• Huge Crude Stakes

    This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
    There is a titanic struggle going on right now in the oil market. On the one side of the futures market are the usual pace setters, the money managers. Last week, the latest COT data available, they went the most net long since March. If it continues, it will close in on the most positive futures position since the record long they established back in February.
    Normally that would be insanely bullish for oil prices. But just as in February/March another part of the futures market has intervened on the other side. Back then it was the oil producers who rising inventory forced into a larger and larger offsetting net short (hedge).
    This time, however, it is the swap dealers who are short for reasons that aren’t really clear. The weekly COT report for the last week in October showed a record net short for dealers, just beating their most extreme position from the middle of 2013 at -424k contracts. In the first week and November, they blew away that record at -470k.

    This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ November 16, 2017.


  • After Slamming Bitcoin As A Money Laundering Tool, JPMorgan Busted For Money Laundering

    Score one for the poetic irony pages.
    Two months after JPMorgan CEO Jamie Dimon lashed out at bitcoin, calling it a “fraud” which is “worse than tulip bulbs, warning it won’t end well”, will “blow up” and “someone is going to get killed” and threatened that “any trader trading bitcoin” will be “fired for being stupid” as it was merely a tool for money-laundering, today Swiss daily Handelszeitung reported that the Swiss subsidiary of JPMorgan was sanctioned by the Swiss regulator, FINMA, over money laundering and “seriously violating supervision laws.”
    As the newspaper adds, the Swiss sanctions relate to breaches of due diligence in connection with money laundering standards. In other words, JPMorgan was actively aiding and abeting criminal money laundering.

    This post was published at Zero Hedge on Nov 17, 2017.


  • Mueller Subpoena Spooks Dollar, Sends European Stocks, US Futures Lower

    Yesterday’s torrid, broad-based rally looked set to continue overnight until early in the Japanese session, when the USD tumbled and dragged down with it the USDJPY, Nikkei, and US futures following a WSJ report that Robert Mueller had issued a subpoena to more than a dozen top Trump administration officials in mid October.
    And as traders sit at their desks on Friday, U. S. index futures point to a lower open as European stocks fall, struggling to follow Asian equities higher as the euro strengthened at the end of a tumultuous week. Chinese stocks dropped while Indian shares and the rupee gain on Moody’s upgrade. The MSCI world equity index was up 0.1% on the day, but was heading for a 0.1% fall on the week. The dollar declined against most major peers, while Treasury yields dropped and oil rose.
    Europe’s Stoxx 600 Index fluctuated before turning lower as much as 0.3% in brisk volumes, dropping towards the 200-DMA, although about 1% above Wednesday’s intraday low; weakness was observed in retail, mining, utilities sectors. In the past two weeks, the basic resources sector index is down 6%, oil & gas down 5.8%, autos down 4.9%, retail down 3.4%; while real estate is the only sector in green, up 0.1%. The Stoxx 600 is on track to record a weekly loss of 1.3%, adding to last week’s sell-off amid sharp rebound in euro, global equity pullback. The Euro climbed for the first time in three days after ECB President Mario Draghi said he was optimistic for wage growth in the region, although stressed the need for patience, speaking in Frankfurt. European bonds were mixed. The pound pared some of its earlier gains after comments from Brexit Secretary David Davis signaling a continued stand-off in negotiations with the European Union.
    In Asia, the Nikkei 225 took its time to catch up to the WSJ report that US Special Counsel Mueller has issued a Subpoena for Russia-related documents from Trump campaign officials, although reports pointing to North Korea conducting ‘aggressive’ work on the construction of a ballistic missile submarine helped the selloff. The Japanese blue-chip index rose as much as 1.8% in early dealing, but the broad-based dollar retreat led to the index unwinding the bulk of its gains; the index finished the session up 0.2% as the yen jumped to the strongest in four-weeks. Australia’s ASX 200 added 0.2% with IT, healthcare and telecoms leading the way, as utilities lagged. Mainland Chinese stocks fell, with the Shanghai Comp down circa 0.5% as the PBoC’s reversel in liquidity injections (overnight net drain of 10bn yuan) did little to boost risk appetite, as Kweichou Moutai (viewed as a bellwether among Chinese blue chips) fell sharply. This left the index facing its biggest weekly loss in 3 months, while the Hang Seng rallied with IT leading the way higher. Indian stocks and the currency advanced after Moody’s Investors Service raised the nation’s credit rating.

    This post was published at Zero Hedge on Nov 17, 2017.


  • Bill Blain: “Stock Markets Don’t Matter; The Great Crash Of 2018 Will Start In The Bond Market”

    Blain’s Morning Porridge, Submitted by Bill Blain of Mint Partners
    The Great Crash of 2018? Look to the bond markets to trigger Mayhem!
    I had the impression the markets had pretty much battened down for rest of 2017 – keen to protect this year’s gains. Wrong again. It seems there is another up-step. After the People’s Bank of China dropped $47 bln of money into its financial system (where bond yields have risen dramatically amid growing signs of wobble), the game’s afoot once more. The result is global stocks bound upwards. Again. It suggest Central Banks have little to worry about in 2018 – if markets get fraxious, just bung a load of money at them.
    Personally, I’m not convinced how the tau of monetary market distortion is a good thing? Markets have become like Pavlov’s dog: ring the easy money bell, and markets salivate to the upside.
    Of course, stock markets don’t matter.
    The truth is in bond markets. And that’s where I’m looking for the dam to break. The great crash of 2018 is going to start in the deeper, darker depths of the Credit Market.
    I’ve already expressed my doubts about the long-term stability of certain sectors – like how covenants have been compromised in high-yield even as spreads have compressed to record tights over Treasuries, about busted European regions trying to pass themselves off as Sovereign States (no I don’t mean the Catalans, I mean Italy!), and how the bond market became increasingly less discerning on risk in its insatiable hunt for yield. Chuck all of these in a mixing bowl and the result is a massive Kerrang as the gears of finance explode!

    This post was published at Zero Hedge on Nov 17, 2017.


  • The Demise of Dissent: Why the Web Is Becoming Homogenized

    In other words, we’ll be left with officially generated and sanctioned fake news and “approved” dissent.
    We’ve all heard that the problem with the web is fake news, i.e. unsubstantiated or erroneous content that’s designed to mislead or sow confusion.
    The problem isn’t just fake news–it’s the homogenization of the web, that is, the elimination or marginalization of independent voices of skepticism and dissent.
    There are four drivers of this homogenization:
    1. The suppression of dissent under the guise of ridding the web of propaganda and fake news–in other words, dissent is labeled fake news as a cover for silencing critics and skeptics.
    2. The sharp decline of advertising revenues flowing to web publishers, both major outlets and small independent publishers like Of Two Minds.
    3. The majority of advert revenues now flow into the coffers of the quasi-monopolies Facebook and Google.
    4. Publishers are increasingly dependent on these quasi-monopolies for readers and visibility: any publisher who runs afoul of Facebook and Google and is sent to Digital Siberia effectively vanishes.

    This post was published at Charles Hugh Smith on FRIDAY, NOVEMBER 17, 2017.


  • Keep Calm & Carry On

    Authored by 720Global’s Michael Liebowitz via RealInvestmentAdvice.com,
    ‘Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption.’ – Mark Carney, Bank of England Governor.
    In 1939, the British Government, through the Ministry of Information, produced a series of morale-boosting posters which were hung in public places throughout the British Isles. Faced with German air raids and the imminent threat of invasion, the slogans were aimed at helping the British public brave the testing times that lay ahead. The most enduring of these slogans simply read:
    ‘Keep Calm and Carry On.’ Ironically, it was the only one of the series that was never actually displayed in public as it was reserved for a German invasion that never transpired. Today, the British Government may wish to summon a fresh propaganda strategy to address a new threat on the horizon, that of the eventuality of Brexit.
    The Kingdom Divided
    The United Kingdom (UK) is in the process of negotiating out of all policies that, since 1972, formally tied it to the economic dynamics of the broader western European community. Since the unthinkable Brexit vote passage in June 2016, the unthinkable has now become the undoable. The negotiations, policy discussions, logistical considerations and legal wrangling are becoming increasingly problematic as they affect every industry in the UK from trade and finance to hazardous materials, produce, air travel and even Formula 1 racing.

    This post was published at Zero Hedge on Nov 17, 2017.


  • How Corporate Zombies Are Threatening The Eurozone Economy

    The recovery in Eurozone growth has become part of the synchronised global growth narrative that most investors are relying on to deliver further gains in equities as we head into 2018. However, the ‘Zombification’ of a chunk of the Eurozone’s corporate sector is not only a major unaddressed structural problem, but it’s getting worse, especially in…you guessed it… Italy and Spain. According to the WSJ.
    The Bank for International Settlements, the Basel-based central bank for central banks, defines a zombie as any firm which is at least 10 years old, publicly traded and has interest expenses that exceed the company’s earnings before interest and taxes. Other organizations use different criteria. About 10% of the companies in six eurozone countries, including France, Germany, Italy and Spain are zombies, according to the central bank’s latest data. The percentage is up sharply from 5.5% in 2007. In Italy and Spain, the percentage of zombie companies has tripled since 2007, the Organization for Economic Cooperation and Development estimated in January. Italy’s zombies employed about 10% of all workers and gobbled up nearly 20% of all the capital invested in 2013, the latest year for which figures are available. The WSJ explains how the ECB’s negative interest rate policy and corporate bond buying are keeping a chunk of the corporate sector, especially in southern Europe on life support. In some cases, even the life support of low rates and debt restructuring is not preventing further deterioration in their metrics. These are the true ‘Zombie’ companies who will probably never come back from being ‘undead’, i.e. technically dead but still animate. Belatedly, there is some realisation of the risks.

    This post was published at Zero Hedge on Nov 17, 2017.


  • Business Cycles and Inflation – Part I

    Incrementum Advisory Board Meeting Q4 2017 – Special Guest Ben Hunt, Author and Editor of Epsilon Theory
    The quarterly meeting of the Incrementum Fund’s Advisory Board took place on October 10 and we had the great pleasure to be joined by special guest Ben Hunt this time, who is probably known to many of our readers as the main author and editor of Epsilon Theory. He is also chief risk officer at investment management firm Salient Partners. As always, a transcript of the discussion is available for download below.
    As usual, we will add a few words here to expand a little on the discussion. A wide range of issues relevant to the markets was debated at the conference call, but we want to focus on just one particular point here that we only briefly mentioned in the discussion. In fact, as you will see we are about to go off on quite a tangent (note: Part II will be posted shortly as well).
    Among the things Ben Hunt specializes in are the narratives accompanying economic and financial trends, and not to forget, economic and monetary policy, which inform the ‘Common Knowledge Game’ (in his introductory remarks, Ronald Stoeferle provides this brief definition: ‘It’s not what the crowd believes that’s important; it’s what the crowd believes that the crowd believes’). This reminded us of something George Soros first mentioned in a speech he delivered in the early 1990s:
    Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited.

    This post was published at Acting-Man on November 17, 2017.


  • Rob From The Middle Class Economics

    Much of our financial world functions as a ‘Rob from the Middle Class’ economy. The system robs from the middle class and poor via ‘money printing’ and inflation of the currency supply!
    The rich get richer and the poor get poorer.
    Little benefit comes from complaining about the process or fighting it. Understand the process, work around it, and use it constructively. Explaining Our Rob from the Middle Class Economy:
    Governments, individuals, pension funds and corporations are increasingly financialized and dependent upon debt, central bank interventions and currency devaluations. Wages are less relevant in a financialized economy because wages rise slowly while debt, currency in circulation, and paper financial assets increase rapidly.

    This post was published at Deviant Investor on November 17, 2017.


  • Reality On So-Called ‘Tax Cuts’

    Let’s cut the crap, shall we?
    Tax cuts have never resulted in any sort of material improvement in the living standard of the ordinary America — which I define as everyone other than the top 1% of earners.
    It has simply never happened.
    The last time the tax code was “reorganized” you got more buy-backs and stock options issued to executives.
    The same thing happened with all the other tax cut packages since.
    Further, when we had the so-called “Reagan Tax Reform” Tipper promised to cut spending in order to make them deficit neutral. He did not do so; no reduction in spending was ever delivered.
    This will be no different. In fact, unlike the Reagan-era game nobody is even claiming to intend to reduce spending.
    The chimera of “tax cuts” being “good for business” is nonsense as well. Almost no corporation actually pays the tax rate claimed, especially large firms. They all cheat — Apple has been caught in the “Paradise Papers” and others have as well. The claim of “repatriation” leading to some sort of boom in investment and wages is nonsense as well.

    This post was published at Market-Ticker on 2017-11-17.


  • Draghi Speech: Everything Is Awesome In Europe, No Signs Of Systemic Risks

    Mario Draghi gave the keynote speech at the Frankfurt European Banking Congress this morning in which he focused on the strong outlook for the Eurozone economy and how his monetary policy is playing a vital role. The speech was peppered with upbeat phrases and adjectives like solid, robust, unabated, endogenous propagation, resilient, remarkable and ongoing. According to Draghi.
    The euro area is in the midst of a solid economic expansion. GDP has risen for 18 straight quarters, with the latest data and surveys pointing to unabated growth momentum in the period ahead. From the ECB’s perspective, we have increasing confidence that the recovery is robust and that this momentum will continue going forward. Draghi is confident that future growth will be unabated for three reasons.
    Previous headwinds have dissipated; Drivers of growth are increasingly endogenous rather than exogenous; and The Eurozone economy is more resilient to new shocks. In terms of previous headwinds, Draghi notes that global growth and trade have recovered, while the eurozone has de-leveraged.

    This post was published at Zero Hedge on Nov 17, 2017.


  • Dollar Slammed, USDJPY Roiled On Trump Campaign Subpoena Report

    it has been a rocky session for the dollar which has dumped to a 4-week low, dragging with it USDJPY, the Nikkei and Treasury yields – and to a lesser extend US equity futures – all of which have slumped in the Japanese am session, following a WSJ report that Robert Mueller’s team “caught the Trump campaign by surprise” in mid-October by issuing a document subpoena to more than a dozen top officials.
    The campaign had previously been voluntarily complying with the special counsel’s requests for information, and had been sharing with Mr. Mueller’s team the documents it provided to congressional committees as part of their probes of Russian interference into the 2016 presidential election. The Trump campaign is providing documents in response to the subpoena on an ‘ongoing’ basis, the person said.
    If confirmed, this would be the first time Trump’s campaign has been ordered to turn over information to Mueller’s investigation, even if subpoena has not – for now – compelled any officials to testify before Mueller’s grand jury.

    This post was published at Zero Hedge on Nov 16, 2017.


  • Hayek on Good and Bad Unemployment Policies

    In 1944 Professor Hayek emphasised that sustainable employment de pends on an appropriate distribution of labour among the different lines of production. This distribution must change as circumstances change. Sustain able employment thus depends on appropriate changes in relative real wage-rates. If established producers – both unions and capitalists – prevent such relative changes from becoming effective, there follows an unnecessary rise in unemployment. Sustainable employment now depends on successfully tackling these established labour and capital monopolies. – Sudha R. Shenoy
    One of the obstacles to a successful employment policy is, paradoxically enough, that it is so comparatively easy quickly to reduce unemployment, or even almost to extinguish it, for the time being. There is always ready at hand a way of rapidly bringing large numbers of people back to the kind of employment they are used to, at no greater immediate cost than the printing and spending of a few extra millions. In countries with a disturbed monetary history this has long been known, but it has not made the remedy much more popular. In England the recent discovery of this drug has produced a somewhat intoxicating effect; and the present tendency to place exclusive reliance on its use is not without danger.
    Though monetary expansion can afford quick relief, it can produce a lasting cure only to a limited extent. Few people will deny that monetary policy can successfully counteract the deflationary spiral into which every minor decline of activity tends to degenerate. This does not mean, however, that it is desirable that we should normally strain the instrument of monetary expansion to create the maximum amount of employment which it can produce in the short run. The trouble with such a policy is that it would be almost certain to aggravate the more fundamental or structural causes of unemployment and leave us in the end in a position worse than that from which we started.

    This post was published at Ludwig von Mises Institute on 11/16/2017.


  • Is Peter Thiel Trying To Break Up Google? This $300,000 Political Contribution Seems To Imply He Is…

    Peter Thiel, the billionaire venture capitalist who backed President Trump (just before giving his presidency a “50% chance of ending in disaster“) and infamously helped Hulk Hogan bring down Gawker.com, has allegedly set his sights on a new target: Google. According to The Mercury News, suspicions about Thiel’s next pet project were raised after he recently contributed $300,000 to Missouri Attorney General Josh Hawley just before he launched an antitrust lawsuit against the alleged search monopoly.
    So far, high-profile Silicon Valley venture capitalist and PayPal co-founder Peter Thiel isn’t saying publicly why he gave hundreds of thousands of dollars to the campaign of a state attorney general who’s just launched an antitrust probe of Google. But it’s not the first time Thiel has handed cash to an AG who went after Google over monopoly concerns.
    Missouri Attorney General Josh Hawley announced Nov. 13 that his office was investigating Google to see if the Mountain View tech giant had violated the state’s antitrust and consumer-protection laws. The Missouri attorney general said he had issued an investigative subpoena to Google. He’s looking at the firm’s handling of users’ personal data, along with claims that it misappropriated content from rivals and pushed down competitors’ websites in search results.

    This post was published at Zero Hedge on Nov 16, 2017.


  • Wall Street Discovers the Brick-and-Mortar Meltdown

    Finally time to make some easy money by betting on the collapse of brick-and-mortar retail, years after it began? Here’s a grisly thought: As of today, there’s an ETF for that.
    In its launch announcement today, ProShares explained:
    Over 30 major retailers have declared bankruptcy over the past three years, nearly two-thirds of those in 2017, including Toys ‘R’ Us, RadioShack, and Payless. The pressure is expected to continue with some analysts predicting that online sales growth will outpace bricks and mortar retailers 3 to 1 by 2020.
    Retail is being profoundly disrupted by shoppers moving online, oversaturated markets and changing consumer behaviors.
    The brick-and-mortar retail pain splits two ways: Retailers that have failed to build a vibrant online sales channel and are dependent on their physical stores; and the landlords that lease stores to them.
    This EFT focuses on the first, the retailers. The ticker is evocatively named EMTY. As an inverse ETF, it’s supposed to rise in price when the Solactive-ProShares Bricks and Mortar Retail Store Index, which is composed of 56 ‘traditional’ brick-and-mortar retail stocks, declines.

    This post was published at Wolf Street by Wolf Richter ‘ Nov 16, 2017.


  • Silicon Valley Exec Has Created A New Religion That Will Worship A ‘Godhead’ Based On Artificial Intelligence

    I know that the headline sounds absolutely crazy, but this is actually a true story. A Silicon Valley executive named Anthony Levandowski has already filed paperwork with the IRS for the nonprofit corporation that is going to run this new religion. Officially, this new faith will be known as ‘Way Of The Future’, and you can visit the official website right here. Of course nutjobs are creating ‘new religions’ all the time, but in this case Levandowski is a very highly respected tech executive, and his new religion is even getting coverage from Wired magazine…
    The new religion of artificial intelligence is called Way of the Future. It represents an unlikely next act for the Silicon Valley robotics wunderkind at the center of a high-stakes legal battle between Uber and Waymo, Alphabet’s autonomous-vehicle company. Papers filed with the Internal Revenue Service in May name Levandowski as the leader (or ‘Dean’) of the new religion, as well as CEO of the nonprofit corporation formed to run it.
    So what will adherents of this new faith actually believe?
    To me, it sounds like a weird mix of atheism and radical transhumanism. The following comes from Way of the Future’s official website…
    We believe in science (the universe came into existence 13.7 billion years ago and if you can’t re-create/test something it doesn’t exist). There is no such thing as ‘supernatural’ powers. Extraordinary claims require extraordinary evidence.

    This post was published at The Economic Collapse Blog on November 16th, 2017.


  • Venezuela, PDVSA CDS Triggered: ISDA Says Credit Event Has Occured

    In a long overdue, and not exactly surprising decision, moments ago the ISDA Determination Committee decided, after punting for three days in a row, that a Failure to Pay Credit Event has occured with respect to both the Bolivarian Republic of Venezuela as well as Petroleos de Venezuela, S. A.
    Specifically, in today’s determination, in response to the question whether a “Failure to Pay Credit Event occurred with respect to Petroleos de Venezuela, S. A.?” ISDA said that the Determinations Committee voted 15 to 0 that a failure to pay credit event had occurred with respect to PDVSA.
    ISDA said the DC also voted 15 to 0 that date of credit event was Nov. 13 and that the potential failure to pay occurred on Oct. 12. ISDA also announced that the DC agreed to reconvene Nov. 20 to continue talks regarding the CDS auction, now that the Credit Default Swaps have been triggered.

    This post was published at Zero Hedge on Nov 16, 2017.


  • A WAVE OF CRIME IS ENGULFING SWEDEN: FRAUD, SEXUAL OFFENSES REACH RECORD LEVELS

    The annual Swedish Crime survey has shown an increase in five out of the six types of criminal activities against individuals. Crimes like fraud and sexual assault have reached record levels.
    The number of Swedes who were victims of crimes such as fraud and sexual offenses jumped to the highest level on record last year. According to Bloomberg, a survey by the Swedish National Council for Crime Prevention showed that 15.6 percent of people suffered one or more offenses against the person (defined in the survey as assault, threats, sexual offenses, robbery, fraud, or harassment) last year. That’s up from 13.3 percent in 2015 and the highest number recorded since the annual Swedish Crime Survey started in 2006.
    Of the six types offenses against a person, five of six rose to their highest level on record last year. The number of assault cases reached its second-highest level. The number of offenses against individuals ‘was at a relatively stable level 2005 to 2014, at 11.3 percent to 13.1 percent, but the last two years show an increase,’ the council said in the report published this week. The crimes ‘that have had the clearest development in the past few years are harassment, fraud, and sexual offenses,’ the agency said.

    This post was published at The Daily Sheeple on NOVEMBER 16, 2017.


  • Pay Down Your Mortgage

    The latest issue of Street Freak came out on Tuesday. Street Freak is a bit of an aggressive stock-picking newsletter, where we come up with a new idea every month. I try to keep the ideas a secret – if you want them, you have to subscribe! But I’m going to let you in on this month’s idea for free. Are you ready? Here it is:
    Pay down your mortgage.
    Yes, that’s a bit unorthodox for a financial newsletter. But people spend too much time thinking about the next get-rich-quick idea and not enough time thinking about their overall financial well-being. I’m willing to bet that in addition to having a successful portfolio, many investors reading this also have a lot of debt.
    Going into what might be a downturn, I’m uncomfortable having a lot of financial leverage. If you think the market is going to go down, then you should stop thinking about buying inverse VIX ETNs and start thinking about how to deleverage in a smart fashion.
    Better Risk-Reward Paying down your mortgage is part of that. It is part of an overall exercise in balance sheet repair, which includes –
    Building a cash position Paying off debt: Margin debt Credit card debt Car loans Mortgage debt

    This post was published at Mauldin Economics on NOVEMBER 16, 2017.


  • Options Traders Furiously BFTD!

    Via Dana Lyons’ Tumblr,
    Despite the down day yesterday, one indicator from the equity options market recorded a massive spike in bullishness.
    We like to track metrics from the various stock options exchanges as a measure of stock market sentiment. Generally, when too many calls are being bought versus puts, it is a warning of overheated bullishness, and when put volume becomes extreme relative to calls, it can be a sign of excessive fear. One particular indicator we used to track closely was the International Securities Exchange’s Call/Put Ratio on equity options (ISEE). For years, the ISEE was particularly helpful in signaling bullish or bearish extremes. We’re not sure what changed, however, in recent years the indicator has been of little to no value in that regard (in our assessment). We do still continue to monitor it, though, just in case it gives readings that raise our antennae. Yesterday’s reading did.
    In the past, ISEE readings above 200, i.e., 2 calls bought per every put, have arguably been considered excessively bullish. There have not been nearly as many of these readings in recent years, so yesterday’s number was alarming to say the least. At a reading of 334, it was the highest ISEE recorded in 5 and a half years – and just the 10th ever above 300 since its 2006 inception.

    This post was published at Zero Hedge on Nov 16, 2017.