Core Consumer Price Growth Comes In Cold – Apparel Prices Plunge Most Since 1998

Following producer prices’ surge in November, consumer prices rose 2.2% YoY (as expected).
October producer price pushed to its highest since Dec 2011 but consumer prices are not being pushed higher for now…

The energy index rose 3.9 percent and accounted for about three-fourths of the all items increase; indexes for motor vehicle insurance, used cars and trucks, and new vehicles also increased. The indexes for apparel, airline fares, and household furnishings and operations all declined in November

This post was published at Zero Hedge on Dec 13, 2017.

No, Really?

Gee, how many founders who tell you that you’re being psychologically exploited and abused do you need?
One?
Two?
When do you wake up America and destroy these firms, reducing their stock price to ash?
There are legal ways to do it. You can delete your profile and stop using it. You can ban your kids from using it under pain of losing their Internet access, computer or cellphone. You can target anyone who advertises on these sites and boycott them. You can shun, refuse to associate with and even picket anyone’s home who works at these companies — which is now incidentally a very large number of people, and extend the same sanction to all their family members who are existing on the back of said exploitation.
All of these things are both peaceful and legal forms of protest. You can raise the cost of operating such a firm and destroy its revenue because it relies on you being a drug-addled sheep in order to survive.

This post was published at Market-Ticker on 2017-12-13.

Canadian Homeowners Take Out HELOCs to Fund Subprime Buyers Unable to get a Mortgage

The Housing & Debt Bubble ascends to the next level of risk.
By Steve Saretsky, Vancouver, Canada, Vancity Condo Guide:
The HELOC (Home Equity Line of Credit) has been a blessing and a curse for Canadian households. While it has helped spur house prices and simultaneously provided consumers the ability to tap into their new found equity, it has also crippled many Canadian households into a debt trap that seems insurmountable.
Between 2000 and 2010, HELOC balances soared from $35 billion to $186 billion, according to the Financial Consumer Agency of Canada, an average annual growth rate of 20%. As of 2016, HELOC balances sit at $211 billion, a 500% increase since the year 2000. While also pushing Canadian household debt to incomes to record highs of 168%.

This post was published at Wolf Street by Steve Saretsky ‘ Dec 13, 2017.

Don’t Expect an Investment Boom if the Corporate Tax Rate Is Cut

It appears as though the rate on US federal corporate profits is going to be reduced. Although US corporations may be considered ‘people’ in terms of the First Amendment, they are not ‘people’ when it comes to paying taxes. Corporations are de facto tax collectors, not taxpayers. Real people ultimately pay the taxes in one way or another on the profits that corporations earn. So, why don’t we relieve corporations of their tax-collecting duties and tax their shareholders directly on the accrued profits of corporations in which they own shares as Laurence Kotlikoff, Boston U. econ professor, and 2016 write-in presidential candidate, has suggested? If this were done, the tax on dividends and, thus, the double taxation of corporate profits would be eliminated. Alas, this kind of tax reform is not in the cards, but a cut in the corporate profits tax would be a step in the right direction.
One of the arguments being made in favor of the cut in the corporate profits tax rate is that it would unleash a torrent of investment on the part of corporations. In turn, this increase in business investment would enhance the potential real growth in the economy and would increase the capital-to-labor ratio. An increase in the capital-to-labor ratio would raise the productivity of labor, which eventually would lead to an increase in real wages.

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

GE Is Trying To Figure Out Who Knew About Immelt’s “Chase Plane”

The Wall Street Journal broke one of the most memorable news stories of the year over the summer when it reported that former General Electric CEO Jeff Immelt – who bowed out in June amid intensifying pressure to revitalize the company’s long-suffering share price – would routinely use a “chase plane” when flying to foreign destinations – that is, a second completely empty jet would fly behind Immelt’s aircraft. The company has provided multiple justifications for the second plane, including saying it was for security purposes, and to ensure timely arrival for “business critical” meetings.
The story, which has become emblematic of GE’s longstanding tradition of grossly overspending on executive perks, was a major embarrassment for Immelt, who denied reports that he specifically requested the jet, claiming instead that his air transportation was arranged by the company’s corporate air team. Finally, he admitted that he had used two GE corporate jets in this manner up until 2014, when he changed the policy to use “locally sourced jets” as chase planes instead of one of the GE fleet.

This post was published at Zero Hedge on Dec 12, 2017.

Toronto’s Housing Bubble Is Crushing The Strip Club Industry

Until now, Canada’s soaring housing prices were just another innocent asset bubble spawned by low interest rates and an endless supply of Chinese cash that needed to get laundered. That said, massive bubbles are almost always followed by severe unintended consequences that can have a crippling impact on society as a whole…and in Toronto those unintended consequences are now manifesting themselves in the form of a rapidly deteriorating supply of strip clubs.
As Bloomberg points out today, the soaring value of Toronto real estate has made it all but impossible for strip club owners to turn down multi-million offers from condo developers leaving only a dozen strip clubs in a city whose purple neon lights used to be easily visible from the distant fringes of our solar system.
Condos are killing the Toronto strip club. In a city that once had more than 60 bars with nude dancers, only a dozen remain, the rest replaced by condominiums, restaurants, and housewares stores. Demand for homes downtown and for the retailers that serve them is driving land prices to records, tempting owners of the clubs, most of which are family-run, to sell at a time when business is slowing.
‘Sometimes I feel like the last living dinosaur along Yonge Street,’ says Allen Cooper, the second-generation owner of the famous – or infamous – Zanzibar Tavern. The former divorce lawyer says he has been approached by at least 30 suitors for his property in the past few years but is holding out for a ‘blow my socks off’ offer. ‘I don’t know how many condos we’re going to get, but it seems like just a wall’ of them, Cooper says.

This post was published at Zero Hedge on Dec 12, 2017.

Stressful Year Ahead for Spanish Banks

The ‘spillover effects.’ By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Just how much more stress Europe’s banking system can bear will be one of the big questions of 2018. This year was already a pretty stressful year, what with two major Italian banks being put out of their misery while, another, Monte dei Paschi di Siena, was brought back from the dead. In Spain, 300,000 shareholders and subordinate bondholders mourned the passing of the country’s sixth biggest bank, Banco Popular, which was acquired by Santander for the measly price of one euro.
Now, a whole new problem awaits. A report published by Spain’s second largest lender, BBVA, has warned about the potential impact on the sector’s profitability of new rules on provisions due to come into effect in early 2018.
Until now, banks only had to report losses when loans began deteriorating – i.e. when the defaults began. But the introduction in January of a new accounting rule, known as IFRS 9, will force banks in Europe to provision for souring loans much sooner than at present. One direct result will be that banks will have to hold more capital on their books, and that will have a detrimental impact on their profits.

This post was published at Wolf Street on Dec 12, 2017.

Satellite Images Show North Korea Building New Tunnel At Nuclear-Test Site

Despite earlier hope amid Tillerson’s comments on diplomacy with North Korea, a new batch of satellite images suggests that North Korean leader Kim Jong Un is ignoring warnings from Chinese (as well as American and South Korean) scientists and instead pressing ahead with the country’s nuclear testing regimen at Punggye-ri, a facility situated in the country’s mountainous northeast.
As scientist from several countries have tried to explain, satellite images suggest Punggye-ri is suffering from ‘Tired Mountain Syndrome’ – a phenomenon first documented by spy satellites examining Soviet nuclear test sites. After being warned by Chinese scientists about the dangers, two tunnels collapsed near the testing chamber back in October, killing 200 North Korean workers.
According to 38North, a blog that closely tracks North Korea related news, work on what appears to be a new tunnel near the site’s West Portal is progressing, leaving the North Portal – where the last five tests were conducted – mostly dormant and likely abandoned, at least for the time being.

This post was published at Zero Hedge on Dec 12, 2017.

How Many Bites?

How many bites at the apple do you get?
This is quite important, and today’s the day Alabama decides who takes Jeff Sessions’ place in the Senate.
But as you vote today if you live in Alabama remember this: There should be exactly one bite per election cycle and claim.
We know, at this point, that one of Moore’s accusers forged the yearbook signature. She claims only in part, but it wasn’t an “annotation” it was a forgery because she claimed originally that everything written there was Judge Moore’s. Now she admits she forged part of it.
In other words the accuser has admitting to lying.
What we do not know is what else she lied about. There is evidence that she lied about everything else, but we can’t prove that. We don’t need to. The standard of impeachment of a witness or claimant is that if any material component of their claim is proved to be a lie then everything material linked to that must be disregarded.

This post was published at Market-Ticker on 2017-12-12.