Archive for 2019

China Is Playing The Long Game, Says Charles Gave

Courtesy of ZeroHedge. View original post here.

Via Financial Sense,

“There’s an old saying, a wise man points at the moon and the idiot looks at the finger,” says Charles Gave, founding partner and chairman of Gavekal Research.

Tariffs, soybeans, and rare earth metals steal the headlines when it comes to US-China trade tensions, but these are just tools or weapons of warfare in a much larger battle over money and sovereignty, and China is playing the long game, Gave told Financial Sense in a recent interview on FS Insider (see China Preparing for a Monetary War, says Charles Gave).

The US dollar serves as the world’s reserve currency and is used for pricing and trade by a majority of nations around the globe. However, Americans have decided to weaponize the dollar, Gave stated, making any transactions between two nations susceptible to US action or scrutiny.

This is a “big loss of sovereignty” by other nations, Gave said, and China is taking the lead in forming an “alternative trading currency to the dollar.”

This is a real fight, he told listeners, and China is playing the long game.

“The fight that you hear about semiconductors and all that isn’t so important – the real fight is to know who will have the imperial money in Asia. Will the Chinese be able to buy their oil in renminbi from Russia, for example, and not priced in dollars? That will change the geopolitics of oil big time.”

Gave said China is also creating a new IMF, a new World Bank, and opened a futures market for oil in Shanghai, which now has the 3rd largest trading volume in the world, allowing people to buy oil in renminbi instead of the US dollar.

This is basically “a blow to the sovereignty of the US dollar as a reserve currency,” he said.

In terms of a trade deal, if one were to occur, it’ll be a temporary victory in a power struggle for years to come.

Did The Tech Bubble Just Pop: Investors Balk At SoftBank’s Attempt To Raise $100 Billion

Courtesy of ZeroHedge. View original post here.

Something is not quite right with SoftBank.

Last week, we reported that in a surprising twist, Masayoshi Son's SoftBank, which in early May was reportedly considering a $100 billion IPO for its Vision Fund, had instead changed track and was now seeking to take out a $4 billion margin loan collateralized with its stake in Uber, and to a lesser extent, Guardiant Health and Slack (which itself has yet to go public).

This prompted us to ask: "just how much cash does the fund really need, and what, exactly, is going on behind Softbank's closed doors?"

The question got a renewed urgency on Sunday, when the WSJ reported that SoftBank's attempt to raise a second mega fund has been met with "a chilly reception from some of the world’s biggest money managers", signaling that as the WSJ put it politely, "a crucial initiative for the firm faces significant hurdles." We would put it less politely: the fact that the company behind many of the largest VC investments in the past decade is suddenly encountering the proverbial "closed window" may be the surest sign yet – more than even the Uber and Lyft IPO flops – that the second tech bubble of the 21st century has now popped.

According to the report, the Japanese tech giant made preliminary approaches to some of the world’s largest investors as it seeks to raise $100 billion for another fund dedicated to tech startups, but was rebuffed after several of these prominent investors reportedly planned to make limited or no contributions. These include Canada Pension Plan Investment Board and Saudi Arabia’s Public Investment Fund, whose $45 billion check made it the largest backer of SoftBank’s first tech fund, known as the Vision Fund (Saudi Arabia is having its own problems with oil once again sliding, putting the country's budget in jeopardy and forcing Riyadh to buckle down on foreign investments).

There is another reason why SoftBank, seen by many as nothing more than a venture fund-of-funds, may be having capital raising problems: why give it money in the first place? Indeed, many of the biggest and most sophisticated funds already have existing and programs to invest directly in late-stage startups and aren’t interested in paying…
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Watch: “First Large Group” From Africa Crosses Rio Grande Into US

Courtesy of ZeroHedge. View original post here.

Authored by Kyle Olson via,

A group of illegals from Angola, Cameroon and Congo waded across the Rio Grande River and into the United States, video from Customs and Border Protection shows.

The video shows male and female adults walking through the water and into Texas, several with children on their shoulders.

The attempted invasion occurred on Thursday, according to the agency.

The river – or “natural barrier” – was so shallow, the surface didn’t reach the adults’ waists.

The White House tweeted additional video:

According to CBP, it’s the first large group from Africa to try to breach the U.S. border via Mexico.

“Large groups present a unique challenge for the men and women of the Del Rio Sector,” Chief Raul Ortiz said in a news release.

“This large group from Africa further demonstrates the complexity and severity of the border security and humanitarian crisis at our Southwest border.”

“This is the first large group apprehended in the Del Rio Sector and the first large group of people from Africa – including nationals from Angola, Cameroon and Congo – apprehended on the Southwest border this year,” according to CBP.

There were 116 in the group, the agency says.

Peter Schiff: Bond Buyers Are Right About Recession But They’re Making The Wrong Bet

Courtesy of ZeroHedge. View original post here.


Bond prices have spiked and yields have fallen in the last several weeks. Investors are beginning to see a recession on the horizon and they are pouring into Treasurys believing they will provide a safe haven. In his most recent podcast, Peter said bond buyers are right about the looming recession, but they are making the wrong bet.

In a podcast earlier this month, Peter Schiff called the end of the bear market rally. He reasoned that the rally was built on expectations that the Federal Reserve was shifting toward an easing cycle. When Jerome Powell came out and threw cold water on that, Peter figured that would be the end of the market rally. As he put it, “What the Fed giveth by being more dovish than the markets expected, the Fed had finally taken away by being more hawkish.”

In that podcast, Peter said he didn’t believe that the Fed was nearly as hawkish as it was projecting, nevertheless, it gave that impression.

Fast-forward to today and the S&P 500 and the Dow Jones are both down about 5.5% from their early-May highs.

I still think we are in a bear market. I do not believe that the rally that we had following the Fed’s pivot constituted a brand new bull market that is now already probably over and this is a new bear market. I think this is the same bear market.”

Peter said it did surprise him a bit that the bear market rally went as high as it did. But he thinks things are beginning to turn back and that we will eventually revisit the lows we saw early this year. That will prompt the Fed to once again come to the markets’ rescue. In fact, the markets are already pricing in rate cuts even though Powell and company took them off the table.

The question is how long with the central bank wait?

If the Fed waits until we’re officially in a recession, well, then they’re just going to go straight to

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College Admission Scandal CFO Pleads Guilty, Agrees To Cooperate With Prosecutors

Courtesy of ZeroHedge. View original post here.

The body count of participants in the largest college admission scandal of all time continues to pile up.

The chief financial officer of mastermind William "Rick" Singer's firm has now pleaded guilty to racketeering charges and is cooperating with federal prosecutors, according to Bloomberg. Steven Masera, 69, assisted Singer in laundering fees and bribes that parents paid to fix their children’s college entrance exams and designate non-athletes as recruited athletes to get them preferential treatment. The cash was funneled through a sham charity called the Key Worldwide Foundation.

Masera was in charge of billing the parents, many of whose children were illegitimately admitted to schools like Georgetown, Yale, Stanford and USC. The government claims that Masera helped launder between $9.5 million and $25 million. He was also responsible for sending actress Lori Loughlin and her husband an invoice in 2017 seeking a $200,000 payment just one week after one of their daughters was accepted to USC.

The invoice read: "Thank you for your pledge to The Key Worldwide Foundation. Your pledge is now due. … Our receipt letter will go out to you upon full payment."

For his cooperation, prosecutors have agreed to recommend that Masera serve the "low end" of 57 to 71 months in prison. The US has agreed to give him immunity from prosecution for information he provided in an April 10 letter in hopes of leniency in sentencing. It is unclear from the agreement with prosecutors what information Masera may have for prosecutors that they don’t already know or that may lead to more arrests.

He is the latest to plead guilty in the admissions scandal, joining 4 coaches and 13 parents. Last month we reported that former USC soccer coach Laura Janke was cooperating with prosecutors after pleading guilty. 

Janke's guilty plea stood in contrast with our prior update on the scandal, where we noted that some parents had decided to "punch back" and vigorously defend themselves in court. “I expect a lot more guilty pleas,” Diane Ferrone, a criminal defense lawyer in New York who isn’t involved in the case, told Bloomberg last month. Looks like she was right.  

Several weeks before…
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Did The Government Just Test The Internet Kill Switch?

Courtesy of ZeroHedge. View original post here.

"'I felt a great disturbance in the farce, as if millions of voices suddenly cried out in terror and were suddenly silenced."

At 3pmET, it appears that Google Cloud (affecting Gmail, YouTube, SnapChat, Instagram, and Facebook among others) mysteriously (and almost unprecedently) went offline.

Google Cloud Status Dashboard

This page provides status information on the services that are part of Google Cloud Platform. Check back here to view the current status of the services listed below. If you are experiencing an issue not listed here, please contact Support. Learn more about what's posted on the dashboard in this FAQ. For additional information on these services, please visit

Google Compute Engine Incident #19003 We are experiencing a multi-region issue with Google Compute Engine

Incident began at 2019-06-02 12:25 (all times are US/Pacific).

Jun 02, 20 12:25 We are investigating an issue with Google Compute Engine. We will provide more information by Sunday, 2019-06-02 12:45 US/Pacific.

One Google insider explains (via YCombinator):

I work on Google Cloud (but disclaimer, I'm on vacation and so not much use to you!).

We're having what appears to be a serious networking outage. It's disrupting everything, including unfortunately the tooling we usually use to communicate across the company about outages.

There are backup plans, of course, but I wanted to at least come here to say: you're not crazy, nothing is lost (to those concerns downthread), but there is serious packet loss at the least. You'll have to wait for someone actually involved in the incident to say

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“We’re In A New Game”: Wall Street Luminaries Warn Trade War Could Drag On For Decades

Courtesy of ZeroHedge. View original post here.

Even before President Trump stunned Wall Street by announcing via Tweet that he planned to impose tariffs on Mexican goods next month (proving yet again that thousands of traders are just one presidential tweet away from ruin), Wall Street strategists had been coming around to the possibility that the US-China trade war likely won't be resolved quickly. As such, many have warned their clients that they should expect a "long-term trade war" and set their positions accordingly.


Stephen Jens

Now, a handful of Wall Street luminaries have taken that assessment one step further, telling Bloomberg that they are anticipating a trade war that could last for years, if not decades.

Stephen Jen, a former economist at the International Monetary Fund and Morgan Stanley who now runs Eurizon SLJ Capital, said the trade battle between China and the US will probably endure for the rest of his career.

"This contest will be a drawn-out process that will likely last our careers…we as investors and analysts need to pace ourselves, and try to not just follow the latest news. We need to understand the economics and the cultural differences."

It's tempting to dismiss Jen's statement as an example of extreme hyperbole, but the fact remains that Jens isn't the only one who believes President Trump has ushered in a paradigm shift in US-China economic relations.

Even if Trump and Xi do manage to hammer out a deal in Osaka (an outcome that's looking less likely by the day, despite Mike Pence's Friday morning jawboning), the two countries will likely continue to battle over issues like technology theft and forced transfers for the foreseeable future, Mark Mobius said. Trump and his coterie of China hawks have opened Pandora's Box, and there's no going back.

"We’re in a new game – Trump has really opened this can of worms," the emerging markets veteran, who left Templeton Asset Management last year to co-found Mobius Capital Partners, said in an interview with Bloomberg Television. He flagged India, Vietnam and Bangladesh as potential beneficiaries as the conflict spurs manufacturers to diversify away from China.

After returning…
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Courtesy of ZeroHedge. View original post here.

Authored by Sven Henrich via,

Let’s call a spade a spade: The month of May was a month of collapse.

Collapse in bullish narratives, collapse in trade talks, collapse in yields, collapse in technical structures, collapse in rate expectations, collapse in growth projections and yes, collapse in stocks. While the price damage to equities for now seems reflective of a run of the mill correction the larger macro context is screaming danger. Danger that this long business cycle is turning or perhaps has already has turned.

Once again technical signals were ignored, people got bullish at the top, don’t sell in May was the mantra:


A massive outside reversal month following negative divergences, weakening participation and leadership with price having once been driven by artificial impetus as opposed to organic growth. A dovish Fed, buybacks and political jawboning.

But the political jawboning came to a sudden end as optimism took a cold shower when the entire hope narrative collapsed under its own fictitious weight. China trade deal discussions collapsed and here come Mexico tariffs.

Overly optimistic growth estimates have to contend with a bond market that’s yelling recession risk from the rooftops. A Fed now being bullied into rate cuts by a market that demands them more urgently by the day. Three rates cuts being priced in now by the end of the year.

Not long ago the prospect of three rate cuts coming would have been greeted with feverish buying by the TINA crowd, but cycle theory tells you that rate cuts at the end of a cycle are not a sign of strength, they never were, but signs that the economy is heading toward recession:

But none of this should be a surprise, the bond market has signaled this since last year when the 10 year hit its multi decade long trend line and rejected:

What caused everyone…
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China Used This Exact Phrase Ahead Of Their War With India And Vietnam

Courtesy of ZeroHedge. View original post here.

Submitted by Eric Peters, CIO of One River Asset Management

“Don’t say we didn’t warn you!” declared the China People’s Daily. And historians rushed to remind us that Beijing used the phrase in advance of their 1962 border war with India and 1979 war with Vietnam.

China assembled an “unreliable entities list” for retaliation against foreign companies, individuals and organizations that “do not follow market rules, violate the spirit of contracts, blockade and stop supplying Chinese companies for noncommercial reasons, and seriously damage the legitimate rights and interests of Chinese companies.”

Pence responded by warning Beijing we could double tariffs. “Engaging in activities that run afoul of US sanctions can result in severe consequences, including a loss of access to the US financial system,” warned the US Treasury’s undersecretary for terrorism – you see, the Europeans are building systems to circumvent American sanctions. Today, those sanctions are directed at Iran, Russia, North Korea, Venezuela, but tomorrow they may be directed at China.

Naturally, the Europeans threatened only themselves – 1,500-year habits are hard to break. Germany and France fought bitterly over who would become European Commission President. Brussels warned Rome to honor its obligation to contain its growing debt. Italy’s Salvini threatened to launch a parallel currency – step #1 in the process to abandon the euro and default.

And out of nowhere, Trump warned Mexico to stop the immigrant flow in 10-days or face tariffs. Global CEOs who were rushing to rearchitect their China supply chains, digested the risk that these investments could be instantly devastated by some future tariff – imposed to achieve Americas geopolitical objectives – and they prepared to warn shareholders they’re putting new investment on hold. As the US treasury yield curve inverted, with 3mth bills at 2.34% and 10yrs at 2.12%. Which of course, is one of the most reliable warnings of looming recession.


“Economists generally use tax frameworks to evaluate the trade war,” said my favorite strategist. “They calculate a -0.4% hit to GDP, which is not such a big deal. But they’re using the wrong tool.” Tax frameworks treat tariffs as a tax. They then model how a nation’s currency adjusts to the tax, how corporate profit margins shrink to absorb the…
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‘Lunch With Warren’ Charity Auction Smashes Previous Record With $4.6 Million Winning Bid

Courtesy of ZeroHedge. View original post here.

The auction for the annual "Power Lunch with Warren" – where bidders compete to win a 45-minute lunch with the Oracle of Omaha – took place Friday night. And on Saturday, its organizers confirmed that the winning bidder – who has opted to remain anonymous, at least for now – will shell out $4,567,888 for the opportunity.


Not only is that a new record sum for the annual charity auction, but it surpassed the previous record by $1 million – or roughly 30%. Bidding starts at $25,000, and the auction has only finished below $2 million once since 2010, according to the AP.

Buffett's annual "Power Lunch with Warren" auction benefits an organization called Glide, which offers free meals, health care and other services to homeless and low-income individuals in San Francisco, and is an organization that Buffett's late wife used to support. It has brought it more than $30 million in donations over decades, as bids to the event have risen from just thousands of dollars to, now, millions.  Gilde helps provide meals to the homeless in San Francisco, which are then ostensibly defecated on the streets of the city, as we observed in "Behold, The Shit Map".

Glide Chief Executive Officer Karen Hanrahan told Bloomberg: “A lot of the trend lines around homelessness, poverty and inequality are getting worse. The lines outside of our doors keep getting longer. The funds that we’ve raised with Warren Buffett have allowed us to be just responsive to the community and responsive to the needs of the city.”

* * *

The lunch will be held at Smith & Wollensky, Buffett's favorite steakhouse in New York City. The winner can bring up to seven friends (split eight ways, that $4.6 million price tag comes to roughly $575,000 a head). 

However, as WSJ's Jason Gay argues, if you've committed to shelling out all of this money, it might make more sense to go alone. After all, is it really worth taking the risk that one of you idiot friends might monopolize the conversation and waste all of your precious time with Buffett?…
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Zero Hedge

Has E.T. Gone Home?

Courtesy of ZeroHedge. View original post here.

UFO sightings have been making headlines again lately, notably with The New York Times running an interesting article about several U.S. Navy fighter pilots encountering mysterious objects near the southeastern coast of the United States.

That high-profile story remains unexplained and so do plenty of other UFO sightings reported by members of the public every year like strange lights crossing the night sky or orange disks hovering in the distance.

However, as Sta...

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Phil's Favorites

Food waste: using sustainable innovation to cut down what we throw away


Food waste: using sustainable innovation to cut down what we throw away


Courtesy of Mehrnaz Tajmir, University of Bath and Baris Yalabik, University of Bath

Our appetite for food is a serious problem. The huge amount of energy, land and water used to fill our supermarket shelves mean that modern overproduction and excessive consumerism are rapidly depleting resources and damaging the planet.

Yet still, more than one-third of the world’s food...

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Kimble Charting Solutions

Doc Copper Is Pushing Higher Off 18-Year Rising Support, Says Joe Friday

Courtesy of Chris Kimble.

Gold & Silver have been hot of late! Is Doc Copper about to do the same? Possible says Joe Friday.

This chart looks at Copper Futures over the past 27-years. Copper has spent the majority of that time inside of rising channel (1).

The decline over the past year has Doc Copper testing 18-year rising support and lows of the past 8-months at (2).

Joe Friday Just The Facts Ma’am- Copper is attempting to rally off of long-term support at (3). As Copper is testing the bottom of this support channel, smart money hedgers are making a bi...

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Insider Scoop

Benzinga's Top Upgrades, Downgrades For July 19, 2019

Courtesy of Benzinga.

  • For American International Group Inc (NYSE: AIG), William Blair upgraded the previous rating of Market Perform to the current rating Outperform. American International Gr earned $1.58 in the first quarter, compared to $1.04 in the year-ago quarter. American International Gr's market-cap stands at $48,358,299,270. At the moment, the stock has a 52-week-high of $56.49 and a 52-week-low of $36.16. American International Gr c... more from Insider

Chart School

RTT Plus Chart Book (Sneak Peak)

Courtesy of Read the Ticker.

The magic of support and resistance channel lines and how they direct price. Here are some chart disclosed to members via the RTT Plus service. All charts are a few weeks old. 

XAU bound by parallel channel lines.

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Newmont Mining support from Gann Angles.

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US Dollar index (DXY) dominate cycle ...

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Digital Currencies

Cryptos Suddenly Panic-Bid, Bitcoin Back Above $10k

Courtesy of ZeroHedge. View original post here.

Following further selling pressure overnight, someone (or more than one) has decided to buy-the-dip in cryptos this morning, sending Bitcoin (and most of the altcoins) soaring...

A sea of green...

Source: Coin360

Bitcoin surged back above $10,000...

Ethereum bounced off suppo...

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DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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


DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...

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Professor Shubha Ghosh On The Current State Of Gene Editing


Professor Shubha Ghosh On The Current State Of Gene Editing

Courtesy of Jacob Wolinsky, ValueWalk

ValueWalk’s Q&A session with Professor Shubha Ghosh, a professor of law and the director of the Syracuse Intellectual Property Law Institute. In this interview, Professor Ghosh discusses his background, the Human Genome Project, the current state of gene editing, 3D printing for organ operations, and gene editing regulation.


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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


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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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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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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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>