 2015. Since then, about 20,000 accounts have been opened, with participants contributing a total of $34 million, according to the Treasury; the median account balance was $500. An additional 10,000 accounts whose owners have not contributed to them


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Charlie Munger On The Power Of Prices

By Rupert Hargreaves. Originally published at ValueWalk.

Here Charlie Munger talks about strong pricing power . Part two of a short series on Charlie Munger’s Human Misjudgment Revisited.

Warren Buffett often speaks about the benefits of a company having an economic moat, are a strong competitive advantage which allows it to keep prices high, profit margins wise and returns to shareholders large. Strong pricing power is a huge part of a business, and for brands to have strong pricing power for a prolonged period is the Holy Grail.

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Charlie Munger

Strong Pricing Power

Strong Pricing Power  – Thoughts From Charlie Munger

Consumers also associate price with quality, and it’s this association that can make or break a firm. As Charlie Munger explained in a talk given at UC Santa Barbara in 2003:

“I have posed at two different business schools the following problem. I say, “You have studied supply and demand curves. You have learned that when you raise the price, ordinarily the volume you can sell goes down, and when you reduce the price, the volume you can sell goes up. Is that right? That’s what you’ve learned?” They all nod yes. And I say, “Now tell me several instances when, if you want the physical volume to go up, the correct answer is to increase the price?” And there’s this long and ghastly pause. And finally, in each of the two business schools in which I’ve tried this, maybe one person in fifty could name one instance. They come up with the idea that occasionally a higher
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Crypto Veteran Explains Bitcoin’s “Software Update” And Recent Price Moves

Courtesy of ZeroHedge. View original post here.

By Valentin Schmid of The Epoch Times

After a spectacular run up to $3,000, Bitcoin prices have been choppy, falling as low as $1,830. However, they reversed and rallied more than $1.000 in just a few days after a software upgrade called Segregated Witness (SegWit) was confirmed, which will allow Bitcoin to perform more transactions and develop different functionalities.

Epoch Times spoke to Bitcoin expert Trace Mayer about SegWit, the problem with the Bitcoin miners, other crypto coins, and expectations of price movement going forward.

Epoch Times: It looks like Bitcoin is getting a major upgrade with Segregated Witness. Can you explain?

Trace Mayer: It lays the platform for Bitcoin to scale and it also lays a big platform for extensibility. We’re going to be able to do all types of things because it is also a fix for something called transaction malleability. By fixing a lot of these things with Segregated Witness, Bitcoin is just going to be so much more. It’s a really, really big upgrade.

There are some vested interests, whether in the Bitcoin community or outside of the Bitcoin community, that have not wanted to see Segregated Witness activated. So, it’s been a long, protracted fight. But it looks like it’s going to get activated and Bitcoin will be on its way.

Epoch Times: Why did it take so long?

Mr. Mayer: It’s been two years in the making. If we had something like a Facebook, or a Google, and let’s say that that you only needed five percent of the voting shares in order to completely stop any future growth or development of the company, well, guess what?

So in the board rooms, you fight all the time. But with proxy voting you can have control of some of these very large corporations and get stuff done with inactive votes or people abstaining. But with Bitcoin, when you want to change something, you have to actively get a very large chunk of votes.

You have to gets votes from users who are using the wallet software, that performs network consensus. You have to get votes from the miners who are processing transactions in blocks. You have to have a


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Minor Selling

Courtesy of Declan

Today's action ranked as bearish cloud cover after last week's bearish reversal. However, as these reversals came in beneath last week's highs the significance of this selling is less. Volume was also lighter.

The S&P triggered a 'sell' in its On-Balance-Volume but it's well above breakout support.
 

The Nasdaq just about claimed a bearish engulfing pattern but held 6,345 support. More worryingly, there is a shift in relative trend strength against Large Caps. Tomorrow is a chance for aggressive long players to take a punt but today's action suggests 6,345 support won't hold.
 

The Russell 2000 didn't stop at its 20-day MA as it may have done after recent selling. Instead, it continues its path towards its 50-day MA but has at least 1,420 support to work with. As with the Nasdaq there is an opportunity for aggressive longs to take a position here; although stop placement is more tricky with 1,400 next support beyond the 50-day MA.
 


As with the Nasdaq, the Nasdaq 100 is resting on (what was) channel support. Technicals are all still net bullish and relative performance against Small Caps is still positive.
 

 

For tomorrow, bulls may have to hold their nose but there is a support opportunity in play which may give day traders – if not swing traders – a chance to profit.

You've now read my opinion, next read Douglas' blog.
 





Mish Mailbag: Why is the Euro Still Rising? When Will it Stop?

Courtesy of Mish.

In response to Tapering All Talk No Action, Expensive Valuations, Duration Risk reader David is wondering about the Euro.

David asks “Can anyone explain why the Euro is still rising in value against US dollar, nonstop? When this will end?”

Hi David, this was expected, at least at this end. Rather than play the Euro which I do not like for numerous reasons, I have been long the pound.

I went long the pound on October 7, after the pound’s big Brexit crash. Peter Atwater had this pertinent Tweet on sentiment about a month earlier.

Investors “bracing for horrific consequences” suggests a major low in the British pound is near. Fear-filled delusion marks the bottom.

— Peter Atwater (@Peter_Atwater) September 10, 2014

I believe that “like” was mine.

I am not sure when I first mentioned being long the pound but I commented on it on December 14, 2016 in Saxo Bank CIO Bets on Weaker Dollar, Cites Blowout Equity Bubble.

Pound Weekly

Both FXStreet and Investing.Com have good chart tools.


Continue reading here…





 
 
 

Zero Hedge

WeWork Board, Softbank Officials Push For CEO Neumann's Ouster

Courtesy of ZeroHedge View original post here.

The odds of WeWork co-founder and CEO Adam Neumann becoming "the world's first trillionaire"  maybe about to take another major hit.

In what appears to be the latest attempt to salvage the farce that is the WeWork IPO (and the massive hole it will leave in Masayoshi Son's balance sheet and credibility), ...



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Insider Scoop

Notable Insider Buys In The Past Week: AbbVie, Kraft Heinz And More

Courtesy of Benzinga

Insider buying can be an encouraging signal for potential investors.

A packaged food giant and two drugmakers saw notable insider buying activity this past week.

Some of this insider buying occurred alongside insider sales.

Conventional wisdom says that insiders and 10% owners really only buy shares of a company for one reason — they believe the stock price will rise and they want to profit. So insider...



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Phil's Favorites

Peloton IPO Guide... And Why It Makes No Sense

Courtesy of ZeroHedge

By Scott Willis via Grizzle.com

BOTTOM LINE

At the end of the day, Peloton is a gym membership pretending to be a tech company.

We fully admit the product is exciting and unique in the market, but Peloton still faces the same problem...



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Digital Currencies

Buyer beware: How Libra differs from Bitcoin

 

Buyer beware: How Libra differs from Bitcoin

Recent revelations about the lack of privacy protections in place at the companies involved in Facebook’s new Libra crytocurrency raise concerns about how much trust users can place in Libra. (Shutterstock)

Courtesy of Alfred Lehar, University of Calgary

Facebook, the largest social network in the world, stunned the world earlier this year with the announcement of its own cryptocurrency, Libra.

The launch has raised questions about the difference between Libra and existing cryptocurrencies, as well as the implications of private companies competing with s...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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The Technical Traders

Is A Price Revaluation Event About To Happen?

Courtesy of Technical Traders

Skilled technical traders must be aware that price is setting up for a breakout or breakdown event with recent Doji, Hammer
and other narrow range price bars.  These types of Japanese Candlestick patterns are warnings that price is coiling into
a tight range and the more we see them in a series, the more likely price is building up some type of explosive price breakout/breakdown move in the near future.  The ES (S&P 500 E-mini futures) chart is a perfect example of these types of price bars on the Daily chart (see below).

Tri-Star Tops, Three River Evening Star patterns, Hammers/Hangmen and Dojis are all very common near extreme price peaks and troughs.  The rea...



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Kimble Charting Solutions

India About To Experience Major Strength? Possible Says Joe Friday

Courtesy of Chris Kimble

If one invested in the India ETF (INDA) back in January of 2012, your total 7-year return would be 24%. During the same time frame, the S&P 500 made 124%. The 7-year spread between the two is a large 100%!

Are things about to improve for the INDA ETF and could it be time for the relative weakness to change? Possible!

This chart looks at the INDA/SPX ratio since early 2012. The ratio continues to be in a major downtrend.

The ratio hit a 7-year low a few months ago and this week it kissed those lows again at (1). The ratio near weeks end is attempting to...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

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

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

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

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

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

We shall see. 

...

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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

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



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

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

Are you ready to retire?  

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

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

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



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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.

Some other great content in this free eBook includes:

 

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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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