Visualizing Black Friday’s Surge In US Consumer Debt

It’s that time of year again… when Americans load up on debt to buy stuff they don’t need with money they don’t have because Kim Kardashian told them to…
Next week, Black Friday and Cyber Monday will kick off the start to the U. S. holiday shopping season, during which consumers are expected to spend a total of $655.8 billion this year.
With the average bill coming in at $938.50 for holiday spending, where are people finding the extra cash?
Visual Capitalist’s Jeff Desjardins looked back at the last five years of Equifax data to see how consumer debt correlates to holiday purchases.

This post was published at Zero Hedge on Nov 19, 2016.

Cast of Hamilton Show How Politically Ignorant they Truly Are

The audacity of the cast of Hamilton booed Pence when he attended. They showed how ignorant they truly are of politics and how they are fueling the great divide in the United States that threatens civil war all because they totally lack any comprehension of reality. It does not matter who the President might be, nobody can engage in discrimination for race, creed, or gender. However, they can impose an affirmative test to ensure someone is not a terrorist or rapist coming from countries attempting to infiltrate the West and alter the very fabric of our culture that they happen to despise.

This post was published at Armstrong Economics on Nov 20, 2016.

The Difference Between GAAP And Non-GAAP Q3 Earnings For The Dow Jones Was 25%

As of today, 95% of the companies in the S&P 500 have reported earnings for Q3 2016. 72% of the companies have reported earnings above the mean estimate and 55%of S&P 500 companies have reported sales above the mean estimate. More importantly, however, according to FactSet in Q3 the earnings recession officially ended after five consecutive quarters of EPS declines: for Q3 2016, the blended earnings growth rate for the S&P 500 is 3.0%. The third quarter marks the first time the index has seen year-over-year growth in earnings since Q1 2015 (0.5%).
That’s the official version. The unofficial one is that of this 3% increase in EPS, half comes from buybacks, or a reduction in the number of shares outstanding, which according to Deutsche Bank contributed 1.6% to earnings growth in the third quarter. As the chart below shows, this has been a recurring theme for the S&P, where buybacks have “added” between 1% and 2% to EPS “growth” every quarter going back at least to the start of 2012.

And then there was the very acute distinction between GAAP and non-GAAP, one of our favorite topics which we have covered going as far back as 2010, and more recently in February of this year.

This post was published at Zero Hedge on Nov 19, 2016.

Trump’s First Foreign Policy Test: Syria, Russia, & The Stability Of Europe

Authored by Michael Cembalest, JPMorgan Chairman of Market and Investment Strategy,
For investors, one potential landmine is a dramatic change in Europe’s political landscape just as the continent is finally posting positive growth again. Why would anti-establishment parties be rising when its economy is improving?
At our JP Morgan Asset Management Global Investor Summit and International Council meetings in October, we discussed this issue at two client sessions, one with Condoleezza Rice and the other with Henry Kissinger. The charts below are a synopsis of those discussions. Like Harold Pinter’s play Betrayal, this story is best told backwards; starting with what’s happening now, and finding our way back to root causes.

This post was published at Zero Hedge on Nov 19, 2016.

With TPP Dead, China Officially Launches Its Own Pacific Free-Trade Deal

As we noted on Thursday, “it was ludicrous for Obama to leave China out of things. China is the second biggest economy in the world, third if you treat the EU as a block. Had China been in the deal all along, we may not have seen the ludicrous provision that allowed companies to sue governments. That provision was one of the key reasons the deal failed. With the election of Trump, TPP is officially dead. China, not the US, will be at the center of a new Asian trade pact.”
Furthermore, as Mish Shedlock pointed out, on November 10, in the wake of Trump’s election, Beijing quickly sought to fill the void left by TPP by reviving its proposed Free Trade Area of the Asia-Pacific pact.
“Xi Jinping is rekindling efforts to promote a rival to the US-led Trans-Pacific Partnership trade agreement in the wake of Donald Trump’s election victory, Chinese officials said on Thursday. With Mr Xi set to travel to Peru this month for the annual Asia-Pacific Economic Co-operation summit, Li Baodong, vice-foreign minister, said China’s plan could fill the void. Chinese officials have previously sought to promote the proposal at Apec, only to encounter resistance from US officials who wanted to prioritise TPP negotiations.

This post was published at Zero Hedge on Nov 19, 2016.

Week in Review: November 19, 2016

While the American media is distracted trying to figure out whether to be more outraged by ‘fake news’ or Donald Trump not informing them of his dinner plans, the Mises Wire noted a number of important global trends this week. For one, the war on cash continues to grow. In Australia a number of large financial institutions came out with policies supporting the Australian Treasury Department’s goal of a cashless society. Meanwhile in India, Prime Minister Narendra Modi has banned 1000 and 500 rupee bank notes, a step backward for a country that has enjoyed substantial economic growth thanks to its rejection of protectionism. Japan’s own Prime Minister Shinzo Abe on the other hand is making the same mistakes as Herbert Hoover as he tries to prop up the Japanese economy by mandating higher wages.
In Europe, while it seems France is unlikely to leave the EU, politicians continue to try to come to grips with both Brexit and Trump’s election. Thorsten Polleit suggests Trump could be what finally breaks the euro, while Carmen Elena Dorob worries ‘the UK might end up replacing European bureaucracy with a homegrown version.’
On a brighter note, at least the NFL may be weaning itself off its addiction to taxpayer money.

This post was published at Ludwig von Mises Institute on November 19, 2016.

What “The Worst Bond Rout In 15 Years” Means For Stocks

In light of the dramatic spike in interest rates since the Trump victory, where as we reported yesterday and as Bloomberg comments overnight, “yields on benchmark 10-year Treasuries posted their steepest back-to-back weekly increase since 2001” leading to the “the worst rout in the fixed-income universe in 15 years”…

… and which coupled with a surge in the 10-Year breakeven rate – a gauge of US consumer price expectations – to the highest in more than 18 months…

This post was published at Zero Hedge on Nov 19, 2016.

The Hill’s Group Response To The USGS Wolfcamp Shale 20 Billion Barrel Deposit

(The Hill’s Group),
Yes, the magic words; ‘technically recoverable’. I wonder how much ‘technically recoverable’ oil is on Mars? There may be a lot, but oil that will ever see the surface of the Martian landscape is a different matter. Those would be reserves, and at $45/ barrel there is exactly zero. The same that can be said for the Wolfcamp.
I asked The Hill’s Group what they thought of the recent USGS announcement of the 20 billion barrel Wolfcamp shale Deposit in Texas:
Release Date: November 15, 2016
This is the largest estimate of continuous oil that USGS has ever assessed in the United States.

This post was published at SRSrocco Report on November 19, 2016.

Why the Dollar Remains the World’s Reserve Currency

America came into the Second World War two years after it started, but before that it sold large quantities of American goods to the Allied forces: weapons, war materials, ships, and so on. The bills for all these products and commodities were settled in gold, and American gold reserves were the highest in the world.
By 1944, when a victorious outcome of the war was fairly predicted, representatives of the Allied nations and their central bankers met at Bretton Woods in New Hampshire, where it was agreed that (a) the US dollar would be accepted as the settlement currency for international trade; (b) that the US dollar would be redeemable in gold on presentation at the fixed rate of $35 to the ounce; and (c) the International Monetary Fund (IMF) would be formed to ensure that the US behaved itself and maintained the agreed ratio by controlling the supply of its dollars.
Gold: The World’s First “Reserve Currency” This is how the US dollar became the world’s ‘reserve currency.’ This term is derived from the fact that the original reserve currency was gold – in the sense that trade debts were settled from the debtor country’s gold reserves.

This post was published at Ludwig von Mises Institute on Nov 19, 2016.

Why Are Goldman Insiders Dumping Stock At The Fastest Rate In 5 Years?

While the ‘deplorable’ half of America was greatly relieved when Donald Trump pulled off his establishment-upsetting victory, there is another group of Americans that may be even more pleased. Goldman Sachs’ top executives had over 1 million stock option grants due to expire worthless next week, but thanks to an unprecedented spike in the stock since the election, Bloomberg reports Lloyd Blankfein and friends have cashed out, selling hundreds of millions in stock in the last week.
As Bloomberg details, just last week, it looked like more than 1 million stock options granted toGoldman Sachs Group Inc.’s top executives and directors would expire out of the money.
The awards, granted with strike prices of $199.84 at the end of 2006, a solid year for bank stocks, were set to expire on Thanksgiving eve. But on Nov. 7, the night before Americans voted, they closed at $181.48, meaning it wouldn’t make sense for executives to exercise them.
Then Trump pulled off an upset victory and Goldman Sachs surged 16 percent through Thursday, allowing executives to exercise the options and sell shares to lock in gains. The stock closed at $209.63 on Thursday and traded for as much as $212.07 this week, the highest since July 2015.

This post was published at Zero Hedge on Nov 19, 2016.

Trump is Asking for Your Suggestions – Interesting – Let’s See

The election may be over, but our work is just getting started.
In 61 days, we begin our mission to Make America Great Again!
As I’ve said so many times before, I will not be able to do it alone. I’ll need you to step up and play an active role in fixing our country and enacting our platform for America.
Which is why I’m asking you to take the 100-Day Plan of Action Survey, so that we can determine what we MUST accomplish as our first order of business.

This post was published at Armstrong Economics on Nov 19, 2016.

Doug Noland: As Exciting as the 1930s

This is a syndicated repost courtesy of Credit Bubble Bulletin. To view original, click here. Reposted with permission.
‘One trouble with every inflationary creation of credit is that it acts like a delayed time bomb. There is an interval of indefinite and sometimes considerable length between the injection of the stimulant and the resulting speculation. Likewise, there is an interval of a similarly indefinite length of time between the injection of the remedial serum and the lowering of the speculative fever. Once the fever gets under way it generates its own toxics.’ ‘The Memoirs of Herbert Hoover – The Great Depression 1929-1941′
There are few apt comparisons to today’s extraordinary backdrop. Late in the ‘Roaring Twenties’ period offers the closest parallel – the global nature of vulnerabilities and faltering booms; policymaker confusion and increasing ineffectiveness; fundamental deterioration in the face of impenetrable speculative impulses. It was by 1929 deeply embedded in speculator psyche that the enlightened Federal Reserve would never allow a market or economic collapse.

This post was published at Wall Street Examiner by Doug Noland ‘ November 19, 2016.

Hillary Swag Fire Sale – “Last Call” To Own Your Piece Of “Clinton/Kaine History”

After dashing the hopes and dreams of millions of millennial snowflakes across the country with her stunning defeat, Hillary would like for you to give her just a little bit more of your hard-earned money before she officially bows out of public life. As such, “Madam President” has implemented a fire sale on all Clinton/Kaine swag sold on Personally, we think the “woman card” and “stronger together” bumper stickers would make fantastic stocking stuffers though we would warn parents of the potential “triggering” effect of these gifts.
Per the Daily Caller, team Clinton announced the swag fire sale via an email sent to supporters with the subject line, “Last chance: Own your piece of this campaign and support Democrats across the country.”

This post was published at Zero Hedge on Nov 19, 2016.

Housing in a time of rising mortgage rates: A big jump in mortgage rates is here to stay for these reasons.

In the midst of everything that is going on, the bond market took a big hit to the tune of $1 trillion. What this means is that mortgage rates tied to Treasury bonds had a massive move, the largest in many years. The 30-year fixed rate mortgage rate jumped to nearly 4 percent, the highest rate in a year. The trend looks to continue as the expectation of inflation is now expected to happen. There are a variety of reasons as to why this will happen and we will go into this later in the article. But this jump in the mortgage market happened during a time that the homeownership rate is already low because people are too broke to afford homes at inflated prices. This is a problem because people are already walking on a financial edge. The housing market just got more expensive for regular people.
Bond market movements
The bond market moved because the new entering administration is talking about cutting taxes but also unleashing a massive infrastructure spending plan. Of course with nearly $20 trillion in public debt, that might cause a problem including inflation. So the bond markets reacted in a clear direction.

This post was published at MyBudget360 on Nov 19. 2016.

How The S&P 500 Will Spend $2.6 Trillion In Cash Next Year (Hint: Mostly On Stock Buybacks)

In light of expectations that the Trump fiscal stimulus plan will unleash a new Golden Age for the US economy, driven in part by the repatriation of hundreds of billions in funds held offshore, yesterday we showed a disturbing analysis from Citigroup according to which the bank’s share-shrinker portfolio has soared relative to the S&P following the US election. The implication was clear: as fas as the market is concerned, much if not all of the capital repatriated from overseas will be promptly returned to shareholders, and maybe much of the corporate tax cut as well. Citi’s troubling conclusion: “This doesn’t bode especially well for those who hope policy changes will encourage a significant pick-up in US company capex.”

Which means that far from being a boon to investment, the market’s assessment – at least as of this moment – is that much of the $1 trillion fiscal boost, touted in Friday’s Steve Bannon interview, will end up being returned to shareholders.

This post was published at Zero Hedge on Nov 19, 2016.

Trump and Gold: The Look Ahead

This is a syndicated repost courtesy of The Daily Reckoning. To view original, click here. Reposted with permission.
On Election Night, Nov. 8, gold prices rocketed up by over $50 per ounce at one point, to $1,335 per ounce.
This was as news spread about the likely come-from-behind victory of Donald Trump over Hillary Clinton. Asian stock markets tumbled as panic selling took hold.
By the morning of Wednesday, Nov. 9, Trump was president-elect. Then – and this struck me as odd – by the time Clinton gave her belated concession speech, gold prices were giving up gains. After Clinton conceded, gold prices began to retreat below the previous day’s starting point. Global stock markets commenced a strong rally.

This post was published at Wall Street Examiner by Byron King ‘ November 19, 2016.

Are We Months or Years From a US Recession?

The latest data for the Conference Board US Leading Economic Index (LEI) came out today and appears to indicate that there is still no imminent risk of recession with forward-looking indicators showing positive, though weak, growth.
If we assume that the Conference Board US LEI continues to weaken from its current 1.1% year-over-year growth rate, historically speaking the average time it takes before we see a recession is 9 months, which would put us on track for August 2017, ranging from as short as 3 months (February 2017) to as long as 18 months (May 2018).

This post was published at FinancialSense on 11/18/2016.

Trump Slams “Very Rude” Hamilton Cast After VP Pence Booed, Lectured During Show

Vice President-elect, Mike Pence, may have expected a simple night out with his family on Friday evening in New York when he arrived at the Broadway show, “Hamilton”. He didn’t get that; instead the New York crowd greeted him with boos as he took his seat on arrival, and the cast delivered an unprecedented direct admonishment to the VP, to cap off the night during the curtain call.
“Vice President-elect Pence, I see you’re walking out, but I hope you will hear just a few more minutes.”

This post was published at Zero Hedge on Nov 19, 2016.

We’re Being Played

Our emotions are manipulated by persuasion & propaganda
The explosion of emotions triggered by the recent presidential election caught many off guard. Across the country, friendships have been lost, family members estranged, and hostility has boiled over in many communities.
In our consumer culture we’re sold lots of things. Two weeks ago it might have been jeans and a TV, but last week it was fear. And Loathing. People were sold fear and loathing, and now it is ruining friendships, making people miserable, and driving the country apart.
I’m not going to spend a lot of time on the ‘why’ of this story. The ‘why’ is a mix of competing interests including simple commerce (fear sells), political gain, and creating divisiveness within the population for other purposes.
So, what’s going on?
Sadly, in many cases, I think people have simply been manipulated in traumatic fashion and we’re now dealing with the emotional and social repercussions.
What do I mean by that?
In response to another comment on this site from a teacher whose students were expressing severe emotional distress over the Trump win, contributor Dave Fairtex offered these insights (emphasis mine):

This post was published at PeakProsperity on November 18, 2016.