Archive for 2017

Puerto Ricans Vote for U.S. Statehood with 97% of the Vote, But Turnout was a Mere 23%

Courtesy of Mish

By an overwhelming margin, Puerto Ricans Vote for Statehood. But the vote is nonbinding, and only 23% bothered to vote.

According to early results on a government website, statehood drew 97% of support with more than 90% of votes counted Sunday afternoon, but less than one in four voters participated in the plebiscite as opponents called for a boycott. Polls closed at 3 p.m. Sunday.

The vote was spearheaded by the territory’s governor, Ricardo Rosselló, who has pushed for statehood as a way to help improve the island’s economy, which is weighed down by debts of more than $73 billion. In May, Mr. Rosselló declared what amounts to the largest-ever municipal bankruptcy in the U.S. that placed Puerto Rico under court protection.

Congress would need to authorize a new state. Mr. Rosselló recently signed into law a measure creating a commission to press U.S. lawmakers for admission. On Sunday evening, he said he would visit Washington, D.C. to formally notify Congress and the White House of the results.

“From today going forward, the federal government will no longer be able to ignore the voice of the majority of the American citizens in Puerto Rico,” Mr. Rosselló said.

Political Stunt

Puerto Rico is looking for a handout and Republicans would be crazy to give them one. Do the Republicans want or need two more Democratic senators?

I think not.

This was a political stunt and a waste of money Puerto Rico does not have.

Mike “Mish” Shedlock





Weekly Market Recap Jun 11, 2017

Courtesy of Blain.

Four placid days led to a Friday that in recent terms would be considered “wild” but in 2008 terms would be considered a “quiet session”.  There was some actual volatility Friday as indexes gapped up and ran before reversing sharply mid morning and sell off, led by the giant tech stocks that have been the stars of 2017.   If that is a precursor of anything or algorithms gone wild for a few hours, we shall see in the next few weeks.  Thursday’s Comey testimony and UK elections didn’t really move the needle much but the latter perhaps led to some of the volatility Friday.

Also Thursday, the ECB, as expected, left interest rates unchanged but said it continued to expect interest rates “to remain at present levels for an extended period of time, and well past the horizon” of its asset-buying program, which is set to run at least through December. In previous statements, the ECB had said it expected rates “to remain at present or lower levels for an extended period of time.”  So this is what markets have become the last decade – word smithing central banks massive buying programs for any potential tiny change.

In a quiet economic week, on Monday ISM non manufacturing fell 0.6 to 56.9 in May. Any reading above 50 indicates improving conditions, however.

Of note – Alphabet (GOOG), Google’s parent, closed above $1000 for the first time this week… a week after Amazon did.   Speaking of, Amazon is cutting prices of its Prime membership for low income workers as a direct swipe at Walmart.

The online retailer giant said Tuesday that it will offer a nearly 20% segment of the U.S. population—people who obtain government assistance with cards typically used for food stamps—a $5.99 monthly Prime membership, less than the $10.99 a month or $99 annual plan for other consumers. The membership buys access to unlimited two-day shipping, video and music content, photo storage and other perks.

These 2 stocks, along with Apple did sink Friday but goodness sake they have been on an epic collective run considering the massive size they…
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“Burn Them And Their Families”: As ISIS Crumbles, Vigilantes Run Amok in Iraq

Courtesy of ZeroHedge. View original post here.

Authored by Daniel Lang via SHTFplan.com,

It’s hard to appreciate the effect ISIS has had on ordinary Iraqis and Syrians who wanted nothing to do with the terror group.

There are cities in these countries that have been ruled by these monsters for several years. Monsters whose cruelty and depravity knows no bounds. Most people in the West can’t imagine what that must be like, because the vast majority of us have never lived under those conditions.

So what does happens to people who have been living under ISIS for so long?

Well, try to imagine what you would do if a bunch of lunatics had been running your community for several years. Imagine if they had cut you off from the outside world, tortured and killed family members and neighbors, sold female relatives into sexual slavery, and indoctrinated your children.

Some people manage to move on with their lives after those conditions pass. Others do not. In Iraq for instance, there are now vigilante groups that have risen in the wake of the Islamic State’s collapse, and they’re targeting members of ISIS, as well as their families.

Eleven suspected jihadists who were recently found blindfolded, bound and shot to death on the side of the road 20 miles south of Mosul are some of the victims of the group, which on its Facebook page tells supporters to ‘burn’ the families and homes of ISIS members.

The vigilante group, which has dubbed themselves the Hammam al-Alil Revolution, created a Facebook group to launch revenge on ISIS members in May. It now has 650 members.

‘Soon we will start our operation, we are now locating Deash families,’ read the first post on the page from May 28. ‘We will make them regret joining. Good luck everyone,’ it signs off.

This is what happens when law and order breaks down. People don’t just mete out justice. They are free to go on bloody rampages.

‘Today we targeted Mohammad Atrash, we threw two grenades and attacked the family with gunfire, as they did to us,’ the post said.

The Facebook page posts the addresses of dead and imprisoned ISIS fighters, encouraging its members to go after them and their families.

The group


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In Showdowns With The US President, The FBI Is 4-0

Courtesy of ZeroHedge. View original post here.

Tim Weiner, Pulitzer-prize winning author of “Legacy of Ashes” and a longtime chronicler of US intelligence agencies, sat down for an interview with Bloomberg’s Tobin Harshaw to discuss how the FBI has handled previous investigations involving the White House.

The feud between President Donald Trump and former FBI Director James Comey is hardly unprecedented in modern US history. As Weiner explains, there have been four instances during the past 45 years – excluding the present day – where the FBI has confronted a sitting president. And up until now, the bureau has prevailed every time.

Here’s Weiner:

Five times in the last 45 years the bureau has gone up against the White House. With all due respect to Bob Woodward and Carl Bernstein, it was the FBI that brought down Richard Nixon. Twelve years later it was the FBI that served search warrants and subpoenas on members of Ronald Reagan’s National Security Council after the Iran-Contra imbroglio. Agents recovered 5,000 documents from their computers – a forensic feat unprecedented in technological virtuosity. That led to the indictments of a dozen of Reagan’s national security aids.

A decade later, it was the FBI, in the form of a subpoena to the White House physician who drew blood from the arm of President Bill Clinton for DNA evidence to match the famous blue dress of Monica Lewinsky, that proved he committed perjury and led to his impeachment in the House.

In 2004, then-director Robert Mueller, along with Comey, who was acting attorney general, directly confronted the George W. Bush administration over the unconstitutional and illegal effects of the eavesdropping program Stellar Wind. Bush later wrote in his memoirs that the two men threatened to resign, and that visions of the Saturday Night Massacre  flashed before his eyes. The president backed down.”

The role of the FBI, and its director, has changed dramatically since the bureau was created by President Teddy Roosevelt and then-Attorney General Charles Bonaparte (a great-nephew of the French emperor) in 1908. Then known as the Bureau of Investigations, its primary duty was rooting out organized criminals and other “malefactors of great wealth,” though it was also tasked with investigating corruption in Congress.

But the bureau’s focus shifted away from this original intent after J Edgar Hoover


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Pittsburgh: A city of two post-industrial tales

 

Pittsburgh: A city of two post-industrial tales

Courtesy of Allen Dieterich-WardShippensburg University

File 20170606 3674 1b0tnua

Pittsburgh, between its industrial past and a clean, green tech-driven future. Dllu, CC BY-SA

President Donald Trump’s mention of Pittsburgh in his announcement withdrawing the U.S. from the Paris Agreement on climate evoked the city’s past as an industrial powerhouse. It sparked a furious set of tweets from Pittsburgh Mayor Bill Peduto, who promised his city would work to fight climate change. Trump’s statement also drew strong support from local Republican lawmakers who portrayed themselves as standing with “Western Pennsylvania manufacturers, boilermakers, power plant workers … and miners.”

The president’s words seem fitting for an administration taking great pains to symbolically and literally roll back the achievements of its predecessor. In 2009, the Obama administration chose Pittsburgh as the site for the U.S.-hosted summit of the G-20, a group of governments and central bankers from 20 major world economies. The meeting was in a downtown facility that was the world’s first and largest Leadership in Energy and Environmental Design (LEED) certified convention center. Positive media coverage poured in from around the world, showcasing Pittsburgh’s “green economy” rebirth as a center of clean technology and innovation.

The city took a hard hit in the 1980s when corporate and government policies, global economic forces and new technologies resulted in southwestern Pennsylvania’s permanent loss of more than 150,000 manufacturing jobs and 176,000 residents. In the decades since, Pittsburgh has used its considerable economic, institutional and political resources to reinvent itself as a center of education, innovation and health care. From 2010 to 2015, worker productivity shot up 10 percent, average annual wages increased 9 percent and the overall standard of living rose 13 percent in the region.

But the former Steel City’s success has proven to be uneven across racial and class lines. The recovery has also proven difficult to replicate in the former mill towns and outlying rural mining areas that once provided the raw materials upon which its fortunes were made. In my book, “Beyond Rust: Metropolitan Pittsburgh and the Fate of
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James Montier: Markets Are Behaving Like The White Queen (Alice In Wonderland)

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

James Montier of GMO recently wrote a great paper called Six Impossible Things Before Breakfast, in which he discusses current market conditions and how we can make sense of today’s pricing. It’s a must read for all investors.

Here’s an excerpt from that paper:

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Prawny / Pixabay

I believe the markets are behaving like the White Queen. In order to make sense of today’s pricing, you need to believe in six impossible (okay, I’ll admit some of them are just very improbable as opposed to impossible) things.

1. Secular stagnation is permanent and rates will stay low forever. As we have argued at length elsewhere, secular stagnation is a policy choice and we could exit it reasonably quickly by implementing appropriate policies.

2. The discount rate for equities depends on cash rates. This is nothing more than a belief. It has no foundation in data and not a scrap of evidence exists that supports this hypothesis.

3. Growth rates and discount rates are independent. This is a very questionable assumption. If, as I believe, it is false, then it makes the “Hell” outcome Ben has discussed in previous Quarterly Letters less likely, unless the first two beliefs hold completely.

4. Corporates carry out buybacks ad nauseum, raising EPS growth despite low economic growth. This would imply rising leverage, which is already close to all-time highs. Remember Minsky: Stability begets instability.

5. Corporate cash piles make the world a safer place. Cash levels aren’t high by historic standards, and valuations are extreme even when cash is fully accounted for.

6. The “Hell” scenario is the most probable outcome. This requires “this time is different” to be true and, unlike Jeremy Grantham, I am not yet ready to assign this exceptionally…
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Iran Claims To Have Proof Of “Direct US Support” For ISIS

Courtesy of ZeroHedge. View original post here.

Days after Trump issued a characteristically undiplomatic statement on last week’s s terrorist attack in Iran by ISIS which killed 17 people and which the US president accused Tehran of basically provoking by stating that “states that sponsor terrorism risk falling victim to the evil they promote”, which prompted Iran to slam the “repugnant WH statement… as Iranians counter terror backed by US clients…. Iranian people reject such US claims of friendship”, on Sunday senior Iranian officials responded by accusing the US of supporting the Islamic State and effectively forming an alliance with it, claiming that Tehran possesses documents to prove the allegations.

Tbe deputy Chief of Staff of the Iranian Armed Forces Major General Mostafa Izadi, said that Iran is “facing a proxy warfare in the region as a new trick by the arrogant powers against the Islamic Republic,” according to Fars News Agency.

“As the Supreme Leader of the Islamic Revolution (Ayatollah Seyed Ali Khamenei) said, we possess documents and information showing the direct supports by the US imperialism for this highly disgusting stream (the ISIL) in the region which has destroyed the Islamic countries and created a wave of massacres and clashes,” he added.


Deputy Chief of Staff of the Iranian Armed Forces Major General Mostafa Izadi

So far, however, Iran has yet to present any evidence.

Izadi’s statement echoed remarks made by Iran’s Parliamentary Speaker Ali Larijani on Friday, who condemned the Wednesday terrorist attacks in Tehran, and said that Washington is behind most of the terrorist acts in the world.

“The United States has aligned itself with the ISIL in the region,” Larijani said on Friday, addressing a funeral ceremony held for the victims of ISIL’s Wednesday terrorist attacks on the Iranian parliament and the holy shrine of late Imam Khomeini in Tehran. Larijani’s was addressing a funeral ceremony of the victims of Wednesday terrorist attacks in Tehran. Larjani added that “The terrorist attacks indicated that the terrorist groups had failed to achieve their main goal and targeted the parliament and Imam Khomeini Mausoleum, finally resorted to martyring the innocent people and the staff at the parliament.”

Thousands of Iranians had gathered to commemorate the dead, shouting “Death to Saudi Arabia” and “Death to America.”

Also on Friday Iran’s supreme


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In Her First Interview, Chelsea Manning Explains Why She Went To Prison For You

Courtesy of ZeroHedge. View original post here.

Authored by Andrea Germanos via TheAntiMedia.org,

In her first interview since being released from prison, whistleblower said she felt “responsibility to the public.”

US Chelsea Manning has given her first interview since being released from prison last month in which she explains her motivations for making public thousands of military documents.

Excerpts of her interview with ABC‘s “Nightline” co-anchor Juju Chang aired Friday on the network’s “Good Morning America.”

Asked about why she leaked the trove of documents, she says,

“I have a responsibility to the public … we all have a responsibility.”

“We’re getting all this information from all these different sources and it’s just death, destruction, mayhem.

“We’re filtering it all through facts, statistics, reports, dates, times, locations, and eventually, you just stop,” she adds.

“I stopped seeing just statistics and information, and I started seeing people.”

Asked by Hing what she would tell President Obama, Manning, choking up, says,

“I’ve been given a chance,” she says. “That’s all I asked for was a chance.”

Watch excerpts from the interview below:





The Risk To The “Bull” Thesis

Courtesy of ZeroHedge. View original post here.

Authored by Lance Roberts via RealInvestmentAdvice.com,

Following the election, the markets began pricing in a strongly recovering economic environment driven by a wave of legislative policies. While the market has indeed advanced, the economic and fundamental realities HAVE NOT changed since the election. As noted on Friday:

Economic data is not buying it either. Headline after headline, as of late, has continued to disappoint from new and existing home sales to autos, inventories, and employment. This also puts the Fed at risk of further rate hikes this year.

‘It appears traders are losing faith in the rest of the year as the odds of a hike occurring in December is now above that of September (as both drop to around 25%). As economic data has crashed since The Fed hiked rates in March, so the markets expectations has dropped to just 1.44 rate-hikes this year (one in June guaranteed), well below The Fed’s guidance of 2 more rate-hikes minimum.’”

Another huge risk going forward, as well, is the risk to further stock buybacks to support higher EPS as the lack of legislative reforms to boost the bottom line fade. As noted by Goldman just after the election:

“We expect tax reform legislation under the Trump administration will encourage firms to repatriate $200 billion of overseas cash next year. A significant portion of returning funds will be directed to buybacks based on the pattern of the tax holiday in 2004.” – Goldman Sachs

share-buybacks-112116

But it is not just the repatriation but lower tax rates that will miraculously boost bottom line earnings, but as noted from Deutsche Bank tax cuts are the key.

Every 5pt cut in the US corporate tax rate from 35% boosts S&P EPS by $5. Assuming that the US adopts a new corporate tax rate between 20-30%, we expect S&P EPS of $130-140 in 2017 and $140-150 in 2018. We raise our 2017E S&P EPS to $130.”

Maybe not so fast. Here is the problem.

While you may boost bottom line earnings from tax cuts, the top line revenue cuts caused by higher interest rates, inflationary pressures, and a stronger dollar (as expected would be the result of tax reform)


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The Anatomy of Brown’s Gold Bottom, Report 4 June, 2017

Courtesy of ZeroHedge. View original post here.

As most in the gold community know, the UK Chancellor of the Exchequer Gordon Brown announced on 7 May, 1999 that HM Treasury planned to sell gold. The dollar began to rise, from about 110mg gold to 120mg on 6 July, the day of the first sale. This translates into dollarish as: gold went down, from $282 to $258. It makes sense, as the UK was selling a lot of gold… or does it?

We won’t get into the theories of his motivation. However, we note that if he wanted to—pardon the dollarish—push down gold, he was not particular effective. He squandered half of Britain’s gold to get the price to drop 8.5%. That lasted but a few months. By the end of September, the price was not only back up to $282 but rising rapidly on its way past $320. Then it came down with volatility, rose, slowly fell to just under $260 about two years later. The price bottom just about coincides with the end of his selling.

This is history, and it’s been discussed and analyzed many times. What has not been seen until now is a look at the gold basis and cobasis during this time. Was gold becoming abundant due to selling? Or did something else happen?

Here is a graph showing the continuous gold basis and cobasis, overlaid with the price of the dollar.

letter-jun-11-brown-bottom-basis

Several features are noteworthy:

  1. The basis begins to fall on the announcement, but not a lot yet. The cobasis may be arguably said to begin to rise. Both appear to change character.
  2. The dollar begins rising immediately (i.e. the price of gold falls), but nothing alarming happens in the basis yet. Almost the entire initial price move occurs, with little move in the basis.

We believe this confirms our view that there is a lot of gold out there. This was as clear a case of short selling as can be. Brown wasn’t even selling yet, and the market price was driven down 8.5%. Actually, the market price began falling before the announcement, which suggests that privileged information may have leaked. Yet the market makers handled this with aplomb. The basis moved, but not that much.

  1. Once he began the actual selling, the price did not move much further. Notably, the basis and


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ValueWalk

#1 Performing Global Macro Hedge Fund Sees More Shorts Opportunities Ahead As China Bursts

By Jacob Wolinsky. Originally published at ValueWalk.

Crescat Global Macro Fund update to investors on 1/19/2019

Crescat Global Macro Fund and Crescat Long/Short fund delivered strong returns for both December and full year 2018 in a difficult market. Based on ...



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Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...



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Phil's Favorites

Divisive economics

 

Guest author David Brin — scientist, technology consultant, best-selling author and futurist — explores the records of Democrats and Republicans on the US economy in the following post. For David's latest posts, visit the CONTRARY BRIN blog. For his books and short stories, visit his web...



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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...



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Digital Currencies

Transparency and privacy: Empowering people through blockchain

 

Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...



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Insider Scoop

Cars.com Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

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

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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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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