• Category Archives Market Commentary
  • Public Library of Science Published No Evidence of Global Warming Caused by Humans

    Even the renown Public Library of Science (PLOS) Organization has stated plainly there is no evidence of Global Warming caused by human activity.
    ‘[O]nly 18% of the stations showed increases in water temperature that would be expected from global warming, partially reflecting the limits in detecting trends due to inherent natural variability of temperature data. Decreases in visibility were associated with increased human density. However, this link can be decoupled by environmental factors, with conditions that increase the flush of water, dampening the effects of human influence.’
    SOURCE

    This post was published at Armstrong Economics on Dec 31, 2017.


  • Apple, The BeeEss Company

    Done being a “fanboy” yet? No? You must like getting ripped off.
    Hiding something you know is defective in a manner that will cause people to think their device should be replaced with a newer one, instead of either having it fixed under warranty or performing a relatively inexpensive repair, is outrageous.
    Apple is being sued on this basis alleging consumer fraud, and IMHO rightly so.
    Make no mistake — Apple only came clean after being caught. They didn’t tell anyone up front, they didn’t disclose the presence of the software change they made in anything like release notes that accompanied the new code, nothing.
    They in fact said nothing despite people noting a problem until they were caught by irrefutable evidence that was presented to the public by a customer, and only thendid they come clean as to what they did.
    That is evidence of bad faith and intentional misconduct and I hope the plaintiffs shove it so far up Cook’s and Apple’s ass that they can taste it.
    That was not a mistake. It was in fact just the latest manifestation of what Apple as a company is — an extractive firm that has managed to create a religious cult of fervent grape Kool-Aid drinkers among Americans who parade around like they’ve got some part of God in their pockets and thus are blessed.
    The truth does not matter to any of those fanbois however, nearly all of whom will keep buying their crap despite now having hard evidence that they’ve been intentionally screwed.

    This post was published at Market-Ticker on 2017-12-30.


  • “Q1 Stock Market Outlook: We’re Gonna Need a Bigger Slide”

    Submitted by FFWiley
    If 2018 rings in a bear market, it could look something like the Kennedy Slide of 1962.
    That was my conclusion in ‘Riding the Slide,’ published in early September, where I showed that the Kennedy Slide was unique among bear markets of the last eighty years. It was the only bear that wasn’t obviously provoked by rising inflation, tightening monetary policy, deteriorating credit markets or, less commonly, world war or depression.
    Moreover, market conditions leading up to the Slide should be familiar – they’re not too far from market conditions since Donald Trump won the 2016 presidential election. In the first year after Kennedy’s election, as in the first year after Trump’s election, inflation seemed under control, interest rates were low, credit spreads were tight, and the economy was growing. And, in both cases, the stock market was booming.

    This post was published at Zero Hedge on Sat, 12/30/2017 –.


  • The Dreaded ‘Flattening Yield Curve’ Meets QE Unwind

    During prior incidents of an ‘inverted’ yield curve, the Fed had no tools to get the market to push up long-term yields. Today it has one: the QE Unwind.
    The price of three-month Treasury securities fell and the yield – which moves in the opposite direction – rose, ending the year at 1.39%, after having spiked to 1.47% on December 26, the highest since September 12, 2008. This is in the upper half of the Fed’s new target range for the federal funds rate (1.25% to 1.50%). Back in October 2015, the yield was still at 0%:

    This post was published at Wolf Street by Wolf Richter ‘ Dec 30, 2017.


  • China Eliminates Taxation For Foreign Companies Investing in China

    China has responded to global competition that is exploding in the wake of the Trump Tax Reform. While domestic news in the USA continues to bash the tax reform on class warfare, the rest of the world is trying to come to terms with what Trump has set in motion. China’s response is to allow foreign companies complete tax-free business on any profits they reinvest in China upping the stakes. Their position was stated by the Ministry of Finance and it is designed to ‘foster the growth of foreign investment, improve the quality of foreign investment, and encourage foreign investors to continuously expand their investment in China.’ The tax exemption applies retroactively from January 1st, 2017 beating Trump at his own game once more. Foreign companies who have paid taxes in China for 2017 will be refunded.

    This post was published at Armstrong Economics on Dec 30, 2017.


  • From Crypto To Qatar – These Were The Best & Worst Assets In 2017

    2017 saw global central bank balance sheets explode almost 17% higher (in USD terms) – the biggest annual increase since 2011 – and while correlation is not causation, one can’t help but see a pattern in the chart below…
    Global stocks up, Global bonds up, Global commodities up, Financial Conditions easier (despite 3 Fed rate hikes), and Dollar down (most since 2003)…
    As we noted earlier, Craig James, chief economist at fund manager CommSec, told Reuters that of the 73 bourses it tracks globally, all but nine have recorded gains in local currency terms this year.
    ‘For the outlook, the key issue is whether the low growth rates of prices and wages will continue, thus prompting central banks to remain on the monetary policy sidelines,’ said James. ‘Globalization and technological change have been influential in keeping inflation low. In short, consumers can buy goods whenever they want and wherever they are.’
    Still, the good times may not last: an State Street index that gauges investor risk appetite by what they actually buy and sell, suffered its six straight monthly fall in December, Reuters reported.
    “While the broader economic outlook appears increasingly rosy, as captured by measures of consumer and business confidence, the more cautious nature of investors hints at a concern that markets may have already discounted much of the good news,’ said Michael Metcalfe, State Street’s head of global macro strategy.

    This post was published at Zero Hedge on Fri, 12/29/2017 –.


  • Did The “Big Short” Retail CMBX Trade Pay Off In 2017?

    Since the start of 2017, a number of opportunistic investors sought to profit from the expected demise of the physical retail sector, a trade which we and others dubbed the next ‘Big Short” – also known as the “Amazon crushes everyone” trade – and in which investors bought credit-default swaps against subordinate bonds in certain CMBX derivative indices that are tied to CMBS deals with healthy concentrations of loans against shopping malls and retail centers.
    As CMBS advisory Trepp notes, the trade gained notoriety last February, when spreads for the BBB- and BB rated components of the indices went through a massive widening. They continued to widen at a somewhat steady clip until only recently. That alone indicates the trade, particularly if executed early, has paid off nicely.
    CMBX consists of a group of indices that are each linked to a group of 25 CMBS conduit deals issued during a particular year. The indices are used as an indicator of the overall performance of the CRE market and enables investors to make bets on corresponding long and short positions.
    Investors who expect deals in a specific index to incur losses can buy protection: they would pay a fixed-rate premium to a seller of protection who would bet against losses. If losses occur, the seller of protection would cover them. So, a short trade becomes most profitable when deals in an index suffer actual losses. It also becomes profitable in the event spreads widen, as they have.
    Spreads Move Wider and Wider

    This post was published at Zero Hedge on Fri, 12/29/2017 –.


  • Housing Bubble 2.0: U.S. Homeowners Made $2 Trillion On Their Houses In 2017

    Americans who are lucky enough to own their own little slice of the ‘American Dream’ are about $2 trillion wealthier this year courtesy of Janet Yellen’s efforts to recreate all the same asset bubbles that Alan Greenspan first blew in the early 2000’s. After surging 6.5% in 2017, the highest pace in 4 years according to Zillow data, the total market value of homes in the United States reached a staggering all-time high of $31.8 trillion at the end of 2017…or roughly 1.5x the total GDP of the United States.
    If you add the value of all the homes in the United States together, you get a sum that’s a lot to get your mind around: $31.8 trillion.
    How big is that? It’s more than 1.5 times the Gross Domestic Product of the United States and approaching three times that of China.
    Altogether, homes in the Los Angeles metro area are worth $2.7 trillion, more than the United Kingdom’s GDP. That’s before this luxury home on steroids hits the market.

    This post was published at Zero Hedge on Fri, 12/29/2017 –.


  • The Biggest Oil Story of 2017

    US oil exports boom as OPEC cuts production.
    There have been plenty of eye-catching stories in the energy industry this year, but one notable development has been the rise of the U. S. as a crude oil exporter. The ban on crude exports from the U. S. was lifted at the end of 2015, and exports ticked up in the following year, but only modestly. 2017, however, was the year that the floodgates opened.
    In the first half of the year, there were several weeks when the U. S. topped 1 million barrels per day (mb/d), but exports averaged about 750,000 bpd between January and June.

    This post was published at Wolf Street by Nick Cunningham ‘ Dec 29, 2017.


  • US Dollar Has Worst Year since 2003, Defying the Fed

    Where will it go from here?
    Today is another down-day for the US dollar, the third in a row, capping a nasty year for the dollar, the worst since 2003. In 2017, the dollar dropped 7% against a broad basket of other currencies, as measured by the Trade Weighted Dollar Index (broad), which includes the Chinese yuan which is pegged to the US dollar. It was worse than the 5.7% drop in 2009, but not as bad the 8.5% plunge in 2003.
    Here are the past four years of the dollar as depicted by the Broad Trade Weighted Dollar Index, which tracks 26 foreign currencies. The index is updated weekly, with the last update on December 26, and has not yet captured the declines of past three days:

    This post was published at Wolf Street on Dec 29, 2017.


  • Stock Markets Hyper-Risky 2

    The US stock markets enjoyed an extraordinary surge in 2017, shattering all kinds of records. This was fueled by hopes for big tax cuts soon since Republicans regained control of the US government. But such relentless rallying has catapulted complacency, euphoria, and valuations to dangerous bull-slaying extremes. This has left today’s beloved and lofty stock markets hyper-risky, with serious selloffs looming large.
    History proves that stock markets are forever cyclical, no trend lasts forever. Great bulls and bears alike eventually run their courses and give up their ghosts. Sooner or later every secular trend yields to extreme sentiment peaking, then the markets inevitably reverse. Popular greed late in bulls, and fear late in bears, ultimately hits unsustainable climaxes. All near-term buyers or sellers are sucked in, killing the trend.
    This mighty stock bull born way back in March 2009 has proven exceptional in countless ways. As of mid-December, the flagship S&P 500 broad-market stock index (SPX) has powered 297.6% higher over 8.8 years! Investors take this for granted, but it’s far from normal. That makes this bull the third-largest and second-longest in US stock-market history. And the superior bull specimens vividly highlight market cyclicality.
    The SPX’s biggest and longest bull on record soared 417% higher between October 1990 and March 2000. After it peaked in epic bubble-grade euphoria, the SPX soon yielded to a brutal 49% bear market over the next 2.6 years. The SPX wouldn’t decisively power above those bull-topping levels until 12.9 years later in early 2013, thanks to the Fed’s unprecedented QE3 campaign! The greatest bull ended in tears.

    This post was published at ZEAL LLC on December 29, 2017.


  • This Flu Season Begins the Risk of a Pandemic 2018-2019

    A possible new pandemic is forming from a deadly strain of flu emerging from Australia and will be headed to the UK as the normal flow of travels would take it. Britain will perhaps be hit with the worst flu season in 50 years. Already, there are about 170,000 cases of flu reported in Australia which is more than double this season than usual.
    The strain of flu is called H3N2, and the number of flu deaths in Australia over winter has not yet been released, but it’s thought to be the worst in many years. The last major flu epidemic was in the 1968 pandemic which began in Hong Kong killing more than a million people worldwide. Flu pandemics have been linked to fluctuations in climate, and new research connects the world’s four most recent pandemics to the cyclical cooling of the Pacific Ocean near the equator.

    This post was published at Armstrong Economics on Dec 29, 2017.