• Google’s DeepMind Wants to Enter the Grid

    At the beginning of the year, we wrote about Alphabet’s [NASDAQ: GOOG] acquisition of a British artificial intelligence (AI) startup called DeepMind. DeepMind made headlines last year when its AlphaGo program defeated the champion go player Lee Sedol of South Korea, then the second-ranked go player in the world. It has since defeated the world’s top player, although only in informal online play.
    AlphaGo showcases DeepMind’s transformative approach to AI: machine learning that emulates human learning. Traditional approaches to computer chess, for example, rely on brute force – working out all the permutations of possible future moves to identify the most promising next move to make. That approach is limited because the number of permutations gets so large as the program looks more and more moves ahead. It’s even more limited with the game of go because there are so much more possible moves than there are in chess. The ‘decision tree’ quickly gets far too large to exhaustively examine and evaluate. That’s why until last year, most experts thought it would be decades before a computer program could compete with world-class go masters. They were waiting for new hardware that could crunch the numbers faster. But DeepMind delivered with revolutionary software instead.

    This post was published at FinancialSense on 03/27/2017.

  • ‘Big Short’ 2017: When the Auto Industry Implodes

    The first line of The Wall Street Journal’s March 21 story sums up the trend:
    ‘The auto finance sector has taken a bad turn.’
    ‘The auto finance sector just ran a red light and is about to T-bone a minivan’ would’ve been more accurate.
    We first wrote about the coming carnage in U. S. auto finance in December.
    Now the story’s catching on. There’s big trouble in the U. S. auto market.
    That means there are also huge profit chances ahead, if you know what to do.
    According to the WSJ, Ally Financial, one of the biggest auto finance companies, said defaults on auto loans for low-credit borrowers are still increasing.
    As I wrote in December, Experian’s market tracking shows that up to 40% of all auto debt in America today is ‘nonprime’ or worse.
    Let’s take a closer look at what that means.
    The more nonprime auto debt out there floating around, the higher the likelihood of defaults.
    That means more car repos.

    This post was published at Wall Street Examiner on March 27, 2017.

  • 30Y Treasury Yield Back Below 3.00% As Shorts Squeezed To Lowest Since November

    10Y yields are back below 2.40% and 30Y below 3.00% as the post-rate-hike curve collapse continues, aided by the biggest short-squeeze since Brexit sending speculative Treasury shorts to their lowest since November.
    The lofty fiscal expectations surrounding President Donald Trump have begun to subside.
    Bond bears are having major second thoughts.

    This post was published at Zero Hedge on Mar 27, 2017.

  • SWOT Analysis: Why Exploration Budgets Are On the Rise

    The best performing precious metal for the week was palladium, up 4.22 percent on improving expectations for the automotive industry where palladium is principally used to clean gasoline emissions. According to ZeroHedge, a new trend is gaining popularity in China – digital gold ‘gifting.’ Tencent’s digital gold packets, known as microgold, are backed by the country’s biggest bank and allow users to send funds that track the real-time value of gold over the WeChat platform. An ICBC document shows that during the Lunar New Year, WeChat users sent 70,000 microgold packets across the platform worth $14.5 million. Gold ETFs recorded inflows over the past two days totaling nearly 9 tons, reports Commerzbank, reversing more than half of outflows previously seen this month. Noting a drop in net long positions to their lowest level since the beginning of the year during the run-up to the Fed meeting, one analyst wrote that this means there is ample upside potential for gold. As seen in the chart below, we are seeing the longest losing run for the dollar since November, reports Bloomberg, as gold advanced to its highest level in three weeks on haven demand amid a global selloff in stocks.

    This post was published at GoldSeek on 27 March 2017.

  • SocGen Reveals The Best Trading Strategy Of The Year

    Despite the recent modest drop in stocks, the S&P remains just shy of all time highs, and near valuations which according to Goldman are at nosebleed levels and which market participants recently admitted are the most overvalued since 2000. Furthermore, with the market seemingly finding itself painfully rangebound in a world where until recently volatility was non-existent, traders desperate for alpha, have been scrambling for a strategy that produces a steady stream of profits.
    One such trade was proposed overnight by SocGen’s Andrew Lapthorne, who notes that “the only strategy to stand out this year is short-term (1 month) price reversal, which involves selling last month’s winner and buying the losers.”
    Here is his overnight note, according to which “Outperformance of reversal strategies points to a market struggling for direction”

    This post was published at Zero Hedge on Mar 27, 2017.

  • Having Missed Friday’s Move, Gartman Is Looking To “Reestablish Net Short Positions”

    On Friday morning, ahead of Congressional and market rollercoaster resulting from the Republicans’ failure to repeal Obamacare, we reported that Dennis Gartman had “moved to the sidelines” and covered his recent short:
    Regarding positioning… and please do remember that the only money we manage is our own retirement fund and although it is only a few small millions it is still our money and we do indeed value it!… we came into yesterday’s session modestly net short of equities. However considering that the passage or non-passage of the health care legislation was a veritable coin toss circumstance we moved to cover those short derivatives positions early in the day and took to the sidelines. We remain there this morning. In our retirement account are long of several monthly dividend paying closed end short term bond funds; we are long of gold in EUR and Yen denominated terms and at the very close of trading yesterday we took small ‘punts’ on the long side of crude oil.
    Fast forward to Monday morning, when Gartman had this to say about the overnight action:

    This post was published at Zero Hedge on Mar 27, 2017.

  • The Panic Is On – First Effects Showing Up

    New home sales totaled 49,000 units in February, according to an estimate released today by the Census Bureau. That number is the actual number of sales during the month as estimated by the Bureau. It was not seasonally adjusted (NSA). It was derived from housing starts and permits data, along with a tiny sample survey of US home builders. That estimate will be revised on each monthly release over the next 4 months. Those revisions can be quite large.
    The 49,000 sales were 4,000 units, or 8.9%, greater than a year ago. The 8.9% increase shows the growth rate accelerating. It was at zero just 2 months before. That was the lowest growth rate of the past 12 months. The high was a 25.7% year over year gain in September. That was not an outlier. The year over year gain in July was 25.6%. The market was blowing off in the third quarter thanks to all time record low mortgage rates of 3.4%. That compares with 4.2% today.
    February sales were 8,000 higher than January or a difference of 19.5%. That compares with a gain of 15.4% in February 2016, with that month having an extra day thanks to leap year. The average February gain from 2006 to 2016 was 4,300 units or 13%. This February’s increase was greater than 8 of the 10 preceding Februaries. However, we have to take this month’s number with a grain of salt, since it is subject to a large revision next month and a smaller one in ensuing months. It may not have been as ‘good’ as it currently looks.

    This post was published at Wall Street Examiner on March 27, 2017.

  • ‘Soft’ Data Slump Continues – Dallas Fed Misses, Tumbles Most In 14 Months

    Following disappointing Manufacturing and Services PMIs last week, this week has not started well for the hope embedded in ‘soft’ survey data. After six straight months higher, The Dallas Fed Manufacturing Outlook slumped in March (down 7.6pts to 16.9). This is the biggest drop since Jan 2016 and was lower than all estimates.
    New Orders, Inventories, and number of employees all tumbled. Prices Paid and Received fell (but the latter consierably more than the former).

    This post was published at Zero Hedge on Mar 27, 2017.

  • Health-Care Industry Debt Turns into ‘Systemic Recession Risk’

    Debt binge hits its limit, with big impact on overall economy.
    Sector booms and busts have historically been driven by speculation and over-borrowing, often triggering regional or even national recessions. Textbook examples include the 2014 Energy and 2008 Financial sector collapse. In both of these instances, fallacies such as perpetual $100 oil and ever rising home prices drove rampant speculation, overinvestment, and unsustainable debt buildup.
    So warns John Burns Real Estate Consulting, in a new paper, ‘Industries at Risk and Implications for Housing.’
    This time, three sectors stand out where ‘a similar pattern of unsustainable growth has driven rapid expansion’ since the end of the Great Recession: technology, automotive (whose current travails I keep dissecting), and health care.
    But health care poses the biggest ‘systemic recession risk’ to the US economy, according to the report. After employment in the sector has soared 113% since 1990, it accounts for 16% of private sector jobs, up from 10% in 1990.
    [T]thus a correction to the industry will likely cause a slowdown for the national economy. Several large housing markets have an even bigger concentration of jobs tied to the Health Care industry and will be disproportionately hit by a Health Care slowdown, including: Philadelphia, Boston, New York, and Nashville

    This post was published at Wolf Street on Mar 27, 2017.

  • Is Twitter Now Censoring Drudge Report?

    In an extraordinary development, Westmonster has found that the world famous Drudge Report has been marked as ‘sensitive material’ by Twitter, with some users now having to OPT IN in order to see tweets. Hardly any tweets from Drudge were visible today when we first logged in.

    This post was published at Zero Hedge on Mar 27, 2017.

  • Consolidation Time in the US Stocks

    In the Wednesday Report the title read, What Type of Investor are You? My main focus was to show some intermediate to long term buy and sell signals based on the 21 month simple moving average and the MACD-Histogram. Tonight I would to take it one step further and look at the Chartology for some of the big stock market indexes which shows the intermediate to longer term perspective. There is one dominate chart pattern that has built out a consolidation pattern for the 2015 to 2016 correction.
    Lets start by looking at a 4 year weekly chart for the $SPX which shows the dominate H&S consolidation pattern that was needed to consolidate the last rally phase. It could have been any number of different consolidation patterns, but this time it was the H&S consolidation pattern. Back in December of last year the SPX broke out above its neckline and has rallied strongly without much of a correction. Four weeks ago the SPX hit a high of 2401 and has been going nowhere which is suggesting the first real correction may be at hand since the rally out of the November elections low.
    The blue shaded areas shows the size of some of the previous corrections on a linear scale. If our current consolidation phase is similar to some of the previous corrections then we could see the SPX dip down to the 2280 area, which would also be a 38% retrace from the right shoulder low. If a deeper correction is in the cards then a complete backtest to the neckline would come into play. The red 30 week ma is rising strongly and is now just above the neckline. The H&S consolidation pattern has a price objective up to the 2556 area, at a minimum.

    This post was published at GoldSeek on Monday, 27 March 2017.

  • Stock Market Getting Ready for a BIG Move; Risk to the Downside

    ‘Pull’ is a term used in shooting sporting clays, which are supposed to represent real birds and sharpen the shooter’s ability to actually hunt live birds. The term is yelled by the shooter to tell the person operating the trap to launch a sporting clay. ‘Pull’ comes from an era long gone by when they actually had real birds in cages and the shooter would say ‘pull’ to have the cage cord pulled and release the bird. The term ‘pull,’ however, took on a whole new meaning last Friday when Speaker Ryan ‘pulled’ the Republican healthcare bill (H. R. 1628) from consideration. I had literally said on CNBC earlier that day (as paraphrased): I lived in Washington D. C., and still have a pretty good network on Capitol Hill and typically what happens, if they don’t think a bill will pass, they pull it (read: withdraw it). But, there is NOTHING typical going on in D. C. these days! I also opined on the same show that – I was hearing that H. R.1628 was a few votes short of the ability to pass. Even if it had passed there would have been major revisions to it in the Senate. I guess it was once again the Russians that influenced the death of H. R. 1628 since they are being blamed for just about everything else. The question now becomes, ‘How will the various markets view Friday’s Foil?’
    Speaking to many media types late Friday afternoon I suggested that a lot of technical damage has been done to the charts during the week.

    This post was published at FinancialSense on 03/27/2017.

  • The Curse of the Thinking Class

    Let’s suppose there really is such a thing as The Thinking Class in this country, if it’s not too politically incorrect to say so – since it implies that there is another class, perhaps larger, that operates only on some limbic lizard-brain level of impulse and emotion. Personally, I believe there is such a Thinking Class, or at least I have dim memories of something like it.
    The farfetched phenomenon of Trumpism has sent that bunch on a journey to a strange land of the intellect, a place like the lost island of Kong, where one monster after another rises out of the swampy murk to threaten the frail human adventurers. No one back home would believe the things they’re tangling with: giant spiders, reptiles the size of front-end loaders, malevolent aborigines! Will any of the delicate humans survive or make it back home?
    This is the feeling I get listening to arguments in the public arena these days, but especially from the quarters formerly identified as left-of-center, especially the faction organized around the Democratic Party, which I aligned with long ago (alas, no more). The main question seems to be: who is responsible for all the unrest in this land. Their answer since halfway back in 2016: the Russians.

    This post was published at Wall Street Examiner on March 27, 2017.

  • Top Ten USDollar Risks

    The USDollar has never been in greater danger for losing its dominant position as global reserve currency and payment standard. Challenges to its supremacy are many and with each passing month, more threats are put in place. While the volumes of trade payment in Chinese RMB grow slowly, and the banking reserves in non-USD bonds grow slowly, the risk for the USDollar to be marginalized has increased significantly in the last two to three years. Basically speaking, a fiat currency run by a corrupt, thieving, and dishonorable hegemonic regime for the sole purpose of exploiting the rest of the world cannot stand the test of time, and will be dismantled. The community of nations gathers momentum and organization with producing an alternative. It has taken time, and will require more time. The scenario is indeed possible of a dual universe has been raised, whereby the West continues under the USD-based system, and the East emerges under a new RMB-based system. However, the Eastern alternative is step by step to emerge with a gold foundation. The USDollar cannot compete with Gold in any way except through continued fraud, intimidation, extortion, and open war. All these topics at high level and ground level are covered with analysis in the Hat Trick Letter.
    The fall of the King Dollar Empire is near, as the Global Paradigm Shift proceeds without potential for interruption or much further delay. The galactic decay decline and demise is assured. It has been a brutal final chapter, marred by universal corruption and endless war. It has earned the Empire of Chaos label, for its many color revolutions which mask the brutal hegemony and theft of assets. The fall of the baseless USDollar occurs simultaneously with the rise of the solid Gold foundation. Below are the Top Ten risks to the USDollar, which will end the year 2017 in a significantly weaker position than it started.

    This post was published at GoldSeek on 27 March 2017.

  • As Market Tumbles, Investors Rush Into Safe Haven SNAP After Mass Wall Street Upgrade

    While US equity markets are shuddering under the uncertainty of President Trump’s agenda, it appears investors have found a safe haven for their hard-gambled retirement funds. Following a series of upgrades, overweights, and “buy” recommendations from Wall Street’s biggest and brightest commission-takers, SNAP shares are soaring – back to their post-IPO open at $24.
    Why SNAP is up: GS: Initiate Buy, $27 PT Citi: Buy, $27 PT MS: Overweight, $28 PT RBC: Outperform, $31 PT Jefferies: Buy, $30 PT

    This post was published at Zero Hedge on Mar 27, 2017.

  • It’s “Judgment Time”: Goldman Sees Three Options For Traders

    From Goldman’s Tony Pasquariello
    Judgment Time … Options Include:
    get bearish S&P for a trade. don’t fight the primary trend — this is a melt-up, and there are good (macro) reasons behind it. simplify the portfolio; wait for better location to re-load length. A case for door #1:
    US equities are OWNED right now. positioning metrics look very stretched (particularly for the levered community and retail money) and the options market smells of complacency. the second derivative of global growth will likely turn lower; see first chart below on why that could really matter. plot crude oil, high yield, small cap or the banks — all of these assets are encountering some turbulence. coming out of this week, policy expectations surrounding the new administration need to be reconsidered. A case for door #2:
    in February, the Current Activity Index printed its best month in a decade and financial conditions … got easier (as. the dollar and the bond market were well behaved; link). in English: the interplay between global growth and financial markets is a stock operator’s dream. a global cyclical upswing was taking shape before the US election; that narrative remains intact today and will underpin cyclical assets irrespective of DC headlines. failure to pass healthcare reform doesn’t necessarily doom tax reform nor other pro-cyclical policy ambitions (deregulation, fiscal expansion). unless you foresee a recession, it’s unlikely that stocks will trade lower; see very last chart at bottom. again, don’t ignore the history book.

    This post was published at Zero Hedge on Mar 27, 2017.

  • Dollar Collapse Continues – Over 80% Of Post-Trump Gains Gone

    When the dollar was soaring, it was ‘unequivocally’ a reflection of the strength (or potential strength) of the US economy and its safe-haven, cleanest-dirty-short status. Since The Fed hiked rates for the 3rd time in 11 years, however, the dollar has done nothing but decline…
    Erasing over 80% of post-Trump gains…

    This post was published at Zero Hedge on Mar 27, 2017.