Author Archive for Zero Hedge

“It Feels Eerily Like 2007″ – DoubleLine’s Gundlach Blasts Fed’s “Unprecedented Reversal”

Courtesy of Zero Hedge

As the whipsaw in stocks and the dollar sank in today – while the bond market remains unimpressed by the machine's liftathon today – market participants are still shaking their heads at what just happened.

One of the more outspoken of those market participants is DoubleLine CEO Jeffrey Gundlach who took to Twitter this morning to express his disdain…

Three months ago the Fed predicted totally different policy than where they are now. How can they predict 2020 policy with a straight face?

— Jeffrey Gundlach (@TruthGundlach) March 21, 2019


But he was not done, in a brief interview with Reuters after the close, Gundlach unleashed on Jay Powell and rest of the FOMC warning that their sudden cautious stance on raising interest rates could backfire by creating uncertainty in the economy…

“This U-Turn – on nothing fundamentally changing – is unprecedented,” Gundlach said in a telephone interview.

“Three months ago, we were on ‘autopilot’ with the balance sheet – and now the bond market is priced for a rate cut this year. The reversal in their stance is stunning.”

Gundlach, the new "Bond King" now that Bill Gross has 'retired', oversees more than $123 billion in assets (we offer that tidbit to suggest he is worth listenig to), said he feels the Fed’s massive shift in such a short period on quantitative tightening could hurt the U.S. central bank’s credibility.

“They aren’t telling you what they are targeting. It’s like they aren’t really telling you what their motivation is,” Gundlach said.

“Just because things seem invincible doesn’t mean they are invincible. There is kryptonite everywhere. Yesterday’s move created more uncertainty.”

Gundlach, who correctly predicted the S&P 500 would post negative returns in 2018, said the benchmark index is set for another negative year.

He said the stock market, for now, “likes the fact that they (the Fed) aren’t going to give them…
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Which Nations Will Crumble And Which Few Will Prosper In The Next 25 Years?

Courtesy of Charles Hugh Smith, OfTwoMinds

Adaptability and flexibility will be the core survival traits going forward.

What will separate the many nations that will crumble in the next 25 years and those few that will survive and even prosper while the status quo dissolves around them? As I explain in my recent book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic, the factors that will matter are not necessarily cultural or financial; being hard-working and wealthy won't be enough to save nations from coming apart at the seams.

Here are the factors that will matter in the next 25 years:

1. The ability to engage and survive non-linear change, which is rapid, unpredictable and systemic, as opposed to linear change which is gradual, predictable and limited in nature.

None of the current political systems are decentralized enough and adaptable enough to survive the non-linear era we're entering. As I explained in What If Politics Can't Fix What's Broken?, the politics of centralized compromise and incremental, top-down adjustments are wholly inadequate to dealing with non-linear disruptions.

2. The nations that cannot jettison their parasitic elites will fall; the few that find the political will to jettison their parasitic elites will have the wherewithal to survive and possibly even prosper as the global status quo collapses around them.

The problem, as we all know, is the parasitic elites rule the centralized hierarchies of wealth and political power, and they will cling to power even as the nation they rule crumbles around them. The hubris, complacency and greed of the ruling parasitic elites is near-infinite; the idea that the political and financial structures that they dominate will not survive simply doesn't exist in the parasitic elites, with the exception of a few outliers who are constructing remote bugout compounds with landing strips etc.

Unfortunately for these outliers, they can't escape satellite and drone imagery, or the loose tongues of employees, contractors, etc.

By the time the populace awakens to the precariousness of the entire status quo, it will be too late to effect meaningful change via removing the parasitic elites from power. Just as Rome was too hollowed out to survive by the end, the status quo structures will be too enfeebled to adapt quickly enough to survive.

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The ‘Big Short’ In Canada: Eisman Ups Bets Against “Big Six” Canadian Banks

Courtesy of Zero Hedge

Over the last year, Neuberger Berman portfolio manager Steve Eisman – who gained notoriety beyond Wall Street thanks to 'The Big Short' and his portrayal by Steve Carrell in the movie adaptation – has taken seemingly every opportunity to talk his book, which apparently consists of concentrated bets against the financial systems of two developed nations: The UK and Canada.

Though UK banks largely bottomed out in October and have managed only a tepid rebound since, their Canadian peers have clawed back much of their losses from late last year. But this hasn't shaken Eisman's faith in his bet against Canadian banks, which is effectively a bet against the Canadian housing market (though Eisman doubts the fallout will be anywhere near as intense as the US housing market collapse that minted his reputation).


During an interview with the FT that was published on Thursday, Eisman explained that he's simply betting on a "normalization of credit" in the Canadian economy, where lax lending terms fueled a housing bubble that has been tentatively acknowledged as a systemic risk by the Bank of Canada. For the first time ever, the central bank late last year even started buying mortgage bonds late last year to prop up the sliding Canadian housing market help increase the tradeable float of its benchmark securities

"I’m calling for a simple normalisation of credit that hasn’t happened in 20 years," Mr Eisman told the FT, while declining to name the banks he is shorting, or the full extent of his positions. He said the effects would hurt banks and the real estate sector, but would not be as intense as the financial crisis a decade ago in the US, when he and others saw huge profits from the implosion of the subprime mortgage market. "This is not ‘The Big Short: Canada’ – I’m not calling for a housing collapse," he said.

Adding to the already precarious finances of Canadian households, more Canadians are plundering their home equity to finance everything from renovations to car purchases.


Meanwhile, Canadian home sales crashed in January…


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Nothing Happens, Then Everything Happens

Courtesy of ZeroHedge. View original post here.

Authored by Nick Maggiulli of Dollars And Data

After traveling the world for over five years aboard the HMS Beagle, Charles Darwin returned to England on October 2, 1836.  You would think that after half a decade of documenting the unknown flora and fauna of the globe Darwin would sit down and write up his theory on evolution.  But, that didn’t happen.  As Bill Bryson notes:

It wasn’t until 1842, six years after his return to England, that Darwin finally began to sketch out the rudiments of his new theory.

However, even this wasn’t enough to get Darwin to finish his most famous work.  It would take a letter from Alfred Wallace, another English naturalist, to force Darwin to collect his thoughts.  The letter, which arrived 16 years after Darwin’s initial drafts, contained Wallace’s own independently discovered theory of evolution.  Darwin saw the writing on the wall and knew he had to act fast.  Over the course of the next year Darwin worked furiously to finalize his ideas.  He published On the Origin of Species in November 1859, over 23 years after returning from his worldwide voyage.

We look back upon history as a series of events that seem simple and logically connected.  Darwin traveled the world, studied animal behavior, and then immediately came up with the theory of evolution.  But that’s not how things unfolded.  History isn’t so simple.  It actually took over two decades of pondering and working on other matters before Darwin finalized the ideas that would revolutionize biology.  Nothing happened, then everything happened.

The same can be said of investing, where mostly smooth growth is occasionally interrupted by violent fluctuations.  Morgan Housel said it best when he compared investing to being an airline pilot:

Ninety percent of the job is uneventful to the point of automation; ten percent of the job is terrifying and requires complex skills and a flawlessly calm demeanor.

Nothing happens, then everything happens.

To illustrate this concept I am going to show you a different way of looking at price charts.  First, I am going to show you the growth of $1 for the S&P 500 from 1990-2018 (using…
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WTF Chart Of The Day

Courtesy of ZeroHedge. View original post here.

Presented with no comment…

Thanks Tim Cook…

Doomed Boeing 737s Lacked ‘Optional Safety Features’; Ethiopian Air Captain Skipped Training

Courtesy of Zero Hedge

The two doomed Boeing 737s which crashed under similar conditions lacked optional safety features that the aircraft manufacturer will now make standard, according to the New York Times

For Boeing and other aircraft manufacturers, the practice of charging to upgrade a standard plane can be lucrative. Top airlines around the world must pay handsomely to have the jets they order fitted with customized add-ons.

Sometimes these optional features involve aesthetics or comfort, like premium seating, fancy lighting or extra bathrooms. But other features involve communication, navigation or safety systems, and are more fundamental to the plane’s operations.

Many airlines, especially low-cost carriers like Indonesia’s Lion Air, have opted not to buy them — and regulators don’t require them. -New York Times

Investigators are still sifting through what caused the crashes of Ethiopian Airlines Flight 302 on March 10 and Lion Air Flight 610 last October – however they are focusing on whether a new stall-avoidance software system may have been partly to blame. 

The system, known as MCAS, takes readings from two vanelike "angle of attack" sensors which measure how much the plane's nose is pointing up or down. If MCAS believes that the plane is pointing up at a dangerous angle, it can immediately push the nose of the plane down to try and stop it from stalling. 

Optional features could have helped pilots determine if MCAS was malfunctioning

One of them – an angle-of-attack indicator, displays the readings from the sensors which feed the MCAS system. The other, called a "disagree light," will activate if those two sensors are at odds with each other. 

"They’re critical, and cost almost nothing for the airlines to install," said aviation analyst Bjorn Fehrm – who adds "Boeing charges for them because it can. But they’re vital for safety."

Neither feature has been mandated by the Federal Aviation Administration for the now-grounded 737 Max jets. Of note, Southwest Airlines – which ordered 280 737 Max 8s, purchased the disagree alert option and also installed an angle-of-attack indicator above the pilots' heads. Following the Lion Air crash, the airline said it would place the sensor on the pilots' main computer screens. …
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US Market Open Sparks Stock-Buying-Panic – Everything Green Post-Powell

Courtesy of ZeroHedge. View original post here.

With Treasury yields tumbling and the dollar still down from Powell's big flip-flop, why would it be surprising to anyone that the machines have gone wild at the US cash market open, panic-buying stocks back into the green post-Powell…

Dow futures are up 200 points from the open…

But bonds and the dollar are not buying it…

US “Oil Weapon” Could Change Geopolitics Forever

Courtesy of Tim Daiss via

In a dynamic that shows just how far U.S. oil production has come in recent years, the U.S. Energy Information Administration (EIA) said on Monday that in the last two months of 2018, the U.S. Gulf Coast exported more crude oil than it imported.

Monthly net trade of crude oil in the Gulf Coast region (the difference between gross exports and gross imports) fell from a high in early 2007 of 6.6 million b/d of net imports to 0.4 million b/d of net exports in December 2018. As gross exports of crude oil from the Gulf Coast hit a record 2.3 million b/d, gross imports of crude oil to the Gulf Coast in December—at slightly less than 2.0 million b/d—were the lowest level since March 1986.

U.S. oil production hit a staggering 12.1 million b/d in February, while that amount has been projected to stay around that production mark in the mid-term then increase in the coming years. The U.S. is the new global oil production leader, followed by Russia and Saudi Arabia, while Saudi Arabia is still the world’s largest oil exporter – a factor that still gives Riyadh considerable leverage, particularly as it works with Russia, and other partners as part of the so-called OPEC+ group of producers. However, Saudi Arabia's decades-long role of market swing producers has now been replaced by this coalition of producers, reducing Riyadh’s power both geopolitically and in global oil markets. In short, what Saudi Arabia could once do on its own, it has to do with several partners.

Meanwhile, U.S. crude oil production, particularly in the Gulf Coast region, is still increasing. In November 2018, U.S. Gulf Coast crude oil production set a new record of 7.7 million b/d, the IEA report added. However, since most of the oil produced in the U.S. is light sweet crude, the U.S. still has to rely on heavier crude blends from Saudi Arabia, Venezuela and others since most American refineries are configured to process heavy crude. On the other hand, a surplus of light sweet crude allows the U.S. to export more oil thus giving the country growing energy geopolitical power once enjoyed almost exclusively by Saudi Arabia and Russia. The increasing amount of U.S.…
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Chicken Or Egg? ‘Blamescaping’ For Local Slowdowns Goes Global

Courtesy of ZeroHedge. View original post here.

Authored by Michael Every via Rabobank,

Which came first, chicken or egg?

This age-old question may have been talked about as much as Brexit. And Brexit, too, is now facing a similar catch-22 situation. On Monday, speaker Bercow blocked another meaningful vote on May's deal, as it wasn't substantially different than the one that was voted down last week. As a result PM May had to ask the EU for an delay of Brexit yesterday without having tabled her deal for a vote again. Europe responded that it is willing to grant some form of extension, provided that there are guarantees that a (short) extension would result in an orderly Brexit; i.e. guarantees that her deal would pass this time, after being voted down twice now. Basically, the EU wants to see the Withdrawal Agreement being approved by the House of Commons before it commits itself. So the EU needs the UK to give guarantees (a positive vote in the House) before it will approve any extension, and the PM May needs a substantial change to what has been agreed before she can bring anything back to the House for a vote. Like the chicken and the egg discussion, this sounds a bit like a stalemate.

In the case of the chicken and the egg, evolution provides an answer. However, for Brexit there is now just one week left for things to evolve. And so the game of chicken continues…

PM May appealed to the nation, pleading:

“You’re tired of [...] MPs talking about nothing else but Brexit when you have real concerns about our children’s schools, our National Health Service, knife crime.” 

And she's probably right. People are getting tired. However, in Europe, similar feelings of Brexit-fatigue are showing. Macron has probably been the most vocal about this. The French president is worried that a delay will cause the European Union to remain too preoccupied with Brexit-negotiations whereas he much rather sees the EU make some real progress on reforms and other policies on his agenda. The Prime Minister will have to convince Macron and his peers today that an extension will help get results. However, by putting the blame on the MPs in her speech last…
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Nomura: “BOOM, Roasted: The Fed’s “Clown Car” Experiment Is Now Complete”

Courtesy of ZeroHedge. View original post here.

In the aftermath of the Fed's second consecutive dovish capitulation, which while framed as a response to the slowing economy (a slowdown which the Fed completely missed as recently as December when 9 FOMC officials expected 1 or more rate hikes and now expect 0) but was really meant to support assets, many have taken turns to urinate and/or defecate on the grave of Fed credibility, the latest among them Nomura's Charlie McElligott, who this morning derives an intense pleasure, and feels "vindicated" as "the Fed’s hilarious tightening / normalization “clown car” experiment (and ensuing credibility farce) is now complete."

To avoid "diluting" his stream (of consciousness and/or metaphorical Fed graveyard micturation), we will present his full rant as extracted from his morning post in its entirety, just as a #timestamp for posterity, which may one day be curious when it all started to turn for the modern-day central planners.

* * *


Outside of this morning’s Brexit spasm…I’m going all-in on the Fed and our worst “Balance-Sheet Recession” past / “Japanifcation” / “end-of-cycle” worst fears seemingly being confirmed, which now looks to have indeed set us permanently stuck within “The QE Trap.”  Richard Koo quotes, hashtags AND Wu Tang Clan references….get it all “hot” below.


I was openly dismissed / laughed-at by many, many investors late last Spring – early last Summer when I first-posited my “UST steepener” call (specifically expressed in a 5s30s curve cap) off the back of my long-held 2018 “Two Speed Year” thesis, based-upon a then-building “tightening ourselves into a slowdown” impulse which would metastasize- then-force the Fed to pivot away from “tightening” and towards “easing” as early as 2019—all because the market would experience a late 2018 “Financial Conditions Tightening Tantrum.”  

BOOM, roasted.

Instead and on a larger horizon, the Fed’s credibility issue is about the simple-fact that for over 10 years now, market participants have already long-realized that, per the lessons of Japan from 1990-2005, the U.S. variety “balance-sheet recession” of 2007-09 would then lead us down the path of “the QE trap”…and here we are, “realizing” in real-time.

Let me turn it over to the master of this concept—Richard Koo—and this amazingly-prescient quote
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Phil's Favorites

Britain has its first new deep coal mine in decades - a result of pretending climate change isn't political


Britain has its first new deep coal mine in decades – a result of pretending climate change isn't political

Oscar Johns / shutterstock

Courtesy of Rebecca Willis, Lancaster University

The UK is widely seen as a climate leader. Its Climate Change Act, which passed into law ten years ago, is the envy of the world. It has targets for carbon reduction enshrined in law, and recently, the government hinted that it would adopt a target of zero greenhouse gas emissions by 2050 (the current target is an 80% reduction). Four years ago, the government, with cross...

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The Future Of National Beverage Corp. (FIZZ) Stock; Cannabis Webinar

By Jacob Wolinsky. Originally published at ValueWalk.

Whitney Tilson’s email to investors discussing the LaCroix maker National Beverage Corp. (FIZZ)’s stock; Tesla; Cannabis webinar; question 3; Jamaica.

1) I’m still sniffing around National Beverage Corp, best known for its LaCroix brand of flavored sparkling water, which I wrote up as my Stock Idea of the Day in my ...

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Zero Hedge

"It Feels Eerily Like 2007" - DoubleLine's Gundlach Blasts Fed's "Unprecedented Reversal"

Courtesy of Zero Hedge

As the whipsaw in stocks and the dollar sank in today - while the bond market remains unimpressed by the machine's liftathon today - market participants are still shaking their heads at what just happened.

One of the more outspoken of those market participants is DoubleLine CEO Jeffrey Gundlach who took to Twitter this morning to express his disdain...

Three months ago the Fed predicted totally different policy than where they are now. How can they predict 2020 policy with a straight face?

— Jeffrey Gundlach (@TruthGundlach) March 21, 2019


But he was not done, in a brief i...

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Kimble Charting Solutions

Interest Rates Sputter... Is U.S. Economy Next?

Courtesy of Chris Kimble.

The Federal Reserve wasn’t quite as hawkish as investors expected. The result: Treasury bond yields (interest rates) fell sharply.

In today’s chart of the 10-Year US Treasury Yield, we highlight the reversal in rates that occurred late last year.

This wasn’t just any old reversal, though. It occurred along the same long-term downtrend line that produced reversals in the years 2000 and 2007.

A closer look at the chart and it appears that 10-year yields are breaking short-term support. This is also occurring as monthly momentum rolls over fr...

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Chart School

Silver is cheap vs Gold

Courtesy of Read the Ticker.

Metal investors will be paying attention to how out of favor silver is relative to gold. And it is hard to wonder why with the well forecast boom of electric cars expected over the next 10 years. Who owns all the silver? JM Bullion has a series of charts here. Notice the stock pile held by JPM. They will do will if silver gets to $30 USD an once!

Chart up to April 2017

As of the 20th of March 2019 the US Federal Reserve has switched to dovish...

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Insider Scoop

Wells Fargo Expects FedEx Margins To Remain Under Pressure From Market Woes

Courtesy of Benzinga.

FedEx Corporation (NYSE: FDX) reported disappointing third-quarter results Tuesday and lowered its fiscal 2019 guidance.

The flexibility of the company’s network allows it to respond more quickly to competitive threats and a tough supply chain environmen... more from Insider


Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

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


Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...

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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down


Facebook's cryptocurrency: a financial expert breaks it down


Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...

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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 >>