Global Warming Causing California Wildfires?

Believe it or not, now the Global Warming crowd is trying to claim that the California wildfires are being caused by none other than Global Warming. ‘As global temperatures continue to rise, scientists say the risk of extreme fire seasons across the West is rising, too.’ Anyone who has ever visited the Red Wood Forest in California stands in awe of the grandeur of the place. However, to the shock of many, the redwoods are nearly indestructible. They have evolved to withstand fires. That means, over millions of years, wildfires in California have existed long before humans were even there. The Global Warming people just never both looking at the facts.
Armstrong Economics

This post was published at Armstrong Economics on Dec 9, 2017.

Signs Of The Peak: These 10 Charts Reveal An Auto Bubble On The Brink

U. S. auto sales have hovered well north of replacement rates for several years now on the back of an improving labor environment and more importantly an extremely accommodating financing market characterized by $0 down, 0% interest loans to subprime borrowers, with perpetually longer maturities to help manage monthly payments…because if your monthly payment is $500 you can afford it, right?

This post was published at Zero Hedge on Dec 8, 2017.

Are US Shale Stocks Finally Set for a Rebound?

After years of meager returns and overspending to boost production at all costs, US shale explorers and drillers are finally about to see their share prices rise next year, according to veteran energy investor Shawn Reynolds.
The new wave of a more disciplined approach to spending and the focus on higher returns will benefit mostly the exploration and production companies. Drilling firms and oilfield services providers are also set to benefit, Reynolds told Bloomberg in an interview published on Friday.
Read Energy Analyst: “Meaningful Upside” for Oil Prices…
Shale companies have already started to realize the need to finally reward their shareholders, and firms are now planning within their means, not just spending to grow production at any cost.
Shale companies now have more growth potential than conventional oil and gas producers, because shale firms face lowered risks in resources extraction, said Reynolds, a fund manager at Van Eck Associates.
‘With shale, you have incredible visibility on growth, possibly the best visibility of any industry in the entire market, and lower risk,’ Reynolds told Bloomberg.

This post was published at FinancialSense on 12/08/201.

Baltimore Students Create An App To Detect If Their Heroin Is Laced With Fentanyl

If you have a smartphone, you’ve probably heard the distinct sound of an AMBER alert and or perhaps weather notifications. These notifications are free and great, alerting us to potential danger, and what we need to do to prepare.
With the help of student programmers, Baltimore health officials have launched a similar notification service, but it’s to warnresidents in the city when a deadly batch of drugs enters their neighborhood. Mike LeGrand, co-founder of the nonprofit Code in the Schools, worked with a team of student programmers around Baltimore to develop ‘Bat Batch Alert’, an anonymous free text messaging service aimed at helping those struggling with heroin addiction to stay alive.
LeGrand got the idea of ‘Bad Batch Alert’, after he lost a close friend in Florida to an opioid overdose. With a grant from Baltimore City’s health department and data feeds from Emergency medical services (EMS), LeGrand was able to track the ‘hot spots of fentanyl overdoses’ across the city.

This post was published at Zero Hedge on Dec 8, 2017.

Enron Dj Vu? Citi, BofA, HSBC, Goldman, BNP on the Hook as Steinhoff Spirals Down

$21 billion of debt. Off-balance-sheet entities. Moody’s wakes up, downgrades it four notches, with more to come.
Steinhoff International Holdings – which acquired nine companies in the past two years, including Mattress Firm Holding in the US, and which presides over a cobbled-together empire of retailers and assorted other companies in the US, Europe, Africa, and Australasia – issued another devastating announcement today: It cancelled its ‘private’ annual meeting with bankers in London on Monday and rescheduled it for December 19.
This is the meeting when the company normally discusses its annual report with its global bankers. The annual report should have been released on Wednesday, December 6. But on precisely that day, the company announced cryptically that ‘accounting irregularities’ had ‘come to light’ that required ‘further investigation,’ and that CEO Markus Jooste had been axed ‘with immediate effect,’ and that it would postpone its annual report indefinitely.
This is raising serious questions about the company’s viability as a going concern. The lack of transparency doesn’t help.
To soothe investors, the company announced on Thursday that it was trying to prop up its liquidity by selling some units ASAP. And it made more cryptic statements: It ‘has given further consideration to the issues subject to the investigation and to the validity and recoverability’ of some assets of ‘circa 6 billion’ ($7 billion).

This post was published at Wolf Street by Wolf Richter ‘ Dec 8, 2017.

Market Talk- December 8, 2017

Asia started where the US markets off and confidence ahead of payrolls Friday, a government shut-down averted and hopes riding high for a BREXIT deal – which ran on the back of Sterling’s strength. For the Nikkei it felt important that we saw a 1.5% rally today taking us back to returning a roughly flat week. The GDP data certainly helped sentiment blasting the market 1.4% expectation and printing an impressive +2.5%. Yen lost a little as expected (0.4%), but that was a full big figure change and was in-place ahead of the US payrolls number. China’s economic data was also in the news with Trade figures better than forecast, resulting in a strong Hang Seng (+1.2%) and Shanghai (+1.1%) indices. Including the near 1% rally for the SENSEX also, these were strong and confident closes for Asia.

This post was published at Armstrong Economics on Dec 8, 2017.

Bitcoin’s ‘Message’ & Tax Reform’s ‘Hidden Agenda’

Authored by James Howard Kunstler via Kunstler.com,
The hidden agenda in the so-called tax reform bill is to act as stop-gap quantitative easing to plug the ‘liquidity’ hole that is opening up as the Federal Reserve (America’s central bank) makes a few gestures to winding down its balance sheet and ‘normalizing’ interest rates. Thus, the aim of the tax bill is to prop up capital markets, and the apprehension of this lately is what keeps stocks making daily record highs. Okay, sorry, a lot to unpack there.
Primer: quantitative easing (QE) is a the Federal Reserve’s weasel phrase for its practice of just creating ‘money’ out of thin air, which it uses to buy US Treasury bonds (and other stuff). The Fed buys this stuff through intermediary Too Big To Fail banks which allows them to cream off a cut and, theoretically, pump the ‘money’ into the economy. This ‘money’ is the ‘liquidity.’ As it happens, most of that money ends up in the capital markets. Stocks go up and up and bond yields stay ultra low with bond prices ultra high. What remains on the balance sheets are a shit-load of IOUs.
The third round of QE was officially halted in 2014 in the USA. However, the world’s other main central banks acted in rotation – passing the baton of QE, like in a relay race – so that when the US slacked off, Japan, Britain, the European Central Bank, and the Bank of China, took over money-printing duties. And because money flies easily around the world via digital banking, a lot of that foreign money ended up in ‘sure-thing’ US capital markets (as well as their own ). Mega-tons of ‘money’ were created out of thin air around the world since the near-collapse of the system in 2008.

This post was published at Zero Hedge on Dec 8, 2017.

Weekend Reading: Recession Risk Hidden In Tax Bill

Authored by Lance Roberts via RealInvestmentAdvice.com,
Since the election, equity bulls have been pinning their hopes on ‘tax cuts’ as the needed injection to support currently elevated stock prices. Stocks have advanced sharply since the election on these expectations, and while earnings have recovered, primarily due to the rise in oil prices, whatever economic growth was to come from tax reform has likely already been priced in.
For some background on our views, both Michael Lebowitz and I have been discussing the tax bills as they are currently proposed since May of this year.
The Spurious Math Of A Tax Cut Rally Corporate Tax Cuts – The Seen & Unseen 3-Myths About Tax Cuts Bull Trap: The False Promise Of Tax Cuts The Conundrum Of Debt, Tax Cuts & The Economy Tax Cuts – The Economic Cure-All Buy The Rumor – Sell The News
We are currently in the second longest economic expansion since WWII. While Republican lawmakers are betting on jump-starting economic growth, the problem becomes the length of the current liquidity-driven expansion. All economic cycles end, and we are already closer to the end of the current expansion than not.

This post was published at Zero Hedge on Dec 8, 2017.

Where The Jobs Were In November: Who’s Hiring… Who Isn’t

Assuming that the BLS’ estimate of avg hourly warnings growing only 0.2% in November is accurate, it would imply that – as has often been the case – the bulk of job growth in November took place in minimum-paying and other low-wage jobs. However, a breakdown of jobs added by industry shows the contrary to expectations, the bulk of new job creation, and 3 of the 4 top category, were not in the “low wage” bucket. In fact, as shown below, with the exception of Education and Health jobs which rose by 54K in November, Manufacturing (+31K), Professional and Business Services (+27), and Construction (+24) were the fastest growing occupations in the previous month.

This post was published at Zero Hedge on Dec 8, 2017.

“It Was Like A War Zone” – Heavy Winds Push Wildfires Toward San Diego As Bel Air Burns

Images of charred palm trees and the burnt-out husks of multi-million-dollar homes flooded social media for a fifth day Friday as the SoCal wildfires that exploded into life at the beginning of the week showed no signs of slowing.
Instead, some of the largest fires have entered the heart of Los Angeles – America’s second largest city – and are menacing some of the most expensive homes in the country.
To date, six large wildfires have scorched 141,000 acres in the state, with the flames spreading as far south as San Diego, Cal Fire officials said. At least 5,700 firefighters from several agencies and at least nine states are working to contain the massive walls of flames. The fires have forced 190,000 people out of their homes in a hurry. Many took only their pets and a few choice mementos.

This post was published at Zero Hedge on Dec 8, 2017.

Can You Trust this Stock Market? Warning Signs Grow.

Some of the same warning signs that emerged before the 1929 to 1933 market crash, the tech mania crash of 2000, and the epic Wall Street meltdown of 2008 are flashing red.
If you have significant amounts of your 401(k) invested in equity mutual funds (that is, those invested in stocks), it’s time to take an objective appraisal of today’s market versus historic benchmarks.
This is also a good time to remember that markets have lost as much as 50 percent of their value from peak to trough in the last 20 years. If that’s more pain than you’re prepared to suffer, it may be time to trim back your exposure.
We’ll get to the specifics on today’s market shortly, but first some necessary background.
In the market crash of 1929 to 1933, the stock market lost 90 percent of its value. It did not return to the level of 1929 until 1954 – a quarter of a century later.
There is some basis to speculate that the bear market of October 2007 to March 2009, which included the epic Wall Street crash of 2008, would have produced far more serious pain than the 50 percent retracement in the S&P 500 that did occur – perhaps pain on the level of 1929 to 1933 – had it not been for the secret $16 trillion in almost zero-interest loans that the Federal Reserve Bank of New York sluiced into the major brokerage firms on Wall Street – which was on top of the hundreds of billions of dollars in bailout funds that were authorized by Congress.

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

WeWork: London’s Soon-To-Be Biggest Property Renter Makes Massive Bet On Office Market Despite Brexit

The rationale for creating WeWork, the eco-friendly serviced workspace provider, was simple as co-founder Adam Neumann explained to the New York Daily News.
‘During the economic crises, there were these empty buildings and these people freelancing or starting companies. I knew there was a way to match the two. What separates us, though, is community.’ It wasn’t a bad idea since the company was recently valued at $20 billion. The first WeWork location was established in New York’s fashionable SoHo district (above) in 2010. Only four years later, Wikipedia notes that WeWork was the ‘fastest growing lessee of new office space in New York’. The company currently manages office space in 23 cities across the United States and in 21 other countries including China, Hong Kong, India, Japan, France, Germany and the UK.
WeWork’s growth has been little short of stratospheric, and investors have included heavyweight financial names such as JP Morgan. T. Rowe Price, Goldman, Wellington Management and Softbank. As Bloomberg reports, WeWork is about to repeat its success in New York and other cities by becoming the largest private lessee of office space in London. However, some old-school property developers are predicting that WeWork’s break-neck expansion is ill-timed.

This post was published at Zero Hedge on Dec 8, 2017.

The Euro Is Not Dead, Claims EU Survey

The mood has shifted.
By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Europeans are finally learning to love the euro, it seems, at least according tothe latest edition of the Eurobarometer, which is published twice yearly by the European Commission: 64% of the respondents, representing 16 out of 19 Eurozone economies, believe that having the euro is ‘a good thing for their country,’ the highest proportion since 2002, and up from 56% in 2016. Only 26% of respondents thought it was a bad thing.
A further 74% of respondents said that the euro is a good thing for the EU as a whole, the highest proportion in the 2010-2017 series. This is somewhat ironic given that even the ECB conceded this week that the main idea behind the euro as a driving force for regional economic convergence has produced, let’s say, mixed results, having essentially failed where it mattered the most, in Southern European economies:
‘It is striking, however, that little convergence has occurred among the early euro adopters, despite their differences in GDP per capita. In contrast to some initial expectations that the establishment of the euro would act as a catalyser of faster real convergence, little convergence, if any, has taken place for the whole period 1999-2016’
Nonetheless, the results of the survey point to a marked improvement in Europe’s love affair with the single currency, as growth in the Eurozone has reached its highest level (a forecast 2.6% for 2017) since the financial crisis began 10 years ago.

This post was published at Wolf Street on Dec 8, 2017.

November Payrolls Jump 228K, Beat Expectations But Wage Growth Disappoints

In a continuation of the recent theme shown by the labor market, the BLS reported that November payrolls rose by a seasonally adjusted 228K, beating expectations of 200K, if lower than October’s downward revised 244K (from 261K) while September was revised up from +18,000 to +38,000. With these revisions, employment gains in September and October combined were 3,000 more than previously reported.
There were few surprises in the report, which saw the labor force participation rate flat at 62.7%, near a 30+ year low, while the unemployment rate also remained unchanged at 4.1%, the lowest since Dec 2000.
And while overall the labor report was strong, there was once again disappointment in wage growth, with average hourly earnings rising 0.2% m/m, below the consensus estimate of est. 0.3%, with the October number revised lower to -0.1%. The Year over year number also missed, printing at 2.5%, up from October’s 2.3% but below the consensus print of 2.7%.

This post was published at Zero Hedge on Dec 8, 2017.

Jobs Report Preview: Here’s What Wall Street Expects

What a difference a year makes: last December, just as the ECB was about to shock the market with the announcement of its first 20 billion QE tapering, macroeconomic data mattered, especially since the Fed’s tightening intertia appeared to truly be data-dependent, if only for a very short period of time. Fast forward one year, when 3 rate hikes into the Fed’s “paradoxical” tightening cycle, in which much to the BIS’s shock the higher Fed Funds rates rise, the easier financial conditions get, a “dovish” December rate hike is assured, and as such Friday’s payroll report, which will probably print withint a few thousands of 200K, is completely irrelevant.
Still, to at least some headline-scanning algos, the jobs report will matter, if only so that it can respond in a knee-jerk reaction, and be stopped out by yet another group of headline-scanning algos whose only job is to make sure the first group of algos pukes their trades at a loss, regardless of what the underlying data is.
With that in mind, and with the understanding that fundamental data hasn’t really mattered since 2009, here is what Wall Street expects – and algos – will expect from tomorrow’s charade, which no matter what will send the market higher.
From RanSquawk
The BLS will release November’s Employment Situation Report at 1330 GMT (0830 EST) on Friday 8 November
After October’s bounce-back, analysts expect normalisation in the rate of payroll additions (consensus 200k) Wage growth may be buoyed by calendar effects, pushing the Y/Y rate up to 2.7% SUMMARY: Analysts expect payroll growth to ease in November; the October data was boosted by unwinding negative effects from hurricanes Harvey, Irma and Maria, and therefore, analysts will see a slowing as more of a normalisation, rather than the beginning of a new slowdown. There may be some upside in retail hiring given the early Thanksgiving Holiday. Rounding effects may result in the rate of joblessness slipping slightly. Earnings growth is likely to be supported by calendar effects, which may push the Y/Y rate up to 2.7%, matching the pace of annualised wage growth seen in Q3.

This post was published at Zero Hedge on Dec 8, 2017.

UK And EU Reach Agreement Taking Brexit Talks To “Phase 2” As Irish Border Questions Linger

Early on Friday morning, the EU and UK negotiated a deal allowing Brexit negotiations to move on to the “Phase 2”, which will establish their future trading relationship.
The European Commission said it recommends to the European Council to conclude that sufficient progress has been made in the first phase of the Article 50 negotiations with the U. K. The European Council will announce its decision on 15 December 2017. If approved, talks can proceed to second phase. Diplomats from both sides worked into the night to resolve the Irish border issue – although questions remain whether it’s really fully resolved. UK Prime Minister, Theresa May, and Brexit secretary, David Davis, travelled to the Berlaymont building, the headquarters of the European Commission in Brussels, early on Friday morning to conclude the agreement with EU President, Jean Claude Juncker, and the EU’s chief negotiator, Michel Barnier.
Juncker and May subsequently hosted a press conference announcing the breakthrough. In a sign that a deal had been reached Martyn Selmayr, Juncker’s head of cabinet, had earlier tweeted a photograph of white smoke emerging from the chimney of the Sistine Chapel, the signal that the Vatican has successfully chosen a new Pope.

This post was published at Zero Hedge on Dec 8, 2017.

US Futures, Global Shares, Dollar All Jump On Brexit, Basel News, Averted US Shutdown; Payrolls Loom

U. S. equity index futures have bounced on the last day of the week, along with European and Asian shares, oil and the dollar following overnight news that the UK and EU have reached a successful conclusion on Phase 1 of Brexit negotiations, that Congress averted a government shutdown with another can-kicking 2 week measure until December 22, after strong Chinese trade data and an upward revision to Japanese GDP, and ahead of the November nonfarm payrolls data which is expected to cement the December Fed rate hike.
Setting the bullish mood this morning was Christmas coming early for Theresa May, who managed to forge an agreement – if only for the time being – with the EU in the early hours of Friday morning to pave way for phase 2, with talks set to move to trade with support being voiced by Senior Brexiteers, Gove and Johnson. In reaction to this, GBP initially hit a 6-month high, however once the agreement had been confirmed, the pound saw a “buy the rumour sell the news” price action, while gilts were met with selling pressreure with the price making a firm move below 124.00.
Also after the close on Thursday, the House voted 235-193 and Senate voted 81-14 to pass the stopgap spending measure which will avoid a government shutdown and fund government through to Dec. 22nd, kicking the can on and averting a government shutdown for another two weeks.
European stocks advance in a broad rally amid optimism over a newly-struck deal between Britain and the European Union to unlock divorce negotiations and proceed to discussing a future trade deal. The Stoxx Europe 600 Index rises 0.7%, with the index heading for a weekly gain of 1.3%. Banks advance the most, up for a second day, as the sector emerged relatively unscathed from global regulators’ final batch of Basel III post-crisis capital rules, with few lenders needing to raise major new funds. Miners are also among the best indusreptry group performers, following copper prices higher. The FTSE 100 is trailing other European indexes, trading little changed, as the pound climb.

This post was published at Zero Hedge on Dec 8, 2017.

Homeless Swedes Out In The Cold

Authored by Bruce Bawer via The Gatestone Institute,
One reason there are so many immigrants in Sweden, both legal and illegal, is that the country’s welfare system is a bonanza for foreigners. Far from not being covered by the system, immigrants often enjoy preferential treatment These Swedes should not be sleeping on the streets. The Scandinavian welfare states were founded on a compact between the citizens and their government: the people would pay outrageously high taxes, and in return their government would guarantee them a magnificent safety net should they get sick or get fired. But ever since these countries chose to open their doors to mass Muslim immigration, that compact has been broken. A state-employed paper-pusher who gives citizens something for which they have already paid can hardly feel particularly virtuous, whereas handing out free stuff to aliens who have done absolutely nothing to deserve it can make that same government paper-pusher feel like a world-class Good Samaritan. Even more shattering is that millions of those Scandinavian citizens accept it. Marinated from birth in multiculturalism, millions of them dare not demand what they have coming to them — what they have paid for, what they deserve — lest they be viewed by others, and even by themselves, as bigots. The other day, I reported about the Church of Sweden’s strenuous efforts to appease Islam. Now comes the news that from December 15 to March 15, churches in the diocese of Gothenburg will be used at night as shelters for the homeless.
Lovely idea. But there is a catch. The only homeless people who will be allowed in are foreigners — either immigrants from elsewhere in the EU, who are by definition legal, or illegal immigrants from outside the EU. In other words, native Swedes need not apply, even though the initiative is being paid for by taxpayer money.

This post was published at Zero Hedge on Dec 8, 2017.

Bitcoin Phase Transition or Plateau Move?

Hackers have managed to get $70 million worth of Bitcoin, revealing the risk of all electronic forms of money to which cryptocurrencies are not exempt. The prices keep soaring and requests to add it to Socrates have been coming in so we are complying. With the futures about to begin, this should make it a more transparent market. The problem now is a single trade can be registered just buy one coin to put up prints that do not reflect volume. A future contract will help reveal the true depth of a market.
If we accept the quotes as real, then Bitcoin’s market capitalization is now larger than that of major US banks Citigroup or JP Morgan standing at about $ 220 billion. The problem that emerges is the reclassification legally of Bitcoin. Because it is pretending to be a currency rather than a stock, governments can simply take the latest print and declare that to be a profit and tax you on that number. If the governments would accept Bitcoin as legal tender in payment of taxes, that would be fine. However, if they demand their own currency (dollars) which then forces one to sell Bitcoin to pay the tax, then the price will collapse and they will force you to pay the tax on the inflated number. You can claim you lost money selling it below that figure and they then allow a tax credit but spread out over 10 years. Bitcoin should swap everything to shares and that will eliminate the clash with the government.

This post was published at Armstrong Economics on Dec 8, 2017.

Are Economic Crises Inherent to Market Economies?

It is interesting to note that Marx, in his analysis of the capitalist economic system, basically concentrates on the study of the imbalances and maladjustments which occur in the market.
This accounts for the fact that Marxist theory is primarily a theory of market disequilibrium and that occasionally it even coincides remarkably with the dynamic analysis of market processes which was developed by economists of the Austrian School, and particularly by Mises and Hayek themselves. One of the more curious points on which a certain agreement exists relates precisely to the theory of the crises and recessions which systematically ravage the capitalist system. Thus it is interesting to observe that certain authors of the Marxist tradition, such as the Ukrainian Mijail Ivanovich Tugan-Baranovsky (1865 – 1919), reached the conclusion that economic crises originate from a tendency toward a lack of proportion among the different branches of production, a lack Tugan-Baranovsky believed inherent in the capitalist system.1 According to Baranovsky, crises occur because
the distribution of production ceases to be proportional: the machines, tools, tiles and wood used in construction are requested less than before, given that new companies are less numerous. However the producers of the means of production cannot withdraw their capital from their companies, and in addition, the importance of the capital involved in the form of buildings, machines, etc., obliges producers to continue producing (if not, the idle capital would not bear interest). Thus there is excessive production of the means of production.2

This post was published at Ludwig von Mises Institute on 12/07/2017.