Alibaba Launches Giant Car Vending Machines In China

Shares of Alibaba fell on Thursday morning, despite an exciting news story involving the Chinese e-commerce juggernaut, which is rushing to shake up the way people buy cars in China. Alibaba seems to be taking a page from Amazon’s acquisition of Whole Foods, with the continued push into physical retail. The plan outlined by Alibaba, is to open two giant car vending machines in early 2018, shaped like a futuristic tubular building with a giant cat’s head on top.
Having monopolized the online world, Alibaba continues to push offline with investments in Chinese bricks and mortar retailers.
Alibaba CEO Daniel Zhang said back in November, ‘physical stores serve an indispensable role during the consumer journey, and should be enhanced through data-driven technology and personalized services in the digital economy.’

This post was published at Zero Hedge on Dec 15, 2017.

The Yield Curve And The Boom-Bust Cycle

The central bank is not the root cause of the boom-bust cycle. The root cause is fractional reserve banking (the ability of banks to create money and credit out of nothing). The central bank’s effect on the cycle is to extend the booms, make the busts more severe and prevent the investment errors of the boom from being fully corrected prior to the start of the next cycle. Consequently, there are some important relationships between interest rates and the performance of the economy that would hold with or without a central bank, provided that the practice of fractional reserve banking was widespread. One of these relationships is the link between a reversal in the yield curve from flattening to steepening and the start of an economic recession/depression.
Unfortunately, the data we have at our disposal doesn’t go back anywhere near as far as we’d like, where ‘as far as we’d like’ in this case means 150 years or more. For example, the data we have for the 10year-2year spread, which is our favourite indicator of the US yield curve, only goes back to the mid-1970s.
For a longer-term look at the performance of the US yield curve the best we can do on short notice is use the Fed’s data for the 10year-3month spread, which goes back to the early-1960s. However, going back to the early-1960s is good enough for government work and is still satisfactory for the private sector.
As explained in many previous commentaries, the boom phase of the cycle is characterised by borrowing short-term to lend/invest long-term in order to take advantage of the artificial abundance of cheap financing enabled by the creation of money and credit out of nothing. This puts upward pressure on short-term interest rates relative to long-term interest rates, meaning that it causes the yield curve to flatten.

This post was published at GoldSeek on Sunday, 17 December 2017.

16/12/17: Remember the Russian Attack on the Internet?

In 2016, a bot, named Mirai, wrecked havoc over the global internet with massive waves of DoS attacks on anything, from French telecoms, to U. S. web services, to Russian banks, to African airports and beyond. Per Wired, “As the 2016 US presidential election drew near, fears began to mount that the so-called Mirai botnet might be the work of a nation-state practicing for an attack that would cripple the country as voters went to the polls.”
Of course, the minute there is any suspicion of the ‘nation-state’ actors behind the attack, we know that is the code word for ‘the Russians’. And, of course, given the sheer number of ‘security research’ lackeys eagerly awaiting for the U. S. or UK or EU dollars/pounds/euros in grants and subsidies, the ‘Russian’ spectre loomed large in the wake of Mirai havoc. Here’s a snapshot:

This post was published at True Economics on Saturday, December 16, 2017.

Meet The “Armani of Armor” Behind America’s Growing Bulletproof Clothing Industry

In the early 1990s, Colombia was locked in a brutal drug war, led by Pablo Escobar, that saw homicide rates in Medellin surge over 8x in a matter of just a few years…

…and it was that surging violence that first prompted Miguel Caballero to start his line of bulletproof clothing some 25 years ago.
Now, as Racked points out today, with violent crime in Colombia back to levels not seen since at least the 70s, Caballero is looking to bring his bulletproof fashions to the United States where he’s hoping that growing fears of gun violence, combined with an eager American consumer that is always willing to part with his/her hard-earned cash in pursuit of the next fad, will be a boon for his business.

This post was published at Zero Hedge on Dec 15, 2017.

Here Is The Full Text Of The Final Republican Tax Bill

Update: in addition to the previously leaked highlights (see below), Republicans on Friday evening released the final version of their legislation to slash tax rates for corporations and individuals. The 1,097 page document, containing the bill and an explanatory statement, was crafted by the House-Senate conference committee. The bill is expected to come up for votes in Congress next week.

This post was published at Zero Hedge on Dec 15, 2017.

Four Charts Prove The ‘Economic Recovery’ Is Just A Fed-Induced Entitlement Program For The Wealthy

“Economic recovery” in America no longer means what it used to mean. Historically “economic recovery” was largely characterized by job and wage growth, distributed across the income spectrum, and a rebound in GDP growth to north of ~3%-5%. These days, the notion of “economic recovery” has been hijacked by the Fed and bastardized in such a way that they celebrate “asset bubbles” rather than real growth in economic output.
Presented as ‘exhibit A’, here is the Fed’s modern-day definition of “economic recovery” (chart per Bloomberg):

This post was published at Zero Hedge on Dec 15, 2017.

Proctor & Gamble Concedes Proxy Fight, Names Nelson Peltz To Board

Two months after narrowly losing a proxy vote that would have granted him a seat on Proctor & Gamble’s board, Trian’s Nelson Peltz has somehow managed to win a crucial battle in the largest and most expensive corporate proxy battle in modern history.
To wit, the consumer-products giant announced Friday that it would add Peltz to its board, according to the Wall Street Journal. The company said it would add Peltz to the board beginning March 1.
P&G’s stock, which has lagged the broader market this year, rose over the summer after Peltz started his proxy fight. Shares tumbled on Oct. 10, the day Peltz lost his proxy vote at the company’s annual shareholder meeting in Cincinnati.
Afterwards, Peltz revealed that he intended to challenge the results of the narrow vote in court.
Trian is disagreeing with the P&G and is to challenge the count… ‘According to our proxy solicitors, today’s vote is too close to call and it will take more time to determine the outcome. We await the certified election results by the independent inspector of election. Trian is pleased with the support we have received from shareholders and all of the nation’s independent proxy advisory firms. We believe shareholders’ voices are being heard at P&G today, thanks to Trian’s involvement.

This post was published at Zero Hedge on Dec 15, 2017.