Posts Tagged ‘White House’

Rosie On The Fed’s Intent To Get Everyone Onboard Its All-In Bet On Stocks

Rosie On The Fed’s Intent To Get Everyone Onboard Its All-In Bet On Stocks

Courtesy of Tyler Durden at Zero Hedge

Just in case there is someone living in a cave who still doesn’t understand that the Fed’s one and only mandate (forget that crap about inflation and jobs) is to give everyone one last shove into the all inponzi before the diarrhea hits the HVAC, here is David Rosenberg explaining, for the cheap seats, what the Fed’s terminal intent is.

The Fed’s intent is not to create consumer inflation, but rather asset inflation — primarily in the equity market. By pulling longer-term bond yields lower, the Fed hopes that this will alter how investors value equities relative to the fixed-income market. Moreover, the Fed will be actively pushing up the value of bonds that exist in investor portfolios, and as such the intent is to induce these investors to rebalance their asset mix towards equities in order to maintain their current allocation. The Fed is also trying to incentivize fund flows into the equity market. This in turn would theoretically boost household wealth and as such make consumers, who now feel richer, to go out and spend more. So the theory goes — we shall see how it works in practice.

The Fed’s intent is also to lower both the debt and equity cost of capital so that companies will, at the margin, compare that to expected returns on newly invested capital and begin to spend more on new plant and equipment. The hope here is that the investment spending multiplier will kick in and that stepped-up job creation would occur in tandem with the renewed capex growth.

In essence, the Fed wants to avoid what happened in Japan over the last two decades — have a look at Japan Goes from Dynamic to Disheartened on the front page of the Sunday NYT. The comment in the article to the effect that back in 1991, the consensus was looking for the Japanese economy to begin surpassing the U.S. economy in size by 2010. Nice call. Instead, Japan’s economy has not expanded at all since that time whereas the U.S. economy, despite all its problems, has grown 65%.

That said, the U.S. has already experienced a lost decade in many respects, especially as it pertains to the labour market, while Japan has lost two decades. Also have a


continue reading


Tags: , , , , , , , , , , , ,




Paul Farrell Explains Why The Fed-Wall Street Complex Will Self Destruct By 2012

Paul Farrell Explains Why The Fed-Wall Street Complex Will Self Destruct By 2012

Courtesy of Zero Hedge 

Some rather scary predictions out of Paul Farrell today: "It’s inevitable: Wall Street banks control the Federal Reserve system, it’s their personal piggy bank. They’ve already done so much damage, yet have more control than ever.Warning: That’s a set-up. They will eventually destroy capitalism, democracy, and the dollar’s global reserve-currency status. They will self-destruct before 2035 … maybe as early as 2012 … most likely by 2020. Last week we cheered the Tea Party for starting the countdown to the Second American Revolution. Our timeline is crucial to understanding the historic implications of Taleb’s prediction that the Fed is dying, that it’s only a matter of time before a revolution triggers class warfare forcing America to dump capitalism, eliminate our corrupt system of lobbying, come up with a new workable form of government, and create a new economy without a banking system ruled by Wall Street." And just like in the Hangover, where the guy is funny because he’s fat, Farrell is scary cause he is spot on correct.

Handily, Farrell provides a projected timeline of events:

Stage 1: The Democrats just put the nail in their coffin confirming they’re wimps when they refused to force the GOP to filibuster Bush tax cuts for billionaires.

Stage 2: In the elections the GOP takes over the House, expanding its strategic war to destroy Obama with its policy of “complete gridlock” and “shutting down government.”

Stage 3: Post-election Obama goes lame-duck, buried in subpoenas and vetoes.

Stage 4: In 2012, the GOP wins back the White House and Senate. Health care returns to insurers. Free-market financial deregulation returns. Lobbyists intensify their anarchy.

Stage 5: Before the end of the second term of the new GOP president, Washington is totally corrupted by unlimited, anonymous donations from billionaires and lobbyists. Wall Street’s Happy Conspiracy triggers the third catastrophic meltdown of the 21st century that Robert Shiller of “Irrational Exuberance” fame predicts, resulting in defaults of dollar-denominated debt and the dollar’s demise as the world’s reserve currency.

Stage 6: The Second American Revolution explodes into a brutal full-scale class war with the middle class leading a widespread rebellion against the out-of-touch, out-of-control Happy Conspiracy sabotaging America from within.

Stage 7: The domestic class warfare is exaggerated as the Pentagon’s global warnings play out: That by 2020


continue reading


Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,




TLP: At Least That’s Settled

TLP: At Least That’s Settled

Courtesy of Jr. Deputy Accountant 

white house press room

So now we know. The biggest swinging d*ck in the White House press room belongs to the AP.

NYT:

Fox News moves up, The Associated Press moves over and National Public Radio comes in second.

Mark your seating charts. The new assignments for the White House briefing room are in.

The A.P. correspondent will get the highly coveted front-row center seat previously occupied by Helen Thomas, the White House Correspondents Association announced Sunday.

The reporter for Fox will take The A.P.’s former front-row seat, moving up from the second row, and National Public Radio, now in the third-row, will replace Fox. (That’s got to be tough.)

The new assignments are effective immediately.

N.P.R., Fox and Bloomberg News — also seated in the second row — have lobbied for Ms. Thomas’s seat ever since the former United Press International and Hearst News Service writer resigned in June amid controversy over videotaped remarks she made calling on Israelis to get “out of Palestine.”

Here’s a guess: you won’t hear another word from AP about the new seating arrangement and Fox won’t shut up about it. 


Tags: , , , ,




BP CEO Considering Cutting Q2 Dividend As Oil Spill And Liability Estimates Double, Goldman Not Exuberant

BP CEO Considering Cutting Q2 Dividend As Oil Spill And Liability Estimates Double, Goldman Not Exuberant

Courtesy of Tyler Durden, at Zero Hedge 

Those recently popular trades to hedge BP dividends using options to create synthetic BP stock may prove prescient. The WSJ is reporting that the firm is now "considering cutting or deferring its second quarter dividend." The dividend is due to be announced on July 27, and BP’s board may cut it altogether, defer it, or pay all or part in scrip, effectively an IOU to investors, Hayward was quoted as saying." The news comes as Reuters announces that the daily flow rate from the spill is actually double previous estimates: "News that the flow rate may be as high 40,000 barrels (1.68 million gallons/6.36 million liters) per day — twice as much as previously thought — came after the U.S. market closed on Thursday." This is very bad news as it effectively doubles any accrued fines that the firm will ultimately have to pay: the new liability estimate now may be as high as $80 billion! And true to form, an administration official is there to pour some more fuel in the fire: "White House adviser David Axelrod dismissed complaints from BP about the U.S. government’s pressure, saying in an interview Hayward should “spend less time on hyperbole, and a lot more time on trying to solve the problem,” according to the Journal." In other news, in a research note released yesterday, Goldman’s analyst della Vigna expressed a muted enthusiasm for the stock, nothing compared to JPM rabid support for BP stock at these levels.

From Goldman:

BP shares have fallen 12% this week, due to increased pressure on management from the US administration, however no material negative news came through in terms of the size or potential cost of the GoM spill. Additionally the riser cap is in place and appears to be capturing a significant amount of oil. BP shares have now fallen 42% since the accident, underperforming European integrated oils by 23%. This implies that the market is discounting c.US$33 bn of post-tax damages from the spill, equivalent to US$40-50 bn on a pre-tax basis, which is in the upper end of our estimated liability range. Given uncertainties remain, we still see superior risk/reward in Shell and Statoil, both


continue reading


Tags: , , , , , , ,




The OTHER Reason that the U.S. is Not Regulating Wall Street

The OTHER Reason that the U.S. is Not Regulating Wall Street 

Courtesy of Washington’s Blog

Mature businessman dancing along street with briefcase and umbrella

Sure, American politicians have been bought and paid for by the Wall Street giants. See this, this and this.

And everyone knows that the White House and Congress – while talking about cracking down on Wall Street with strict regulation – have actually watered down some of the most important protections that were in place.

For example, Senator Cantwell says that the new derivatives legislation is weaker than the old regulation. And leading credit default swap expert Satyajit Das says that the new credit default swap regulations not only won’t help stabilize the economy, they might actually help to destabilize it.

But the U.S. is not being sold out in a vacuum.

On March 1, 1999, countries accounting for more than 90 per cent of the global financial services market signed onto the World Trade Organization’s Financial Services Agreement (FSA). By signing the FSA, they committed to deregulate their financial markets.

For example, by signing the FSA, the U.S. agreed not to break up too big to fails. The U.S. also promised to repeal Glass-Steagall, and did so 8 months after signing the FSA.

Indeed, in signing the FSA and other WTO agreements, the U.S. has legally bound itself as follows

• No new regulation: The United States agreed to a “standstill provision” that requires that we not create new regulations (or reverse liberalization) for the list of financial services bound to comply with WTO rules. Given that the United States has made broad WTO financial services commitments – and thus is forbidden by this provision from imposing new regulations in these many areas – this provision seriously limits the policy [options] available to address the current crisis.

• Removal of regulation: The United States even agreed to try to even eliminate domestic financial service regulatory policies that meet GATS [i.e. General Agreement on Trade in Services] rules, but that may still “adversely affect the ability of financial service suppliers of any other (WTO) Member to operate, compete, or enter” the market.

• No bans on new financial service “products”: The United States is also bound to ensure that foreign financial


continue reading


Tags: , , , , , , , , ,




Obama Earthquake Rocks Wall Street

Obama Earthquake Rocks Wall Street

Courtesy of John Carney of Clusterstock

paul volcker barack obama

Details of Obama’s new proposal are still hard to come by but this looks huge. 

Sources inside major financial institutions are saying that they are scrambling to see if they will have to spin off operations, change their regulatory status, and perhaps find new business models.

Here’s the AP’s report:

President Obama is calling for tougher regulations on banks that would limit the size and complexity of large financial institutions.

The proposal would also limit banks’ ability to engage in high-risk trades. Restrictions would be placed on proprietary trading by commercial banks to separate those institutions from investment banks.

Obama said Thursday that without these regulations, the financial system will continue to operate under the same rules that led to its near collapse.

The announcement comes as Obama renews his calls for financial regulatory reform, which is being negotiated on Capitol Hill.

Obama’s announcement comes as the White House renewed Obama’s demand that any overhaul of banking regulations contain an independent consumer financial protection agency. The proposed agency is one of the major sticking points in the Senate and the central focus of negotiations between Democrats and Republicans on the Senate Banking Committee.

"The president is not going to compromise because lobbyists tell somebody that we shouldn’t have an agency that protects consumers," White House spokesman Robert Gibbs said. "That’s something the president’s not willing to give up."

The tougher measures to be announced Thursday aim to limit speculation by commercial banks and to keep financial institutions from becoming so big that they pose a risk to the overall economic system.

In focusing attention on Wall Street,however, the administration is also seeking to halt a wave of public anxiety that is benefiting Republicans and undermining Obama’s agenda.

News of the announcement came shortly after Treasury Secretary Timothy Geithner had a private dinner Wednesday night with chief executives from some of the top Wall Street banks.

There was also a new urgency in the Senate to move on the legislation — an attempt to respond to voter anger at Wall Street and bank bailouts that helped propel Republican Scott Brown


continue reading


Tags: , , , , , , , , , , , ,




Obama Terrified Of Another Leg Down In Housing, As Fannie Mae And Freddie Mac Are Set To Go In Dramatic New Direction

Obama Terrified Of Another Leg Down In Housing, As Fannie Mae And Freddie Mac Are Set To Go In Dramatic New Direction

Courtesy of Joe Weisenthal at Clusterstock/The Business Insider

fanniemaehqWhen the Treasury announced on Christmas Eve that it was lifting the limit on how much Fannie Mae (FNM) and Freddie Mac (FRE) could receive, one point that may have been lost on people was that neither of the GSEs were yet anywhere close to the $200 billion they’d been alloted.

It’s not like there was a need, under the current system to give them a permanent, unlimited blank check to cover their losses.

So then, maybe that’s not what’s going on.

Maybe it’s this, via MarketWatch:

The government’s decision to provide unlimited support to Fannie Mae and Freddie Mac probably presages more aggressive action to prop up the U.S. housing market.

The government may put a mortgage-modification effort, called the Home Affordable Modification Program, or HAMP, into overdrive in coming years, pushing for reductions in the principal outstanding on home loans overseen by Fannie and Freddie Bose George, an analyst at Keefe, Bruyette & Woods, wrote in a note to investors Monday.

So basically, Fannie and Freddie will be called on to do everything humanly possible to prop up the housing market in the coming years. Mortgage purchases, principal reductions… everything. And as it goes nuts in its efforts, it will need a blank check so that its lenders don’t even get slightly nervous.

Another serious dip in housing would be killer to this recovery and Obama’s Presidential career. That can’t be let to happen.

See Also: 

Here’s The Secret Reason We Eliminated The Bailout Caps On Fannie And Freddie

 


Tags: , , , , , , ,




The Vicious Circle of Chrysler Crony Capitalism

Courtesy of John Carney at ClusterStock

The Vicious Circle of Chrysler Crony Capitalism

obama-smiling_tbi.jpgWashington Examiner columnist Tim Carney explains how Barack Obama helped himself by helping the UAW:

President Barack Obama’s auto industry policy promises to heighten the influence of lobbyists and to open the door to ethical transgressions and even outright corruption. By naming as car czar a financier who is also a Democratic fundraiser steeped in cozy business-government relationships, and by replacing the traditional bankruptcy procedures with the will of politicians, Obama has injected Detroit with all the elements of crony capitalism…

For the foreseeable future, Chrysler will be on the federal dole, both directly and indirectly. The Obama-Rattner plan puts UAW in charge of Chrysler, which is good news for the Democratic Party.

UAW’s political action committee spent $13.1 million last election cycle, a slow year for the union’s political arm. Of the PAC’s $2.3 million in direct contributions to candidates and candidate PACs, more than 99 percent went to Democrats. Of 42 Senate candidates to get UAW money, only one was Republican, and that was Arlen Specter.

The union’s PAC also reported $4.5 million in independent expenditures supporting Obama, plus an additional $423,000 opposing John McCain.

So, here’s the arrangement: You pay your taxes, the Obama administration funnels some of the money to Chrysler, whose profits enrich the UAW, which in turn funds Obama’s re-election.

Predictability, precedent and the rule of law have been replaced with the fiat of politicians. Chrysler could become a pass-through entity from taxpayers to the Democratic Party. And in charge of it all is a Democratic fundraiser. Boss Tweed would be proud.

But you should go read the whole thing if you want to learn more about Obama’s Car Czar Steve Rattner’s skill at manipulating public policy to create private profits.


Tags: , , , , , , , , ,




 
 
 

Zero Hedge

More Italians Move Savings To Switzerland As Fears Of Banking "Doom Loop" Intensify

Courtesy of ZeroHedge. View original post here.

With the euro weakening against the Swiss franc (recently trading at session lows of 1.14) and Italian stocks and bonds tumbling once again on reports that the European Commission is planning to reject the Italian draft budget plan submitted earlier this week - a repudiation of Italy's populist leaders that was widely anticipated - th...



more from Tyler

Phil's Favorites

Jamal Khashoggi disappearance a defining moment for Saudi Arabia's relations with the West

 

Embed from Getty Images

 

Jamal Khashoggi disappearance a defining moment for Saudi Arabia's relations with the West

Armida L. M. van Rij, King's College London

On October 2, Saudi Arabian journalist Jamal Khashoggi entered his country’s consulate in Istanbul to obtain the documents he needed to marry his fiancée. She was waiting outside. He never came out.

Following days of report...



more from Ilene

Kimble Charting Solutions

Banks Creating Pattern Similar To 2007 Highs?

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

The left chart above looks at the Bank Index (BKX) over the past 13-years. In 2007, the index diverged with the broad market as it was creating a bearish descending triangle. Once support of the descending triangle broke, selling pressure ramped up. This pattern took place while “interest rates were actually moving higher, which is often good for banks.”

This year the bank index has been diverging from the broad market while forming a bearis...



more from Kimble C.S.

Insider Scoop

Musk Will Buy Another $20M In Tesla Stock - The Same Amount He Was Fined By The SEC

Courtesy of Benzinga.

Related TSLA Tesla Trades Higher After Judge Approves Musk's SEC Settlement Saudi Arabia Mixes Oil, Politics After Journ...

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

Digital Currencies

Tether Tumbles Below Critical $1 Threshold As Dollar-Pegged Crypto Doubts Soar

Courtesy of ZeroHedge. View original post here.

Update: Careful to quickly assuage any potential loss of the narrative and 'full faith and credit' of the 'stablecoin', Tether released a statement on USDT drop:

"We would like to reiterate that although markets have shown temporary fluctuations in price, all USDT in circulation are sufficiently backed by U.S. dollars (USD) and that assets have always exceeded liabilities."

See, nothing to panic about.

*  *  *

The only cryptocurrency not rallying right now is the one pegged to the U.S. dolla...



more from Bitcoin

Chart School

Weekly Market Recap Oct 14, 2018

Courtesy of Blain.

Wednesday and Thursday finally brought some fireworks to a very complacent market.   The S&P 500 had not had a 1% move in 74 days until Wednesday’s drawdown.

Rising yields were nailed as the culprit but months of rallying eventually require some sort of shake out – whatever the catalyst.  Wednesday’s sell off was the worst day for the S&P 500 since February and the worst for the NASDAQ since June 2016.

The market losses are “a reaction from investors finally realizing we are in a higher interest-rate environment, and given the elevated level of stocks, market participants were likely looking for a reason to sell,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “Higher interest rates typically bring on tighter ...



more from Chart School

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

Members' Corner

Why obvious lies still make good propaganda

 

This is very good; it's about "firehosing", a type of propaganda, and how it works.

Why obvious lies still make good propaganda

A 2016 report described Russian propaganda as:
• high in volume
• rapid, continuous and repetitive
• having no commitment to objective reality
• lacking consistency

...

more from Our Members

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 >>