How I’m Playing the FANG Stocks Right Now

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
Bank of Japan head Haruhiko Kuroda aimed his kamikaze plane straight at the global economy last week, and scored a direct hit by imposing negative interest rates in Japan for the first time in this cycle.
In doing so, he joined his reckless European banking brother Mario Draghi and increased the volume of global sovereign debt with negative interest rates to $5 trillion dollars.
This type of monetary insanity can only end one way – in the destruction of capitalism whose very laws it violates by confiscating capital from retirees, insurance companies, pension funds and others who require a positive return to survive.
This was another step on the road to financial Armageddon, but there’s still money to be made if you make the smart move…

This post was published at Wall Street Examiner by Michael E. Lewitt ‘ January 31, 2016.

“Stable” China’s Economic Bounce Is Over: PMIs Plunge In January

After an almost unprecedented surge in credit (total social financing) and over-invoicing enabled a bounce in China’s PMI data in December, both Manufacturing and Services data tumbled in January, confirming South Korean trade data. While manufacturing continues its contraction (dropping to 49.4, the weakest since Aug 2012), it is non-manufacturing’s plunge from a one-year high “transition is happening, see” narrative to practically the weakest print since 2008. But apart from that all that, China is “stabilizing” according to officials.
China’s economy is improving under medium-to high-speed growth, according to a People’s Daily commentary written by Zhong Sheng, who wasn’t identified. There is consensus in the international community that long- term basic element in the Chinese economy is still strong: commentary

This post was published at Zero Hedge on 01/31/2016 –.

US consumer is the last defense against strong dollar drag on the economy

This is a syndicated repost courtesy of Sober Look. To view original, click here. Reposted with permission.
We continue to receive questions about the impact of the recent dollar strengthening on the US economy. The most immediate impact of course is on trade, which has created an immediate drag on the GDP growth.

This post was published at Wall Street Examiner by Sober Look ‘ January 30, 2016.

America’s #1 Import: Deflation

Submitted by Erico Matias Tavares of Sinclair & Co.,
It seems that everyone these days is exporting deflation to the US.
The drop in commodity prices and the US dollar rally versus a broad basket of currencies in recent years had a big impact of course, but the magnitude of the decline of US import prices has been very significant indeed. And this matters for many reasons.
Competition for the all-important US consumer remains fierce, as exporting countries devalue their currency and/or further reduce their costs to maintain market share. While imports represent a relatively small percentage of US GDP (typically <17%), the technocrats at the Federal Reserve will now have to work harder to fan the flames of inflation across the economy (hint: not by continuing to raise interest rates…). Moreover, these price patterns suggest that all is certainly not well in the global economy.

This post was published at Zero Hedge on 01/31/2016 –.

Global Trade Collapsed In January: Bellwether South Korea Exports Crash “Most Since Lehman”

As the first major exporting nation to report each month, all eyes and hopeful speculative capital was glued to tonight’s South Korean trade data. After a brief respite in November, December’s drop was worrisome, but January’s just reported 18.5% crash – the most since the financial crisis – has only been seen during a US economic recession. Worse still, South Korean imports plunged over 20% in January as it appears crashing crude and cliff-diving freight indices are less about supply and more about demand (there is none) after all.
Annother red flag in the US recession looming camp…

This post was published at Zero Hedge on 01/31/2016 –.

What A Cashless Society Would Look Like

Submitted by Erico Matias Tavares of Sinclair & Co., and reposted from the original as of May 19, 2015 in light of the recent decision by the Bank of Japan to launch negative interest rates.
What A Cashless Society Would Look Like

Calls by various mainstream economists to ban cash transactions seem to be getting ever louder, while central bankers have unleashed negative interest rates on economies accounting for 25% of global GDP, with $5.5 trillion in government bonds yielding less than zero. The two policies are rapidly converging.
Bills and coins account for about 10% of M2 monetary aggregates (currency plus very liquid bank deposits) in the US and the Eurozone. Presumably the goal of this policy is to bring this percentage down to zero. In other words, eliminate your right to keep your purchasing power in paper currency.
By forcing people and companies to convert their paper money into bank deposits, the hope is that they can be persuaded (coerced?) to spend that money rather than save it because those deposits will carry considerable costs (negative interest rates and/or fees).
This in turn could boost consumption, GDP and inflation to pay for the massive debts we have accumulated (leaving aside the very controversial idea that citizens should now have to pay for the privilege of holding their hard earned money in a more liquid form, after it has already been taxed). So at long last we can finally get out of the current economic funk.

This post was published at Zero Hedge on 01/31/2016 –.

31/1/16: Why is Inflation so Low? Debt Demand Oil = Central Bankers

One of the prevalent themes in macroeconomic circles in recent months has been what I call the ‘Hero Central Banker’ syndrome. The story goes: faced with the unprecedented challenges of dis-inflation, Heroic Central Bankers did everything possible to induce prices recovery by deploying printing presses in innovative and outright inventive ways, but only to see their efforts undermined by the falling oil prices.
Of course, the meme is pure bull.
Firstly, there is no disinflation. There is a risk of deflation. Let’s stop pretending that negative growth rates in prices can be made somewhat more benign if we just contextualise them into a narrative of surrounding ‘recovery’. Dis-inflation is deflation anchored to an invented period duration of which no one knows, but everyone assumes to be short. And there is no hard definition of what ‘short’ really means either.

This post was published at True Economics on Sunday, January 31, 2016.

WalMart “Absolutely Shafted” Washington DC; Here’s How

It’s been nearly a year since a grinning Doug McMillon recorded a video message to the world in which he explained that WalMart was set to raise the minimum wage for its lowest paid employees.

After all, McMillon said, ‘it’s our people that make the difference.’
11 months later, those ‘people’ (the lowly shelf stockers and cashiers) aren’t materially better off than they were before, because handing someone $10/hour instead of $9 is such a small concession that you might as well have done nothing. In other words, $10 is no more of a ‘living wage’ than $9 is.
But while the impact on the retailer’s legions of hourly employees has been minimal, the consequences for the company have been nothing short of dramatic.


This post was published at Zero Hedge on 01/31/2016 –.

The zero down mortgage is back and it starts in San Francisco with Poppyloan: Need $2 million for a shack but don’t have the money? No problem!

The Taco Tuesday house humping brigade is having a tougher time denying that we are in another bubble. Sure, they keep pointing to prices going up and rents surging but what about stagnant household incomes or the stock market getting kicked between the legs? According to these delusional Kool-Aid drinkers, everyone is saving money and is perched on the fence ready to bounce on that piece of crap real estate that was built during the Great Depression. ‘But we don’t have no down payment loans!’ Of course much of the move in prices over the last few years came from investors, foreign and domestic, that drove prices into the stratosphere. In the Bay Area, with the typical home selling for $1.2 million, even high income tech households are unable to buy. And you really have a double bubble. Easy venture capital money is trying to find those next mystical unicorns (i.e, Twitter, Facebook, SnapChat, etc) but this is another symptom of hot money trying to find a home. All of this growth is predicated on prices only going up. With households broke, a new product called a Poppyloan is here to save the day bringing back the zero down option. What could possibly go wrong?
The zero down Poppyloan
The house couch humpers keep saying that there are pockets of massive demand just waiting to erupt like a volcano. However, when you actually look at demographics, Census figures, and grown freaking adults living at home that theory falls by the wayside especially when it comes to buying a $1 million crap shack.

This post was published at Doctor Housing Bubble on Jan 31, 2016.

Nate Silver’s Continual Underestimation of Donald Trump’s Chances

On January 18, I sent the article below (starting with the title Nate Silver Off the Mark on Donald Trump Nomination Odds) to the New York Times as an Op-Ed.
They did not publish it.
It’s hard enough getting something timely to major new organizations, and when you do, you have to sit and wait days for no response. The New York times has the best turnaround of the bunch, three days so I could have used this earlier.
This would have been more timely on the 18th and even more timely when I first started writing, but here it is now. What I have to say the is still relevant.

This post was published at Global Economic Analysis on Sunday, January 31, 2016.

Shining A Light On Sociopaths In Politics

Submitted by Doug Casey via InternationalMan.com,
There are seven characteristics I can think of that define a sociopath, although I’m sure the list could be extended:
Sociopaths completely lack a conscience or any capacity for real regret about hurting people. Although they pretend the opposite. Sociopaths put their own desires and wants on a totally different level from those of other people. Their wants are incommensurate. They truly believe their ends justify their means. Although they pretend the opposite. Sociopaths consider themselves superior to everyone else, because they aren’t burdened by the emotions and ethics others have – they’re above all that. They’re arrogant. Although they pretend the opposite. Sociopaths never accept the slightest responsibility for anything that goes wrong, even though they’re responsible for almost everything that goes wrong. You’ll never hear a sincere apology from them.

This post was published at Zero Hedge on 01/31/2016 –.

Trade was Biggest Obstacle to Faster 2015 U.S. Recovery

This is a syndicated repost courtesy of RealityChek. To view original, click here. Reposted with permission.
Yesterday’s first official take on America’s fourth quarter, 2015 gross domestic product (GDP) showed that the trade deficit’s continued resurgence was the biggest drag on the period’s feeble 0.69 percent annualized real growth. In addition, since these figures have generated the first take on full-year 2015 performance, they revealed that trade took the biggest slice from its 2.38 percent constant-dollar growth – and undermined economic expansion by the greatest relative percentage since 2002. As a result, America’s trade performance has now slowed the nation’s growth during this historically slow recovery by nearly ten percent after inflation.
Moreover, total real exports fell year-on-year for the first time since the end of the last recession, in 2009, while inflation-adjusted goods and services imports continued growing and hit their latest annual record. The real trade deficit in 2015, consequently, rose to its highest annual level since 2008, and its annual deterioration was the worst such widening since 2000. As for the inflation-adjusted quarterly trade deficit, its October-to-December, 2015 total was the biggest since the first quarter of 2008.

This post was published at Wall Street Examiner by Alan Tonelson ‘ January 30, 2016.

“The Fed Suspended The Laws Of The Market In Order To Save It” – What Happens Next

That the Fed has been boxed in by unleashing destructive monetary policies to “fix” decades of prior policy mistakes, is something we have been warning about since our first day. And, with every passing day that the Fed and its central bank peers pile up error upon error to offset prior mistakes, the day approaches when this latest bubble, which some have dubbed it the “central banks all-in” bubble, will burst as well: Friday’s shocking announcement of NIRP by the BOJ just brought us one step closer to the monetary doomsday.
However, the one saving grace for the central banks was that as long as none of the market participants who benefited from these flawed policies dared to open their mouths and point out that the emperor is naked, nobody really cared: after all, why spoil the party, especially since virtually nobody outside of finance knows, let alone cares, about monetary policy or why the Fed is the most important institution in the world.
All of that has changed in recent weeks, when just one week ago in the aftermath of the Fed’s dovish quasi-relent, the billionaires in Davos were quite clear that in light of the upcoming bursting of the latest “policy error” bubble by the central banks, “The Only Winning Move Is Not To Play The Game.” As the WSJ summarized the Davos participants’ mood so well, “their mood here was irritated, bordering on affronted, with what they say has been central-bank intervention that has gone on too long.”

This post was published at Zero Hedge on 01/31/2016 –.

Economists in Fantasyland: Economists See 20% Chance of Recession That’s at Least 20% Likely Already Here

Economists have a perfect track record of 100% failure in ability to predict a recession. In a recession that’s at least 20% likely to have already started, Economists See 20% Chance of US Recession this Year.
A Financial Times survey of 51 economists, conducted in the days after the Fed’s January meeting, underscores the impact of the past month’s severe market turbulence and a string of lacklustre economic reports out of the US and China.
The fear that the world’s largest economy – considered the lone engine of global growth – is on the verge of recession has intensified. In the FT’s December survey economists had put the odds of a US recession at 15 per cent during the next two years. Now, they see a one-in-five chance of recession in the next 12 months.

This post was published at Global Economic Analysis on Sunday, January 31, 2016.

The Last (Policy-Induced) Gasp Of Speculative Excess

Excerpted from Doug Noland’s Credit Bubble Bulletin,
‘Shock and awe’ is not quite what it used to be. It still carries a punch, especially for traders long the Japanese yen or short EM and stocks. The yen surged 2% against the dollar (more vs. EM) Friday on the Bank of Japan’s (BOJ) surprising move to negative interest rates. BOJ Governor Haruhiko Kuroda has a penchant for startling the markets. Less than two weeks ago he stated that the BOJ would not consider adopting negative rates. It wasn’t all that long ago that central bankers treasured credibility.
For seven years, I’ve viewed global rate policies akin to John Law’s (1720 France) desperate move to hold his faltering paper money and Credit scheme (Mississippi Bubble period) together by devaluing competing hard currencies (zero and now negative rates devalue ‘money’). It somewhat delayed the devastating day of reckoning. Postponement made it better for a fortunate few and a lot worse for everyone else.
Last week saw dovish crisis management vociferation from the ECB’s Draghi. Now the BOJ adopts a crisis management stance. The week also had talk of some deal to reduce global crude supply. Meanwhile, the Bank of China injected a weekly record $105 billion of new liquidity. Nonetheless, the Shanghai Composite sank 6.1% to a 13-month low. There was desperation in the air – along with a heck of a short squeeze and general market mayhem.

This post was published at Zero Hedge on 01/31/2016 –.