Wells Fargo’s Artificial Intelligence Defies Analysts, Slaps ‘Sell’ on Google and Facebook

Oh the irony!
Google, which makes almost all of its money on ads and internet user data, is undertaking herculean efforts to get a grip on artificial intelligence (AI). It’s trying to develop software that allows machines to think and learn like humans. It’s spending enormous resources on it. This includes the $525 million acquisition in 2014 of DeepMind, which is said to have lost an additional $162 million in 2016. Google is trying to load smartphones with AI and come up with AI smart speakers and other gadgets, and ultimately AI systems that control self-driving cars.
Facebook, which also makes most of its money on ads and user data, is on a similar trajectory, but spreading into other directions, including a ‘creepy’ run-in with two of its bots that were supposed to negotiate with each other but ended up drifting off human language and invented their own languagethat humans couldn’t understand.
And here comes an AI bot developed by stock analysts at Wells Fargo Securities. The human analysts have an ‘outperform’ rating on Google’s parent Alphabet and on Facebook. They worked with a data scientist at Amazon’s Alexa project to create the AI bot. And after six months of work, the AI bot was allowed to do its job. According to their note to clients on Friday, reported by Bloomberg, the AI bot promptly slapped a ‘sell’ rating on Google and Facebook.

This post was published at Wolf Street by Wolf Richter ‘ Oct 7, 2017.

After Losing Millions To Nigerian Scammers, A Bankrupt Boris Becker Is Liquidating His Assets

It has already been one of the most remarkable rags to riches and then back to rags – with a bankruptcy on top – stories ever, and it is getting more bizarre by the day.
Three months ago, we reported that while Boris Becker was a legend on the tennis court, when it comes to investing, he appears to have shared an advisor with Johnny Depp.
Becker shot to fame when he won Wimbledon aged just 17 and went on to win a total of six Grand Slam titles, including a further two Wimbledon titles, two Australian Opens, and a US Open crown, before retiring in 1999 aged just 31 and moving into business. Alas, here the fairy tale ends, and according to claims in the German media, Boris Becker may have lost a substantial portion of his roughly 50 million fortune in part because of questionable investments in the Nigerian oil industry.

This post was published at Zero Hedge on Oct 7, 2017.

Doug Noland: Kevin Warsh to Lead the Fed in a New Direction

This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
The threat of nuclear crisis with North Korea. Two destructive hurricanes. Puerto Rico devastated and about out of money. The start of a major comprehensive tax reform effort, along with general political mayhem in Washington. The worst mass shooting in U. S. history. In the midst of it all, the President is apparently about to make a potentially momentous decision: A Fed chair will be appointed with a new four-year term.
As has become the norm, markets are happy-go-lucky (at almost daily record highs). How could anything possibly rock the boat? Outside of the financial media, a change of guard at the Fed is hardly newsworthy.
It’s an interesting narrative leading up to the President’s decision. Of course, there’s the typical ‘hawk’ vs. ‘dove’ framework. The Wall Street Journal had an insightful op-ed: ‘Donald Trump’s Fed Choice: Continuity or Disruption.’ And then there was Friday’s Krugman piece in the New York Times: ‘Will Trump Trumpify the Fed?’ – that I will return to.

This post was published at Wall Street Examiner by Doug Noland ‘ October 7, 2017.

Trump Hints At War With North Korea: “Sorry, But Only One Thing Will Work”

When we commented on this morning’s Trump tweetstorm, in which he covered everything from the fake (and not so fake) media, to RNC donors, to reaching out to Democrats on Obamacare repeal, to “late night” comedians and their “one-sided coverage” of Trump, we said that Trump has yet to make a comment on the most cryptic topic of the last week, his repeated suggestions that the current situation is a “calm before the storm.”
Moments ago, he may have done just that, when in his latest pair of tweets, Trump ominously suggested that following 25 years of failed diplomacy with North Korea, there is “only one thing that will work.”
“Presidents and their administrations have been talking to North Korea for 25 years, agreements made and massive amounts of money paid hasn’t worked, agreements violated before the ink was dry, makings fools of U. S. negotiators. Sorry, but only one thing will work!”

This post was published at Zero Hedge on Oct 7, 2017.

3 New Intraday Lows at the London P.M. Gold Fix

07 October 2017 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price traded mostly sideways in Far East trading on their Friday, but developed a slight positive bias around the time that London opened. That lasted until shortly before the noon silver fix over there — and the price began to slide a bit. There was only a tiny price jiggle at the release of the jobs report at 8:30 a.m. in New York, but the price was pressured lower until the low tick of the day…and new intraday low for this move down…was set at the afternoon gold fix in London. It rallied sharply from there, before getting capped at the London close — and from that point chopped quietly, but unevenly higher for the rest of the Friday session.
The CME Group reported the low and high ticks at $1,262.80 and $1,279.20 in the December contract.
Gold finished the Friday session on its high tick of the day at $1,276.10 spot — and up $8.30 from Thursday’s close. Not surprisingly, net volume was over the moon at something around 352,000 contracts.

This post was published at GoldSeek on Sunday, 8 October 2017.

“My Watch Is Off”: HSBC Traders Used Code Words To Trigger Front-Running Trades

According to prosecutor Carol Sipperly, former HSBC currency trader Mark Johnson used just four words to trigger a massive, international front-running operation that netted his firm some $8 million in illicit profits: “my watch is off.”
The bank’s former global head of foreign exchange alerted the traders around the globe via a phone call in December 2011 that was recorded, a prosecutor said Thursday. The gambit was designed to take advantage of a $3.5 billion client order to buy sterling, the U. S. says.
After Johnson’s trial recessed for the day, prosecutor Carol Sipperly asked that the jury hear the recordings on Friday, in which Johnson allegedly tipped off a trader in Hong Kong. That signal eventually reached others on both sides of the Atlantic, she said. Johnson was in New York that day, speaking to Stuart Scott, the bank’s former head of currency trading in Europe, who was in London, just before the transaction for its client, Cairn Energy Plc.
Prosecutors say Johnson and Scott, along with other traders, bought pounds before the transaction. Johnson is on trial in federal court in Brooklyn, New York, accused of a scheme that produced a $8 million profit for his bank.

This post was published at Zero Hedge on Oct 6, 2017.

Uncle Sam’s Unfunded Promises

Here’s a surprisingly profound question: What is a promise? Dictionaries offer various definitions. I like this one: ‘An express assurance on which expectation is to be based.’

That definition captures the two-sided nature of a promise. One party offers an assurance, which the other converts into an expectation. You deposit money in your checking account, and the bank assures you that you can have it back on demand. You expect that the bank will fulfill its promise when you visit an ATM.
Governments likewise make promises, but those are different. Government is the ultimate enforcer of promises, but we have no recourse if it chooses to break them – except at the ballot box. As we’ve seen in recent weeks regarding public pensions, that’s ineffective when the promises were made long ago by officials who are no longer in office.

This post was published at Mauldin Economics on OCTOBER 7, 2017.

Visualizing The Real Test For Market Bulls (In 1 Simple Chart)

As StockBoardAsset shows on the 24-year monthly ratio chart below, bulls have pushed the S&P:VIX price into uncharted territory this year.

The REAL test for sustained market euphoria is now occurring, as the ratio probes a two decade ascending diagonal (red) line responsible for past market tops.
After 8-9 years of a central bank induced bull market, and pushing +2803% gains from lows, investors are making the fatal decision to get back in, as the final stages are here explained in the ratio.

This post was published at Zero Hedge on Oct 7, 2017.

Is The World About To Take A ‘Gold Shower?’

The 1944 Bretton Woods international monetary system as it has developed to the present is become, honestly said, the greatest hindrance to world peace and prosperity. Now China, increasingly backed by Russia – the two great Eurasian nations – are taking decisive steps to create a very viable alternative to the tyranny of the US dollar over the world trade and finance. Wall Street and Washington are not amused, but they are powerless to stop it… Now, ironically, two of the foreign economies that allowed the dollar an artificial life extension beyond 1989 – Russia and China – are carefully unveiling that most feared alternative, a viable, gold-backed international currency and potentially, several similar currencies that can displace the unjust hegemonic role of the dollar today.
The above is an excerpt from William Engdahl’s essay, ‘Gold, Oil, Dollars, Russia and China.’ The essay is a must-read if you want to understand how the dollar was cleverly forced on the world as the reserve currency and how it is about to be cleverly removed and replaced with a trade system that reintroduces gold into the global monetary system.
Unfortunately, the U. S. educational system presents a fraudulent account of world financial and economic history from Bretton Woods to present. Fed on a steady educational diet of U. S. propaganda, anyone raised and educated in the U. S. will wake up one day to an economic cold shower and eventual poverty unless they’ve taken the steps necessary to protect their savings (if they have any).

This post was published at Investment Research Dynamics on October 7, 2017.

Junk Bond Debt Covenant Quality Drops To All Time Lows

By Mark Rzepczynski of the Disciplined Systematic Global Macro Views blog
Corporate spreads are tight and there is little room for further reduction given the absolute level of spreads.

The reach for yield may be at an extreme. The bond spread is the compensation given bondholders for taking on the risk of corporate debt; consequently, it should become a concern when the quality of bond covenants or protections declines with spreads. Of course, if risk is declining, this is not the case, but at this point in the credit cycle it is hard to make that argument. An inverse relationship between spreads and covenant weakness means you are getting less compensation and less protection for the same risk, all things equal.

This post was published at Zero Hedge on Oct 7, 2017.

Catalan Independence: Deutsche Bank Explains How We Got Here & What Happens Next

In the past few days, many questions have arisen regarding the exact institutional mechanisms and next steps surrounding the Catalan events.
In this note, Deutsche Bank’s Marc de-Muizon provides a Q&A addressing these issues.
Why is the referendum illegal?
The Spanish Constitution states that Spain cannot be broken up. The Article 2 in the preliminary part of the Constitution states: ” The Constitution is based on the indissoluble unity of the Spanish Nation, the common and indivisible homeland of all Spaniards”. The Spanish Constitutional Court suspended the law passed by the Catalan parliament at the start of September to organise the referendum.

This post was published at Zero Hedge on Oct 6, 2017.

Mapping The Most (And Least) Valuable States In America

Everyone knows location is the most important part of real estate. You can’t change where your house is (all things being equal). You have to consider school districts, crime rates, commute times – the list goes on and on. It can be much simpler when you’re considering buying a home to compare apples to apples so you can see how the real estate market differs according to location.
So HowMuch.net created a new visualization showing land and housing prices at a glance.
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The blue dots represent the value of an acre of land, and the red circles indicate the median value of a home. The bigger the blue dot and the larger the red circle, the more expensive it is to become a property owner. Small circles and dots likewise indicate a very low cost of purchasing property. The home values are from the U. S. Census Bureau’s 2015 American Consumer Survey, and the numbers behind the land values come from the Bureau of Economic Analysis.

This post was published at Zero Hedge on Oct 6, 2017.

Survey shows UK and US Pensions Crisis is Imminent

Both UK and US drop in Global Retirement Security Rankings US falls due to sharp income inequality and reduced workforce to support retirees UK is two spots away from being in the bottom 10 for government indebtedness FCA’s Andrew Bailey says ‘clear risk’ that savings rate for retirement is too low UK’s retirement savings gap set to widen to 2.3trn due to automation of jobs UK expected to fall into major pensions crisis by 2028 The economics of retirement funding is at breaking point. Thanks to low interest rates, looming inflation rates and slow growth the future of our retired populations are at serious risk.
Currently there are 600 million individuals placing pressure on already-established retirement systems. This is set to get worse as the results of the last decade of financial experimentation show themselves and ageing populations widen the cracks in our economies.
Most pension schemes were formed in a time when manufacturing and traditional bricks and mortar business were the pinnacle of Western economies. This is no longer the case. Globalisation has seen countries switch to service economies. Our financial planning has failed to keep up.

This post was published at Gold Core on October 7, 2017.

6/10/17: CA&G on Ireland’s Tax, Banking Costs & Recovery

Occasionally, the Irish Comptroller and Auditor General (C&AG) office produces some remarkable, in their honesty, and the extent of their disclosures, reports. Last month gave us one of those moment.
There are three key findings by CA&G worth highlighting.
The first one relates to corporate taxation, and the second one to the net cost of banking crisis resolution. The third one comes on foot of tax optimisation-led economy that Ireland has developed since the 1990s, most recently dubbed the Leprechaun Economics by Paul Krugman that resulted in a dramatic increase in Irish contributions to the EU budget (computed as a share of GDP) just as the Irish authorities were forced to admit that MNCs’ chicanery, not real economic activity, accounted for 1/3 of the Irish economy. All three are linked:
Irish banking crisis was enabled by the combination of a property bubble that was co-founded by tax optimisation running rampant across Irish economic development model since the 1990s; and by loose money / capital flows within the EU, which was part and parcel of our membership in the euro area. The same membership supported our FDI-focused competitive advantage. Irish recovery from the banking crisis was largely down to non-domestic factors, aka – tax optimisation-driven FDI and foreign companies activities, plus the loose money / capital flows within the EU enabled by the ECB. In a way, as Ireland paid a hefty price for European imbalances and own tax-driven economic development model in 2007-2012, so it is paying a price today for the same imbalances and the same development model-led recovery.

This post was published at True Economics on Friday, October 6, 2017.

Spike In Airborne Radioactivity Detected In Europe, Source Located In Southern Urals

In late February, concerns about a potential nuclear “incident”, reportedly in the vicinity of the Arctic circle, emerged when trace amounts of radioactive Iodine-131 of unknown origin were detected in January over large areas in Europe, according to a report by the Institute for Radiological Protection and Nuclear Safety, the French national public expert in nuclear and radiological risks. And while Norway was the first to measure the radioactivity, France was the first to officially inform the public about it.
“Iodine-131 a radionuclide of anthropogenic origin, has recently been detected in tiny amounts in the ground-level atmosphere in Europe. The preliminary report states it was first found during week 2 of January 2017 in northern Norway. Iodine-131 was also detected in Finland, Poland, Czech Republic, Germany, France and Spain, until the end of January”, the IRSN wrote in a press release.

This post was published at Zero Hedge on Oct 6, 2017.