Author Archive for Zero Hedge

PG&E Plummets After Drawing Down Billions On Its Revolvers

Courtesy of Zero Hedge

Two days after California utilities PG&E and Edison crashed, losing a third of their market cap in 48 hours amid investor fears over their exposure to the devastating California fires which are still raging, moments ago PG&E stock tumbled over 20% in premarket trading after the company disclosed it has fully drawn down its revolving credit facilities, in anticipation of soaring liquidity needs.

In an 8-K filing this morning, PG&E and its subsidiary, Pacific Gas and Electric Company, announced they had drawn the full $3.3 billion available to them in aggregate borrowings on their revolving credit facilities as of November 13.

With these borrowings, PG&E Corporation’s and the Utility’s balance of cash and cash equivalents increased to approximately $356 million and $3.1 billion, respectively, at November 13, 2018.  PG&E Corporation and the Utility made the borrowings under their respective revolving credit facilities for greater financial flexibility.  PG&E Corporation and the Utility plan to invest the cash proceeds from the borrowings in highly liquid short-term investments and to use them for general corporate purposes, including upcoming debt maturities.

California authorities have been investigating PG&E equipment as a possible cause of the deadliest wildfire in state history, burning about 150 miles (240 kilometers) northeast of San Francisco. The blaze has killed at least 48 people and destroyed 130,000 acres.

This is how PG&E explained the source of the Camp Fire:

On November 8, 2018, a wildfire began near the city of Paradise, Butte County, California (the “Camp Fire”), located in the service territory of the Utility.  The California Department of Forestry and Fire Protection’s (“Cal Fire”) Camp Fire Incident Report dated November 13, 2018, 7:00 a.m. Pacific Time (the “incident report”), indicated that the Camp Fire had consumed 125,000 acres and was 30% contained.  Cal Fire estimates in the incident report that the Camp Fire will be fully contained on November 30, 2018.  In the incident report, Cal Fire reported 42 fatalities.  The incident report also indicates the following: structures threatened, 15,500; single residences destroyed, 6,522; single residences damaged, 75; multiple residences destroyed, 85; commercial structures destroyed, 260; commercial structures damaged, 32; and other minor structures destroyed, 772.

While the cause of the Camp Fire…
continue reading





Core Consumer Price Gains Weakest Since February As New Car Prices Slide

Courtesy of ZeroHedge. View original post here.

After producer prices printed hotter than expected (surging most MoM in six years), hawkish fears were modestly allayed as consumer prices rose 2.5% YoY (as expected), a small rebound from September’s 2.3%.

Headline CPI up 2.5% YoY…

But core CPI slowed to +2.1% YoY – its weakest since February and below expectations of a 2.2% rise.

The October advance in the CPI benefited from some bounce-back from September: used-car prices rose 2.6 percent, the most since 2009, after posting the biggest monthly drop in 15 years. The measure has been volatile since the Labor Department changed its methodology earlier in 2018. New car prices, by contrast, weighed on inflation in October, falling 0.2 percent from the prior month, the biggest drop since April.

Energy prices rose 2.4 percent from the previous month, while food costs fell 0.1 percent.

The shelter index rose 0.2 percent in October, the same increase as in September. The rent index rose 0.2 percent and the index for owners’ equivalent rent advanced 0.3 percent.

Policy makers and economists look at core inflation as a better indicator of underlying trends because the broader figures are subject to bigger swings from energy prices, and given the fact that they remain above the 2% level, it would appear The Fed is guns-hot for a Dec rate hike no matter what.





Nomura: “Long-Awaited” Credit Contagion Emerges, Crushing Risk Sentiment

Courtesy of ZeroHedge. View original post here.

For the past month, ground zero for “max pain” trades had been concentrated in equities, and specifically growth and tech stocks, which slumped into a bear market amid “peak profit” (and “peak iPhone”) and economic slowdown concerns, leading to dramatic losses for hedge funds which have been forced to liquidate positions and meet redemption requests ahead of a November 15 deadline, while getting crushed by a dramatic squeeze in value stocks.

However, that changed in recent days when first the collapse in oil – coupled with a historic short squeeze in nat gas - redirected attention to the dramatic events in the commodity sector, leading to major losses for commodity CTAs and momentum traders. Meanwhile over the past 48 hours the sudden blow out in GE credit to junk bond levels, has shaken the investment grade bond market, prompting renewed fears about hundreds of billions in future “fallen angel” bonds, whose inevitable downgrade to junk could lead to the next bond market crisis according to such investors as Guggenheim’s Scott Minerd.

Commenting on the “credit contagion” move, Nomura’s Charlie McElligott writes this morning that the Credit market’s “catch down” to Equities “was a significant development of the past few days.”

According to the cross-asset strategist, “this long-awaited spread widening is a significant NEGATIVE development for the risk-asset macro regime, because as per Quant Insight factor PCA model, “Corp Credit” is the 2nd largest factor driver / price sensitivity for SPX, NDX, SXXP, MXEF and the largest factor input for NKY, while also too the largest price-driver for FX risk-proxy EURJPY.”

It’s not just secondary price action either – as McElligott notes, yesterday’s primary deals were only 1.4x’s covered (half the 2018 YTD average cover ratio) while issuers paid nearly 15bps in concessions to price deals. He goes on to note that the concern is “cycle-related, as the wave of 1) debt for buybacks and 2) debt for M&A has much of the IG universe teetering from BBB to BB (Xerox on negative watch, with Conagra and Kellogg Co recently downgraded.

Meanwhile, as noted earlier, risk sentiment has also gotten hammered by the relentless downward price action in Crude Oil over the course of the past few weeks which was “obviously horrific” with “macro catalysts of USD rally and supply/demand OPEC concerns which along…
continue reading





Was A “Behemoth” Energy Fund Just “Taken To The Chipper”?

Courtesy of ZeroHedge. View original post here.

Authored by Kevin Muir via The Macro Tourist blog,

Crude oil. Ugly move lower over the past two weeks.

The market pundits will try to explain the price action. They will offer evidence of President Trump’s tweet as the catalyst for the sell off.

Or they will point to the decline resulting from market participants’ belief the global economy is about to roll over.

And if they don’t use that excuse, they will trot out the breakout in the US Dollar Index.

Either way, the chart looks about as attractive as my moldy 30-year old hockey equipment.

Although I don’t deny these three factors played a role in oil’s recent demise (especially the global slow-down narrative), I contend that these were just excuses.

The truth of the matter is that there is a Behemoth out there that was long crude oil against short nat gas (along with short nat gas spreads).

Don’t believe me?

Although I acknowledge it has become mildly colder over the past couple of weeks, do you really believe that is was enough to spike the front nat gas future from $2.75 to $4.03?

A 46% increase in a couple of months. C’mon – that’s not weather.

Still don’t believe me that someone is offside? If you can come up with a fundamental reason for the March / April 2019 Nat Gas spread to spike like this, then by all means, please pass it along.

Look closely at that chart. The spread has bounced around 25 and 40 cents for the past three years. Now, in November, a full 3 months ahead of the front month coming due, they have decided it should trade at an 82 cent premium?

This week’s move in both crude oil and nat gas was not the result of some well-thought out fundamental reasoning. Rather, in large part, it is due to a large hedge fund calling up their
continue reading





Shorts Crushed As Nat Gas Explodes Higher After Tripping Stops

Courtesy of ZeroHedge. View original post here.

While the investing community has been focused on crude oil for the past two weeks, and for obvious reasons as the black gold suffered a historic and record rout of 12 consecutive days of declines, sending it into a bear market from multi-year highs just a few weeks ago, a just as notable – if inverse – development has been taking place in natural-gas, whose prices have been soaring.

On Tuesday, a sudden change in weather forecasts pushed natural-gas futures to $4.10 per MMBTU, the highest level since November 2014. The rapid surge has rattled investors and traders, as the market goes into the winter heating season with less supplies in storage than any other year since 2005. Natural-gas prices have climbed 39% this year, and last week they entered a bull market, just as oil slumped into a bear.

Traders had expected record-high levels of natural-gas production would replenish stores for winter. However, as the WSJ notes, demand has climbed outside of weather-related catalysts, going toward rising exports and as a substitute for other energy sources like coal. “There’s a more structural base to the demand equation than others think,” said Kyle Cooper, a consultant at ION Energy Group in Houston.

Last winter, a severe storm drove natural-gas futures above $3/mmBtu. The Northeast, which lacks the pipelines needed to move natural gas, experienced even sharper price swings, with regional prices surging as high as $175/mmBtu. “The cold to this extent was not really on anyone’s radar. Now forecasters are scrambling,” said Jacob Meisel, chief weather analyst at Bespoke Weather Services.

Meanwhile, as prices rose, some suggested that one or more funds were caught short nat gas, hoping the rally would reverse sooner or later.

Alas, for at least one of these shorts, the reversal did not come in time when this morning the price of the 1st month natgas contract soared, spiking as much as 20% in minutes - the biggest intraday move higher since 2009 – with the price exploding higher once a barrier of stops at $4.40 was tripped, at which point furious short covering sent nat gas as high as $4.929 in just seconds, the highest since February 2014, when the U.S. experienced its "polar vortex" winter.


continue reading





Global Stocks, US Futures Slide As Oil Rebound Fizzles, Pound Tumbles

Courtesy of ZeroHedge. View original post here.

European stocks pared a decline of as much as 1.2% on Wednesday but remained in the red, as the FTSE 100 erased losses after the pound resumed its drop ahead of today's key cabinet meeting, and as oil rebounded after a Reuters report OPEC+ may cut 1.4MM barrels of output, following the latest mixed data out of China…

…  while Asian shares slumped and US equity futures slid in the red fading earlier gains.

Overall sentiment was negative, with stocks around the globe in the red, if not suffering major losses.

Europe's Stoxx 600 Index was dragged lower by mining and energy shares following the latest round of disappointing Chinese retail sales data, as good news for the auto sector – following a Bloomberg report that the White House would hold off imposing auto tariffs for now – wasn’t enough tip the broad European market into the green.

Autostocks

European stocks were also pressured by the worst German GDP print since 2015, after Europe's strongest economy contracted in the 3rd quarter as a result of collapsing auto production.

Not helping was continued political gridlock in Italy, whose cabinet defied Europe overnight and resubmitted its budget proposal, predicting a 2.4% budget deficit, a number that had previously been rejected by Brussels. European energy stocks were down 0.9%; they pared losses at one point as oil recovered after a OPEC’s President said the group and its allies will cut production, and Reuters reported up to 1.4MM barrels in production would be cut. West Texas crude attempted a rebound after posting its longest losing streak on record, however the spike has been short-lived for now and at this pace, oil's record 12-day decline appears set to continue.

OPEC

The UK's FTSE 100 was flat with the pound falling as much as 0.5% vs USD after a sharp jump on Tuesday, with the success of U.K. Prime Minister Theresa May’s Brexit deal still in question, given the need to win over her
continue reading





Oil Rallies On Report OPEC+ Will Do “Whatever It Takes”, May Cut By 1.4MM Barrels

Courtesy of ZeroHedge. View original post here.

One day after Saudi Arabia revealed that it had not complied with its production quota in October for the first time since OPEC's November 2016 meeting in Vienna, triggering an all-out 7%+ collapse in already badly beaten crude, Reuters briefly sent oil prices into the green Wednesday morning with a report that OPEC and its partners were discussing a proposal to cut oil output by up to 1.4 million barrels per day in 2019 to avoid a surplus that could tank prices.

Opec

Unnerved by oil's record 12-day losing streak, OPEC and OPEC+ are again talking about cutting production just months after Saudi Arabia and Russia agreed to pump more. The group is set to meet on Dec. 6 to agree on its policy for 2019.

West Texas Intermediate futures rose as much as 1.4% to $56.49/bbl, erasing an earlier 1% decline though the rally soon faded and prices slumped back into the red. If oil settles higher on the day, it would break what has been a record losing streak for oil prices.

OPEC

Still, more may be needed as gains have failed to hold, as the report noted that least one OPEC member (Iran) still needed to be convinced to support the plan.

A supply cut of up to 1.4 million bpd was one of the options discussed by energy ministers from Saudi Arabia, non-OPEC Russia and other nations at a meeting in Abu Dhabi on Sunday, the sources said.

"I believe a cut of 1.4 million bpd is more reasonable than above it or below it," one of the sources, who declined to be identified by name as the talks are confidential, said.

OPEC member Iran, as well as Russia, would need to be brought on board for the new plan, the sources added. One source said Iran does not want to have a production target in a new agreement as it is facing lower exports due to U.S. sanctions.

Meanwhile, in overnight comments, OPEC chief Mohammed Barkindo did his best Mario Draghi impression, confirming once again that the oil cartel sees itself as a central bank.

continue reading





German Economy Shrinks For First Time In 3 Years As Car Production Collapses

Courtesy of ZeroHedge. View original post here.

After notching a tepid growth rate in the prior quarter, the Bundesbank's warnings that the economic engine of Europe faltered during the third quarter have proved accurate.

In what was its worst GDP print in three years, Germany saw its economy contract 0.2% in Q3, putting Europe's strongest economy on the bring of a technical recession and providing the clearest sign yet that economic growth in the euro area stalled just as the ECB was preparing to end its massive bond buying program with an eye toward raising interest rates late next year, according to Bloomberg.

While the hope is that the setback is related largely to new emissions tests that temporarily disrupted car production, the data will feed into fears that the euro area’s expansion has faltered as the Continent faces down risks including Italy's confrontational populism, the looming Brexit, and the ongoing US trade conflict (which threatens to hammer the German auto industry if Trump changes his mind and decides to pursue tariffs). But analysts have found at least one scapegoat to blame the contraction: according to Bloomberg, Germany's economic ministers hope the contraction was largely driven by new emissions tests that temporarily disrupted car production. Data from the VDA German carmakers’ association appears to bear that out, as the agency said September production plunged 24% compared with a year earlier.

Cars

At least one analyst said they expect auto production to rebound, as a second quarter of declining growth would be "highly unlikely" especially as that would put Germany in a recession.

"The good news is that the economy will expand at a decent clip so long as auto output doesn’t take another leg down – and that’s highly unlikely. We expect a material rebound as industrial production picks up a bit further through the quarter."

Germany's Economy Minister Peter Altmaier echoed that view during a speech in Berlin, saying the GDP figures were "not particularly pleasing but were also not a secret," and that it's no catastrophe, we had similar numbers in 2015." If anything, the data showed us that the expansion "is a tender flower" that must be protected (the implications of which, we imagine, were…
continue reading





The Most Popular Political Figures In The UK

Courtesy of ZeroHedge. View original post here.

In a time of political upheaval and uncertainty in the UK with key figures pulling in very different directions, where do the public's affections lie?

Unsurprisingly, as Statista's Martin Armstrong notes, it is as split as the political landscape itself.

Infographic: The most popular political figures in the UK | Statista

You will find more infographics at Statista

According to the latest YouGov 'Ratings', Boris Johnson and Theresa May enjoy the most positive opinions from the public, both of which having a 32 percent favourability rating.

The Labour leader Corbyn is in third place with 30 percent of respondents saying they view him positively.





Autonomous Vehicles And The Rise Of Mobile Sex Workers 

Courtesy of ZeroHedge. View original post here.

Connected and autonomous vehicles (CAVs) have the potential to revolutionize the way people live, work and travel across cities… oh, and have sex, according to a new study from the Annals of Tourism Research titled: “Autonomous vehicles and the future of urban tourism.”

Co-authors Scott Cohen, a tourism professor at the University of Surrey, and Debbie Hopkins, a transportation instructor at the University of Oxford, discovered that CAVs have the potential to reshape the night-time visitor economy.

It’s only a natural conclusion that sex in autonomous vehicles will become a phenomenon,” Cohen told The Washington Post, citing convenience and the interior redesigns of CAV automobiles.

Hopkins & Schwanen said mass market penetration and growth in public acceptance of CAVs could be as early as 2025, first in parts of Asia, Europe, and the US, and are forecasted by some to be the primary means of transportation globally by 2040.

The academics searched over 150 studies on the future of automobiles and attempted to envision the technology’s impact on the night-time visitor economy: How could CAVs transform the sex industry?

Silicon Valley transportation analyst forecast that the economy is less than a decade away from the series production of driverless cars – some futurists predict that traditional taxis will be obsolete.

With no driver costs, auto and tech companies could reinvest more into the customer experience. Interiors may become more spacious with bedding and or a massage chair, analysts said.

Enter “hotels-by-the-hour” on wheels, Cohen said, "a fleet of rolling love making bedrooms." Tourists could summon the autonomous vehicle with a prostitute of their choice via the app on a basic smartphone. 

“It is just a small leap to imagine Amsterdam’s Red Light District ‘on the move,’ ” Cohen and Hopkins wrote. Sex, they noted, “plays a central role in many tourism experiences. ”

Given the potentially short timeline until CAVs enter the mass market, mobile prostitution could disrupt the entire underground economy by the mid-2020s: "While [driverless cars] will likely be monitored to deter passengers having sex or using drugs in them,” the authors warned, “such surveillance may be rapidly overcome, disabled or removed."

continue reading





 
 
 

Phil's Favorites

The US government has huge debts, and House Democrats could lead the way on solutions - an economist explains how

 

The US government has huge debts, and House Democrats could lead the way on solutions – an economist explains how

Democrat Nancy Pelosi spoke in D.C. the night of the midterm elections. Reuters/Jonathan Ernst

Courtesy of Laurence J. Kotlikoff, Boston University

Now that Democrats control the House, the question on many minds is what they will do with it.

Incoming Majority Leader Nancy Pelosi s...



more from Ilene

Zero Hedge

PG&E Plummets After Drawing Down Billions On Its Revolvers

Courtesy of Zero Hedge

Two days after California utilities PG&E and Edison crashed, losing a third of their market cap in 48 hours amid investor fears over their exposure to the devastating California fires which are still raging, moments ago PG&E stock tumbled over 20% in premarket trading after the company disclosed it has fully drawn down its revolving credit facilities, in anticipation of soaring liquidity needs.

In an 8-K filing this morning, PG&E and its subsidiary, Pacific Gas and Electric Company, announced they had drawn the full $3.3 billion available ...



more from Tyler

Kimble Charting Solutions

Stock Market Correction Lingers As 800 Pound Resistance Levels Hold

Courtesy of Chris Kimble.

Key stock market indices continue to struggle beneath 800-pound Fibonacci extension levels (resistance).

In today’s “6-pack” chart, we illustrate these key bull/bear lines for investors – see below. The Dow Jones Industrials, Transports, S&P 500, and Nasdaq 100 are all experiencing weakness and selling pressure at long-term Fibonacci extension levels each at (1).

But the overhead resistance spreads to other key sectors like the Banks and Semiconductors. The Banks are experiencing weakness at the 2007 highs at (2) and the Semiconductors are experiencing weakness at the 2000 highs at (3).

Expect market weakness (or consolidation) to continue until these stock indexes and key market sectors breakout above resistance. Stay tuned!

6-Pack of Stock Market Indices –...



more from Kimble C.S.

Insider Scoop

BTIG Research: Etsy Is Online Leader In Handmade, Artisanal Goods

Courtesy of Benzinga.

Related ETSY Is Etsy A Better E-Commerce Play Than Amazon? 88 Biggest Movers From Yesterday ...

http://www.insidercow.com/ more from Insider

Members' Corner

NY Times: OPERATION INFEKTION

 

This is a three-part Opinion Video Series from NY Times about Russia’s meddling in the United States’ elections as part of its "decades-long campaign to tear the West apart." This is not fake news. Read more about the series here.

OPERATION INFEKTION

RUSSIAN DISINFORMATION: FROM COLD WAR TO KANYE

By Adam B. Ellick and Adam Westbrook

EPISODE 1

MEE...



more from Our Members

Chart School

Weekly Market Recap Nov 11, 2018

Courtesy of Blain.

This past week was saw another positive move up by bulls – especially in the Dow and S&P 500; the NASDAQ was not quite as enthusiastic.   Wednesday’s rally was on the legs of an election that was seen as market friendly or at least not as bad as it could have been.   Essentially – paying people a lot of money to get nothing done the next 2 years – woo hoo!

The market is interpreting Wedneday’s result as insuring that “no big things will get done,” in Washington between now and 2020, Craig Birk, chief investment officer at Personal Capital told MarketWatch. “The market appreciates the relative certainty of the slow legislative agenda.” he said.

“As President Trump plans his 2020 reelection campaign, a gridlocked Congress is unlik...



more from Chart School

Digital Currencies

Bitcoin's high energy consumption is a concern - but it may be a price worth paying

 

Bitcoin's high energy consumption is a concern – but it may be a price worth paying

Shutterstock

Courtesy of Steven Huckle, University of Sussex

Bitcoin recently turned ten years old. In that time, it has proved revolutionary because it ignores the need for modern money’s institutions to verify payments. Instead, Bitcoin relies on cryptographic techniques to prove identity and authenticity.

However, the price to pay for all of this innovation is a high carbon footprint, created by Bitc...



more from Bitcoin

ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



more from ValueWalk

Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

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

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



more from Biotech

Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



more from M.T.M.

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 ...



more from OpTrader

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:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions

All About Trends

Mid-Day Update

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

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David





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...

Learn more About Phil >>


As Seen On:




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 >>