• Bannon: “The Trump Presidency That We Fought For Is Over”

    / Aug 19, 2017 12:51 PM
    In his first interview shortly after the White House announced that it was parting ways with Trump’s chief strategist, Steve Bannon told the Weekly Standard on Friday afternoon that “the Trump presidency that we fought for, and won, is over.” After confirming his departure Bannon said that ‘we still have a huge movement, and we will make something of this Trump presidency. But that presidency is over. It’ll be something else. And there’ll be all kinds of fights, and there’ll be good days and bad days, but that presidency is over.’
    In his interview with the conservative publication, Bannon predicted that in the wake of his departure, Trump’s administration would “be much more conventional” as his absence from the White House would make it ‘much harder’ for Trump to pave a way forward on issues like ‘economic nationalism and immigration.’ He also predicted that republicans would “moderate” Trump:
    ‘I think they’re going to try to moderate him,’ he says. ‘I think he’ll sign a clean debt ceiling, I think you’ll see all this stuff. His natural tendency – and I think you saw it this week on Charlottesville – his actual default position is the position of his base, the position that got him elected. I think you’re going to see a lot of constraints on that. I think it’ll be much more conventional.’
    In Bannon’s view, his departure is not a defeat for him personally but for the ideology he’d urged upon the president, as reflected in Trump’s provocative inaugural address in which he spoke of self-dealing Washington politicians, and their policies that led to the shuttered factories and broken lives of what he called ‘American carnage.’ Bannon co-authored that speech (and privately complained that it had been toned down by West Wing moderates like Ivanka and Jared).

    This post was published at Zero Hedge by Tyler Durden.

  • Doug Noland: Crisis of Confidence

    Global markets are indicating heightened vulnerability. Thursday trading saw the S&P500 decline 1.54%, the second biggest decline of 2017. The session also saw the junk bond market under pressure. A notable $2.18bn of junk fund outflows this week spurred the headline, ‘Risk Exodus Gets Real With Biggest Fund Redemptions in 6 Months.’ Currency markets are increasingly unstable. The euro traded to 1.1838 on Monday and fell to a trading low of 1.1662 on Thursday. The dollar/yen rose to 110.95 on Wednesday before reversing course to a near nine-month low of 108.60 during Friday trading. Gold traded to $1,300 in early Friday trading, the high going back to the election. Early-week market relief over the North Korean situation quickly shifted to unease over festering domestic issues.
    August 16 – Wall Street Journal (Gabriel Wildau): ‘One of the most influential analysts of China’s financial system believes that bad debt is $6.8tn above official figures and warns that the government’s ability to enforce stability has allowed underlying problems to go unchecked. Charlene Chu built her reputation as China banking analyst at credit rating agency Fitch, where she was among the earliest to warn of risks from rising debt, especially in the country’s shadow banking system… In her latest report, Ms Chu estimates that bad debt in China’s financial system will reach as much as Rmb51tn ($7.6tn) by the end of this year, more than five times the value of bank loans officially classified as either non-performing or one notch above. That estimate implies a bad-debt ratio of 34%, well above the official 5.3% ratio for those two categories at the end of June… ‘What I’ve gotten a greater appreciation for is how everything is so orchestrated by the authorities,’ she said. ‘The upside is that it creates stability. The downside is that it can create a problem of proportions that people would think is never possible. We’re moving into that territory.”

    This post was published at Wall Street Examiner on August 19, 2017.

  • Dilbert’s Scott Adams Explains “How To Know You’re In A Mass Hysteria Bubble”

    History is full of examples of Mass Hysterias. They happen fairly often. The cool thing about mass hysterias is that you don’t know when you are in one. But sometimes the people who are notexperiencing the mass hysteria can recognize when others are experiencing one, if they know what to look for.
    I’ll teach you what to look for.

    A mass hysteria happens when the public gets a wrong idea about something that has strong emotional content and it triggers cognitive dissonance that is often supported by confirmation bias. In other words, people spontaneously hallucinate a whole new (and usually crazy-sounding) reality and believe they see plenty of evidence for it. The Salem Witch Trials are the best-known example of mass hysteria. The McMartin Pre-School case and the Tulip Bulb hysteria are others. The dotcom bubble probably qualifies. We might soon learn that the Russian Collusion story was mass hysteria in hindsight. The curious lack of solid evidence for Russian collusion is a red flag. But we’ll see how that plays out.

    This post was published at Zero Hedge on Aug 18, 2017.

  • The Real Story Behind Goldman’s Q2 Trading Loss: How A $100M Gas Bet Went Awry

    Goldman Sachs FICC-trading income was an unexpectedly ugly blemish on what was already a poor Q2 earnings report. And while the FDIC-backed hedge fund initially blamed the decline on lower trading revenues, lack of volatility and depressed client activity…

    … there was more to the story. The Wall Street Journal has uncovered what really happened: A $100 million bet on regional natural-gas prices gone awry after production problems at a local pipeline sent prices soaring, decimating Goldman’s position.
    ‘Goldman wagered that gas prices in the Marcellus Shale in Ohio and Pennsylvania would rise with the construction of new pipelines to carry gas out of the region, said people familiar with the matter. Instead, prices there fell sharply in May and June as a key pipeline ran into problems.’
    More specifically…

    This post was published at Zero Hedge on Aug 18, 2017.

  • Rogoff Tells Central Banks More Negative Interest Rates Will Be Needed

    Kenneth Rogoff, the Professor of Economics at Harvard University, is stuck in a time warp where he cannot think out of the box even once. He is telling the central banks that the next recession they will have to resort to negative interest rates and they should prepare now. Despite the fact that negative rates have failed to work in Europe or Japan, seems to be nothing to really consider. So what after almost 10 years of failed policies at the European Central Bank, it will eventually work maybe in 12 or 13 years? It just requires patience? Well even a broken watch is correct twice a day for a brief moment in time.
    This is the problem with academics. They don’t get the calls for help. A friend in the central bank of Canada referred a major Canadian company to us.

    This post was published at Armstrong Economics on Aug 19, 2017.

  • U.S. Has 3.5 Million More Registered Voters Than Live Adults – A Red Flag For Electoral Fraud

    American democracy has a problem – a voting problem.
    According to a new study of U. S. Census data, America has more registered voters than actual live voters. It’s a troubling fact that puts our nation’s future in peril.
    The data come from Judicial Watch’s Election Integrity Project. The group looked at data from 2011 to 2015 produced by the U. S. Census Bureau’s American Community Survey, along with data from the federal Election Assistance Commission.
    As reported by the National Review’s Deroy Murdock, who did some numbers-crunching of his own, “some 3.5 million more people are registered to vote in the U. S. than are alive among America’s adult citizens. Such staggering inaccuracy is an engraved invitation to voter fraud.”

    This post was published at Zero Hedge on Aug 18, 2017.

  • Gold Is Money: It’s Elemental!

    Gold is money. That’s one of the main reasons you want to own gold.
    Gold possesses all of the characteristics of money Aristotle listed 2,000 years ago. The philosopher said sound money must be durable, portable, divisible, and have intrinsic value. You can check off all four of these characteristics for gold. You can also add a fifth characteristic to Aristotle’s list. Sound money cannot be easily manipulated by central bankers – i.e. created out of thin air. That’s why the yellow metal has held its value over time while fiat currencies have fallen in value.
    But a chemistry professor at University College London said there is an even more elemental reason gold is money.
    Gold is boring. Chemically speaking that is.
    In a 2013 BBC article, Andrea Sella argued that its chemical makeup makes gold the perfect element to function as money. It is stable. It doesn’t react with other elements. It doesn’t break down over time.
    In fact, gold was chemically destined to be money.

    This post was published at Schiffgold on AUGUST 18, 2017.

  • Weekend Reading: Losing Faith?

    33% of surveyed asset managers in latest BoA ML GFMS believe corporate profits will improve, down from 58% earlier in year $SPX $SPY pic.twitter.com/u8HC2l6PTB
    — Babak (@TN) August 15, 2017

    Last week, I penned the following:
    ‘Now, you would suspect the possibility of nuclear war might just be the catalyst to send markets reeling, but looking at the market’s reaction on Thursday, I suspect there will be t-shirts soon reading:
    ‘I survived the threat of nuclear war and the ‘great crash of 2017′ of 1.5%’’
    Of course, as markets touched on their 50-dma, the algos kicked in hard on Monday morning sending the markets surging higher. The reason, according to the media, was the reduction in global risk as Donald Trump briefed Kim Jung-Un about the U. S.’s retaliatory response should North Korea decide to attack Guam.
    I was able to acquire a copy:

    This post was published at Zero Hedge on Aug 18, 2017.

  • Current AI Recession Forecast: June 2019

    Earlier this year, FS Insider discussed a new machine-learning “forecasting engine” developed by San-Diego-based Intensity Corporation used for economic and revenue forecasting, large-scale investing, supply chain optimization, and a wide range of other areas.
    The current forecast their platform is giving for a US recession is June 2019, which is updated daily on their website here along with a one-year forecast history (shown below).

    This post was published at FinancialSense on 08/18/2017.

  • Cashing Out of Unicorns Gets Hard

    Until shares can be sold, ‘valuations’ remain fake wealth. With Friends like these…
    Goldman Sachs’ hedge fund, Goldman Sachs Investment Partners, has offloaded over $75 million of Spotify shares, or ‘less than half’ of its stake, in recent weeks, Sky News ‘has learnt’ from ‘insiders.’ This is peculiar because the Swedish music streaming service is preparing to list its shares on the New York Stock Exchange at a valuation of $13 billion, and confusingly, Goldman Sachs is one of the three investment banks that are advising Spotify on this ‘direct listing.’
    A source told Sky News that Goldman Sachs had ‘practical reasons to sell a small stake.’
    So what does Goldman Sachs know that others don’t?
    A ‘direct listing’ is not an IPO. It bypasses underwriters and their hefty fees and avoids the whole issue of IPO pricing. It also means that Spotify would not raise any new capital via this listing, which is planned for later this year or early next year. If it succeeds, it’ll be the first major direct listing on the NYSE. If other companies follow the example, investment banks, losing out on underwriting fees, would not be happy campers.
    Spotify is one of the 167 ‘unicorns’ in the US, Europe, and Asia listed in the Billion Dollar Startup Club: venture-capital funded startups that have reached ‘valuations’ during their last round of fund-raising of $1 billion or more.

    This post was published at Wolf Street by Wolf Richter ‘ Aug 18, 2017.

  • The Relationship Between Saving and Money

    Conventional wisdom says that savings is the amount of money left after monetary income was used for consumer outlays. Hence, for a given consumer outlays an increase in money income implies more saving and thus more funding for investment. This in turn sets the platform for higher economic growth.
    Following this logic, one could also establish that increases in money supply are beneficial to the entire process of capital formation and economic growth. (Note increases in money supply result in increases in monetary income and this in turn for a given consumer outlays implies an increase in savings).
    Saving vs. Money Saving as such has nothing to do with money. It is the amount of final consumer goods produced in excess of present consumption.
    The producers of final consumer goods can trade saved goods with each other or for intermediate goods such as raw materials and services. Observe that the saved goods support all the stages of production, from the producers of final consumer goods down to the producers of raw materials, services and all other intermediate stages.
    Support means that these savings enable all these producers to maintain their lives and wellbeing while they are busy producing things. Also, note that if the production of final consumer goods were to rise, all other things being equal, this would expand the pool of real savings and would increase the ability to further produce a greater variety of consumer goods (i.e., wealth).

    This post was published at Ludwig von Mises Institute on August 19, 2017.

  • ‘Bannon Bounce’ Fails To Correct ‘Cohn Crash’ As Nasdaq Drops For 4th Straight Week

    Well that was a week…

    Roller-coaster day for stocks – 2 overnight pump efforts failed; stocks sank into and beyond the US cash open, then went bid as Bannon headlines hit… only to slide as reality struck that with Bannon gone, the probability of war is considerably higher…and an ugly close into OPEX

    This post was published at Zero Hedge on Aug 18, 2017.

  • The De-Branding of a President

    Promising to cut corporate taxes, roll back regulations on Wall Street, and get government off the back of business, Donald Trump was enjoying a honeymoon with the stock market and the CEOs of the most iconic brands in the U. S. What a difference four days can make.
    Yesterday, the Dow Jones Industrial Average dropped 274 points. Also yesterday, Trump announced that he was cancelling his business advisory council on infrastructure. That move followed his prior day’s axing of his star-studded CEO councils on manufacturing and Strategy & Policy Forum. According to published reports, Trump was saving face by axing the councils after getting a heads up that the CEOs were leaving en masse.
    The rapid move by top CEOs to distance themselves and their brands from the President came after Trump delivered impromptu remarks on Tuesday in the lobby of Trump Tower in Manhattan, where he appeared to equate the KKK and neo-Nazi groups that protested in the weekend Charlottesville, Virginia rally with the protesters opposing them.

    This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

  • Goldman Sees 50% Chance Of A Government Shutdown

    As we pointed out earlier, the chances of government agreeing any kind of debt ceiling deal (and avoiding a government shutdown) is dropping fast as USA default risk spikes and the Treasury Bill curve inverts. Goldman Sachs is now concerned also…
    Uncertainty in The White House is starting to make investors realize the chance of successfully navigating the debt ceiling crisis without a government shutdown are dwindling…

    This post was published at Zero Hedge on Aug 18, 2017.