Archive for the ‘Phil’s Favorites’ Category

Supply Chain Chaos Unfolds At Major Chinese Ports As Frozen Meat Containers Pile Up

Courtesy of ZeroHedge

New evidence from Bloomberg reveals cracking global supply chains are fast emerging at major Chinese ports with thousands of containers of frozen meat piling up with nowhere to go. 

The Covid19 outbreak will remain a dominant issue for 1Q as supply chain shocks are being felt by multinationals on either side of the hemisphere. 

Sources told Bloomberg that containers of frozen pork, chicken, and beef (mostly from South America, Europe, and the US) are piling up at Tianjin, Shanghai, and Ningbo ports because of the lack of truck drivers and many transportation networks remain closed.

Seaports in China are quickly running out of room to house the containers and cannot provide enough electricity points to keep existing containers cold. This has forced many vessels to be rerouted to other destinations. 

We've already noted that Bloomberg's Stephen Stapczynski recorded footage of an oil tanker parking lot off the Singapore coast last week as refiners in China cut runs as crude consumption has collapsed by more than 4 million barrels per day.  

It's clear that a logistical nightmare is unfolding as two-thirds of the Chinese economy has effectively shut down much of its production capacity, producing a massive "demand shock." 

The impact on the global economy is already dragging down world trade and could force the World Trade Organization (WTO) to slash economic growth forecasts for the year.

The Chinese economy constitutes about 20% of global GDP, and supply chain disruptions across China could cause a cascading effect that could tilt the world into recession. 

But it's not just frozen meats piling up at Chinese ports or a crude glut developing. There's a high risk that product shortages to Western countries could be 60-90 days out. 

Alibaba Group's CEO Daniel Zhang warned last week that the supply chain disruption, or "shock," is a "black swan event" for the global economy. 

The "black swan" warning was also repeated by Freeport-McMoRan CEO Richard Adkerson several weeks ago after he said the outbreak of the virus in China is a "real black swan event." 

China's economy is at a standstill and could trigger the next economic crisis, not seen since 2008. 

 





Fed Slashes 14-Day Repo Loans to $25 Billion; Will Cut Further in March

Courtesy of Pam Martens

Jerome Powell, Chairman of the Federal Reserve

Jerome Powell, Chairman of the Federal Reserve

Federal Reserve Chairman Jerome Powell sat through two days of grueling hearings before the House Financial Services Committee and Senate Banking Committee last week. At numerous times, the Fed and Powell were portrayed by Congressional members as sugar daddies for Wall Street while aloof to the financial suffering of the average American. (See Fed Chair Tells Congress There Is a 10-Year “Game Plan” to Deal with Financial Crisis But No Plan to Deal with Americans Left Devastated By It.)

The House Financial Services Committee held its hearing on Tuesday. The Senate Banking Committee held its hearing on Wednesday. On Thursday, in a surprise move, the Fed announced that it would be trimming the $30 billion it has been making in 14-day loans (at about 1.60 percent interest) to Wall Street’s trading houses to $25 billion through March 12 and trimming that amount even further to $20 billion beginning on March 17. The 14-day loans are made twice a week, typically on Tuesday and Thursday, and are in addition to the daily 1-day loans the Fed has been making every business day to trading houses on Wall Street since September 17 of last year.  The 1-day loans currently have a cap of $100 billion per day.

This morning’s money funnel by the Fed to Wall Street totaled $78.55 billion. It consisted of $53.55 billion in a 1-day loan and $25 billion in the 14-day loan. It’s not a good sign that the 14-day loan was oversubscribed by $14.9 billion. The demand for more 14-day money than the Fed is willing to supply has been happening regularly of late.


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Strange Stuff on Wall Street: Big Job Cuts, Fed Bailout, Record Markets

Courtesy of Pam Martens

New York Stock Exchange Trading Floor

New York Stock Exchange Trading Floor

HSBC has become the latest bank with a big Wall Street footprint to announce job cuts. After announcing that its 2019 profits fell by about a third, it said it would cut 35,000 jobs over the next three years. Some of the job cuts are expected to fall within its investment banking business in the U.S.

The HSBC news comes amid a steady drumbeat of similar news on Wall Street. In July of last year, another European bank with heavy derivative ties to Wall Street, Deutsche Bank, confirmed plans to cut 18,000 jobs. In the same month, Bloomberg News reported that Citigroup would be cutting hundreds of trading jobs. Then in September Commerzbank announced it would trim 4300 jobs. That news was followed by CNN reporting in December that Morgan Stanley would cut 1500 jobs.

This is by no means an exhaustive list, but you get the picture. So here’s a quick IQ test. Find the two words in this sentence that don’t sound logical. “The situation is so bad on Wall Street that major trading houses are announcing big job cuts, the Fed is conducting a new bailout program by making hundreds of billions of dollars in cheap repo loans each week to the Wall Street trading houses, and the stock market is regularly setting new highs.” If you selected the words “new highs” you win the rational thinker award.

Indeed, in a rational world, big Wall Street job cuts and the need for massive bailout money from the Fed would not correlate with a stock market regularly setting new highs. But Wall Street no longer exists in a rational universe. It exists in an alternative universe where Wall Street banks are allowed to put out a buy recommendation on a company and then trade its stock in their own Dark Pools; where trillions of dollars of risky stock derivatives are held by the country’s largest federally-insured bank; where initial public offerings of deeply indebted companies that have never made a dime of profits are hustled for listing on the nation’s stock exchanges; and where Wall Street is allowed by the…
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Bloomberg Has Built a Star Wars Machine to Try to Steal the Democratic Nomination

Courtesy of Pam Martens

Billionaire Owner of Bloomberg News, Michael Bloomberg

Michael Bloomberg

Billionaire Michael Bloomberg is used to getting his way. After serving two terms as New York City’s Mayor as a Republican, he used his own vast stash of cash to repeal term limits and give himself another four-year term, running as an Independent. Now he has promised to do the unprecedented: spend $1 billion of his own money to install himself as President of the United States, running on the Democratic ticket.

Bloomberg’s campaign increasingly resembles an octopus with money gushing out of its tentacles into anything and everything that will inject Michael Bloomberg into the presidential dialogue on the local, national or social media stage. And there is an unusually dark curtain being drawn around the early days of that spending.

While there has been much media ado about the first Federal Election Commission filing that Bloomberg made in January, covering expenditures through December 31, 2019, there has been little to no acknowledgement of the fact that $81.8 million of the $188 million in disbursements were actually contributions in kind from Michael Bloomberg or his business, Bloomberg L.P., or were to simply acknowledge expenditures they had made on behalf of the campaign by one of the two. For example, an entry dated December 31, 2019 shows a “disbursement” to Bloomberg L.P. from the campaign committee, Mike Bloomberg 2020 Inc., for an even $10 million categorized as “Prepayment of Campaign Expenses.” There is no granular details on this or any of the other myriad disbursements to a “Bloomberg” entity.

We reached out to the Bloomberg campaign and asked what was going on. The campaign’s response came from Stu Loeser, whom Lee Fang at the Intercept reports was previously “retained by Purdue Pharma, makers of OxyContin, to combat widespread criticism that the company had fueled the opioid addiction crisis.” Loeser explained the disbursements as follows:

“None of what you are seeing are reimbursements to the campaign, they are all in-kind contributions — expenditures Mike made personally before he decided to run for President that had to be accounted for in our first filing. So, for instance, Mike paid for the ad we released to announce his candidacy personally and our filing counts it as an in-kind contribution.”


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Coronavirus: the blow to the Chinese economy could be felt for years

 

Coronavirus: the blow to the Chinese economy could be felt for years

Courtesy of Chusu He, Coventry University

Investors are still being fairly complacent about the novel coronavirus. After the number of new daily cases suddenly shot up to more than 15,000 on February 12 following more than a week of decline, there were some jitters in the markets. With Chinese authorities saying the increase was due to a decision to broaden the definition for diagnosing people, there were falls in the region of 1% in European markets, and smaller retrenchments in Asia and North America.

It is a fairly minor shift in sentiment after a few days in which investor concerns had been steadily receding. There appears to be a real danger of underestimating the likely economic impact of this crisis. China’s manufacturing sector in particular faces an unprecedented challenge because supply chains have been so seriously disrupted.

Coronavirus daily new cases

Worldometers

Well over 80 cities have gone into lockdown, including the entire areas of five Chinese provinces – Hubei, Liaoning, Jiangxi, An’hui and Inner Mongolia – and four main cities in Zhejiang province, affecting well over 275 million people. Since February 10, Beijing and Shanghai have further restricted the movement of people, having already extended the Chinese New Year break.

My parents live in Jiangxi province and are among millions semi-quarantined at home. The local government allows one person from each household to go out every two day to buy necessities. Even in cities not under compulsory lockdown, there are rarely people on the streets. The tweet below shows the Nanjing Road in Shanghai, the busiest shopping precinct in the country. It was taken on January 26 but the situation is not much better now.

This is taking a serious toll on the Chinese economy. No statistics on the actual losses are available yet, but for example, the number of intercity passengers on public…
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Designing artificial brains can help us learn more about real ones

 

Designing artificial brains can help us learn more about real ones

Understanding how the computations in the brain go wrong could help scientists develop treatments for neurological disorders. (Shutterstock)

Courtesy of Blake Richards, McGill University

Despite billions of dollars spent and decades of research, computation in the human brain remains largely a mystery. Meanwhile, we have made great strides in the development of artificial neural networks, which are designed to loosely mimic how brains compute. We have learned a lot about the nature of neural computation from these artificial brains and it’s time to take what we’ve learned and apply it back to the biological ones.

Neurological diseases are on the rise worldwide, making a better understanding of computation in the brain a pressing problem. Given the ability of modern artificial neural networks to solve complex problems, a framework for neuroscience guided by machine learning insights may unlock valuable secrets about our own brains and how they can malfunction.

Our thoughts and behaviours are generated by computations that take place in our brains. To effectively treat neurological disorders that alter our thoughts and behaviours, like schizophrenia or depression, we likely have to understand how the computations in the brain go wrong.

However, understanding neural computation has proven to be an immensely difficult challenge. When neuroscientists record activity in the brain, it is often indecipherable.

In a paper published in Nature Neuroscience, my co-authors and I argue that the lessons we have learned from artificial neural networks can guide us down the right path of understanding the brain as a computational system rather than as a collection of indecipherable cells.

Brain network models

Artificial neural networks are computational models that loosely mimic the integration and activation properties of real neurons. They have become ubiquitous in the field of artificial intelligence.

To construct artificial neural networks, you start by first designing the network architecture: how the different components of the network are connected to one another. Then, you define the learning goal for the architecture, such as “learn to predict what you’re going to see next.” Then, you define a rule that tells the network how to change in…
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These Are the Goods

 

These Are the Goods

Courtesy of 

Articles

The real expected value of random stock research is zero, by Tyro Capital

Home prices are rising faster than wages in roughly 80 percent of American metro regions, by Annie Lowrey

Dynamic withdrawal strategies transform sequence risk into lifestyle risk, by Adam Collins

What tech has done to retail, is unfolding in media, by Scott Galloway

The problem when studying historical events is that you know how the story ends, and it’s impossible to un-remember what you know today when thinking about the past, by Morgan Housel 

If you’re a long-term investor in equities, experiencing a large decline is a matter of when, not if, by Charlie Bilello

My heart is full and my cup runneth over, by Blair duQuesnay

If history is any indicator, those skittish during the great bull market will be panic stricken when volatility hits, by Verdad Capital

Sometimes you have to light your money on fire, by Ben Carlson

One of the arguments for why markets crash during viral outbreaks is that market participants are anticipating worsening results, by Nick Maggiulli

Podcasts

I’ve never been afraid of taking big risks, with Bill Simmons and Bob Iger

Books

In August, the Chicago Mercantile Exchange alone identified forty-six instances where Deutsche had violated technical rules regarding the trading of derivatives, by David Enrich

 




Hedge Fund CIO: Guys Text Me All Day, The Dumbest Of The Dumb Are Making Hundreds Of Thousands Daytrading Tesla Right Now

Courtesy of ZeroHedge

Submitted by Eric Peters, CIO of One River Asset Management

"You always knew you’d know it when you saw it,” said Roadrunner. “But you could never be sure what it would look like until you saw it,” continued the market’s biggest equity vol trader. “This is it – now we know. We’re in this cycle’s euphoria stage,” said Roadrunner.

“The Tesla move we just saw is unlike anything I’ve experienced.” Amazon trades 2.5-3.0mm shares on a busy day. Tesla traded 60mm. “1.4mm Tesla options traded. And vol was 170. I’m guessing that in notional terms it was the busiest day for a single stock in history."

"The Tesla flows are mostly retail,” continued Roadrunner. “And most of the flow is in one-week options.” Which tells you it’s pure speculation. “Guys text me all day. And the dumbest of the dumb are making hundreds of thousands in their personal accounts right now.” Animal spirits have been unleashed. The shift by brokers to offer zero-commission equity-trading added to the market’s energy.

“This is Millennial kind of action. It’s like it was in 1999. It’s a race to the top, fear of missing out kind of move,” said Roadrunner, glancing left, right, up.

"This year is set to be wild,” said Roadrunner. “The big bear market probably waits till right after the election, and it won’t matter if Trump wins or loses,” he said.

So that means you need to get out well ahead of Nov, because bear markets have a way of outsmarting almost everyone,” said Roadrunner. “And as this phase ends, the question is what will replace it?” he asked, stopping to scan the horizon. “I wonder if Larry Fink’s recent ESG theme kicks off a self-fulfilling bubble in a whole group of new names. Maybe Tesla is showing us the way."

"Sentiment is not yet off the charts,” bellowed Biggie Too. “And the data does not say boom or bust, inflation or deflation,” continued the global chief investment strategist for one of Wall Street’s too-big-to-fail affairs. “It’s just that when you


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How to Stop Bill Barr

 

How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

THE THREE INDIVIDUALS on whose support the impeached criminal Donald John Trump most depends are Rupert Murdoch, owner of News Corp., who heads the president’s popular propaganda media network; Mitch McConnell, the obstructionist Senate Majority Leader, who throttled the will of the people in the sham impeachment trial; and, above all, William Barr, the nihilist Attorney General, who has done everything in his considerable power to insulate Trump from the law—and, thus, to lurch our democracy toward despotism.

Murdoch will remain at Fox until he steps into direct sunlight or Van Helsing stakes his charred and ashy heart. McConnell will be dealt with in November, at the ballot box. But Barr represents a clear and present danger to the United States. His maneuvers at Justice have neutralized the Office of the Special Counsel, which Barr almost certainly shut down early, inoculating Trump and his minions from further investigation, despite the President’s numerous and egregious crimes.

With the news that the DOJ revised its sentencing recommendations for convicted Trumpist Roger Stone, and the subsequent resignation of all four of the federal prosecutors working that case in protest, it is now clear that, to help his orange overlord, Barr is willing to put his fat thumb on the scales of justice. This is especially dangerous because Barr, like McConnell, but alone among Trump cabinet members, actually knows how to wield the mighty powers at his command.

Let me be clear: Barr is not all-powerful. The DOJ is not a monolith, and it is staffed, in the main, by patriots, not traitors—as demonstrated by the aforementioned protest resignations of the four federal prosecutors. These patriots are doing their jobs, albeit working in what must be less-than-ideal circumstances. Even the report that Barr must sign off on any investigations into the president or any presidential candidate is not necessarily the tyrannical power-grab it might seem at first glance:

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Coronavirus: The latest disease to fuel mistrust, fear and racism

 

Coronavirus: The latest disease to fuel mistrust, fear and racism

Medical staff strike over coronavirus concerns in Hong Kong. Hospital workers are demanding the border with mainland China be shut completely to ward off the virus. (AP Photo/Vincent Yu)

Courtesy of Korey Pasch, Queen's University, Ontario

With the outbreak of the novel coronavirus (2019-nCoV) in Wuhan, China, stories of courage and strength have captured our collective attention as the disease spreads.

We have also seen large-scale efforts in China to combat coronavirus, including the construction of new hospitals and facilities in provincial areas as well as the massive quarantine of millions of people.

While efforts to address the disease move forward, the outbreak has also revealed the darker side of human nature and our responses to new diseases and other catastrophic events: mistrust, fear and outright racism.

Here in Canada, we have seen racism and stereotyping of the Chinese community as the number and location of cases of coronavirus have spread and fear of the outbreak festers.

The surge of fear and racism in the face of this latest outbreak is similar to previous experiences in the wake of other diseases, such as the Ebola and Severe Acute Respiratory Syndrome (SARS) viruses.

Yet the prevalence of racism and scapegoating in the face of catastrophes and disasters has a much longer history than these more recent outbreaks.

This history provides important context and is worth reflecting upon. It reminds us that disasters and catastrophes are not exclusively natural phenomena, and are also a result of the economic, political and social decisions that create vulnerability to risk.

Importantly, discrimination, racism and scapegoating has been used to distract from the underlying economic, political and social decisions that produced vulnerability to disaster and disease in the first place.

Disasters aren’t natural

While many headlines highlight “natural” disasters in the aftermath of the latest catastrophe, researchers in the field of disaster studies have long demonstrated the social construction of these events.

This means that catastrophes, whether they’re the latest earthquake, hurricane or outbreak of disease like the coronavirus, are fundamentally connected…
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Phil's Favorites

What scientists are doing to develop a vaccine for the new coronavirus

 

What scientists are doing to develop a vaccine for the new coronavirus

It is critical to learn more about SARS-CoV-2, including its source and why transmission appears to be more efficient than with previous coronaviruses. (Shutterstock)

Courtesy of Marc-Antoine De La Vega, Université Laval

With an increasing number of confirmed cases in China and 24 other countries, the COVID-19 epidemic caused by the novel coronavirus (now known as SARS-CoV-2) looks concerning to many. As of Feb. 19, the latest numbers listed 74,280 confirmed cases including 2,006 deaths. Four of these de...



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Biotech & Health

What scientists are doing to develop a vaccine for the new coronavirus

 

What scientists are doing to develop a vaccine for the new coronavirus

It is critical to learn more about SARS-CoV-2, including its source and why transmission appears to be more efficient than with previous coronaviruses. (Shutterstock)

Courtesy of Marc-Antoine De La Vega, Université Laval

With an increasing number of confirmed cases in China and 24 other countries, the COVID-19 epidemic caused by the novel coronavirus (now known as SARS-CoV-2) looks concerning to many. As of Feb. 19, the latest numbers listed 74,280 confirmed cases including 2,006 deaths. Four of these de...



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Members' Corner

Why do people believe con artists?

 

Why do people believe con artists?

Would you buy medicine from this man? Carol M. Highsmith/Wikimedia Commons

Courtesy of Barry M. Mitnick, University of Pittsburgh

What is real can seem pretty arbitrary. It’s easy to be fooled by misinformation disguised as news and deepfake videos showing people doing things they never did or said. Inaccurate information – even deliberately wrong informatio...



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Zero Hedge

Easily Overlooked Issues Regarding COVID-19

Courtesy of ZeroHedge View original post here.

Authored by Gail Tverberg via Our Finite World,

We read a lot in the news about the new Wuhan coronavirus and the illness it causes (COVID-19), but some important points often get left out.

[1] COVID-19 is incredibly contagious.

COVID-19 transmits extremely easily from person to person. Interpersonal contact doesn’t need to be...



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The Technical Traders

Gold Rallies As Fear Take Center Stage

Courtesy of Technical Traders

Gold has rallied extensively from the lows near $1560 over the past 2 weeks.  At first, this rally didn’t catch too much attention with traders, but now the rally has reached new highs above $1613 and may attempt a move above $1750 as metals continue to reflect the fear in the global markets.

We’ve been warning our friends and followers of the real potential in precious metals for many months – actually since early 2018.  Our predictive modeling system suggests Gold will rally above $1650 very quickly, then possibly stall a bit before continuing higher to target the $1750 range.

The one thing all skilled traders must consider is the longer-term fear that is build...



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Kimble Charting Solutions

Precious Metals Eyeing Breakout Despite US Dollar Strength

Courtesy of Chris Kimble

Gold and silver prices have been on the rise in early 2020 as investors turn to precious metals as geopolitical concerns and news of coronavirus hit the airwaves.

The rally in gold has been impressive, with prices surging past $1600 this week (note silver is nearing $18.50).

What’s been particularly impressive about the Gold rally is that it has unfolded despite strength in the US Dollar.

In today’s chart, we look at the ratio of Gold to the US Dollar Index. As you can see, this ratio has traded in a rising channel over the past 4 years.

The Gold/US Dollar ratio is currently attempting a breakout of this rising channel at (1).

This would come on further ...



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Insider Scoop

68 Stocks Moving In Friday's Mid-Day Session

Courtesy of Benzinga

Gainers
  • Trans World Entertainment Corporation (NASDAQ: TWMC) shares climbed 120.5% to $7.72 after the company disclosed that its subsidiary etailz entered into a deal with Encina for $25 million 3-year secured revolving credit facility.
  • Celldex Therapeutics, Inc. (NASDAQ: CLDX) fell 39.8% to $3.1744. Cantor Fitzgerald initiated coverage on Celldex Therapeutics with an Overweight rating and a $8 price target.
  • TSR, Inc. (NASDAQ: TSRI) gained 36.2% to $8.17.
  • ...


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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Tuesday, 01 October 2019, 02:18:22 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Wall of worry, or cliff of despair!



Date Found: Tuesday, 01 October 2019, 06:54:30 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       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. Contact Ilene to learn about our affiliate and content sharing programs.