Trump Wins: Judge Denies Obama Holdover’s Suit Against Mulvaney Running CFPB

In a somewhat unsurprising decision, President Trump won a legal fight over who gets to run the Consumer Financial Protection Bureau (at least for now).
As Bloomberg reports, Trump’s budget director Mick Mulvaney can remain as temporary head of the agency, a federal judge ruled in rejecting a request to block the move fromLeandra English, who was named to the role by the departing director.
U. S. District Judge Timothy Kelly in Washington rebuffed English, who sued to Nov. 26, contending she is entitled to the provisional post.
Kelly, who has been on the bench since only September, is a Trump nominee who previously worked for Senate Judiciary Committee Chairman Chuck Grassley, an Iowa Republican, and also served as a federal prosecutor.

This post was published at Zero Hedge on Nov 28, 2017.

JPMorgan’s Outlook For 2018: “Eat, Drink And Be Merry, For In 2019…”

While the prevailing outlook by the big banks for 2018 and onward has been predominantly optimsitic and in a few euphoric cases, “rationally exuberant“, with most banks forecasting year-end S&P price targets around 2800 or higher, and a P/E of roughly 20x as follows…
Bank of Montreal, Brian Belski, 2,950, EPS $145.00, P/E 20.3x UBS, Keith Parker, 2,900, EPS $141.00, P/E 20.6x Canaccord, Tony Dwyer, 2,800, EPS $140.00, P/E 20.0x Credit Suisse, Jonathan Golub, 2,875, EPS $139.00, P/E 20.7x Deutsche Bank, Binky Chadha, 2,850, EPS $140.00, P/E 20.4x Goldman Sachs, David Kostin, 2,850, EPS $150.00, P/E 19x Citigroup, Tobias Levkovich, 2,675, EPS $141.00, P/E 19.0x HSBC, Ben Laidler, 2,650, EPS $142.00, P/E 18.7x … there have been a small handful of analysts, SocGen and BofA’s Michael Hartnett most notably, who have dared to suggest that contrary to conventional wisdom, next year will be a recessionary, bear market rollercoaster.
And then, there are those inbetween who expect a good 2018, but then all bets are off in 2019. Among them is JPM’s chief economist Michael Feroli who has published a special report, aptly titled “US outlook 2018: Eat, drink, and be merry, for in 2019…”
Here are the seven main reasons why JPM believes that the party will continue until December 31, 2018 or thereabouts:
Growth momentum at the end of 2017 is solid and global headwinds are unusually mild

This post was published at Zero Hedge on Nov 28, 2017.

US Home Prices Increase Pace At 6.2% YoY, Over 2x Wage Growth and 4x ‘Core Inflation’

This morning, S&P/Case-Shiller released their monthly Home Price Indices for September.
The S&P CoreLogic Case-Shiller U. S. National Home Price NSA Index, covering all nine U. S. census divisions, reported a 6.2% annual gain in September, up from 5.9% in the previous month. The 10-City Composite annual increase came in at 5.7%, up from 5.2% the previous month. The 20-City Composite posted a 6.2% year-over-year gain, up from 5.8% the previous month.
Seattle, Las Vegas, and San Diego reported the highest year-over-year gains among the 20 cities. In September, Seattle led the way with a 12.9% year-over-year price increase, followed by Las Vegas with a 9.0% increase, and San Diego with an 8.2% increase. 13 cities reported greater price increases in the year ending September 2017 versus the year ending August 2017.

This post was published at Wall Street Examiner on November 28, 2017.

WARNING: The US Stock Market Has A 70% Chance Of Crashing RIGHT NOW

Vanguard’s chief economist Joe Davis said investors need to be prepared for a significant downturn in the stock market, which is now at a 70 percent chance of crashing. That chance is significantly higher than it has been over the past 60 years.
The economist added, ‘It’s unreasonable to expect rates of returns, which exceeded our own bullish forecast from 2010, to continue.’ In its annual report, the company told investors to expect no better than four to six percent returns from stocks in the next five years. Vanguard, which manages roughly $5 trillion in assets and is a proponent of long-term investing, isn’t sounding the alarm bells to scare investors out of the market. They simply want investors to be prepared.

This post was published at shtfplan on November 28th, 2017.

Watch Live: Senate Banking Committee ‘Grills’ Trump’s Fed Chair Nominee Jerome Powell

Update (11:45 am ET): As Powell’s testimony draws to a close, analysts at Stone & McCarthy noted that – as expected – the future Fed chair’s comments were “generally dovish”.
The hearing was largely free of surprises. As it neared its close, Powell offered his thoughts about the blockchain and digital currencies (one day they could impact the Fed’s policies, but right now they’re too small to matter), and the mysterious roots of low inflation (the Fed is still struggling to determine if it’s due to transitory factors, or some kind of fundamental shift.
Here’s Stone & McCarthy:
In his confirmation hearing before the Senate Banking Committee, Powell fielded questions mainly on the topics of raising interest rates, shrinking the balance sheet, and his views on “tailoring” regulation. Powell maintained the view that it is appropriate to gradually increase short-term rates against a backdrop of healthy, consistent growth with a strong labor market. He did not address inflation issues. He said GDP growth should be about 2.5% in 2017, and looking forward to “something pretty close to that” next year. Powell declined to specifically say if he would vote for another rate hike at the December 12-13 FOMC meeting. He did say “conditions are supportive” for another rate hike and “the case for raising rates at the next meeting is coming together”.

This post was published at Zero Hedge on Nov 28, 2017.

How Do We Really Cut the Burden of Government? Cut Spending!

In all of the talk about tax reform, nobody is considering the more fundamental problem facing America – the size and scope of the federal government.
Peter Schiff has described the Republican tax plan as ‘tax cuts masquerading as reform.’ When it’s all said and done, Americans aren’t going to get tax relief. They are going to get big government on a credit card. The balance will come due down the road.
The real issue is the total cost of government. In an article originally published on the Mises Wire, Ryan McMaken argues that if Republicans really want to ease the burden of government, they need to cut spending.
Washington, DC is currently in the middle of the ‘tax reform’ process, which as Jeff Deist, points out, is ‘ a con, and a shell game.’ Tax reform proposals, Deist continues ‘always evade and obscure the real issue, which is the total cost – financial, compliance, and human – taxes impose on society.’
Tax reform is really about which interest groups can modify the current tax code to better suit their own parochial interests. The end result is not a lessened tax burden overall, and thus does nothing to boost real savings, real wealth creation, or real economic growth. It’s just yet another government method of rewarding powerful groups while punishing the less powerful ones.
Not surprisingly then, the news that’s coming out of Washington about tax reform demonstrates that the reforms we’re seeing are only shifting around the tax burden without actually lessening it. The central scam at the heart of the matter is that DC politicians are more or less devoted to ‘revenue neutral’ tax reforms. That means if one group sees a tax cut, then another group will lose a deduction, or even see an actual increase in tax rates.
This is why many middle-class families may be looking at a higher tax bill. David Stockman explains:

This post was published at Schiffgold on NOVEMBER 28, 2017.

GOP Tax Plan: Government on a Credit Card

The middle class is not getting tax relief under the Senate plan currently under consideration. It’s getting big government on a credit card.
Here’s a fun fact. Did you know virtually all of the individual tax cuts in the Senate version of tax reform are temporary?
Indeed, what the Senate giveth, it also taketh away. Most of the tax cuts for individuals would expire in 2026 under the Senate plan.
So what’s the reasoning behind sunsetting the tax cuts?
Under Senate rules, any bill adding more than $1.5 trillion to the deficit over 10 years must pass the Senate by 60 votes. Republicans have to keep their plan under that figure to have any chance at passing it. They don’t have 60 votes. By allowing the individual tax cuts to expire within that 10-year window, the total deficit increase comes in right under that max amount.
One might pause here to consider that a $1.5 trillion increase in the deficit is somehow considered trivial. As we have reported, many economists say the substantial increase in debt that will occur if Congress passes tax cuts without any accompanying decrease in the size of government will fail to spark the economic growth being promised.

This post was published at Schiffgold on NOVEMBER 28, 2017.

Cable Crumbles After Government Denies Telegraph Report On Brexit Divorce Bill Agreement

Update: That did not last long. Shortly after The Telegraph report hit the wires, AP reports that Brexit talks between the UK and European Union are continuing as officials played down suggestions that a deal has been reached on the so-called divorce bill.
Reports suggested an agreement in principle has been reached which would see Theresa May increase her offer and pay between 40 and 49 billion (45-55 billion euro).
A British source said they did not recognise the figure in the Daily Telegraph and stressed that talks were ongoing in Brussels.
Cable has reverted back lower after tagging intraday highs…

This post was published at Zero Hedge on Nov 28, 2017.

US Home Prices Surge At Fastest Pace Since July 2014

As the latest housing data shows an uptick in sales, Case-Shiller’s 20-City Composite index surged 6.19% YoY in September – the fastest rate of gain since July 2014.
As Bloomberg notes, the residential real-estate market is benefiting from steady demand backed by a strong job market and low mortgage rates. The ongoing scarcity of available houses on the market, especially previously-owned dwellings, is likely to keep driving up prices.
Eight cities have surpassed their peaks from before the financial crisis, according to the report.

This post was published at Zero Hedge on Nov 28, 2017.

From Shakespeare-For-Dogs To Digital-Puppets, Senator Details 100 Examples Of Government Waste In 2017

Late November is a great time of year for a variety of reasons…there is the crisp fall air, the gatherings with your extended family for Thanksgiving that begin innocently and end with restraining orders and death threats and, of course, Senator James Lankford’s annual report on government waste. And, just like last year, the 2017 report on “Federal Fumbles” is filled with truly infuriating examples of government waste that are sure to get your blood boiling…here are a couple of examples:
First up is a $30,000 grant awarded by the National Endowment for the Arts for a play, dubbed “Doggie Hamlet” by Lankford, that entailed a group of “artists” running around a field in New Hampshire apparently taunting a group of presumably very confused sheep.
As evidenced in previous editions of Federal Fumbles, the American public’s love for William Shakespeare has sometimes translated into unusual and unnecessary federal expenditures. For instance, tens of thousands were spent to support a production of Silent Shakespeare in 2015. However, the strangeness of those fumbles pales in comparison to a $30,000 NEA grant to support a production of Doggie Hamlet.
Doggie Hamlet actually includes humans yelling or running toward very confused sheep and dogs. The production, which does not include any actual lines from Hamlet, is conducted outdoors in a 30-by-50-foot field in New Hampshire. The play is described as ‘a beautiful and dreamlike spectacle weaving instinct, mystery, and movement into an unusual performance event.”

This post was published at Zero Hedge on Nov 28, 2017.

America’s Opiate Crisis Helping to Drive Up Home Prices

Financial Sense Newshour recently spoke with Dr. Frank Nothaft, Executive and Chief Economist at CoreLogic, about the US housing market and why home prices are likely to continue appreciating, though at a slightly lower rate, in 2018.
For related podcast, see Jim Puplava on Oil; Dr. Nothaft on US Home Prices

Source: CoreLogic Home Price Insights
Good News: Demand Is High and Rising
The real estate market could be up 5% or more this year, Nothaft stated, and could possibly rise another 5% next year in 2018.

This post was published at FinancialSense on 11/27/2017.

China Regulators Seek To Calm Mania For HK Stocks As Plunge Protectors Make An Appearance

The Chinese authorities’ efforts to contain leverage and reduce risk across the nation’s financial system took another step forward overnight with the ban on approvals for mutual funds that plan to allocate more than 80% of their portfolios to Hong Kong stocks. This looks like a response to surging capital flows into the territory from the mainland and the equity market euphoria in Asia, which saw the Hang Seng index cross the 30,000 mark last Wednesday for the first time in 10 years. As we noted in ‘Very Close To Irrational Exuberance: Asian Equities Break Above All-Time High As Hang Seng Clears 30,000’.
Ongoing southbound flows from the mainland exchanges in Shanghai and Shenzhen – via the connect trading scheme – helped to propel the rally.
The South China Morning Post has more:
China’s securities regulator will suspend the approval of new mutual funds that are meant for investing in Hong Kong’s equity market, putting a temporary cap on southbound capital that has boosted the city’s benchmark stock index to a decade high.
Chinese mutual funds which plan to allocate more than 80 per cent of their portfolio to Hong Kong-listed equities will no longer be approved for sale on the mainland, according to two state-owned funds familiar with the matter, citing an order by the China Securities Regulatory Commission. Only funds that allocate less than half of their portfolio to Hong Kong will be approved, the funds said, echoing a Monday report on the China Fund website, an industry news site.
The Chinese regulator ‘s latest instruction reflects the concern that Hong Kong’s key stock benchmark has risen too much too quickly to a level that was last attained in 2007, before the global financial crisis a year later caused the Hang Seng Index to plunge 33 per cent, and wiped out billions of dollars of value.

This post was published at Zero Hedge on Nov 28, 2017.

Tax Talks Lead Nowhere Good

The US Senate may vote on its tax ‘reform’ plan this week. If it passes, they’ll have to reconcile it with the somewhat different House plan.
I expect they’ll get bogged down at that point, and today’s broken, dysfunctional tax code will stay as it is.
At least we’ll know what we’re dealing with, but we’ll have missed a chance to fix some of the most glaring problems.
We don’t lack opinions, though. My tax-related articles of the last two weeks drew quite a few reader responses. Today I’ll share some of them and add my own comments.

This post was published at Mauldin Economics on NOVEMBER 28, 2017.

If Vanguard Is Right, You’ll Need to Save More For Retirement

Vanguard is one of the largest mutual fund companies in the world with 20 million investors and approximately $4.5 trillion in global assets under management as of September 30, 2017, according to its website. When it expounds on the outlook for the stock market, people tend to listen closely.
Yesterday, Vanguard issued its economic and stock market outlook for the medium term, writing: ‘For 2018 and beyond, our investment outlook is modest, at best. Elevated valuations, low volatility, and secularly low interest rates are unlikely to be allies for robust financial market returns over the next five years.’
Exactly how ‘modest’ does it expect stock market returns to be over the medium term? The report goes on to define ‘modest’ as follows:
‘Based on our ‘fair-value’ stock valuation metrics, the medium-run outlook for global equities has deteriorated a bit and is now centered in the 4% – 6% range. Expected returns for the U. S. stock market are lower than those for non-U. S. markets, underscoring the benefits of global equity strategies in the face of lower expected returns.’
If your retirement savings strategy has factored in an annualized stock market return of 7 percent or higher and Vanguard is right about the potential for a return of 4 to 6 percent, those planning to retire in less than 10 years will need to either save more for retirement or extend out the date of retirement.

This post was published at Wall Street On Parade on November 28, 2017.

Is it Tuesday? Time for another banking scandal

Another day, another major banking scandal. It’s getting to the point where you can practically set your watch to these things.
The latest involves our old friend Wells Fargo. The Wall Street Journal reported last night that Wells has been screwing its customers on foreign currency exchange rates.
According to the Journal, Wells Fargo conducted an internal review of its fee arrangements and found that they had massively overcharged 88% of the sampled customers.
For example, the bank might have signed a contract with a customer to charge 0.15% on foreign currency transactions, but instead charged as much as 4%… about 26x higher than agreed.

This post was published at Sovereign Man on November 28, 2017.

The Latest Outrage On Taxes

Corker let the cat out of the bag….
The latest outrage in the so-called “tax cut” negotiation emerged yesterday, where the idea was floated of putting “triggers” in the bill so if the deficit blooms — that is, if the alleged “growth” that would lead to higher revenues fails to materialize then taxes would go back up.
Of course the problem with this on whom will the taxes go back up?
And Corker, this morning, just told you live on Communist News Bull****:
ON YOU.
Let’s make this crystal clear: The last time we dropped corporate taxes in a “holiday” to supposedly “bring all that money back and reinvest it” the re-investment didn’t happen. Instead what happened was mergers (monopoly creation and enhancement) and buybacks (which of course preferentially benefit corporate executives.)

This post was published at Market-Ticker on 2017-11-28.

Net Neutrality: Government Can’t Know the “Correct” Price for Internet Service

The motives of net neutrality advocates differ. But the common thread among them is a general belief that internet service providers (ISPs) face no serious competition, and therefore overcharge both their supply-side (i.e., Netflix) and demand-side (internet users) customers and generally treat customers poorly.
In other words, ISPs have ‘natural monopolies’ that allow them to rake in profits without improving service to customers or dealing with different customer-types in an equitable manner.
This perspective gave rise to ‘net neutrality,’ which the Trump administration soundly condemned last week. This measure would have essentially transformed the internet into a public utility by regulating ISPs like other utilities (electricity, water, etc.). For convoluted reasons, regulators believe this will ensure internet service is distributed equitably among all who are willing to pay the going rate – no more up-charging big bandwidth-eaters (like Netflix), even at mutually-agreeable prices.
Underlying this perspective is the belief that we can decipher, in some way, the level of service that ought to be offered on the ISP market. To implement net neutrality, regulators would allegedly examine the ISP market and decide, on some grounds, that what exists ought to be different, and that such a change can only come about through government regulation.

This post was published at Ludwig von Mises Institute on Nov 27, 2017.