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  • Liberals Love Trump’s Tax Plan (When Told It’s Bernie’s)

    President Donald Trump’s proposal for comprehensive tax reform was almost immediately dismissed as heartless and impractical by his political opponents.
    But Campus Reform wondered what would some of those opponents think if they were told the same plan was being proposed by someone they adore – Senator Bernie Sanders?
    To find out, we headed to George Washington University to ask students their opinions on Trump’s new tax plan. WIthout much explanation, the students immediately made clear their distaste for the plan.
    ‘It’s not the most efficient, nor beneficial to the general populus,’ said one student when asked her opinion of Trump’s plan.
    ‘It’s better for the upper class than anyone else,’ added another.
    After watching student after student express their disapproval of the plan, we then asked those same students what they thought of Senator Bernie Sanders’ new tax plan.
    Immediately, they expressed excitement and support after hearing the details of the plan.
    The only problem for them? There was no tax plan for Senator Sanders. The plan they loved was actually President Trump’s.
    How did they react?
    Enjoy…


    This post was published at Zero Hedge on Oct 21, 2017.


  • In The Shadows Of Black Monday – “Volatility Isn’t Broken… The Market Is”

    Authored by Christopher Cole via Artemis Capital Management,
    A full version of the article is available on the Artemis website.
    Volatility and the Alchemy of Risk
    The Ouroboros, a Greek word meaning ‘tail devourer’, is the ancient symbol of a snake consuming its own body in perfect symmetry. The imagery of the Ouroboros evokes the infinite nature of creation from destruction. The sign appears across cultures and is an important icon in the esoteric tradition of Alchemy. Egyptian mystics first derived the symbol from a realphenomenon in nature. In extreme heat a snake, unable to self-regulateitsbody temperature, will experience an out-of-control spike in its metabolism. In a state of mania, the snake is unable to differentiate its own tail from its prey, and will attack itself, self-cannibalizing until it perishes. In nature and markets, when randomness self-organizes into too perfect symmetry, order becomes the source of chaos.
    The Ouroboros is a metaphor for the financial alchemy driving the modern Bear Market in Fear. Volatility across asset classes is at multi-generational lows. A dangerous feedback loop now exists between ultra-low interest rates, debt expansion, asset volatility, and financial engineering that allocates risk based on that volatility. In this self-reflexive loop volatility can reinforce itself both lower and higher. In a market where stocks and bonds are both overvalued, financial alchemy is the only way to feed our global hunger for yield, until it kills the very system it is nourishing.
    The Global Short Volatility trade now represents an estimated $2+ trillion in financial engineering strategies that simultaneously exert influence over, and are influenced by, stock market volatility. We broadly define the short volatility trade as any financial strategy that relies on the assumption of market stability to generate returns, while using volatility itself as an input for risk taking. Many popular institutional investment strategies, even if they are not explicitly shorting derivatives, generate excess returns from the same implicit risk factors as a portfolio of short optionality, and contain hidden fragility.

    This post was published at Zero Hedge on Oct 21, 2017.


  • “It’s Very Common”: Baltimore Teacher Admits To Passing Students That Never Showed For A Single Day Of Class

    Teaching can be a thankless job. Talk to almost any educator in the public school system and you’re bound to get a earful about grueling hours, disrespectful kids, infuriating bureaucracy and minimal pay. As such, it looks increasingly like the teachers in Baltimore’s public schools have decided to just stop teaching altogether and pass every student that walks through their doors.
    In the latest installment of a growing scandal revealed by “Project Baltimore”, an investigative reporting initiative launched by Sinclair Broadcast group in March 2017 to examine Baltimore’s public school system, a teacher at Calverton Elementary/Middle in west Baltimore has come forward with proof that grade changing is not only common in his school district but explicitly encouraged by senior administrators.
    According to Fox45, below is the end of year text message that Calverton teachers received their principal, Martia Cooper, instructing them to “please double check end of the year averages and make sure they are 60 and above.” The message went on to say that any “averages below 60” should be “corrected” so that failing students could be pushed through the system.
    ‘Good Morning people! (Secretary) is printing report cards so finally you can get cumes finished. Please double check end of year averages and make sure they are 60 and above, except our four retention candidates (2 elem and 2 grade 7). If you find any grade averages below 60, pkesss (sic) have (secretary) correct and give me a copy of those student names. Thanks!’

    This post was published at Zero Hedge on Oct 21, 2017.


  • Bearish Fund Traders Head For Early Hibernation

    ‘Speculators’ have never been so confidently complacent that ‘all is well’.

    Speculative positioning in VIX futures and options remains at its most short in history as traders refuse to back away from ‘what works’ as realized volatility collapses to its lowest in over 60 years…

    This post was published at Zero Hedge on Oct 21, 2017.


  • The $2.5 Trillion Paradox: “While The Short End Is Optimistic, The Long End Has Never Been More Pessimistic”

    Last weekend, as Deutsche Bank’s derivatives strategist Aleksandar Kocic was looking at the spread between the short and long end of the curve, and while contemplating the lack of market volatility, he concluded that “given where long rates are, Fed appears as overly hawkish – it has only two more hikes to go and, for volatility and risk premia to reprice higher, the gap has to widen. As is appears unlikely that the Fed will be cutting rates any time soon, the gap could widen only if the Long rates sell off.”
    In practical terms – if only for bond traders – this meant that “for anything to happen, 5Y5Y sector has to move higher”, however the $2.5 trillion question is whether this sell off in long rates will be violent or controlled. Kocic concluded that “This is the catalyst for everything.”
    In other words, those lamenting the pervasive complacency and the ubiquitous lack of volatility in the market, may not have much more to wait: after just two more rate hikes, absent a parallel move wider across the rest of the curve, the Fed’s “breathing space” will collapse, and Yellen, or rather her successor, will lost control of both vol markets and long-dated yields, as the Fed effectively hikes into a self-made recession, where it itself inverts the yield curve. That would be a problem.

    This post was published at Zero Hedge on Oct 21, 2017.


  • 20/10/17: Lancet Report on Impact of Pollution

    A top-level, comprehensive report compiled by the Lancet Commission details estimates of economic and human costs of pollution worldwide. The full report is available here: Before I summarise some of its main findings, it is worth noting that such an undertaking is, by definition, a difficult one and the one that involves a lot of assumptions, models, estimates and uncertainty around its findings. There will be debates and there will be those who disagree with the report findings. However, two things are clear:
    Pollution is costly in terms of health, life, quality of human capital (young age development, etc), and economically; Incidences of pollution impacts are bound to be concentrated in the areas where other factors (e.g. poverty, location of extraction industries, etc) are also at play.

    This post was published at True Economics on Saturday, October 21, 2017.


  • Mapping What Every State In America Is Best At

    Company towns used to be a defining feature of the American economy. Nowadays, as Raul at HowMuch.net notes, thanks to globalization and offshoring, it is much harder to find employers that exert such influence over a small town(with a few notable exceptions).
    That being said, specific industries still tend to grow in clusters and can dominate the economy of a particular region. To understand this new reality, we mapped the most important industries by state according to the U. S. Bureau of Economic Analysis, which takes into account an industry’s collective output as a percentage of the overall GDP. For simplicity, we excluded government jobs and real estate.

    This post was published at Zero Hedge on Oct 20, 2017.


  • Catalonia’s Political Crisis Snowballs into an Economic Crisis

    Independence would be ‘horrific’ and amount to ‘financial suicide,’ said Spain’s Economy Minister. But financial suicide for whom? It’s not easy being a Catalan bank these days. In the last few weeks the region’s two biggest lenders, Caixabank and Sabadell, have lost 9 billion of deposits as panicked customers in Catalonia have moved their money elsewhere. Many customers in other parts of Spain have also yanked their savings out of Catalan banks, but less out of fear than out of anger at the banks’ Catalan roots.
    Moving their official company address to other parts of Spain last week may have helped ease that resentment, allowing the two banks to recoup some 2 billion of deposits. But the move has angered the roughly 2.5 million pro-independence supporters in Catalonia, many of whom have accounts at one of the two banks. Today they expressed that anger by withdrawing cash en masse.
    Many protesters made symbolic withdrawals of 155 – a reference to Article 155 of the Spanish constitution, which Madrid activated today to impose direct rule over the semi-autonomous region. Others opted for 1,714 in a nod to the year 1714, when Barcelona was captured by the troops of King Felipe V, who then proceeded to suppress the rights of rebellious regions.

    This post was published at Wolf Street on Oct 21, 2017.


  • Pat Buchanan Asks: “Is Liberalism A Dying Faith?”

    Asked to name the defining attributes of the America we wish to become, many liberals would answer that we must realize our manifest destiny since 1776, by becoming more equal, more diverse and more democratic – and the model for mankind’s future.
    Equality, diversity, democracy – this is the holy trinity of the post-Christian secular state at whose altars Liberal Man worships.
    But the congregation worshiping these gods is shrinking.
    And even Europe seems to be rejecting what America has on offer.
    In a retreat from diversity, Catalonia just voted to separate from Spain. The Basque and Galician peoples of Spain are following the Catalan secession crisis with great interest.
    The right-wing People’s Party and far-right Freedom Party just swept 60 percent of Austria’s vote, delivering the nation to 31-year-old Sebastian Kurz, whose anti-immigrant platform was plagiarized from the Freedom Party. Summarized it is: Austria for the Austrians!

    This post was published at Zero Hedge on Oct 20, 2017.


  • Bank Of America: “This Could Send The Nasdaq To 10,000”

    Last weekend, One River’s CIO Eric Peters explained what he thought would be the nightmare scenario for the next Fed chair, who as we now know will either be Jerome Powell or John Taylor, or both (with an outside chance of Yellen remaining in her post). According to the hedge fund CIO, the “worst case scenario” is one in which despite an improving economy, yields simply refuse to go up, leading to the final asset bubble and Fed intervention that “pops” it:
    ‘if we don’t see a sustained cyclical jump in wages, then yields won’t go up. And if yields don’t go up, then the asset price ascent will accelerate,’ continued the strategist. ‘Which will lead us into a 2018 that looks like what we had expected out of 2017; a war against inequality, a battle for Main Street at the expense of Wall Street, an Occupy Silicon Valley movement.’ He paused, flipping through his calendar. “Then you’ll have this nightmare for the next Federal Reserve chief, because they’ll have to pop a bubble.’ While Peters never names names in his pieces, the “strategist” in the weekend letter was BofA’s Michael Hartnett, who several days after Peters penned the above, followed up with some thoughts of his own on precisely this topic, and in a note released this week, described what he believes is the “biggest market risk” for the market. Not surprisingly, it is precisely what Peters was referring to in the above excerpt.

    This post was published at Zero Hedge on Oct 20, 2017.


  • Kyle Bass: “Today’s Market Resembles The 1987 Debacle On Steroids”

    The US stock market celebrated the 30th anniversary of Black Monday with the 2017 version of a rocky trading day: Stocks sold off early, with S&P 500 futures recording their steepest post-midnight drop of the year. But the dip was reflexively and aggressively bought, and stocks even poked back into the green seconds before the close as algos mistook a repetitive Politico headline about Jay Powell’s chances of becoming the next Fed chair for news – leaving us with yet another record close.
    Of course, the historical juxtaposition of the 1987 crash with today’s unnaturally placid markets practically forced even the most bullish of traders to question how much longer the present market paradigm – where markets listlessly drift through a seemingly interminable series of record highs while trading volume and volatility remain suppressed – can possibly last.


    This post was published at Zero Hedge on Oct 20, 2017.


  • Marc Faber Responds To Racism Accusations

    Having been forced off the boards of Sprott, NovaGold, and Ivanhoe mines and excommunicated from mainstream business media following his comments earlier in the week, Gloom, Boom, & Doom Report writer Marc Faber responds to his racism allegations…
    “I have been labeled by the mainstream media as a racist – I don’t think this corresponds at all with reality.
    I wrote a report about capitalism and socialism and about private property rights, and I also wrote about the tendency nowadays to want to rewrite history.
    In the US they are trying to tear down statues of people who had a different view from other people at the time… they also tried to tear down statues of Columbus..

    This post was published at Zero Hedge on Oct 20, 2017.


  • Stocks and Precious Metals Charts – To the Moon, Alice

    “For we wrestle not against flesh and blood, but against principalities and powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.”
    Ephesians 6:12
    Stocks continued moving higher.
    Where they’ll stop, nobody knows.
    Asia is rolling out the most new stocks in the US since the Alibaba IPO. Making America great again.
    And the pundits know plenty of reasons why this is still a good time to buy.

    This post was published at Jesses Crossroads Cafe on 20 OCTOBER 2017.


  • Fired Tesla Workers Discover They Were Replaced With Cheap Temp Labor

    Just last week, amid their Model 3 “production hell,” Tesla shocked the auto world with news that they would be firing hundreds of workers. Of course, firing seasoned production staff is somewhat atypical for a ‘growing’ company (shrinking cash flow aside) that was already having difficulty meeting their own production schedule. Of course, the irony was apparently ‘lost’ on Tesla who tried to dismiss the mass firings as “performance-based terminations.” Per Capital and Main:
    Tesla announced the firings, which are reportedly still continuing, last week. Though no official number of terminations would be given, estimates range from 400 to 1,200. The company did not give advance notice under the WARN Act because, it insisted, they were performance-based terminations, not layoffs. ‘Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved during the performance period,’ said a Tesla spokesperson in an emailed statement. ‘As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures.’
    As it turns out, we’re not the only ones who were surprised by Tesla’s mass termination event as laid off workers are now coming forward to say the decision was nothing more than an attempt to break up unionization efforts at the company’s Fremont, CA plant and replace seasoned employees with cheap, temporary contract labor.

    This post was published at Zero Hedge on Oct 20, 2017.


  • A WORLD OF LIES BUT GOLD WILL REVEAL THE TRUTH

    The dollar is dead but the world doesn’t know it.
    It has been a slow death and the final stages will be very painful for the US and for the rest of the world. The US empire is finished financially and militarily.
    NIXON WAS CONVICTED FOR THE WRONG CRIME
    It all started with the establishment of the Fed in 1913 and escalated with Nixon. For anyone old enough to still remember him, they will think about the Watergate scandal. This was corruption and bribery at the highest level in the Nixon administration, including the president himself. In order to avoid impeachment which would have been a certainty, Nixon resigned. All this broke out 11 months after Nixon’s disastrous decision to take away the gold backing of the dollar on Aug 15, 1971. Nixon should not have been impeached for the Watergate scandal but for his decision to end the gold backing of the dollar. That disastrous decision is what will lead to a total collapse of the world economy and the financial system, starting sooner than anyone can imagine.
    DE GAULLE UNDERSTOOD GOLD
    By 1971, the US had already been running chronic budget deficits for 10 years consecutively. At the end of the 1960s, President Gaulle of France realised what would happen to the dollar and demanded payment in gold instead which was his right. This led to Nixon closing the gold window since this was the only way that the US could continue to live above its means. And this is exactly what the US has done for more than half a century now. Not only have they run a real budget deficit every year since 1961 but also a trade deficit every year since 1975.

    This post was published at GoldSwitzerland on October 19, 2017.


  • GE-Dip-Buying-Panic Sends Dow To ‘Most Overbought’ In 62 Years, Yield Curve Collapse Continues

    Always…
    As Bloomberg summarizes, the dollar rose, Treasuries sank and all three broad stock indexes are heading for a record close on bets a budget compromise will bring Washington closer to agreeing on Trump’s promise of tax reform. The dollar touched a three-month high and 10-year Treasury yields approached 2.4% while the Canadian dollar tumbled after inflation and retail sales missed estimates. Some clarity on a budget resolution, a good quarter of earnings and the anticipation of an announcement of the next Fed chair has led to market confidence. One stock clearly bucked the earnings trend; GE posted results before the bell, missing analysts’ estimates significantly and slashing its profit forecast. The stock erased losses after falling 7% in premarket trading.
    So – GE did this…

    This post was published at Zero Hedge on Oct 20, 2017.


  • Weekend Reading: Dow 24,000 By Christmas

    This past week, the Dow crested 23000 sending the networks into a ‘tizzy.’ It took about 5-minutes of crossing that magical ’round number,’ before questions raised of how long before the markets cross 24,000, and 25,000.
    The chart below shows the 1000-point milestones of the Dow going back to 2009. After a long break between 18,000 and 19,000 in 2015 through the election in 2016, the Dow has surged higher ticking off 4-more milestones in less than a year.
    As I have shown previously, these late stage ‘melt-ups’ are not uncommon. In fact, as shown below, it is something witnessed prior to every market peak previously.

    This post was published at Zero Hedge on Oct 20, 2017.


  • Why US Tax Reform Will Put Even More Pressure On Dollar Funding Markets

    On Wednesday, we noted the renewed tightness developing in dollar funding markets. Ignoring embryonic signs of stress in the financial ‘plumbing’ can be dangerous. The divergence of LIBOR from Fed Funds on 9 August 2007, which occurred two months prior to the peak in the Dow, always comes to mind. Fast-forwarding to the present when Mark Cabana, Bank of America’s head of US STIR, has been fielding client questions about the impact of proposed US tax reform. In particular, clients asked for Cabana’s view on what effect dollar repatriation by US corporates might have on funding markets if favorable tax treatment is forthcoming.
    Spoiler alert – negative for dollar funding markets (and of course positive for the dollar).
    Cabana explains ‘As Washington has increasingly focused on tax reform, clients have asked questions about how repatriation might impact the front end of the US rates curve. While there are still many unknown elements of the plan, we believe repatriation could provide modest upward USD funding pressure for foreign banks but likely leave the overall stock of commercial paper outstanding little changed.’

    This post was published at Zero Hedge on Oct 20, 2017.


  • Trump Considers Bringing Both Powell And Taylor To The Fed Together

    TRUMP SAYS BRINGING TAYLOR, POWELL TO FED TOGETHER AN OPTION
    only one leaves pic.twitter.com/k0F8JrPxar
    — zerohedge (@zerohedge) October 20, 2017

    The farce is now complete.
    What is the best way to run schizophrenic monetary policy in a schizophrenic country, where the Fed sees “mysterious” deflation everywhere even as most ordinary consumers can’t afford to pay their health insurance, resulting in Fed chair candidates ranging from the extremely hawkish end to the dovish one? Simple: if you are Donald Trump, you bring both of them in.
    TRUMP SAYS BRINGING TAYLOR, POWELL TO FED TOGETHER AN OPTION

    This post was published at Zero Hedge on Oct 20, 2017.


  • US Spent A Record $4 Trillion In Fiscal 2017, Pushing Deficit To $666 Billion

    One year ago, the CBO forecasted that the Fiscal 2017 US deficit (for the year ended September 30), would be in the mid-$500 billion range. It was not meant to be, however, and on Friday the Treasury reported that with outlays of $341 billion in the last month of the fiscal year, offset by $349 billion in receipts, the full year deficit grew to a nice, round and very memorable $666 billion in fiscal 2017, up $80 billion or 14% from fiscal 2016. The government ran an $8 billion surplus in September, much smaller than the $33 billion surplus in September 2016. Receipts fell 2% while outlays grew 5% last month compared with the same period a year earlier.
    For the full year, federal tax receipts reached a record high $3.315 trillion, thanks to slightly faster growth, according to a Treasury official quoted by the WSJ. But government outlays also hit a record high last year at nearly $4 trillion ($3.981 trillion to be precise), 3% higher than they were in the previous fiscal year, thanks to increased spending on Social Security, Medicare and Medicaid, as well as higher interest payments on the public debt. And that’s with interest rates that were near all time lows. We can’t wait until the $20+ trillion in Federal debt starts really hitting the bottom budget line as the Fed starts pushing rates higher.

    This post was published at Zero Hedge on Oct 20, 2017.