Archive for 2019

Domino #2: Chinese Bank With $105 BN In Assets On Verge Of Collapse

Courtesy of ZeroHedge. View original post here.

While the western world (and much of the eastern) has been preoccupied with predicting the consequences of Trump’s accelerating global trade/tech war, Beijing has had its hands full with avoiding a bank run in the aftermath of Baoshang Bank’s failure, scrambling to inject massive amounts of liquidity last week in the form of a 250 billion yuan net open market operation to thaw the interbank market which was on the verge of freezing, and sent overnight funding rates spiking and bond yields and NCD rates higher.

Unfortunately for the PBOC, Beijing is now racing against time to prevent a widespread panic after it opened the Pandora’s box when it seized Baoshang Bank two weeks ago, the first official bank failure in a odd replay of what happened with Bear Stearns back in 2008, when JPMorgan was gifted the historic bank for pennies on the dollar.

And with domino #1 down, the question turns to who is next, and will they be China’s Lehman.

This was the question we asked last Thursday, when we published a list of regional banks that have delayed publishing 2018 reports, the biggest red flag suggesting an upcoming bank solvency “event.”

One day later we may have gotten our answer, when the Bank of Jinzhou,  a city commercial bank in Liaoning Province, the second name in the list above, and with some $105 billion in assets, notably bigger than Baoshang, announced that its auditors Ernst & Young Hua Ming LLP and Ernst & Young had resigned, not long after the bank announced it would delay the publication of its annual reports.

For those confused, the delay of an annual report and the resignation of an auditor, means a bank failure is not only virtually certain but practically imminent.

As the bank – which first got in hot water in 2015 over its exposure to the scandal-ridden Hanergy Group - writes in a filing on the Hong Kong Stock Exchange, E&Y was first appointed as the auditors of the Bank at the last annual general meeting of the Bank held on 29 May 2018 to hold office until the conclusion of the next annual general meeting of the Bank. That never happened, because on 31 May 2019, out of the blue, the board and its audit committee…
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“They Are Prone To Cracking”: FAA Orders Boeing To Replace Wing Components On Hundreds Of 737s

Courtesy of ZeroHedge. View original post here.

As if trade war wasn’t enough for traders to worry about with futures reopening sharply lower after China’s government blamed the U.S. for the latest collapse in trade talks, it appears that Boeing is about to resume the position as yet another very popular 737 model suddenly finds itself in hot water.

Accord to Bloomberg, the wing components on as many as 312 Boeing 737s, including some of the grounded 737 Max, are prone to cracking and must be repaired within 10 days, aviation regulators said late Sunday.

With Boeing already under scrutiny for the 737 MAX fiasco, Boeing – which is suddenly finding a lot of faults that never existed before the company found itself under congressional scrutiny – informed the FAA that so-called “leading edge slat tracks” may not have been properly manufactured and pose a safety risk, the agency said. The parts allow the wing to expand to create more lift during takeoff and landing.

In response, the FAA plans to issue an order calling for operators of the planes worldwide to identify whether the deficient parts were installed and to replace them. A complete failure wouldn’t lead to a loss of the aircraft, the FAA – which was humiliated for siding with Boeing and was initially against the grounding of the 737 MAX only to flip flop when the rest of the world boycotted the troubled airliner – said, but “could cause damage during flight.”

Because “damage during flight” of a key component rarely if ever leads to a “loss of the aircraft”?

As Boeing noted in the statement, it has notified operators of the planes about the needed repairs and is sending replacement parts to help minimize the time aircraft are out of service, the company said in a statement.

Boeing identified 148 parts made by a subcontractor that are affected. The parts may be on a total of 179 737 Max aircraft and 133 737 NG planes worldwide, including 33 Max and 32 NG aircraft in the U.S., the FAA said. The NG, or Next Generation, 737s are a predecessor to the Max family (which by that logic must be the next, next generation).

So many 737MAX… pic.twitter.com/uG5OMusg8l

— Jeremy Dwyer-Lindgren (@photoJDL) June 2, 2019

This latest quality control fiasco…
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NIMBY – California’s Virtue Signaling Democrats Are Total Hypocrites

Courtesy of ZeroHedge. View original post here.

Despite California’s reputation as a ‘sanctuary state’ that promises to welcome illegal immigrants with open arms and taxpayer-funded handouts, rich Democrats in the Golden State are afflicted with a severe case of NIMBY-ism, according to the Washington Examiner‘s editorial board. 

And while tens of thousands of immigrants are answering the call amid a crisis-level housing shortage, these virtue-signaling Democrats refuse to commit state resources towards accomodating the influx of new residents

Via the Washington Examiner Editorial Board

NIMBY California Democrats

California’s increasingly left-wing residents want open borders, and they want their state to give handouts to immigrants, legal and illegal. But they don’t want any building to house this low-income riffraff anywhere near their expensive homes.

California Democrats’ NIMBY-ism, or “not in my backyard,” is a perfect case study in modern left-wing hypocrisy. Gestures and virtue signaling about tolerance and openness? They’re all for those. But don’t suggest opening the gates to their communities.

California’s housing shortage has reached crisis levels. Home prices are more than twice the national average. The state has the nation’s second-lowest ratio of homes to residents.

Lawmakers in Sacramento considered Senate Bill 50, which would have forced local governments to permit high-density housing in specific areas. Left-wingers who actually, rather than just rhetorically, welcome all comers would pass such a bill. But California Democrats, of course, did not. Instead they passed Senate Bill 451, a tax credit for rich people who restore historic buildings.

SB 451 would grant a 20% tax credit for the restoration of qualifying buildings and a 25% tax credit for the rehabilitation of those historic houses on federal surplus property, include affordable housing, are in a designated census tract or military base, or is a transit-oriented development. Yes, there is some lip service there to affordable housing, but that’s all it is. Weighing the marginal benefits, the owners of low-density historic properties will be happy to renovate at one-fifth taxpayers’ expense and then charge high rents.

From the Spanish colonial and Georgian revivalist structures across Los Angeles County and the Victorian to beaux-arts in the Bay Area, California has plenty of architectural gems worthy of preservation. But wealthy owners of such properties have every reason to maintain and preserve them without a handout. Subsidies to preserve low-density housing amid a severe housing shortage is nuts, or mercenary, or
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Morgan Stanley Sees Recession In Three Quarters If Trade War Escalates Further

Courtesy of ZeroHedge. View original post here.

As we await for Goldman to throw in the towel and admit its forecast of one rate hike in 2020 (and no cuts in 2019), was overly… optimistic, on Friday afternoon – with US interest rates plummeting – Barclays had a “hold my beer” moment, and just hours after JPMorgan changed its forecast as a result of an economic slowdown resulting from the escalating trade war, now expects 2 rate cuts in 2019, Barclays has one-upped the largest US bank, and revised its FOMC forecast, now expecting 3 rate cuts in 2019.

At the same time, while no bank has made a recession its base case yet, on Friday JPMorgan also updated its recession model, noting that based on the yield-curve component of its recession forecast, the probability of a recession in one year is now 60%, the highest it has been since the global financial crisis.

Now, while some may debate whether a curve inversion begins the clock on an upcoming recession, one thing is undisputible: while many analysts will caution that it is the Fed’s rate hikes that ultimately catalyze the next recession and that every Fed tightening ends with a financial “event”, the truth is that there is one step missing from this analysis, and it may come as a surprise to many that the last three recessions all took place with 3 months of the first rate cut after a hiking cycle!

In effect, what both JPM and Barclays are saying, in a politely roundabout way to avoid scaring their clients, is that the US economy is headed for a recession which incidentally is something the market has been pricing in for a while, with rates traders now anticipating at least one rate cut by the end of 2019, and three by the end of 2020.

One bank that did not lack the balls to call a spade a spade, is Morgan Stanley which over the past 6 months has emerged as Wall Street’s most bearish bank, largely thanks to the work of chief equity strategist, Michael Wilson who last week warned that the yield curve inversion is actually far more serious than apologists claim, and that as a result “volatility is about to rise a lot.”

Fast forward to today, when Wilson’s warning…
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Futures, Yuan Tumble In Early Asian Trading

Courtesy of ZeroHedge. View original post here.

Following another weekend highlighted by no progress in trade-talks and further recriminations (from China this time, blaming Trump for the latest collapse in discussions), equity futures and yuan are opening notably lower…

Bloomberg reports that Beijing released a white paper on Sunday saying the escalating trade war between the world’s two largest economies hasn’t “made America great again” — appropriating Trump’s 2016 campaign slogan. The paper instead contends that the trade actions have done serious harm to the U.S. economy by increasing production costs, causing prices hikes, damaging growth and people’s livelihoods and creating barriers to U.S. exports to China. In short, Trump’s tariffs aren’t helping, China concluded.

“It is foreseeable that the latest U.S. tariff hikes on China, far from resolving issues, will only make things worse for all sides,” according to the white paper.

Additionally, as Bloomberg notes, President Trump opened another potential front in his trade war on Friday, terminating India’s designation as a developing nation and thereby eliminating an exception that allowed the country to export nearly 2,000 products to the U.S. duty-free.

“I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets,” Trump said in a proclamation.

“Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019.”

S&P futures are testing the trade-deal hope lows…

Dow futures down around 200 points…

and Yuan is giving back late-Friday’s bounce gains…





These Are “The Good Ol’ Days”…

Courtesy of ZeroHedge. View original post here.

Authored by Chris Martenson via PeakProsperity.com,

At tipping points like now, the steps we take in the present determine our future…

Bill was 48 when his wife stunned him with a request for divorce.  Right up until that moment, he’d thought everything was fine.

He’d been pouring all his energy into his work to provide a very comfortable life for his wife and 2 children.  But she was unhappy and fell out of love while Bill wasn’t paying attention to matters at home.  He’d taken her for granted and forgot to be present for the most important people in his life, and to be grateful in the moment.

After she was gone, Bill was filled with emptiness and regret. All he wanted was to get her back, but it was too late.  The damage had been done.  What he had before was now in the past.

This parable of Bill’s loss serves as a reminder to all of us that, with all that’s awry in the world, it’s all too easy for those of us who are paying attention to gripe about everything that’s going wrong.

Yes, there are many trends that are headed on the wrong trajectory.  But this tumultuous period of history also affords each of us the fantastic opportunity to contribute positively to the new future that’s on the way.

Please take this article an invitation to be grateful for what you have, and to notice just how wonderful our current lifestyle truly is.  It won’t remain this way, as I’ll expound on in a moment.

So take the time to be grateful, hug those that you love, and feed the parts of your life that nourish you most.  Maintaining perspective in times such as these is really important.

The truth is that we happen to be alive at a time of peak abundance and technological miracles.  It’s never been easier or more comfortable to be a human. On nearly every dimension — longevity, dependable access to food, quality of shelter, personal safety, leisure time, intellectual pursuits, technological advancements — no previous generation of humans have enjoyed the excesses and luxuries that we currently do.

What are you going to do with that good fortune while it lasts?

The ‘Good Old Days’

Once I truly understood the role of net energy in delivering the miraculous…
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Lies, Lies, and More Lies: EU Style

Courtesy of ZeroHedge. View original post here.

Authored by Mike Shedlock via MishTalk,

Brexit chief negotiator, Michel Barnier, is boxing with the wind, landing no punches with wild blasts at the UK.

Looking for humorous lies of the day? I can help.

Please consider EU Chief Negotiator Blames Brexit on 'Nostalgia for the Past'.

  1. In an interview with the New York Review of Books, Barnier identified “typically British” causes for the vote to leave, saying one was “the hope for a return to a powerful global Britain, nostalgia for the past”.

  2. He also warned Tory leadership hopefuls that Theresa May’s withdrawal agreement was the only option for leaving the EU.

  3. Speaking about anti-EU sentiment across the continent, he said: “People on the ground feel lost, that they have been abandoned; they feel their cultural identity is in danger … we have to respect these local identities. “The more the economy is global, the more people need to be reassured that their roots will be respected.”

  4. “If the UK wants to leave in an orderly manner, this treaty is the only option,” Barnier said. “If the choice is to leave without a deal – fine. If the choice is to stay in the EU – also fine.”

  5. He also repeated negotiations on Britain’s future relationship with the EU could start immediately once the agreement was signed. “We are ready, we are waiting,” he said.

  6. The two-times EU commissioner and former French foreign minister, is increasingly seen as the next president of European commission. “That’s not a question for today,” Barnier said.

  7. Talking about the EU, he stressed the importance of Europe speaking with one voice to increase its clout in the world: “The fact that we speak with one voice on issues of trade or competition makes us a global actor. Otherwise, Europe would turn into a museum.”

  8. Speaking of his political heritage on the French centre right, Barnier recalled that Charles de Gaulle had once said merging all the peoples of Europe would be like making a purée de marrons (chestnut puree).


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The UK Dominates The Most Damaging Tax Havens

Courtesy of ZeroHedge. View original post here.

New analysis by the Tax Justice Network has revealed the UK to be biggest enabler of corporate tax dodging in the world.

As Statista's infographic below shows, British Overseas Territories and Crown Dependencies dominate the list of places allowing multinationals to avoid paying tax on their profits.

Infographic: The UK dominates the most damaging tax havens | Statista

You will find more infographics at Statista

In total, this makes the UK responsible for about one third of global tax avoidance risk – over four times more than the second biggest contributor, the Netherlands.





Trash Wars Part Deux: Philippines Now Shipping Barge Of Illegal Trash Back To Canada

Courtesy of ZeroHedge. View original post here.

While the world has been focused on the ongoing U.S./China (and now U.S./Mexico) trade war, the final chapter in an ongoing, yet little covered garbage war between the Philippines and Canada looks to have begun. 

A shipment of trash that has been causing strain between the two countries is finally heading back to Canada, 6 years after it arrived in the Philippines, according to Gulf News

Wilma Eisma, Subic Bay Metropolitan Authority (SBMA) chair said: “Finally, the containers of garbage transported from Canada and stored at the Subic Bay Freeport for several years now have been pulled out as of today, May 31, 2019,” 

69 total containers filled with trash were loaded onto the MV Bavaria, pictured below, and sent back to North America. The shipment was commissioned by Canada to take the cargo back to its point of origin. 

“This is one proud moment for all Filipinos,” Eisma continued.

Philippine Foreign Secretary Teodoro Locsin Jr said: “The garbage is gone, good riddance. I am not interested in what the world thinks … Canada pulled all stops on this: seamless cooperation.”

Senator Panfilo Lacson said: “…we will await further developments on future garbage return expeditions to Australia, South Korea, Hong Kong and God knows where else.”

President Rodrigo Duterte had previously prohibited Philippine officials from travelling to Canada as a result of the disagreement over the trash. He had also downgraded the country's diplomatic presence in Canada. When the trash left port for Canada, Locsin withdrew an order for the recall of the Filipino ambassador and consuls to Canada.

“To our recalled posts, get your flights back. Thanks and sorry for the trouble you went through to drive home a point,” Locsin said.

Recall, earlier this month we highlighted the ongoing war between Duterte and Canada.

Canada had previously agreed to take the trash back, but was slow in making arrangements for its return. Duterte threatened to leave the trash in Canadian waters if Ottawa refused to take it back, according to Salvador Panelo, spokesman for the President.

Quoted by RT, Panelo had said Duterte was “upset” by Ottawa’s “inordinate delay” in shipping the garbage back after they missed a May…
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Capitulation: Equity Outflows In The Past 6 Months Are Now The Biggest Ever

Courtesy of ZeroHedge. View original post here.

For much of 2019, the big conundrum facing investors has been justifying the unprecedented divergence between institutional sentiment as represents by historic outflows from equities on one hand, and the market's honey badger-like ascent to new record highs in 2019 on the other, ignoring the continued redemptions, and propelled higher on the back of record stock buybacks, recurring waves of rolling short squeezes, and dealer gamma positioning.

To some, such as JPMorgan's Marko Kolanovic, this divergence was to be glossed over as it was only a matter of time before the market skeptics were forced to throw in the towel on the S&P's way to 3,000 (which Kolanovic predicted in February would be hit by mid-May… it's now June, and the S&P is back down to 2750).

The JPMorgan strategist's core argument is ignore what flows are telling you and just follow the price. And yet, a funny thing happened on the way to S&P 3,000: Trump first doubled down on trade war with China… then he escalated the trade war with Mexico,  "weaponizing" tariffs as a means to achieve his border policyand then – last week – he completed the trifecta when he also dragged India to the verge of the global trade war.

As a result, it now appears that all those screaming that "price is always right" were wrong, as was the overall market, and all those bear who found solace in the ongoing found outflows, were right all along.

Which is a problem for the market, because with the S&P having just suffered its third worst month since the US AAA- rating downgrade in August 2011, and its worst May in decades, all those who were already trimming their exposure will now double down, sending their redemption requests into overdrive.

But before we get there, first a recap of where we are now. 

According to Deutsche Bank, looking at the latest EPFT data, last week the safety bid in flows continued – as one would predict – with large outflows from equity (-$10bn) and HY (-$3bn) funds, but inflows to other bond (+$10bn) and money-market funds (+$12.9bn).

And here,…
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Phil's Favorites

Gulf of Oman attacks: how merchant ships can keep safe in dangerous waters

 

Picture via Pixabay

Gulf of Oman attacks: how merchant ships can keep safe in dangerous waters

Courtesy of Robert McCabe, Coventry University

The latest attacks on two oil tankers in the Gulf of Oman have once again highlighted the vulnerability of merchant ships crossing high risk areas. Both the Front Altair and the Kokuka Courageous sustained significant damage to their hulls in attacks on June 13 that led the the evacuation of the crew. This latest attack mirrors an incident from May, where four vessels, including two Saudi oil tanker...



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Kimble Charting Solutions

Consumer Staple and Yields about to send key message to stocks?

Courtesy of Chris Kimble.

Could the Staples sector and the yield on the 10-year note be on the verge of sending an important message to the stock and bond markets? It sure looks that way.

Staples ETF (XLP) is currently attempting to break above the January 2018 highs at (1). If it does, it would be a breakout of the trading range that has been in play for the past 18-months, as it looks to have created a double bottom last year.

The yield on the 10-year note (TNX)  has declined nearly 35%, since pea...



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Insider Scoop

30 Stocks Moving In Tuesday's Pre-Market Session

Courtesy of Benzinga.

Gainers
  • Moneygram International Inc (NASDAQ: MGI) rose 128.3% to $3.31 in pre-market trading after the company reported a strategic partnership with Ripple. Blockchain payments firm Ripple has made an investment in MoneyGram and will also allow the group to use its XRP cryptocurrency as part of the cross-border payments process. Ripple made an initial investment of $30 million in the money transfer company, made up of common stock and a warrant to purchase common stock. Ripple purchased newly-issued common stock including the shares underlying the warrant from MoneyGram at $4.10 per share.
  • Blue Apron Holdings, Inc....


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Zero Hedge

The Road To Perdition - 10 Cautionary Tenets About US Air Power

Courtesy of ZeroHedge. View original post here.

Authored by William Astore via TomDispatch.com,

The American Cult of Bombing and Endless War

From Syria to Yemen in the Middle East, Libya to Somalia in Africa, Afghanistan to Pakistan in South Asia, an American aerial curtain has descended across a huge swath of the planet.

Its stated purpose: combatting terrorism.

Its primary method: constant surveillance and bombing -- and yet more bombing.

...

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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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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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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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