Archive for June, 2019

Mass protests protect Hong Kong’s legal autonomy from China – for now

 

Picture via Pixabay

Mass protests protect Hong Kong's legal autonomy from China – for now

Courtesy of Kelly Chernin, Appalachian State University

Protesters in Hong Kong have achieved a major victory in their fight to protect their legal system from Chinese interference.

On June 15, in response to massive popular resistance, Chief Executive Carrie Lam announced she would suspend a vote on a proposed new law that would allow China to extradite suspects accused of certain crimes and prosecute them in Chinese courts.

For over a week, some 1.3 million people had gathered daily outside Hong Kong’s legislature to protest the legislation, which protesters say China will abuse to extradite political dissidents. They managed to postpone a June 12 vote by blocking entry to the legislative building. Days later, consideration of the law was indefinitely postponed.

That temporarily protects Hong Kong’s judicial system, one of the island territory’s few remaining areas of government autonomy from China.

Protesters are now demanding that the bill be withdrawn, not just suspended. If the law comes up for vote at a later date, it will likely pass in Hong Kong’s legislative council, where pro-China forces dominate.

‘One country, two systems’

Chinese rule over Hong Kong, an island territory off the coast of Shenzhen, has long been disputed.

The British colonized Hong Kong in the 1800s following the Opium Wars. But China never accepted this territorial claim, and insisted throughout the 20th century that Hong Kong belonged to China.

In 1997, after a decade of negotiations between the United Kingdom and China, Hong Kong returned to China – with some strings attached. Knowing that Hong Kong had developed under a Western system of government, then Chinese leader Deng Xiaoping made Hong Kong a “Special Autonomous Region” and agreed to give the island a 50-year transition period to come fully under Chinese rule.

Under this system, Hong Kong would retain its judicial system and legislative council, affording the island relative independence in its day-to-day operations. But Hong Kong would belong to China. The arrangement became known as “one country, two systems.”

Controversially, full…
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The Rise Of Facial Recognition Should Scare Us All

Courtesy of ZeroHedge. View original post here.

Authored by Derrick Broze via The Mind Unleashed blog,

It seems the sleeping masses are finally waking to the privacy dangers posed by the rise of facial recognition technology.

In the last ten years, our world has been completely transformed thanks to the exponential growth of digital technology. Technological advances with computer processors and the internet have quickly advanced our world into one that resembles some of the most well known sci-fi films and novels. Not a single day passes without a report on an emerging technology or new feature in an already existing product. The last ten years alone have seen rapid growth in information technology, encryption, the medical industry and 3D printing technology, just to name a few.

Unfortunately, as technology is a tool, there are equally frightening developments taking place in the first two decades of the 21st century. Specifically, the ability for governments and private actors to monitor and spy on the activity of the average person has nearly become accepted as the norm. In fact, it has become commonplace to hear Americans respond to warnings of Orwellian futures with the timeless trope, “If you’re not doing anything wrong, there’s nothing to hide!” This is what makes it all the more surprising to see a surplus of recent reports examining the dangers and implications of a world where facial recognition technology is commonplace.

Here’s a small sample of the current headlines related to facial recognition:

The group of lawmakers wrote:

We write to express concerns about reports that the U.S. Customs and Border Protection (CBP) is using facial recognition technology to scan American citizens under the Biometric Exit Program.”

The letter to DHS comes shortly after a representative with the Government Accountability Office…
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Sustainable finance: Canada risks being left behind in low-carbon economy

 

Sustainable finance: Canada risks being left behind in low-carbon economy

Global investors are already mobilizing capital to take advantage of investment opportunities in climate-smart infrastructure, emissions-reducing technology and updated electricity grids. (Shutterstock)

Courtesy of Sean Cleary, Queen's University, Ontario and Ryan Riordan, Queen's University, Ontario

Earlier this spring, the most in-depth analysis to date on Canada’s changing climate provided clear evidence that Canada is warming twice as fast as the global average. As we increasingly experience the physical impacts (flooding, extreme weather, forest fires), we will experience the financial impacts as well in the form of both increasing market risks and unprecedented investment opportunities.

For the financial sector, this is a pivotal moment where it can realign its structures to ensure global capital flows toward solutions that will protect Canada’s economy and our prosperity, more broadly. However, Canada’s financial community has yet to fully grasp the numerous challenges and opportunities that climate change presents for us in the transition to a low-carbon economy.

On June 14, an independent panel of experts released recommendations on what Canada’s financial system needs to do to support this transition. The key message: we must empower our financial sector to design a made-in-Canada sustainable finance system so that Canadian firms can compete successfully among their global peers over the long term.

In its simplest definition, sustainable finance means aligning all of our financial systems and services to promote long-term environmental sustainability and economic prosperity. That includes channelling investments toward climate solutions and managing climate-related financial risks.

Canada has the talent, resources and institutional muscle to define sustainable finance for our economy. We need to grow and harness that capacity now, if we want to captain our own ship through one of the most significant global economic transitions in history.

Much to lose, but more to gain

According to the Economist Intelligence Unit, a 2C global warming scenario will trigger global financial losses of roughly US$4.2 trillion. With 6C of warming, those losses balloon to $13.8 trillion. That represents about 10 per cent of the global assets currently under management.

Losses at this scale will have wide-reaching implications for investors and…
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Inducing consumer paralysis: how retailers bury customers in an avalanche of choice

 

Inducing consumer paralysis: how retailers bury customers in an avalanche of choice

Three decades of behavioural experiments show consumers given too many choices are more likely to make a bad or no choice. www.shutterstock.com

Courtesy of Robert Slonim, University of Sydney

Do you think you are paying more than you should for energy, banking, insurance, internet and phone services? You are not alone, and you are probably right.

Companies offer a growing number of deals that supposedly enable you to choose what is best for you. Every basic economics textbook tells us greater choice should deliver cheaper prices. But in reality this isn’t necessarily the case.

So what’s going on?

A big part of the answer is that businesses are taking advantage of the behavioural phenomenon of “consumer paralysis” to maximise profits.

They provide us with many plans and deals to make us feel like we are in control, but too many choices actually leads most of us to make a bad (or no) choice.

Energy pricing

Let’s consider how this works in the context of Australia’s electricity market.

In most areas of the country, residential customers have at least half a dozen retailers to choose from.


Market share by generation capacity by region, January 2018. ACCC, Retail Electricity Pricing Inquiry Final Report


Nonetheless, according to the Australian Consumer and Competition Commission, electricity prices and profit margins are among the highest in the world, and rising. The consumer watchdog calculates that in the decade to 2018 the average residential electricity bill increased by 55% (or 35% in real terms) – and only a very small part of that had to do with alleged culprits such as renewable energy.

Australia’s biggest electricity company, AGL, made a net profit of A$1.6 billion in 2018 – 194% more than the year before.



Depending on where you live, AGL offers up to 11 energy plans to residential customers.…
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Thousands of asylum seekers left waiting at the US-Mexico border

 

Thousands of asylum seekers left waiting at the US-Mexico border

The U.S.-Mexico border, between San Diego and Calexico, California. Savitri Arvey, CC BY-SA

Courtesy of Savitri Arvey, University of California San Diego and Steph Leutert, University of Texas at Austin

Over the past three months, the number of Central Americans arriving at the U.S.-Mexico border has jumped exponentially, and total border crossings have reached levels last seen in 2006.

Yet, while the number of families arriving between official border crossings has skyrocketed, the number of migrants seeking asylum at official border crossings has remained relatively constant, at around 4,200 per month.

It’s not that these families prefer to cross the Rio Grande or scale the border wall. Instead, our research shows that at least part of this pattern can be explained by a U.S. policy that has left thousands of individuals waiting to request asylum in Mexican border cities since the summer of 2018.

A shift in US policy

In May 2018, U.S. Customs and Border Protection officials began a practice known as metering across the southern border.

This means that officials are stationed at official ports of entry along the border to notify arriving asylum seekers that U.S. border crossings are full due to “limited processing capacity” and they will have to wait in Mexico until space becomes available. Previously, officials processed all asylum seekers that showed up at crossings.

At the same time that the metering process began, these U.S. officials started coordinating with Mexican officials to alert them of their capacity and how many asylum seekers the ports could accept per day.

As metering spread across the border, the number of asylum seekers in Mexican border cities increased. Yet it wasn’t clear exactly how many people were left waiting. When we started our research in November, no one had reported the numbers across the entire border or how the waitlists worked.

In December, we published a report with four colleagues that documented the spread of metering along the U.S.-Mexico border and responses within Mexican border cities.

Soon after the report was published, new migration…
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There’s a Critical National Interest in Cleaning Up the Corrupt Stock Market Structure

Courtesy of Pam Martens

New York Stock Exchange Trading Floor

New York Stock Exchange Trading Floor

By Pam Martens and Russ Martens

U.S. stock markets have historically been challenged by corrupt actors. But there have been two extreme periods of corruption in the history of U.S. stock markets. One period occurred in the lead up to the 1929 stock market crash when Wall Street cartels were forming pools to wildly manipulate stock prices. That period led to an economic calamity known as the Great Depression. It also led to two years of intense hearings in the U.S. Senate to investigate the structure of the stock market, followed by intense legislative reforms including the Glass-Steagall Act, the Securities Act of 1933 and the Securities Exchange Act of 1934.

The second period was the lead up to the 2008 stock market crash which led to the economic collapse known as the Great Recession. In that period, like 1929, Wall Street banks were allowed to systematically engage in practices to enrich themselves at the expense of the public and the national interest. But instead of seriously reforming Wall Street, the Justice Department allowed the criminals to avoid jail time and a Congress whose members received heavy campaign funding from Wall Street allowed Wall Street to simply move its corrupt practices into ever darker corners of the market.

The Securities Exchange Act of 1934 explains why it is a matter of national interest to protect U.S. markets from corruption by powerful players:

“Frequently the prices of securities on such exchanges and markets are susceptible to manipulation and control, and the dissemination of such prices gives rise to excessive speculation, resulting in sudden and unreasonable fluctuations in the prices of securities which (a) cause alternately unreasonable expansion and unreasonable contraction of the volume of credit available for trade, transportation, and industry in interstate commerce, (b) hinder the proper appraisal of the value of securities and thus prevent a fair calculation of taxes owing to the United States and to the several States by owners, buyers, and sellers of securities, and (c) prevent the fair valuation of collateral for bank loans and/or obstruct the effective operation of the national banking system and Federal Reserve System.

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Monetary Monday – Market on Pause Ahead of the Fed

Image result for fed funds rate chartWe're wating on the Fed.

We have "the greatest stock market in history" and "the greatest economy in history" with "record employment" but, if the Federal Reserve doesn't lower rates below the current 2.5% they have set – it will be "a disaster".  Clearly, to any rational person, something must wrong with those statements existing at the same time but they all come from our President's lips and far be it for me to call Donald Trump a liar – so I guess we just have to accept that it's all true.  

30-Year Fixed Mortgages are still 3.5-4.0% yet Home Sales are still trending lower and that's impacting a lot of high-paying construction jobs which, in turn, impacts the materials industry and even banking, as less people look for loans to buy homes and then the Durable Goods crowd can't sell washing machines, refrigerators, couches and TVs and there's less hardware and paint sales, etc., etc. 

Image result for new home sales 2019Housing, as always, is a major driver of the economy and it's kind of hard to ignore it when it begins to falter – but that's exactly what the market is doing at the moment.  This is where the panic is coming from as even a 1% rise in rates last year has caused a 10% decline in housing activity and we NEVER came close to getting back to our pre-2008 levels in the first place.  

What Trump doesn't understand is that, for the average American, low rates aren't enough to get them to invest in real estate.  You can't "take advantage" of low rates on homes you can't afford and very few Americans have $50,000 to plunk down on a $250,000 home – not that there are many $250,000 homes left anymore anyway.  Not only that but Property Taxes have risen out of control and Trump has limited their deductability – making the rises much harsher and not many people in the bottom 90% have tax lawyers to get them out of paying their share.  

Image result for property taxes risingAs you can see from this fairly typical example from King
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Ray Dalio Is Kinda, Sorta, Really Wrong, Part 2

 

Ray Dalio Is Kinda, Sorta, Really Wrong, Part 2

Courtesy of John Mauldin, Thoughts from the Frontline

Last week we started a mini-series in the form of an open letter responding to a series of essays by Ray Dalio, the founder of Bridgewater Associates. I wrote that he was kinda, sorta wrong in Why and How Capitalism Needs to Be Reformed, Parts 1 and 2 but really, really wrong in It’s Time to Look More Carefully at ‘Monetary Policy 3 (MP3)’ and ‘Modern Monetary Theory,’ in which he basically endorsed MMT. Today I continue my response.

As I noted, Ray has done us all a service by pointing out some rarely-mentioned elephants in the room (some tinged with pink). We discuss various parts but seldom the entire creature. By that, I mean the rapidly growing potential for “progressive” control of both Congress and the White House. This stems from frustration over differences between haves and have nots, between the protected and unprotected, combined with a fascination for government solutions to our society’s perceived ills.

Last week, I basically agreed with Ray’s analysis of US income and wealth disparity. It obviously exists. The question is what, if anything, can we do about it? I think this is an important conversation, not just between two people but throughout the entire nation. The answers will make a huge difference to both our society and our children’s futures. Not to mention our own futures.

And if the response from my readers is any indication, you are also passionate about this conversation. Last week’s letter generated many long, thoughtful reader comments. Clearly, it is not just Ray and I who are worried about the country’s future direction. I find that encouraging. A national conversation is precisely what we need in these serious times.

So let’s pick up where we left off last week.

Dear Ray,

…As you can see, I really agreed with almost all of Part 1of your essay. In Part 2, I begin to see things a little differently, especially your suggested actions.

I am going to quote somewhat liberally from Part 2, primarily some portions you put in bold thus highlighting those points. They…
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Baird: Broadcom Lowers Full-Year Revenue Outlook On High Channel Inventory

Courtesy of Benzinga.

Baird: Broadcom Lowers Full-Year Revenue Outlook On High Channel Inventory

Broadcom Inc (NASDAQ: AVGO) lowered its full-year revenue guidance, dispelling hopes of a recovery in the back half of the year, according to Baird.

The Analyst

Tristan Gerra maintained an Outperform rating on Broadcom and reduced the price target from $300 to $280.

The Thesis

Earlier in 2019, several semiconductor companies had guided to a recovery in the second half, but did not take into account “high and still-rising inventories,” Gerra said in a Friday note. (See his track record here.) 

Broadcom reported second-quarter non-GAAP EPS of $4.03 Thursday, almost meeting the consensus estimate of $4.04.

GAAP EPS came in at $1.64. The company reported non-GAAP revenue of $5.52 billion, representing a sequential decline of 4.7% and missing the consensus estimate of $5.68 billion.

Broadcom reduced its non-GAAP revenue guidance for 2019 from $24.5 billion to $22.5 billion.

This still reflects 8% year-on-year growth, Gerra said. Broadcom also raised the non-GAAP operating margin target from 51% to 52.5%, while reducing the GAAP operating margin target from 17.6% to 14.75%. 

The key reason for the lower full-year revenue guidance is channel inventory reductions, the analyst said, adding that it’s an industry-wide deleveraging that could continue for several years.

“Abundant red flags” have popped up on these trends since the turn of the year, according to Baird. 

Price Action

Broadcom shares were up 0.97% at $268.47 at the time of publication Monday. 

Related Links:

Flat Affect: Markets Tread Water With Fed, Other Central Bank Meetings Ahead

Huawei Acknowledges Potential $30B Revenue Shortfall

Latest Ratings for AVGO

Date Firm Action From To
Jun 2019 Maintains Outperform
Jun 2019 Maintains Buy
Jun 2019 Maintains Buy

View More Analyst Ratings for AVGO


View the Latest Analyst Ratings

Posted-In: Baird semiconductors Tristan GerraAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga





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Phil's Favorites

Mass protests protect Hong Kong's legal autonomy from China - for now

 

Picture via Pixabay

Mass protests protect Hong Kong's legal autonomy from China – for now

Courtesy of Kelly Chernin, Appalachian State University

Protesters in Hong Kong have achieved a major victory in their fight to protect their legal system from Chinese interference.

On June 15, in response to massive popular resistance, Chief Executive Carrie Lam announced she would suspend a vote on a proposed new law that would allow China to extradite suspects accused of certain c...



more from Ilene

Zero Hedge

The Rise Of Facial Recognition Should Scare Us All

Courtesy of ZeroHedge. View original post here.

Authored by Derrick Broze via The Mind Unleashed blog,

It seems the sleeping masses are finally waking to the privacy dangers posed by the rise of facial recognition technology.

In the last ten years, our world has been completely transformed thanks to the exponential growth of digital technology. Technological advances with computer processors and the internet have q...



more from Tyler

Insider Scoop

Baird: Broadcom Lowers Full-Year Revenue Outlook On High Channel Inventory

Courtesy of Benzinga.

Broadcom Inc (NASDAQ: AVGO) lowered its full-year revenue guidance, dispelling hopes of a recovery in the back half of the year, according to Baird.

The Analyst

Tristan Gerra maintained an Outperform rating on Broadcom and reduced the price target from $300 to $280.

The Thesis

Earlier ...



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Biotech

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

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

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...



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Kimble Charting Solutions

Gold Bugs Index Attempting 8-Year Breakout, Says Joe Friday

Courtesy of Chris Kimble.

Are Gold Bugs fans about to receive positive news they haven’t had in years? Possible!

This chart looks at the Gold Bugs Index (HUI) on a weekly basis over a couple of decades. The index has spent the majority of the past 20-year inside of rising channel (1).

The index hit the top of the channel in 2011, where it peaked and started creating a series of lower highs for the past 8-years, which has formed line (2).

The index is now kissing the underside of falling resistance and the underside the 2016/2017 lows at (3).

Joe Friday Just The Fa...



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Chart School

Silver Review

Courtesy of Read the Ticker.

The folks in the federal reserve will debase the US dollar currency to an extreme degree silver will finally lift off the floor.. 

Note: Readers should re watch the silver back screen news video, here.

The following video looks at price action and Wyckoff logic.

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Chart in video

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If gold moves, silver wi...

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Digital Currencies

Cryptos Are Crashing As Asia Opens, Bitcoin Back Below $8k

Courtesy of ZeroHedge. View original post here.

Having survived the day's bloodbath in US tech stocks, cryptos are crashing in the early Asian session, apparently playing catch-down to the day's de-risking.

While no catalyst is immediately evident, there are some reports noting 13 large global banks are preparing to launch digital versions of major global currencies next year, though we suspect this drop was more algorithmic that fundamental-driven.

...



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ValueWalk

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

By Jacob Wolinsky. Originally published at ValueWalk.

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

rawpixel / Pixabay

Friends and Fellow Investors:

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



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Members' Corner

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

Are you ready to retire?  

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

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

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



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

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

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



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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

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

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

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

Some other great content in this free eBook includes:

 

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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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