Archive for the ‘Permissions’ Category

Yield Curve Tumbles Back Into Inversion As Fed Sparks Mid-Cycle Maelstrom

Courtesy of ZeroHedge View original post here.

Today's chaos was brought to you by the the words "mid-cycle" (market threw a tantrum that The Fed Minutes were not more dovish) and "inverted" (the much-watched 2s10s curve tumbled back into inversion)  and the number '16' (line in the sand for VIX and gamma)

Chinese stocks trod water overnight…

Source: Bloomberg

Source: Bloomberg

European stocks surged on the day, led by Italy…

Source: Bloomberg

Bond headlines dominated Europe with an ugly 30Y zero-coupon auction sparking yield chaos then a bid came in…

Source: Bloomberg

US equities accelerated once again overnight for no good reason but stalled once the Fed Minutes hit (and confirmed the mid-cycle language)…

The S&P 500 stalled at critical resistance once again (NOTE – today's highs for S&P were lower highs than yesterday and that was lower than Monday's highs)…

VIX plunged back through 16 as short gamma scramble sent stocks soaring…

Bond yields, stocks, and the dollar all decoupled as Europe opened, then The Fed sparked recoupling (short-end notably underperformed long-end)…

Source: Bloomberg

A very choppy day for bonds with The Fed Minutes sparking a surge in yields on the hawksih mid-cycle language…

Source: Bloomberg

Roundtrip in TSY yields on the day, selling in Asia and buying in Europe…

Source: Bloomberg

The Treasury curve (2s10s) plunged back to inversion…

Source: Bloomberg

The Dollar index limped lower into the Fed Minutes and weakened immediately after (testing unchanged on the week),…
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Bernstein: Tesla’s Competition Is Crushing Model S, Model X Sales; Model 3 Could Be Next

Courtesy of ZeroHedge View original post here.

While investors may have been momentarily distracted by the fact that Tesla solar roofs are apparently spontaneously combusting across the country, the company's legacy vehicle business also remains in turmoil, with Bernstein opining on the Model S and the Model X's sales collapse this morning.

In a new note, Bernstein seeks to explain the weakness behind both of the models, which lag the newer Model 3 in sales. Bernstein says that "competition" is likely to blame for Model S and Model X gross profit dollars declining 57% in the first half of 2019.

Did Elon forget about this part in his "master plan"?

Bernstein says that the introduction of new offerings from companies like Audi and Jaguar have not expanded the EV market as a whole – rather, they have cannibalized sales from Tesla. Perhaps it is just pesky consumers that want a vehicle they can actually get serviced and a warranty that they are actually going to be made whole on.

The free market works in mysterious ways…

Bernstein notes that the cannibalization is still a new trend that has come to light over the first half of this year, but that it is worth watching as competition is going to grow significantly in the space over the next 12 to 24 months. It also anticipates traditional auto makers to enter the sub $50,000 electric vehicle segment, which could target Tesla's one remaining area of strength – if you want to call it that - the Model 3.

Q2 2019 deliveries


 

The competition narrative has been peddled by short-sellers and skeptics for years, even though it has taken the auto industry some time to finally get up to speed. After all, storied names like Audi and Jaguar don't exactly have the option to throw together their EVs in a hastily built tent outside of their production facility.

Now, it looks as though they are done biding their time – if Bernstein's conclusions hold true, it looks as though the carefully calculated competition could be ready to wreak havoc on Tesla.





Fed Minutes Hint At Coming QE

Courtesy of ZeroHedge View original post here.

Ignore all the hoopla about the "mid-cycle adjustment" being the dominant theme in the  July 30-31 FOMC minutes, and focus on what matters: the coming QE.

In the minutes, which had no less than six mentions of "asset purchases", i. e QE, the Fed made it clear that with the S&P not even 5% below all time highs, the FOMC was already contemplating the next round of QE, with "several participants" lamenting that the Fed had not bought up even more Treasurys and MBS (and who knows, maybe stocks) because, get this, QE had not resulted in hyperinflation (yet). No, really:

In particular, a number of participants commented that, as many of the potential costs of the Committee's asset purchases had failed to materialize, the Federal Reserve might have been able to make use of balance sheet tools even more aggressively over the past decade in providing appropriate levels of accommodation. However, several participants remarked that considerable uncertainties remained about the costs and efficacy of asset purchases, and a couple of participants suggested that, taking account of the uncertainties and the perceived constraints facing policymakers in the years following the recession, the Committee's decisions on the amount of policy accommodation to provide through asset purchases had been appropriate.

But if that statement is simply ridiculous, the next one will result in a scene right out of scanners. According to the minutes, an unknown number of participants thought that just because they had already conducted QE, they are now experts, and any future cases of QE will be a walk in the park:

In their discussion of policy tools, participants noted that the experience acquired by the Committee with the use of forward guidance and asset purchases has led to an improved understanding of how these tools operate; as a result, the Committee could proceed more confidently and preemptively in using these tools in the future if economic circumstances warranted.

Why would the Fed pivot toward QE? Because everyone else is doing it of course:

Expectations for near-term domestic policy easing had occurred against the backdrop of a global shift toward more accommodative monetary policy. Several central banks had eased policy over the past month and


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FOMC Minutes Show “Most Fed Officials” Saw Rate-Cut As “Mid-Cycle Adjustment”

Courtesy of ZeroHedge View original post here.

Since The Federal Reserve cut interest rates (for the first time in over a decade), the world has started worrying about recession (and the 2s10s curve inverted)…

Which might explain why US equity markets have floundered as bonds and bullion have been bid…

And, yuugely disappointing for President Trump, the dollar is modestly higher.

But there is one thing that has dramatically improved… the economic data!!

Source: Bloomberg

And finally, setting the scene for today's Minutes, the market is now demanding more rate-cuts for the rest of 2019 than it did BEFORE the actual Fed rate-cut (thanks to Trump's escalation of the trade war and China's currency response)…

Source: Bloomberg

So, what did the dissentful, pre-tariffs, Minutes show?

The Fed Minutes are problematic for markets as they confirm that "most Fed officials see the July rate-cut as a 'mid-cycle adjustment" and not the beginning of an epic easing cycle that investors are demanding.

Additionally, here are the key takeaways from the minutes:

On the need to remain "flexible":

A number of participants suggested that the nature of many of the risks they judged to be weighing on the economy, and the absence of clarity regarding when those risks might be resolved, highlighted the need for policymakers to remain flexible and focused on the implications of incoming data for the outlook.

Most saw the rate cut as a "mid-cycle adjustment", not the start of an easing cycle:

Most participants viewed a proposed quarter- point policy easing at this meeting as part of a recalibration of the stance of policy, or mid-cycle adjustment, in response to the evolution of the economic outlook over recent months.

A rate cut is not to boost the economy but to mitigate risk:

A policy easing at this meeting would be a prudent step from a risk- management perspective.

Two ultra doves were heard: Bullard and Kashkari…

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Gold Is Knocking On Key Breakout Level

Courtesy of Chris Kimble

In 2013, Gold broke below its 23 percent Fibonacci retracement level and a bearish trend change took place at (1).

This was the beginning of a bigger decline that saw gold fall another 450 dollars.

Nearly six years later, Gold returns to this “breakdown” level in hopes of making it a new “breakout” level at (2).

If Gold can breakout at (2) it will send a very bullish message to the market.

Stay tuned – gold bulls are knocking on heaven’s door!

If pattern opportunities in Gold, Silver, Copper and Miners is important to you, our weekly Metals Report will help you find those opportunities.

This article was first written for See It Markets.com. To see the original post CLICK HERE

To become a member of Kimble Charting Solutions, click here.





France Rattles EU Sabre: ‘No-Deal’ Brexit Now Central Scenario, Demands UK Pay Up

Courtesy of ZeroHedge View original post here.

Here we go again.

In what sounds like a repeat of the soundbites from early this year, the French government has once again declared that the UK leaving the EU without a withdrawal agreement is now its 'base case' scenario.

That's according to an unnamed official in President Emmanuel Macron's office, according to Bloomberg. That's because UK Prime Minister Boris Johnson is refusing to accept the withdrawal agreement unless the EU agrees to remove the hated Irish Backstop, which, by law, could leave the UK trapped in the EU customs union, but with no authority to offer input into its rules.

EU officials have accused Johnson and his Brexiteers of secretly wanting to reimpose a border between Norther Ireland and Ireland, something that many suspect would lead to a revival of "troubles-era" violence.

But the EU's accusations sound about as a convincing as the unnamed French officials "threat" that the EU should expect the UK to pay the 39 billion pound ($47 billion) exit bill even if the UK leaves the bloc without a deal.

To wit, Brussels has no obvious way to force the UK government to pay, just like it has no way to force Ireland and the UK to build a land border, as Mish Shedlock recently pointed out.

Hello @eucopresident Donald Tusk and @JunckerEU

WTF are you going to do when Britain ignores the backstop and Ireland does not put in controls?

Insurance notion is a scam unless you have an answer.

— Mike Mish Shedlock (@MishGEA) August 21, 2019

And he's not the only one who's noticed this, and questioned who, exactly, will pay for and erect the land border and customs checkpoint.

The UK has promised not to erect a border. Ireland has promised not to erect a border. So who is going to build it? Donald Trump? With Mexico paying? https://t.co/fqSqJ4K9zG

— Daniel Hannan (@DanielJHannan) August 21, 2019



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R.I.P. Dodd-Frank: Wall Street Is Unleashed – Again

Courtesy of Pam Martens

R.I.P. Dodd-FrankYesterday the Office of the Comptroller of the Currency, the regulator of national banks, and the FDIC, which provides the taxpayer-backstopped Federal insurance to deposits at these banks, announced that they were going to “simplify” the Volcker Rule. Under the Trump administration, “simplify” is code for “gut.”

The Volcker Rule was part of the 2010 financial reform legislation known as Dodd-Frank. It outlawed deposit-taking banks from using those deposits to make wild gambles for the house, known as proprietary trading. It also required the banks to end their ownership of hedge funds and private equity funds where the banks can secretly dump losing positions or hide enormous losses in hard to price instruments. 

Wall Street hated the Volcker Rule so much that it made sure the rule never came into being. It has stonewalled the implementation of the rule for nine years and one month. Now the rule has been stripped of all of its meaningful components.

The gutting of the Volcker Rule was snuck through in the dog days of summer as families are busy getting kids ready to return to school. Five years ago, as families were busy preparing for the Christmas holidays, Citigroup’s lobbyists pushed through the repeal of the second most important aspect of Dodd-Frank. It was called the “push-out” rule which would have forced banks to move their tens of trillions of dollars in derivatives out of the Federally-insured bank unit into another unit that could be placed into bankruptcy or wound-down in the event of insolvency.

By keeping these dangerous derivatives in the Federally-insured bank, Wall Street effectively guaranteed itself another bailout if it blew up the U.S. economy again.

Vox explained on December 17, 2014 how the dirty deal on the “push-out” rule went down:



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Whipsaw Wednesday – Low Volume Futures Rallies Mask Market Losses

Wheeee, what a ride!  

The indexes fell off a cliff in afternoon trading but, not to worry because, as soon as the markets closes, the little manipulator gnomes went right to work and prettied things up for the Asian (9pm) and European (3am) opens – so no one even knew that the US sold off into the close and the total flat-line since 5am isn't the least bit suspicious – just normal human beings trading normally…  Move along – nothing to see here folks…

The stock market is becoming a farce and that makes for dangerous trading conditions so caution is strongly advised.  We are right back where we started the day yesterday so I won't bore you with a repeat of yesterday morning's PSW Report but I will point out that it doesn't count to get over the Strong Bounce lines if you can't hold them for 48 consecutive hours so, according to the 5% Rule™ – we're still not our of the woods on the recent correction.

This afternoon we get the FOMC Minutes from their July 31st meeting (2pm), when they gave Trump a 0.25% cut with Rosengren and Quarles objecting but the Minutes will give us color as to how supportive the rest of the Fed was as it's now widely believed that they will cut AT LEAST 0.25% at the Sept 18th meeting and Trump is asking for a 1% rate cut – which would be uprecedented and unhinged! 

Image result for fed rate cuts 2019Of course, as usual, the markets are reading it wrong and, as usual, traders have absolutely no grasp of history as, historically, the Fed raises rates in a GOOD market and LOWERS rates in a bad market – ESPECIALLY at the top of a bad market as they attempt to forestall a looming disaster so the cut of July 31st was a warning – not a bullish signal!

And notice the key is the Fed generally cuts rates about 5% during a market correction and now we are starting at 2.25% so are we going to go for -3% when the market begins to tumble?  -3% means you get paid to borrow money, which sounds good but no one is actually going to lend
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“A Generation Without A Future”: Millennials Struggle To Survive In Modern Hong Kong

Courtesy of ZeroHedge View original post here.

As we pointed out yesterday, migration from Hong Kong to Taiwan has surged this year – but not solely because the streets of Hong Kong have been clogged with protesters since June. Young Hong Kongers, like their American counterparts living in San Francisco and Brooklyn, are struggling with the twin burdens of managing rent in one of the world’s most unaffordable cities. But unlike young Americans, Hong Kongers are also struggling against the creeping authoritarianism from Beijing.

This prompted Bloomberg to name Hong Kong’s millennials “the generation with no hope.”

And its latest profile begins with the story of Billy Tung, a 28-year-old accountant who regularly works weekends, but barely makes enough to share a small apartment that’s been partitioned into six bedrooms.

Billy Tung

Like many young workers in his situation, Tung is contemplating a move to Taiwan, where housing is more affordable, and which has a much lower cost of living.

Like many Hong Kongers of his generation, Tung finds it hard to save even while he carefully watches his spending on a day-to-day basis, which is why he’s been toying with the idea of moving to Taiwan. “I don’t want to spend the next 10 years working just to give it all away to Hong Kong real estate developers,” he said.

In a description that, probably intentionally, reflects the US, BBG writes about the “cardboard grannies” – elderly poor who have been reduced to picking through trash and recyclables – and a sense of aspirational living that has given way to hopelessness.

And this has been facilitated by a growing lack of economic and political self-determination felt by Hong Kongers.

Hong Kong has long been a land of contrasts in which glittering skyscrapers and chauffeur-driven Rolls-Royces are juxtaposed with decrepit apartment blocks and “cardboard grannies” picking through rubbish in search of recyclables. An aspiration for a share of those riches has been replaced by a growing sense of hopelessness.

Ho-Fung Hung, a professor in political economics who’s a China expert at Johns Hopkins University, says the economic malaise, combined with a perceived loss of cultural identity and frustration at a lack of political voice, is driving young people into the streets. “Participants come from all economic backgrounds,” says Hung. “What binds them together is a shared


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Beijing Confirms Detention Of UK Consulate Worker

Courtesy of ZeroHedge View original post here.

China confirmed that it has detained an employee of the UK consulate in Hong Kong, according to BBC and Bloomberg.

Nearly two weeks after Simon Cheng failed to return from a conference over the border in Shenzen, prompting his girlfriend, with whom he’d purportedly been texting at the time he was seized, to finally go to the press, Chinese Foreign Ministry spokesman Geng Shuang said Wednesday that Cheng was being held under a 15-day administrative detention process in the mainland city of Shenzhen. Geng said the issue was “a domestic matter” and not a “diplomatic dispute.”

If he’s only being held for 2 weeks, Cheng should be nearing the end of his time in custody, presumably unless Beijing wants to move ahead with formal charges.

Simon Cheng

The UK’s foreign office said Tuesday that it was “extremely concerned” about Cheng’s disappearance, and was seeking information from authorities in Hong Kong and the southern Chinese province of Guangdong.

In a sign that Cheng’s detention could be retaliation for UK lawmakers’ support for the pro-democracy protesters in HK, Geng cited China’s Public Security Administration Punishment Law, a statute pertaining to minor violations.

Geng warned the UK against meddling in the affairs of its former colony. “The British side has made a lot of erroneous remarks on Hong Kong,” Geng said, urging the UK “to stop pointing fingers and making accusations.”

A “Save Simon Cheng” rally was held Wednesday in HK. 

LOOK: Protesters hold a “Save Simon Cheng” demonstration outside the British Council in Hong Kong.

China says the U.K. Consulate staffer has been held under a 15-day administrative detention process in Shenzhen #香港 pic.twitter.com/NLsQQ7AsRn

— Bloomberg TicToc (@tictoc) August 21, 2019

Cheng’s disappearance has upset the UK consulate (though its reasons for not going public remain a mystery) given Beijing’s tendency to retaliate against diplomatic personnel. Chinese police have charged a former Canadian diplomat and a Canadian businessman with espionage, purportedly as retaliation for the decision to arrest Huawei CFO Meng Wanzhou.





 
 
 

Phil's Favorites

South Africa is caught in the global hype of the fourth industrial revolution

 

South Africa is caught in the global hype of the fourth industrial revolution

There’s nothing inherent in Fourth Industrial Revolution technologies that will result in economic growth. Shutterstock

Courtesy of Alison Gillwald, University of Cape Town

South Africa is caught up in the global hype of the Fourth Industrial Revolution (4IR). This is distracting it from the unfinished business of redressing inequality and creating the preconditions for an inclusive digital economy and society.

Reinvented by Klaus Schwab of the World Econo...



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Zero Hedge

Yield Curve Tumbles Back Into Inversion As Fed Sparks Mid-Cycle Maelstrom

Courtesy of ZeroHedge View original post here.

Today's chaos was brought to you by the the words "mid-cycle" (market threw a tantrum that The Fed Minutes were not more dovish) and "inverted" (the much-watched 2s10s curve tumbled back into inversion)  and the number '16' (line in the sand for VIX and gamma)

Chinese stocks trod water overnight...

Source: Bloomberg

Source: Bloomberg

European stocks surged on the day, led by Italy...

...



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Kimble Charting Solutions

Gold Is Knocking On Key Breakout Level

Courtesy of Chris Kimble

In 2013, Gold broke below its 23 percent Fibonacci retracement level and a bearish trend change took place at (1).

This was the beginning of a bigger decline that saw gold fall another 450 dollars.

Nearly six years later, Gold returns to this “breakdown” level in hopes of making it a new “breakout” level at (2).

If Gold can breakout at (2) it will send a very bullish message to the market.

Stay tuned – gold bulls are knocking on heaven’s door!

If pattern opportunities in Gold, Silver, Copper and Miners is imp...



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Insider Scoop

Earnings Scheduled For August 21, 2019

Courtesy of Benzinga

Companies Reporting Before The Bell
  • Analog Devices, Inc. (NASDAQ: ADI) is estimated to report quarterly earnings at $1.22 per share on revenue of $1.45 billion.
  • Lowe's Companies, Inc. (NYSE: LOW) is expected to report quarterly earnings at $2 per share on revenue of $20.94 billion.
  • Target Corporation (NYS...


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Lee's Free Thinking

Watch Out Bears! Fed POMO Is Back!

Courtesy of Lee Adler

That’s right. The Fed is doing POMO again.  POMO means Permanent Open Market Operations. It’s a fancy way of saying that the Fed is buying Treasuries, pumping money into the financial markets.

Over the past 6 days, the Fed has bought $8.6 billion in T-bills and coupons. These are the first regular Fed POMO Treasury operations since the Fed ended outright QE in 2014.

Who is the Fed buying those Treasuries from?

The Primary Dealers. Who are the Primary Dealers?  I’ll let the New York Fed tell you:

Primary dealers are trading counterparties of the New York Fed in its implementation of monetary policy. They are also expected to make markets for the New York Fed on behalf of its official accountholders as needed, and to bid on a ...



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The Technical Traders

Fed Too Late To Prevent A Housing Market Crash?

Courtesy of Technical Traders

Real Estate is one of the biggest purchases anyone will make in their lifetime.  It can account for 30x to 300x one’s annual income and take over 30 years to pay off.  After you’re done paying for your property, now you have to keep paying to maintain it and to support the property taxes to keep it.  What has happened to the US Real Estate market since the 2008-09 global credit market collapse and is the US Fed behind the curve?

Case-Shiller Home Price Index

One of the most common indicators used to measure national housing affordability and price trend is the Case-Shiller Home Price Index.  In this chart, we are displaying the Case-Shiller National Home ...



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Chart School

Bitcoin 2019 fractal with Gold 2013

Courtesy of Read the Ticker

Funny how price action patterns repeat, double tops, head and shoulders. These are simply market fractals of supply and demand.

More from RTT Tv

Ref: US Crypto Holders Only Have a Few Days to Reply to the IRS 6173 Letter

Today's news from the US IRS has been blamed for the recent price slump, yet the bitcoin fractal like the gold fractal suggest the market players have set bitcoin up for a slump to $9000 USD long before the IRS news hit the wire.

Get the impression some market players missed out on the b...

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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

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/Shutterstock.com

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



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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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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.

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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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