This is What’s Cannibalizing the US Economy

The sector is booming, but it’s a costly boom. In the sluggish US economy, the goods-producing sector has been in decline since late 2014, but sales in its biggest sub-sector are booming: medicines.
Drugs are a physically small part of the goods-producing economy. But in terms of dollars, they’re the elephant in the room: According to the wholesales report by the Commerce Department, total drug sales by manufacturers to pharmacies, hospitals, and others in the distribution chain jumped 11.3% from a year ago (not seasonally adjusted) to $54.3 billion.
That was the largest of the wholesale categories in the report: larger than ‘Groceries’ ($51.5 billion), ‘Electrical’ ($45.0 billion),’Petroleum’ ($43.4 billion), and Automotive ($36 billion). Drug sales accounted for 12.2% of total wholesales. For the last 12 months, it was 12.0%.

This post was published at Wolf Street by Wolf Richter ‘ July 15, 2016.

India’s ‘Gold Shirt Man’ Stoned-And-Sickled To Death By Mob

Datta Phuge took the interwebs by storm three years ago when we introduced the $250,000 22-karat-gold-shirt-wearing 32-year-old Indian who proclaimed “I know I am not the best looking man but surely no woman could fail to be dazzled by this shirt?” showing the world that gold is much more than a barbarous relic. Sadly, as The BBC reports, “the gold man” was murdered overnight – found stoned-and-sickled to death near his home in Dighi, India.

This post was published at Zero Hedge on Jul 15, 2016.

15/7/16: A Booming Tax Haven? And Why Not?

Yes, we all know, Irish GDP in 2015 grew by an officially idiotic 26%. And yes, I am no longer gracing these illusionary / delusionary numbers with an attempt at any serious analysis. Doing so would be too big of an intellectual subsidy to the world of Irish officialdom. So here are two quite opposite (in their top-line accuracy) views of the same problem, that both, in the end, arrive at the same conclusion:

This post was published at True Economics on Friday, July 15, 2016.

Who Gave Us Justice Ginsburg?

Submitted by Patrick Buchanan via Buchanan.org,
‘Her mind is shot.’
That was the crisp diagnosis of Donald Trump on hearing the opinion of Justice Ruth Bader Ginsburg on the possibility he might become president.
It all began with an interview last week when the justice was asked for her thoughts on a Trump presidency. Ginsburg went on a tear.
‘I can’t imagine what this place (the Supreme Court) would be – I can’t imagine what the country would be – with Donald Trump as our president. For the country, it could be four years. For the court, it could be – I don’t even want to contemplate that.’
Yet she had contemplated the horror of it all, as she quoted her late husband as saying of such a catastrophe, ‘It’s time for us to move to New Zealand.’
This week, Ginsburg doubled down.
‘Trump is a faker,’ she vented in chambers on Monday, ‘He has no consistency about him. He says whatever comes into his head. … He really has an ego. … How has he gotten away with not turning over his tax returns? The press seems to be very gentle with him on that.’

This post was published at Zero Hedge on Jul 15, 2016.

Britain’s Chancellor of the Exchequer Revolts Against Merkel & Draghi

The new British Finance Minister Philip Hammond was appointed as Chancellor of the Exchequer on July 13, 2016. Hammond is a welcome relief and has come out openly to question the policies of Draghi and Merkel. ‘The markets need calming signals. You need to know that we will do everything necessary to keep on track the economy,’ Hammond said.

This post was published at Armstrong Economics on Jul 15, 2016.

These Are The 10 Corporate Bond With The Most Negative Yields In The World

Earlier today Germany’s 10Y Bund crossed back into positive yield territory for the first time since Brexit, after touching as low as -0.20% earlier in the week…
… but that, oddly, does not mean that corporate bunds have to follow. In fact, as Goldman finds, negative corporate bond yields may turn out to be even stickier than their respective government treasuries. According to Goldman’s Lotfi Karoui finds there is “more negative yielding EUR corporate bonds despite the rates selloff. The amount of corporate bonds with negative yields continues to grow in the EUR market despite the rate sell-off this week.”
In fact, as of last night, using the bond constituents of the EUR iBoxx IG index, there is now a record high 216 billion in negative yielding corporate debt, representing 14% of the index. Within the broader EUR fixed income complex, a total of 4.1 trillion now trades in negative-yield territory representing 49% of the combined size of the sovereign, quasi-sovereign, covered and corporate iBoxx bond indices.

This post was published at Zero Hedge on Jul 15, 2016.

Large investors make the full exit: Big rental investors like Blackstone are now selling properties to current renters.

Big Wall Street investors stopped buying real estate in large quantities back in late 2014. In many casesbig investors had front row seats at banks and were able to buy in bulk and for incredibly low prices not offered to the public. This crowding out of course has caused two major things to unfold: inventory to dwindle and a push up in prices for regular families looking to buy. For the first time in history many things happened in the housing market including nationally falling prices but also a large interest from Wall Street in single family homes. Now with prices near previous peak levels many of these large investors are making the full exit by offering to sell the homes to current tenants, for of course a modest increase. Those bailouts that were geared to helping the public actually created a system that has slammed the homeownership rate lower and has now jacked home prices up once again. Large investors are now making their final play by cashing out.
Large investors cashing out
An interesting story from Bloomberg examines this new trend:
‘(Bloomberg) Melissa Suniga and her mother had been renting a three-bedroom Phoenix house for less than a year when their landlord, Blackstone Group LP’s Invitation Homes, gave them the chance to buy it.

This post was published at Doctor Housing Bubble on July 15, 2016.

Housing Bubble 2.0 – Are You Ready For This?

The mind-numbing Case-Shiller regional charts below are presented without too much comment. As MHanson.com’s Mark Hanson adds, the visual says it all.
Bottom line:
Q: If 2006/07 was the peak of the largest housing bubble in history with affordability never better vis a’ vis exotic loans; easy availability of credit; unemployment in the 4%’s; the total workforce at record highs; and growing wages, then what do you call ‘now’ with house prices at or above 2006 levels; worse affordability; tighter credit; higher unemployment; a weakening total workforce; and shrinking wages? A: Whatever you call it, it’s a greater thing than the Bubble 1.0 peak.
1) Funny (and Demented) Seattle area Realtor anecdote regarding the potential for another housing Bubble: ‘House prices can’t be in a bubble because they are only 10% greater than the 2006 peak, meaning growth of only 1% per year since 2006. And 1% per year is not the Bubble type gains we saw back in the mid-2000’s’.

This post was published at Zero Hedge on Jul 15, 2016.

Gold Daily and Silver Weekly Charts – Comex Expiry Next Week, Military Coup Underway In Turkey

‘Have courage for the great sorrows of life and patience for the small ones; and when you have laboriously accomplished your daily task, go to sleep in peace. God is awake.’
Victor Hugo
With shots fired and helicopters flying over Ankara, it appears that there has been a ‘military uprising’ in Turkey. But it cannot be called a ‘coup d’etat’ according to their president.
The military has taken control of the country, according to them.
Gold was responding to this after the bell and is ending the day with some modest gains. The Turkish lira and their stock ETFs were getting sold.

This post was published at Jesses Crossroads Cafe on 15 JULY 2016.

The “War On Inequality” Is Coming To The Stock Market: Three Ways How To Trade It

According to Bank of America’s Michael Hartnett, in the coming quarters – especially in the aftermath of the shocking wake up call to the “establishment” delivered by Brexit, one which forced even McKinsey to declare a stunning U-turn on the think tank’s favorable opinion on globalization – investors must prepare for policies to address inequality. BofA believes that there are three ways to trade market “populism”,
From BofA’s Michael Hartnett
We believe the BREXIT vote was the biggest electoral riposte yet to the Age of Inequality. We also suspect the prospect of further electoral success by populists is quietly spurring governments and the corporate sector to activate fiscal stimulus in 2016 to appease voters. Telling examples: Japanese infrastructure spending, a new UK industrial policy, and announcements of higher minimum wages by high-profile US companies. Markets may soon start to discount policy rotation from the exclusive use of QE to stimulate animal spirits (which has failed) to a new policy mix of monetary-stability (central banks keep rates and rate volatility low and stable) and fiscal stimulus.
Tactically, we believe investors looking for exposure to this policy rotation theme should go long global industrials, semis, transportation, Japanese small-cap, TIPS and HY over IG. The duration of this trade will be dependent on the credibility of Japanese/European fiscal stimulus announcements.

This post was published at Zero Hedge on Jul 15, 2016.

An Open Letter to Donald Trump on Economic Policy

We the undersigned urge you, the presumptive Republican nominee for President, to support a rebirth of free-market capitalism in the U. S. You have said repeatedly that you want to make American great again. We agree with you. And we assert that the most effective way to start that process would be to affirm your principled support for economic liberty, for open and competitive markets and for a foreign policy that rejects both protectionism at home and interventionism abroad.
Over the last two decades especially, the U. S. economy has been saddled increasingly with burdensome government rules and regulations that stifle innovation and retard economic growth. Some of the more obvious examples are the massive command and control system put in place under the Affordable Care Act (ACA); the enactment of purposely mislabeled ‘free trade’ agreements (such as NAFTA) that actually have harmed some U. S. businesses and destroyed jobs while subsidizing other politically connected firms; the failed so-called ‘War on Drugs’ which wastes private and public resources and contributes to rising violent crime rates; and the expansion of inefficient and rights-violating environmental regulations that have hampered productivity and increased the overall cost of doing business; and, finally, the pursuit by the Federal Reserve of a pernicious decade-long low-interest rate monetary policy which has (again) created a massive speculative bubble in housing and on Wall Street…that is sure to end badly.

This post was published at Lew Rockwell on July 15, 2016.

US Oil Rig Count Rises At Fastest Pace Since Dec 2011

The US oil rig count rose 6 to 357 this week – this is 6th rise of the last 7 weeks (up 41 rigs) – the biggest absolute rise since May 2014. Off the lows, the US oil rig count is now up over 10% – the most since Dec 2011. Of course, oil prices are rallying on this news…
*U. S. OIL RIG COUNT UP 6 TO 357, BAKER HUGHES SAYS The oil rig count continues to track 3mo lagged WTI prices almost perfectly…

This post was published at Zero Hedge on Jul 15, 2016.

The Fuel That May Halt The Electric Car Revolution

Submitted by Matt Slowikowski via OilPrice.com,
Electric cars are often touted as the nail in the coffin for gasoline-powered vehicles. However, there’s another fuel revolution in the developing world, which is changing the economics of electric cars. Whether it’s CNG, LNG, autogas, or propane, gaseous-hydrocarbon fuels turn conventional cars into dual-fuel vehicles, and limit the uptake of electric cars in these economies.
Tesla and the lost supercharger stations
A quick look at the map of Tesla supercharger stations across the planet poses some interesting points: There are curiously few supercharger stations in south-central America, with only one in the Latin-speaking part of the new world. Few exist in Eastern Europe, Spain, Africa, the Middle East, India, or Oceania. This map can be correlated to GDP per capita, GDP, infrastructure, the country’s electric car incentives, and the uptake of dual-fuel vehicles. For the average consumer, it’s simple economics – their area of residence drives their vehicle fuel choices.

This post was published at Zero Hedge on Jul 15, 2016.

May Becomes PM in Britain & Boris Becomes Foreign Secretary

Theresa May became the new Prime Minister of Britain on Wednesday and formally met with the Queen to ask permission to lead her government. May is now embracing BREXIT as such members are dominating her cabinet and on top of that, May made the main Brexit campaigner Boris Johnson her foreign secretary. May is positioning Britain to exit the EU. This is fantastic news for Britain may survive rather than be dragged down by the collapse of the EU. This would be a restoration of economic sanity.

This post was published at Armstrong Economics on Jul 15, 2016.