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  • Buffett Sells A Third Of His IBM Stake: ‘I Don’t Value IBM The Same Way That I Did Six Years Ago”

    When Warren Buffett surprised markets in 2011 after announcing that he had started building up a stake in IBM – a member of the tech sector from which Buffett had traditionally kept a safe distance – we joked that the only reason for his involvement was IBM’s then unprecedented buyback spree. A few short years later, IBM’s buybacks ended with a whimper when its debt level hit record highs (the company’s credit rating was recently downgraded) even as its revenues continued to post a record slide and were back to levels seen at the start of the Millennium, while EPS only beat thanks to ever lower effective tax rates.
    Which is why we were not surprised to learn overnight that Buffett’s Berkshire had dumped a third of its stake in IBM in the first explicit sign of declining confidence by the famed investor.
    Speaking with CNBC, Buffett said he had sold the substantial holding, worth more than $4bn at the current share price, after “revising his view of the company’s competitive prospects.”
    ‘I don’t value IBM the same way that I did six years ago when I started buying’.’.’.’I’ve revalued it somewhat downward,’ he said. ‘IBM is a big strong company, but they’ve got big strong competitors too.’
    “I think if you look back at what they were projecting and how they thought the business would develop I would say what they’ve run into is some pretty tough competitors,’ Mr Buffett added,

    This post was published at Zero Hedge on May 5, 2017.

  • Dennis Gartman: “We Suffered Our Worst Days Of The Year These Past Two Days”

    From Dennis Gartman’s latest letter to clients, presented without comment.
    We want very badly to believe that the great bull market that has been extant for as long as it has been… now having finished eight powerful years to the upside here in the US… continues in unabated fashion for the simple truth of the matter is that everyone, everywhere lives better in bull markets. The food tastes better; the music is clearer with sweeter melodies; the women are lovelier and the men are actually handsome. Cinderella lives in bull markets. In bear markets, suddenly the make-up runs; the dresses turn shabby; the bands play off-key and without rhythm and the men and women turn one upon the other. Life turns harshly for the worse. Thus we want truly to believe that the bull market continues but we are beginning to have real doubts. Certainly a correction of some very real magnitude is upon us.
    * * *
    We suffered our worst days of the year these past two days in our retirement fund here at TGL, losing nearly 3% this week and in the process we cut back our positions dramatically and in violent, swift fashion. We cut back our steel position entirely; we cut back our positions in closed end bond funds entirely; we cut back our position in grains entirely, leaving us only with a position in the US’ largest ball bearing manufacturer (which we had threatened to buy on a correction and which we did yesterday) and with our positions in gold predicated in EURs and Yen.
    We know only this: that when things go awry it is best to cut positions as swiftly as one might. As Jesse Livermore was told by a more senior mentor about a position that he… Livermore… had had in place that was causing him to lose sleep, cut back to a ‘sleeping’ position. We have done that, and even now we find it difficult to doze off for the pain of losing 3% in one week is very real and all too evident.

    This post was published at Zero Hedge on May 5, 2017.

  • Macron Says He Is Victim Of “Massive, Coordinated” Hack After 9 Gigabytes Of Private Documents Released

    As reported overnight, the anonymous source of documents alleging Emmanuel Macron’s involvement with an operating agreement for a Limited Liability Company (LLC) in the Caribbean island of Nevis returned to release several high quality images of the purported documents along with promises to release even more documents and identify account locations and the extent of the assets Macron is supposedly hiding from regulatory authorities.

    Screenshot of image showing the alleged Macron signature on the operating agreement
    The leaker noted that Macron’s assets were not located in the Bahamas as was been reported by some media outlets, but in the Cayman Islands, another known hotspot for tax evasion. They further stated that they were taking measures to conceal their identity because they are located in the European Union and did not wish to be arrested. The leaker also explained that they were one of a small group of individuals working online with a source in the Cayman Islands to expose the leaked information. They claimed that they were in possession of SWIFTNet logs dating back for several months, and would soon not only know where Mr. Macron’s alleged accounts are located but also the “extent of the money he is hiding from [France’s] government.”

    This post was published at Zero Hedge on May 5, 2017.

  • As Oil Flash Crashes, One Trader Says The Commodity Selloff Is “The Single Largest Macro Factor” Right Now

    It was a very ugly night for the Andy Halls, Pierre Andurands and other crude longs, after oil flash crashed just before midnight ET, dragging WTI from above $45/bbl to below $44 in seconds on a surge in volume, to the lowest price since OPEC agreed to cut output in November.
    As shown in the chart below, in less than 10 minutes futures slumped more than $1 as volume surged 14 times.

    And while WTI eventually rebounded from its overnight snap, and was back above $45, putting this week’s rout in context, oil prices have collapsed by more than 10% %, sliding to lowest since Nov. 15, or two weeks before OPEC signed 6-month deal to curb production aimed at easing global glut. The decline has been driven by expanding U. S. output before OPEC is set to decide whether to prolong its cuts.

    This post was published at Zero Hedge on May 5, 2017.

  • Oil Fireworks Unsettle Global Markets Ahead Of Payrolls Report

    With all eyes on crude, following last night’s mini flash crash which sent WTI lower by 3% from just above $45 to under $43 in under 10 minutes, equity markets, generally quiet overnight, have taken on a secondary importance ahead of today’s key risk event, the April payrolls report (full preview here). In global equities, Asian and European stocks are lower, while S&P futures are little changed.
    The main in the overnight session was oil’s sudden slide below $45 a barrel for the first time since OPEC agreed to cut output in November. As noted earlier, in less than 10 minutes on Friday, U. S. futures slumped more than $1 amid a surge in volume, launching a modest scramble into safe haven assets such as Treasurys, yen and gold. They have collapsed 8.6 percent this week, erasing all gains since the Organization of Petroleum Exporting Countries signed a six-month deal in November to curb production and ease a global glut.

    Things only began to stabilize when Saudi Arabia’s OPEC chief did the usual jawboning routine, hitting the wires in European hours and saying there was a growing consensus among oil pumping countries that they needed to continue to “rebalance” the market. Specifically, the Saudi OPEC governor’s comments that: “A six-month extension (to production cuts) may be needed to rebalance the market, but the length of the extension is not firm yet.” Which while nothing new, provided a floor to the overnight dump and a signal to BTD.

    This post was published at Zero Hedge on May 5, 2017.

  • April Payrolls Preview: “It Better Be Good”

    After the abysmal March labor report, all we – and the Fed – can say is that April better be good, or else Yellen’s claim of “transitory weakness” will simply be the latest nail in the coffin of Fed credibility. Here is the consensus for the key numbers the BLS will report at 8:30am ET on Friday morning.
    March Nonfarm Payrolls Exp. 185K, (Prey. 98K, Feb. 235K) US Unemployment Rate (Mar) M/M Exp. 4.6% (Prey. 4.5%, Feb. 4.7%) Average Hourly Earnings Exp. 0.30% (Prey. 0.20%, Feb. 0.20%) Payrolls Expectation by Bank:
    Barclays: 225K, Bank of America: 170K, Goldman Sachs: 200K, SocGen: 165K, UBS: 210K, Wells Fargo: 178K, Big Picture: Friday’s non-farm payrolls release follows Wednesday’s FOMC meeting where the Fed, as expected, kept rates on hold with all eyes now on June’s decision. One key takeaway from this week’s decision was the Fed noting the labour market conditions continuing to strengthen as growth slowed, as it deemed that job gains had been solid despite March’s softer than expected labor market report and quasi-recessionary Q1 GDP. The Fed’s statement was devoid of any real negatives and has led to Fed Fund futures pricing in a near 80% chance of a 25bps hike at its June meeting.

    This post was published at Zero Hedge on May 5, 2017.

  • What the Layoffs at Ford’s Medium-Duty Truck Plant Mean

    Demand from businesses in the real economy is slumping.
    These particular layoffs aren’t happening because consumers are strung out and have trouble getting financing or are switching down to used vehicles or whatever. They’re happening because demand from commercial customers that ply their trade in the real economy is slumping.
    Ford announced that it will lay off 130 hourly workers and eliminate one shift from May 8 until the end of September at its Ohio Truck Plant that makes medium-duty F-650 and F-750 trucks. They’re are used by businesses such as…
    Dump-truck operators…

    This post was published at Wolf Street by Wolf Richter ‘ May 5, 2017.

  • Despite Record ‘Misery’, Investors Are Panic-Buying Turkish Bonds

    Despite the Turkish people having never been more ‘miserable’ based on painfully high unemployment and soaring inflation, it appears the world’s yield-hungry investors can’t get enough of Turkish debt (because hey, you can trust a guy who just dictated himself as ‘sultan for life’).
    This so-called misery index signals the mood of the population…

    This post was published at Zero Hedge on May 5, 2017.

  • It’s Official – Trump Sets New Record For Cabinet ‘No’ Votes

    During his first 100 days in office, President Trump broke numerous records. As Statista’s Niall McCarthy notes, in addition to having the lowest approval ratings of any U. S. president this early into his first term, Trump’s Cabinet has also received the most ‘no’ votes in history.

    This post was published at Zero Hedge on May 4, 2017.

  • Gold-Futures Shorting Attacks

    Gold has suffered a sharp pullback over the past couple weeks, stoking much bearish sentiment. While a variety of factors fed this selloff, the precipitating catalyst was a gold-futures shorting attack. These are relatively-rare episodes of extreme selling specifically timed and executed to manipulate gold prices lower rapidly. Traders need to understand these events, which are inherently self-limiting and soon bullish.
    Gold-futures shorting attacks are very real, with telltale volume and price signatures unlike anything else. I’ve studied them for many years now, and have written extensively about them in our newsletters as they occur. But it’s critical to realize these rare events are only responsible for a tiny fraction of all gold selling. The vast majority of the time gold selloffs are driven by other far-more-normal factors, not shorting attacks.
    These isolated anomalous episodes are often cited as proof the gold price is actively manipulated. But whether that’s true or not, gold-futures shorting attacks can only explain tiny sporadic swaths of gold-price behavior. When they occur their impacts can definitely be outsized, but these are always short-lived. That’s because the huge selling necessary to execute a shorting attack is far too extreme to be sustained.
    Gold-futures shorting attacks are naturally a subset of gold-futures trading, which dominates short-term gold prices. Gold-futures speculators enjoy a wildly-disproportional impact on gold levels for a couple of key reasons. The American-gold-futures-derived gold price is the world’s reference price. So whatever the futures speculators as a herd are doing greatly affects popular psychology among gold traders globally.

    This post was published at ZEAL LLC on May 5, 2017.

  • Axiom: “Red Flags” Suggest China Credit Event Is “Closer Than It Appears”

    Submitted by Gordon Johnson of Axiom Capital
    While we, as well as the few bearish peers we have, have warned of a pending ‘credit event’ in China for some time now – admittedly incorrectly (China has proved much more resilient than expected) – the more recent red flags are among the most profound we’ve seen in years – in short, we agree with fresh observations made by some of the world’s most famous iron ore bears. Thus, while it is nearly impossible to pinpoint exactly when the credit bubble will definitively pop in China, a number of recent events, in our view, suggest the threat level is currently at red/severe.
    WHERE IS CHINA AT TODAY VS. WHERE THE US WAS AT AHEAD OF THE SUBPRIME CRISIS? At the peak of the US subprime bubble (before the failure of Bear Stearns in Mar. ’08, and subsequently Lehman Brothers in Sep. ’08, troubles in the US credit system emerged as early as Feb. ’07), the asset/liability mismatch was 2% when compared to the total banking system. However, in China, currently, there is a massive duration mismatch in wealth management products (‘WMPs’). And, at $4tn in total WMPs outstanding, the asset/liability mismatch in China is now above 10% – China’s entire banking system is ~$34tn, which is a scary scenario. In our view, this is a very important dynamic to track given it foretells where a country is at in the credit cycle.

    This post was published at Zero Hedge on May 4, 2017.

  • The Real Reasons Why Trump Has Flipped On His Campaign Promises

    Back in December of 2016 I wrote an article titled ‘Trump Is Exactly Where The Elites Want Him’, which I think was very difficult for a large part of the liberty movement to read and accept. In that article I outlined the future of the Trump presidency; a future dominated by Washington insiders, Goldman Sachs internationalists and Neo-Con warmongers. Trump, at the very onset of his administration, broke one of his most important campaign promises – to ‘drain the swamp.’ Instead, he filled his cabinet with all of the same swamp creatures he originally attacked; the same swamp creatures Hillary Clinton was notorious for serving.
    I also warned in numerous articles that because of this initial broken promise, conservatives should not expect that Trump would fulfill most if any of his original plans. In the BEST CASE SCENARIO, Trump is surrounded by enemies dictating policy from every corner and corridor of the White House.
    This article, of course, triggered quite a bit of wrath from hardcore Trump supporters. And, of course, time has so far proven I was right yet again.

    This post was published at Alt-Market on Thursday, 04 May 2017.

  • The Chart That’s Keeping Goldman Up At Night

    The spread between “hard” and “soft”, or survey and sentiment data, ever since the election has been extensively noted and discussed on this website in recent months (especially since over the past two months the soft data has rolled decisively over, while the Citi economic surprise index has crashed at the fastest pace on record). Which is why it will come as no surprise to readers that, as Goldman writes in a note looking at “Peak Sentiment”, over the past six months, US ‘sentiment surveys’ have outpaced both ‘activity surveys’ and ‘hard data’. This rise in sentiment has accelerated in the post-election period, prompting many (Goldman included) to link the surge in sentiment with optimism about the new administration’s pro-growth policy. It has also spilled over into equity markets in general, and institutional and retail traders in particular.
    That is a problem for one simple reason: as Goldman points out, based on empirical studies, “positive sentiment negatively correlates with future asset returns“, or the more confident the market, the greater the subsequent drop. Additionally, Goldman notes that “the correlation between consumer sentiment and market sentiment suggests that the former might be useful as a contrarian market timing signal.”

    This post was published at Zero Hedge on May 4, 2017.

  • Exposing The Student Servitude Scam

    Authored by Gordon Long via MATASII.com,
    Many today strongly believe it is morally wrong to indenture students to the degree of liabilities presently required to achieve the education required to become a productive contributor within our modern society.
    The question we need to demand answers to is why has college costs for students exploded upward, while salaries and job positions for graduates has not? What is driving the relentless and inexplicable surge in the debt burden for students and their parents?
    The well researched “Ivy League Inc” by my friends at OpenTheBooks only begins to scratch the surface of what is minimally a sham and may be better described as an orchestrated banking scam, not to dissimilar in design to the last financing bubble (i.e. the Residential Real Estate bubble in the last decade). Let me take the discussion in a critical direction which they politically may have felt it to be too sensitive to broach?
    First, to quickly grasp the underpinnings of how this sham has been symphonized it would help to frame our thinking around what might appear as two unrelated notions of how the capitalist system works (or more appropriately in the case of growing student debt – doesn’t work!).

    This post was published at Zero Hedge on May 4, 2017.

  • Shake Shack Plunges To Record Low As Store Growth Unexpectedly Reverses

    In May of 2015, we watched in stunned amazement as the price of Shake Shack stock exploded from its January IPO to soar to just shy of $100/share. Just around the time SHAK hit all time highs for the first and only time, we showed just how amazing the value of any one Shake Shack restaurant was in the context of its peers. As of May 2, 2015, it looked as follows:

    This post was published at Zero Hedge on May 4, 2017.

  • It’s Turning Into A Very Interesting Week

    Authored by Mark St. Cyr,
    Back in days of yore (circa January 2017) I dared make the assertion that all that was ‘unicorn infatuation’ in the Valley was much more akin to ‘the old gray mare ain’t what it used to be.’
    In the article ‘Is 2017 The Year Silicon Valley Experiences The Dark Side Of ‘It’s Different This Time?’’ I posed the following. To wit:
    ‘Here’s the equation I believe will not only send shock waves, but will bring down many a valuation edifice within ‘The Valley’ in 2017. And here it is: ‘First: The Fed. And Second: Rate hikes.
    Two very short sentences containing nothing more than two words each but their implications could have exponentially explosive results. For what they portend is that ‘It’s different this time’ may indeed be exactly that.
    What I hoped you may have noticed during this discussion is the one thing myself and very few others pointed out would happen if the hypothesis we’ve been articulating over the last few years was correct. That hypothesis has always been ‘Without the Fed. pumping in unlimited funds via the QE programs, and a ‘death-grip’ to the zero bound (aka ZIRP) the first ones to show how much of a facade these ‘markets’ where would be seen directly in the ‘tech’ space.’

    This post was published at Zero Hedge on May 4, 2017.

  • One Of The World’s Biggest Oil Hedge Funds Just Liquidated All Its Longs

    That didn’t last long.
    Just one week after Canada’s largest alt-mortgage lender Home Capital Group sent shockwaves across the Canadian financial system, when it confirmed that long-running allegations about its liar-loan business were true, and suffered a spectacular bank run necessitating emergency loans which yield a stunning 22.5%, the company is now “actively seeking expanded sources of funding” having drawn half of its C$2b rescue loan, according to an email sent to mortgage brokers seen by Bloomberg News.
    ‘This is a fluid situation, and we are optimistic our challenges are temporary,’ Pino Decina, executive vice president of residential mortgage lending, said in the email.
    He further said that despite what’s “written in media” the company continues to experience demand for financing from brokers. He did not deny, however, the rest of what is written in the media, namely that as the company’s GICS’s mature, it risks running out of liquidity in the coming weeks even with the full C$2bn facility fully drawn, especially since by now it is almost certain that its retail deposits have all been redeemed.

    This post was published at Zero Hedge on May 4, 2017.