House Set To Vote On Stopgap Spending Bill Tomorrow

Update (5:30 pm ET): House Republicans are moving ahead with a plan to avoid a shutdown after the House Rules Committee approved a rule change that will allow Republicans to bring a two-week stopgap plan up for a floor vote Thursday, allowing the senate until end-of-day Friday to avoid a shutdown. The plan helped Speaker Paul Ryan override conservative GOP lawmakers who were pressing for a longer extension to get more leverage over Democrats and the Senate.
The decision on a stopgap bill with a Dec. 22 end-date came after Ryan and his leadership team held discussions on overall budget strategy with the leaders of the restive House Freedom Caucus. A formal check of how members would vote on the Dec. 22 deadline came back showing widespread support, said Representative Dennis Ross, a member of the vote-whipping team.
The Freedom Caucus will discuss the stopgap at a meeting tonight, according to a House Republican aide. Votes from the group’s three-dozen members may not be needed if Democrats support the stopgap plan.
As part of the talks, the Freedom Caucus has sought and Republican leaders are weighing a plan to attach the House’s fiscal year 2018 defense spending bill to a second resolution to keep the government funded after Dec. 22, according to Freedom Caucus Chairman Mark Meadows and Representative Mac Thornberry, the Texas Republican who leads the House Armed Services Committee, according to Bloomberg.
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Update: After Trump once again raised the prospect of a shutdown while speaking with reporters following a cabinet meeting today, Nancy Pelosi had a few choice words for the president…

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

The Moment The Market Broke: “The Behavior Of Volatility Changed Entirely In 2014”

Earlier today we showed a remarkable chart – and assertion – from Bank of America: “In every major market shock since the 2013 Taper Tantrum, central banks have stepped in (even if verbally) to protect markets. Following the Brexit vote, markets no longer needed to hear from CBs as they rebounded so quickly that CBs didn’t need to respond.” As a result, buy-the-dip has a become a self-fulfilling put.

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

Does Amazon Create Jobs? Well, It Hired 75,000 Robots in 2017

Like millions of other people, I am a fan and a user of Amazon. They do make buying things convenient, especially little things that you might have to go to art specialty stores to find. I’m a huge user of the Kindle app on my iPad, especially since I learned that I do not technically own the books I buy from the Apple bookstore. If I ever wanted to migrate away from an Apple product, I could not take my books that I purchased on Apple to a competing platform.
Not only can I do that with the Kindle app, I can highlight and make notes in the books, and they show up on my Amazon Kindle page, where presumably they will reside forever, so that in 20 years I can go back and review what I thought was important about a particular book. If I could do that for every book I’ve read in the last 50 years, I would be dangerous.
I will admit that I don’t quite understand the Amazon business model of growth over profits, but I have noticed that most of the profits Amazon actually makes are coming from their noncommercial side – stuff like cloud services. Be that as it may, there is a semi-dark side to Amazon. They are slowly but surely eating retail jobs.
Now, to be fair, Amazon represents only a small portion of US retail sales, but it accounts for an outsized portion of the growth in retail sales. And, again to be fair, Amazon does not do even a majority of online sales, since other online retailers are just as aggressively pushing their own products.

This post was published at Mauldin Economics on DECEMBER 6, 2017.

Tax Bill May Spark Exodus From High-Tax States

The following is a summary of our recent podcast, “Exodus – The Major Wealth Migration,” which can be listened to on our site here on on iTunes here.
It’s looking increasingly likely that we’ll see the GOP tax bill pass in the near future. Prepped for signing by the end of this year, the bill is sure to have sweeping effects on all taxpayers, especially those in high tax states.
Consider Dan White at Moody’s: Taxation Shift Spells Trouble for Underfunded States
‘(Eliminating the state and local tax deduction) could help on the margins to drive people from those states to lower tax states because their burdens are going to increase significantly,’ White said. ‘What’s more, it’s going to make it more difficult during the next recession for states to increase taxes without being burdensome to the underlying economy.’
Many of the Rich Will Pay Under New Tax Plan
If we take the example of a high-net-worth individual living in California and making $1 million a year, that person’s state taxes amount to $102,000. If that person owns a $1.5 million home, property taxes would be around $27,000. As the new plan eliminates mortgage interest deduction above $500,000, this person would lose the ability to deduct roughly $20,000 in interest expenses.

This post was published at FinancialSense on 12/05/2017.

US Officials Confirm Mysterious Cuba Attack Victims Suffered Brain Abnormalities

In the most specific finding to date about physical damage, AP reports that doctors treating the U. S. Embassy victims of mysterious, invisible attacks in Cuba have discovered brain abnormalities as they search for clues to explain the hearing, vision, balance and memory damage.
Medical testing has revealed the embassy workers developed changes to the white matter tracts that let different parts of the brain communicate, several U. S. officials said, describing a growing consensus held by university and government physicians researching the attacks. White matter acts like information highways between brain cells.
As AP details, loud, mysterious sounds followed by hearing loss and ear-ringing had led investigators to suspect ‘sonic attacks.’

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

Pound Tumbles Amid Brexit Chaos, “Headline Havoc”

Uh oh, hold your fire. A DUP source: "No deal this week". Hopes now fading fast in No10 of Theresa May going back to Brussels on Thursday too. — Tom Newton Dunn (@tnewtondunn) December 6, 2017

Cable traders are suffering through a news overload this morning, with the optimism and euphoria which sent the pound to two month highs as recently as 2 days ago fading fast on speculation whether UK PM Theresa May will be able to engineer a Brexit breakthrough in time. And following overnight speculation that her cabinet may revolt, and what one desk dubbed “headline havoc” this morning in which DUP sources saying that there will be no deal this week, it’s looking increasingly in jeopardy.
Overnight the Telegraph and Bloomberg reported that Theresa May is facing a revolt from inside her Cabinet over her plan to keep U. K. regulations aligned with the European Union after Brexit, “a split that threatens to undermine her chances of breaking the deadlock in negotiations.” Foreign Secretary Boris Johnson and Environment Secretary Michael Gove “will lead a Cabinet revolt against Theresa May over fears she is forcing a soft Brexit” the Telegraph reported. While this is hardly the first time we’ve heard this sort of speculation, considering the closeness to the EU Council Summit next Thursday/Friday, the clock is ticking for May to come up with a solution.

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

Zandi Warns “Job Market Feels Like It Might Overheat” As Manufacturing Jobs Grow At Fastest Pace On Record

Following October’s better-than-expected surge in ADP employment data (as goods-producing jobs soared), November was expected to see some slowdown, and it did, printing right on expectations at +190k (close to NFP’s 195k exp).
‘The labor market continues to grow at a solid pace,’ said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.
‘Notably, manufacturing added the most jobs the industry has seen all year. As the labor market continues to tighten and wages increase it will become increasingly difficult for employers to attract and retain skilled talent.’
Mark Zandi, chief economist of Moody’s Analytics, said,
‘The job market is red hot, with broad-based job gains across industries and company sizes. The only soft spots are in industries being disrupted by technology, brick-and-mortar retailing being the best example. There is a mounting threat that the job market will overheat next year.’
Of note perhaps is Nov 2017’s ADP print is 16% lower than Nov 2016’s

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

Bi-Weekly Economic Review: Who You Gonna Believe?

We’ve had a pretty good run of data recently and with the tax bill passing the Senate one would expect to see markets react positively, to reflect renewed optimism about economic growth. We have improving economic data on pretty much a global basis. It isn’t a boom by any stretch of the imagination but there is no doubt that the rate of change has recently been more positive. We also have a change in tax policy that should, if one believes the economists and politicians on the starboard side of the political divide, be positive for future growth. And stock punters certainly seem to believe both, that the incoming data is the beginning of a trend and that the tax bill is a big positive for growth – or at least corporate profits.
The problem is that the other markets we monitor – which actually have a much better track record at predicting growth than stocks – are not participating. It is what Alan Greenspan and Ben Bernanke would call a conundrum. The Fed is busy hiking rates and shrinking its balance sheet (well promising to at least) because they see an economy at full employment and inflation that will be jumping just as soon as the Philips Curve really kicks in. And, now they have the added incentive to get moving on those rate hikes because Congress has passed a huge – huge I say – tax cut that will expand the deficit and produce even more growth. At least that’s the Keynesian theory, although the Republicans are selling this as more of a supply-side, Laffer curve, self financing tax cut. Personally, I think the Keynesian and Laffer adherents are both wrong. We are not that far right on the Laffer curve and more debt at this point isn’t the answer.

This post was published at Wall Street Examiner on December 5, 2017.

The Global Equity Market’s 20 Trillion Dollar Mistake Exposed

Last week there were all sorts of articles hitting the newswires about the fact the world’s stock market total capitalization was pushing $100 trillion.
This article and chart from Business Insider sums up the reaction:
We first saw the chart in a note from CLSA analyst Damian Kestel: ‘I almost fell off my chair when I saw this and went to check that Bloomberg hadn’t reclassified some data… but no. I included this chart of total equity market cap in [a previous note to clients] in early June this year. At that point total world market cap was US$74 trillion, it’s now US$93 trillion,’ he wrote. (The chart excludes ETFs and the like, so there is no double-counting of single stocks in different indexes.)

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

Giant Sucking Sound Sucks (Far) More Than US Industry Now

There are two possibilities with regard to stubbornly weak US imports in 2017. The first is the more obvious, meaning that the domestic goods economy despite its upturn last year isn’t actually doing anything positive other than no longer being in contraction. The second would be tremendously helpful given the circumstances of American labor in the whole 21st century so far. In other words, perhaps US consumers really are buying at a healthy pace, just not with the same eagerness from China and the rest anymore.
It was during the dot-com recession of 2001 that Ross Perot’s ‘giant sucking sound’ finally materialized. Between then and the bottom of the Great ‘Recession’, one third of US manufacturing jobs disappeared. With imports stuck, especially those from China, could production be moving back onshore? The unemployment rate at 4.1% would seem to suggest a burgeoning economy where that might be the case for US consumers.
Unfortunately, that doesn’t appear to be happening according to any data. Despite it being a Trump campaign promise, there just isn’t any indication that the loss of manufacturing capacity is anything other than permanent. Then again, we don’t really know for sure because there just isn’t any growth in the demand of US consumers regardless of where the goods are produced.

This post was published at Wall Street Examiner on December 5, 2017.

150,000 Flee Los Angeles As Wildfires Rage – “We’ll Be Fighting This All Week”

The gate to nowhere. Home destroyed. Now gas line is burning. #VenturaFires pic.twitter.com/3HUR68Urhc
— Sara Sidner (@sarasidnerCNN) December 6, 2017

In what sounds like a replay of the devastating fires that killed dozens of people and torched a broad swath of California wine country this past summer, at least five discrete fires barreled across Southern California with extreme speed, torching more than 65,000 acres as firefighters struggled to contain the simultaneous infernos.
The first blaze started at about 6:25 p.m. Monday in the foothills near Thomas Aquinas College in Santa Paula, a popular hiking destination. It grew quickly to more than 15 square miles in the hours that followed, consuming vegetation that hasn’t burned in decades, Ventura County Fire Sgt. Eric Buschow said, according to CNN.
Powerful Santa Ana winds and extremely dry conditions have fueled the wildfires, according to the Washington Post, adding hundreds of millions – if not billions – of dollars in damage to what has already been a devastating year for fires. The winds that caused the fires were part of the season’s longest and strongest wind event – driving down from the desert and mountains into the city of Los Angeles.

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

Asian Market Rout Goes Global On Tech, Tax And Government Shutdown Tremors

A selloff which started in Asia, driven by renewed liquidation of Chinese and Hong Kong tech stocks and accelerated by weaker metal prices which pushed the Shanghai Composite below a key support and to 4 month lows…

… which sent the Nikkei to its worst day since March and the second worst day of the year, while the overall Asia Pac equity index slumped for the 8th day – the longest streak for two years, spread to Europe adn the rest of the world, pushing the MSCI world index lower by 0.3% as investors continued to lock in year-end gains among the best performing assets amid a broad risk-off mood. In FX, the dollar stabilized as emerging-market currency weakness meets yen gains while Treasuries and euro-area bonds gain as focus now turns to efforts to avert a U. S. government shutdown on Saturday. Euro and sterling trade heavy in average volumes while the loonie consolidates before BOC decision.

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

GOP tax plan will be a bad hombre for the California housing market: National Association of Realtors warns that prices can fall by 8 to 12 percent if tax plan is approved.

It seems like a lot of people are tripping over themselves regarding the GOP tax plan. For California, the housing cheerleaders always trumpeted the massive amount of tax deductions you got when buying a ridiculous crap shack. I always found this to be absurd. You usually got ‘free market’ thinkers on the economy but then suddenly, wanted massive government support when they bought their expensive home. In the Bay Area a crap shack will cost you $1.5 million if you even want to have a parking spot within walkable distance. So it is no surprise that the GOP tax plan doesn’t give two seconds of thought as to what is good for California. And good just means on what side of the dinner table you are sitting at. Frankly, the rest of the country subsidizes the crazy housing market in California and other expensive states so it never made sense to have a mortgage interest deduction of up to $1,000,000 when the typical house in the U. S. costs $200,000. In regards to housing, the GOP tax plan will not help California housing values.
Subsidizing expensive California
There is some irony that San Francisco, a city that touts to be progressive and open to all is so incredibly expensive that only the elite can afford to live there. Surely you can see the cognitive dissonance in that? We want to help you so long as you stay far and away from our expensive NIMBYism enclave. An area where making $100,000 a year will confine you to living with roommates and eating Ramen from your tech cubicle.

This post was published at Doctor Housing Bubble on Dec 5, 2017.

The One Indicator OPEC Must Watch

Authored by Nick Cunningham via OilPrice.com,
‘We will not let go of our current approach until we reach a balanced market,’ Saudi oil minister Khalid al-Falih saidMonday at a news conference in Riyadh.
OPEC ended months of speculation last week when it decided to extend its production cuts through the end of 2018, easing concerns that the limits would be lifted before the oil market was ready. But while it put some uncertainty to rest, the next question is what OPEC does when the oil market becomes ‘balanced’? What is the exit strategy?
There isn’t one at the moment, and we can assume OPEC doesn’t know what comes next. But we do know that the group has one key metric in mind: inventories. The target is to bring global oil inventories back down to the five-year average.
Oil inventories exploded between 2014 and 2017, hitting record levels that left the world awash in oil. That metric, arguably more than any other, exemplified the glut of supply that led to the crash of prices.
It has been a stubborn thing, getting those inventories back down to average levels. A wave of shale bankruptcies didn’t do it, the vanishing rig count didn’t do it either. That led OPEC and a handful of non-OPEC countries led by Russia to limit their production. But even that deal didn’t seem to be doing the trick at the start of 2017, as inventories remained stuck at elevated levels. The euphoria that followed the announcement of the initial deal gave way to a renewed sense of gloom, which pushed WTI back down into the low-$40s by mid-2017.

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

Beware Of Fake Expectations

When you read the title of this article, I am sure you assumed this article would be all about the latest event of fake news which supposedly rocked the market this past Friday. Well, I am sorry to disappoint you.
You see, many investors have been following fake news for much longer than you realize. Well, more accurately, the news has been real, but the expectations held by analysts and investors has been fake.
As I have been presenting for quite some time now, we have seen many expectations of negative reactions to news being presented by analysts over the last two years. They have pointed to news events like Brexit, Frexit, terrorist attacks, rise in interest rates, cessation of QE, the Trump election, and many other reasons as to why the stock market will start heading south in a big way. So, while they have all pointed to real news events, their expectations have been fake.
So, maybe its time to consider that fake news and fake expectations have potentially been hurting investors these last few years!?
And, rather than maintaining fake expectations about how the next news event is going to ’cause’ a move in the market, at some point, investors may have to accept that the substance of these news events do not cause anything. Rather, it is the investor reaction to the news events which cause movements in the market. And, investor reactions are driven by investor sentiment.
When investor sentiment is positive, seemingly negative news events are discounted (terrorist attacks, North Korea, rising interest rates, cessation of QE, etc.) as the market continues on its northern trajectory. However, as the market completes its natural path of progression, we reach a point at which it is time we can begin to expect that investor sentiment has reached a pinnacle, and will likely turn south for a time.

This post was published at GoldSeek on Wednesday, 6 December 2017.

World’s Third Largest Shipbuilder Crashes 29% Amid Asian Equity Carnage

Shares in Samsung Heavy, the world’s third largest shipbuilder, plunged by 29% during Wednesday’s trading session after unexpectedly forecasting operating losses this year and 2018 and announcing a capital raise. Meanwhile, Asian equities tumbled, led by technology, mining and industrial companies, with the MSCI Asia Pacific Index falling for eight straight days, its longest run of down days since 2015.

‘Things are really getting bad for Samsung Heavy because they have been slow to respond to the weakening market conditions,’ said Park Moo Hyun, an analyst at Hana Financial Investment Co. in Seoul. ‘It’s not going to look good for the company next year.’

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

Why The Globalists Need A War, And Soon

It is difficult to gauge and understand geopolitical and economic events without first comprehending the fact that much of what happens in the world is engineered to happen and with a specific encompassing goal in mind. If you subscribe to the theory that all is random “chaos” and outcomes are circumstantial or coincidental, then you will be lost in the dark on most things. If you think a globalist “conspiracy” would require “too much control” or foresight, I would point out that organized conspiracy by people in power is a matter of history, not of theory. If such cabals were prevalent in the past, it is rather foolish to dismiss the reality that they are prevalent today.
In my articles “The Economic End Game Explained” and “The Economic End Game Continues,” I outline considerable evidence supporting the following conclusion: International financiers and political puppets in Western AND Eastern countries share a deep rooted ideology called “globalism” or the “new world order.” This ideology demands total centralization of economy and government resulting in a single global fiscal authority, a single global monetary system and a one world ruling structure. Obviously, such a pursuit would take extensive time and planning. It is a long term project, with moments of accelerated change.
The globalists refer to the process of their intended change as the “global economic reset.” A reset of the world’s economic processes is not so far fetched as skeptics like to argue. When an organized group of ideologues maintains control over the currency production and interest rates of most nations on the planet, it would hardly be difficult to manipulate politicians, manipulate legislation or even scientifically conjure financial bubbles and collapses. By extension, it would also be simple to trigger international conflicts if needed.

This post was published at Alt-Market on Wednesday, 06 December 2017.