Archive for December, 2018

Don’t Use Underwear Sales As An Economic Indictor, China Warns

Courtesy of ZeroHedge. View original post here.

This past week, as the Chinese leadership pledged economic reforms and promised additional stimulus to help revive softening growth in the world’s second-largest economy, a post in the English language Global Times quietly went viral.

It cited a steady rise in sales of men’s underwear in the northeast province of Liaoning as a sign that an economic rebound was underway in the province, which has lagged the rest of the country as it the former industrial powerhouse has transitioned to a more service-based economy. For the sake of context, we pointed out that the Men’s Underwear Index is a legitimate economic indicator created by former Federal Reserve Chairman Alan Greenspan, who argued that, during economic downturns, men put off buying staples like underwear, opting to get more use out of their briefs before buying new pairs.

But when the economy begins to rebound, sales of underwear rise as consumers start feeling more secure and ramp up their purchases of staples.

Underwear

According to the GT post, sales have been steadily climbing for three years. And aside from buying more pairs, men in Liaoning are also opting for underwear of a higher quality.

But alas, hopes that a turnaround in the MUI might portend a broader economic rebound may be…wait for it…brief. Because over the weekend, the GT returned with a second article arguing that, while the MUI might have proven to be a reliable indicator during the early days of the post-GFC recovery in the US, the same principles likely aren’t applicable to China.

A widely circulated post claimed that a rise in the sale of men’s underwear in Northeast China’s Liaoning Province signals an economic recovery in the long-lagging province.

Once a famed industrial base, Northeast China is undergoing a painful economic transition. Officials have announced plans to revitalize the region through reforms. Does a rise in sales of men’s underwear raise the prospects of an economic recovery?

The Men’s Underwear Index (MUI), which claims that upswings in sales predict an improving economy, was long favored by former US Federal Reserve chairman Alan Greenspan. The MUI may be a barometer of the US economy, but it’s perhaps not very adaptable to China.

Spending habits differ vastly between American and Chinese consumers, the post argued. And it’s equally likely…
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An Economy With Zero Human Beings In It?

Courtesy of Zero Hedge

How much of the internet and digital environment many now live their lives engulfed in is completely fake? A new disturbing report in New York Magazine lays out some key facts, beginning with the following astounding trend

For a period of time in 2013, the Times reported this year, a full half of YouTube traffic was “bots masquerading as people,” a portion so high that employees feared an inflection point after which YouTube’s systems for detecting fraudulent traffic would begin to regard bot traffic as real and human traffic as fake. They called this hypothetical event “the Inversion.”

Some of the methods and data revealing just how we arrived at a largely "fake internet" were revealed by alarming Justice Department findings based on unsealed indictments against eight people involved in what's widely considered among the largest digital ad-fraud operations ever uncovered, as the accused fleeced advertisers to the tune of $36 million.

NY Mag explains of their methods, which are indicative of what's happening more broadly:

The two schemes at issue in the case, dubbed Methbot and 3ve by the security researchers who found them, faked both. Hucksters infected 1.7 million computers with malware that remotely directed traffic to “spoofed” websites — “empty websites designed for bot traffic” that served up a video ad purchased from one of the internet’s vast programmatic ad-exchanges, but that were designed, according to the indictments, “to fool advertisers into thinking that an impression of their ad was served on a premium publisher site,” like that of Vogue or The Economist. 

This resulted in an army of bots that could imitate humans producing “faked clicks, mouse movements, and social network login information to masquerade as engaged human consumers” — as one exhaustive study demonstrated. 

Studies compiled over past years suggest a general trend, notes NY Mag, that less than 60 percent off all web traffic is human, with some researchers finding a "healthy majority" of this to be bots. 

There are also perhaps simpler, or less technologically sophisticated means employed to generate fake clicks — namely…
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Crescat Capital Up 40% In 2018 On Everything Bubble Short

By Jacob Wolinsky. Originally published at ValueWalk.

Crescat Capital December 31 2018 update to investors below.

We are happy to report estimates for Crescat’s 2018 performance:


dagon_ / Pixabay

Profit Attribution by Theme

Investment Outlook Summary

September 20, 2018 should mark the closing high for the S&P 500 to end the second longest bull market in US history. It should also mark the top of the “everything bubble”, a term coined by investment newsletter writer Jesse Felder to describe historic valuations in every major asset class, commodities being the one exception. The everything bubble was courtesy of experimental global central bank policies in the wake of the Great Recession. We think it is only the beginning of the asset bubble bursting process brought on by the sheer extent of the bubbles themselves. In other words, we are likely to face the real-life playing out of economist Hyman Minsky’s “financial instability hypothesis” which portends much more unwinding still to come. There is a natural economic cycle, including a natural business, market, liquidity, and credit cycle which are all intertwined. While no one can predict the lengths and inflection points of these cycles with perfect precision, our goal is to time them as best we can to be prudent stewards of our clients’ capital and grow and protect it over the long term.

Our macro model is telling us that the bull market has finally topped out for this cycle and that the economy will soon follow. The central bank liquidity tide is going out while equities, fixed income, real estate, and private asset vehicles are all at historic valuations. We strongly believe there is still ample opportunity to capitalize on the everything bubble meltdown in 2019 through select shorts positions and “proper” defensive longs. The extreme macro imbalances have only just begun to unwind based on:

  • Record global leverage compared to global GDP;
  • Only-recent record US equity valuations across eight comprehensive measures;
  • Recent record financial asset valuations relative to GDP in the US;
  • A record currency and credit bubble in China;
  • Historic housing bubbles in Canada and Australia;
  • Record cheap valuations for precious metals and related mining stocks;
  • The second longest economic expansion and second longest bull market in US history;
  • Recently historic US market-top


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Canadian Facing Death Penalty For Drug Smuggling As China Orders Retrial

Courtesy of ZeroHedge. View original post here.

A Chinese court has ordered a retrial for a Canadian national accused of smuggling "an enormous amount of drugs" into the Communist nation, arguing that his initial sentence of 15 years imprisonment followed by immediate deportation was too light.

The sentence, which had not been previously reported, was apparently handed down on Nov. 20. But at a hearing on Saturday, the Canadian citizen, Robert Schellenberg, prosecutors accused him of playing a key role in a major drug smuggling operation and argued that his sentence was far too light, according to Reuters.

The Associated Press reported that few details about Schellenberg's case have been released.

Robert Lloyd Schellenberg was tried in 2016 but his case has been publicized by the Chinese press following the Dec. 1 arrest of the chief financial officer of tech giant Huawei on U.S. charges related to trading with Iran.

Drug offenses are typically punished severely in China, and drug smuggling offenses are often met with the death penalty – as in the case of a British national who was put to death in 2009 for smuggling more than 4,000 grams of heroin into the country. The initial sentence was handed down by the high court in Dalian, the top court in the northeastern province of Laioning.

Canada

The Canadian government said it has been offering consular support to Schellenberg in the case, and that it has also been in contact with Chinese officials. Canadian diplomats were at the court when the retrial was ordered. Canada has been following the case for several years, but said it couldn't offer any more details citing privacy concerns.

Though some fear that a retrial could heighten tensions between China and Canada after China detained two Canadians on charges of endangering national security, Ottawa celebrated a decision by Beijing to release a third Canadian who had been detained for allegedly working illegally in the country. China said her deportation would be counted as an "administrative punishment."

In one development that could lessen tensions, a Canadian government spokesman said on Friday that a Canadian citizen who was detained in China this month had returned to Canada after


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Louisiana Police Departments Offering “Home Visit” To Test Meth For Zika Virus

Courtesy of ZeroHedge. View original post here.

This is not The Onion, but an actual public safety notice issued by police in Louisiana. The Harahan Police Department is asking people who might have crystal meth in their possession to get it tested for the deadly Zika Virus by bringing it to their local police station

The invitation and warning was posted to the department’s Facebook page to spread awareness of the “threat” while offering “test” batches of meth “for free” at their department, and further advising all state residents possibly in possession of crystal methamphetamine to bring it to a local police department. 

And in what appears the most epic police attempt yet at uncovering and busting meth labs across the state, the department goes so far as to offer a home visit for “those not comfortable going to the police station.” The post is signed Officer Moody. 

The Harahan Police Department announcement adds to the dubitable offer:

For those not comfortable going to the police station, if you make the call, an officer will be glad to come to you and test your Meth in the privacy of your home. Please spread the word!

We can only imagine the paranoid and hilarious conversations to ensue among area meth producers and addicts. Perhaps police will have the “success” stories later posted online as well in the form of police reports and mug shots? 

It turns out that it is a tongue-in-cheek tactic to fight the dangerous drug epidemic involving the homemade ultra-addictive substance that came to greater national attention by the hit series Breaking Bad. Other police departments over the past few years have tried it, apparently with little to no results, though surely it gets a big laugh at police stations — especially on the rare occasion that someone just might actually bring their meth to police. 

For example, police in a small Michigan town once tried to same thing with almost the exact same post:

Bailey said he put it out as a joke, but said the post has drawn attention to crystal meth and other drug issues.

“Crystal meth is poison. It’s evil. Anything that will take a mother’s love from a child is a bad drug. Anything that will make a man lose custody of his children and not be able to see them is evil. Yeah, we’re going to combat it any way we


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Millions Of Minimum-Wage Workers Will See Higher Pay In 2019

Courtesy of ZeroHedge. View original post here.

With fewer than 24 hours to go until 2019, millions of minimum-wage workers across the US are preparing for sizable boosts in their compensation thanks to wage hikes in 20 states and 21 cities – increases that were largely inspired by the 'Fight for $15' movement launched back in 2012 by fast food and retail workers in NYC.

The wage hikes will impact some 17 million workers across the US over the course of 2019.

The federal minimum wage has been stalled at $7.25 since 2009. At least 13 counties and cities will implement the higher wage laws immediately starting on Jan. 1, reaching or exceeding $15 an hour. The rest will gradually phase in higher minimums of between $12 and $15 an hour, NBC News reported.

Fight

In addition, eight states – Arizona, California, Colorado, Maine, Massachusetts, Missouri, New York, and Washington state – are phasing in increases that will eventually put their minimum wages at $12 to $15 an hour, according to the National Employment Law Project.

According to a statement published last week, NELP Executive Director Christine Owens said the increases would be a boon for hardworking Americans who "have little to show for it," according to the Huffington Post.

"Working people are struggling to pay their bills, but they see that it’s the corporations and the wealthy CEOs who are getting the tax breaks," Owens said. "It's just not right. The American people believe in the value of work – and that workers deserve to be valued."

One NELP policy director said that while these increases are tremendous victories for the workers, in high cost states like California, more wage hikes may be needed, while workers in low cost-of-living states will see an outsize benefit.

The complete list of states raising the minimum wage this year includes: Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Jersey, New York, Ohio, Rhode Island, South Dakota, Washington and Vermont.

While economic equality sounds like laudable goal on the surface, it ignores the fact that by raising costs, employers will be incentivized to hasten their adoption of automation. As McKinsey warned in a study published one year ago, automation will kill 800 million jobs by 2030.





“They Said It Could Never Happen Again?” – Global Stocks Suffer Worst Year In A Decade

Courtesy of ZeroHedge. View original post here.

The world’s central banks’ safety harness finally gave way and one by one the world’s markets started to plunge.

Global stock markets lost almost $12 trillion in 2018 – the largest market cap loss since 2008 (and second largest in history)…

In fact, from its highs in January, world market cap is down $20 trillion.

As global central banks ‘allowed’ their balance sheets to contract on an annual basis for the first time ever

But they said “It could never happen again” … fortress balance sheets and all, and yet global systemically important banks collapsed in 2008.

No corner of the world escaped unscathed.

Asia Ex Japan was the worst year since 2008 (and 2nd worst on record)

This was China’s 2nd worst year on record (2nd to 2008).

All the major Chinese markets were a mess.

The only major Asian market in the black for the year was India, where the BSE was ahead by almost 6 percent. 

Europe was a bloodbath with the Stoxx 600 down 13% in 2018, its biggest loss since 2008.

And as Project Fear kicked in, The FTSE 100 ended 2018 down 12% – also its worst year since 2008 – but Germany’s export-heavy DAX was even worse.

US equities looked unstoppable… until Humpty Dumpty fell off the wall.

… and December was a bloodbath (even with the last few days’ manic bounce):

And so, this is still the worst December for US stocks since The Great Depression.

Gold and bonds outperformed notably in December as stocks plunged.

But on the year, only the dollar survived unscathed…

This is the first time since the 1970s that the S&P 500 has slumped so much when earnings growth was more than 10%.

So what should retail investors do? Well don’t turn to the hedgies – Long-short equity fund performance in December is the worst since August 2011.

Bonds were all underwater on the year – despite a huge compression in yields over the last two months – with the short-end the worst performer on a yield basis.

In fact this is the Treasury market’s biggest monthly rally since Jun 2016.

And the yield curve collapsed further this year…(inverting in the 2s5s region)

And yields…
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2018 Greatest Hits: The Most Popular Articles Of The Past Year And A Look Ahead

Courtesy of ZeroHedge. View original post here.

One year ago, when looking at the 20 most popular stories of 2017, we admitted that perhaps as a result of too many conflicting narratives and outcomes, it was difficult to find a coherent theme of the key events that shook the world, and which you, our readers, found most interesting and notable.

  • 2017 was a year of continued populist upheaval and political shocks, twists, turns and unexpected outcomes, a continuation of the "unexpected" Brexit vote outcome and Trump's shocking presidential victory, both of which forced many to re-evaluate what "expert", "pundit" and certainly "opinion poll" means; it was also the year when the concept of "fake news" became ubiquitously used by the establishment to slam any reporting it disagreed with and to justify why it was so wrong about everything, yet which would boomerang and lead to an even greater collapse in mainstream media credibility.
  • 2017 was year in which class warfare in the US approached unprecedented levels with antagonism between races, genders, ethnicities, ideologies, age groups and incomes all approaching peak levels, and spilling over, literally, on the street as the US public was inundated with reports of ordinary citizens snapping and killing their peers in cold blood, of petulant students demanding conformity, and culminating with the deadliest mass shooting event in US history when a Vegas gunman killed 58 people and injured 851. His motives are still unknown.
  • 2017 was a year of perplexing market stability: despite daily news of political, geopolitical and social turmoil, the market ignored virtually any potential risks and chugged along ever higher, with volatility crumbling to an all time low as the VIX printed a record number of days in the single digits
  • it was a year in which the S&P closed far higher than many had speculated, and defied the doomsayers who predicted a crash after Donald Trump won the presidential election despite the ongoing pile up of various imbalances, thanks largely to an unprecedented credit injection by China which has single-handedly been the world's biggest source of new debt creation since the financial crisis, as well as the now widely accepted support of central banks around the globe which injected a record amount of liquidity in 2017 and whose only mandate is to prop


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Here Are The “Costanza Trades” Of 2019

Courtesy of ZeroHedge. View original post here.

After a wild 2018, Mark Orsley – Head of Macro Strategy for Prism (and formerly with RBC), is out with a review of his 2018 “Costanza Trades,” while offering his comprehensive thoughts for next year.

***

It’s that time of year again. Stockings, dreidels, Festivus poles, and, of course, the inevitable truckload of bank “2019 Year Ahead” pieces cluttering your inboxes which are about as attractive as getting coal in your stockings.  However, these pieces are useful in some regards, as they are very good at nailing the consensus themes and are excellent counter-indicators.  Long time readers will know that The Macro Scan takes another twist at year end, to present next year’s top “Costanza Trades.”

For those of you not familiar with George Costanza, his character on the sitcom Seinfeld could do no right when it came to employment, dating, or life in general.  In one episode, George realizes over lunch at the diner with Jerry that if every instinct he has is wrong, then doing the opposite must be right.  George resolves to start doing the complete opposite of what he would do normally.  He orders the opposite of his normal lunch, and he introduces himself to a beautiful woman that he normally would never have the nerve to talk to. “My name is George,” he says, “I’m unemployed, and I live with my parents.” To his surprise, she is impressed with his honesty and agrees to date him! 

I find employing the Costanza method to trading an interesting exercise.  Ask yourself this: what are the trades that make complete sense and all your instincts say are right? Now consider the opposite.  Basically what you end up constructing is an out of consensus portfolio.

Employing the Costanza method can identify interesting, non-consensus trade ideas that could kick in alpha. Last year’s top 7 Costanza trades netted 5 of 7 WINNERS (some with huge gains), and past years have all been successful: 2017 had 5 of 6 winners (and 1 tie), 2016 had 7 of 10 winners, and 2015 had 7 of 10 winners.  Let’s quickly review last year’s trades…

2018 Costanza Trades:

  1. Long UST 10yrs = trying to work now but a loser as yields were 35bps higher
  2. Long Bunds = winner as yields were 18bps lower
  3. Long EUR/USD = worked early in the year


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1Y-2Y Treasury Yield Curve Inverts Most Since Financial Crisis

Courtesy of ZeroHedge. View original post here.

With the 10Y Treasury yield, fittingly enough, sliding to the lowest level since January, closing Friday trading at 2.6842%, some 55 bps below where it traded less than two months ago when it peaked at 3.2373% on November 8, a more interesting move in TSYs has been observed in the short end where the 1 Year (or 52 Week Bill) closed at 2.590%, up 1.81bps, while the 2Y yield, seen by many as the bond market's estimation of what the Fed will do in 2019, has continued to slide, and on Friday closed 2.8bps lower at 2.4878%, the lowest since the start of June.

As a result, the 1s2s curve has inverted to a whopping -10.8bps.

What the reason is for this bizarre divergence in preference for 2Y paper over 1Y we are not sure, however we will point out that the last time the 1s2s traded almost this negative, when it touched -10.2bps, was in October 2008, just after the government announced  it had bailed out AIG.





 
 
 

Zero Hedge

Why Is Maduro Still Pushing The Petro?

Courtesy of ZeroHedge View original post here.

Authored by William Luther via The American Institute for Economic Research,

In a recent Wall Street Journal article, Mary Anastasia O’Grady writes that Venezuela’s “National Superintendency for the Defense of Socio-Economic Rights is reportedly pressuring stores to accept the government’s new digital fiat currency, the petro.” The Venezuelan government claims its digital...



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The Technical Traders

Is The Technology Sector Setting Up For A Crash? Part IV

Courtesy of Technical Traders

As we continue to get more and more information related to the Coronavirus spreading across Asia and Europe, the one thing we really must consider is the longer-term possibility that major global economies may contract in some manner as the Chinese economy is currently doing.  The news suggests over 700+ million people in China are quarantined.  This is a staggering number of people – nearly double the total population of the entire United States.

If the numbers presented by the Chinese are accurate, the Coronavirus has a very high infection rate, yet a moderately small mortality rate (2~3%).  Still, if this virus continues to spread throughout the world and infects m...



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Phil's Favorites

Why Trump's post-impeachment actions are about vengeance, not retribution

 

Why Trump's post-impeachment actions are about vengeance, not retribution

President Trump fired Army Lt. Col. Alexander Vindman for testifying in his impeachment trial. AP Photo/Susan Walsh, File

Courtesy of Austin Sarat, Amherst College

Since the end of his Senate impeachment trial, President Donald Trump has carried out a concerted campaign against ...



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Biotech & Health

Deep learning AI discovers surprising new antibiotics

 

Deep learning AI discovers surprising new antibiotics

A colored electron microscope image of MRSA. NIH - NIAID/flickr, CC BY

Courtesy of Sriram Chandrasekaran, University of Michigan

Imagine you’re a fossil hunter. You spend months in the heat of Arizona digging up bones only to find that what you’ve uncovered is from a previously discovered dinosaur.

That’s how the search for antibiotics has panned out recently. The relatively few antibiotic hunters out there ...



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Kimble Charting Solutions

King Dollar Going To Lose Strength Here? Gold & Silver Hope So!!!

Courtesy of Chris Kimble

Is King$ and the Euro facing important breakout/breakdown tests at the same time? It looks like it in this chart!

The US$ trend remains up, as it has created a series of higher lows since the start of 2018. The opposite can be said for the Euro, as it has created a series of lower highs since early 2018.

The US$ is currently testing the top of its 18-month rising channel, as the Euro is testing the bottom of its falling channel.

What King$ and...



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Insider Scoop

The Daily Biotech Pulse: Heron Pain Drug Review Extended, Disappointment For Teva In Tourette Syndrome Study

Courtesy of Benzinga

Here's a roundup of top developments in the biotech space over the last 24 hours.

Scaling The Peaks

(Biotech Stocks Hitting 52-week highs on Feb. 19)

  • Adverum Biotechnologies Inc (NASDAQ: ADVM)
  • Akebia Therapeutics Inc (NASDAQ: AKBA)
  • Ana...


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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Tuesday, 01 October 2019, 02:18:22 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Wall of worry, or cliff of despair!



Date Found: Tuesday, 01 October 2019, 06:54:30 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...



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Members' Corner

How to Stop Bill Barr

 

How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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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"

 

 

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:

 

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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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