• 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.


  • New “Deep Learning” Hacking Technique Is 99.5% Effective Cracking Into Android Smart Phones

    Researchers at Nanyang Technological University in Singapore have developed a “deep-learning” for cracking into smart phones running the Android OS which has a “99.5 percent” effective rate after only three attempts, according to a new study reported by the Daily Mail.
    The method uses an algorithm to reveal a person’s passcode using the phone’s six built-in sensors, which analyzes the unique tilt of the phone and how much light is being blocked while a person enters their four-digit pin.
    Co-author of the study Dr Shivam Bhasin from Nanyang Technological University, Singapore (NTU Singapore) said: ‘When you hold your phone and key in the PIN, the way the phone moves when you press 1, 5, or 9, is very different.
    ‘Likewise, pressing 1 with your right thumb will block more light than if you pressed 9.’ –Daily Mail
    Researchers developed a custom Android application which analyzes data from a phone’s accelerometer, gyroscope, magnetometer, proximity sensor, barometer and ambient light sensor – in a method which can be used to guess all 10,000 possible combinations of four-digit PINs.

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


  • Global Stocks Set To Close 2017 At All Time Highs, Best Year For The Euro Since 2003

    With just a few hours left until the close of the last US trading session of 2017, and most of Asia already in the books, S&P futures are trading just shy of a new all time high as the dollar continued its decline ahead of the New Year holidays.
    Indeed, markets were set to end 2017 in a party mood on Friday after a year in which a concerted pick-up in global growth boosted corporate profits and commodity prices, while benign inflation kept central banks from snatching away the monetary punch bowl. As a result, the MSCI world equity index rose another 0.15% as six straight weeks and now 13 straight months of gains left it at yet another all time high.
    In total, world stocks haven’t had a down month in 2017, with the index rising 22% in the year adding almost $9 trillion in market cap for the year.
    Putting the year in context, emerging markets led the charge with gains of 34%. Hong Kong surged 36%, South Korea was up 22% and India and Poland both rose 27% in local currency terms. Japan’s Nikkei and the S&P 500 are both ahead by almost 20%, while the Dow has risen by a quarter. In Europe, the German DAX gained nearly 14% though the UK FTSE lagged a little with a rise of 7 percent.
    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.’

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


  • Hong Kong Ship Seized After Transferring Oil To North Korea

    Just days after we showed satellite images which indicated that Chinese ships were trading oil with North Korean ships in a blatant violation of UN Security Council sanctions, South Korea said Friday that it was holding a Hong Kong flagged ship suspected of doing just that.
    The Lighthouse Winmore is believed to have “secretly transferred” about 600 tons of refined petroleum products to the North Korean ship, the Sam Jong 2, in international waters in the East China Sea on Oct. 19, according to Bloomberg and the Associated Press.

    The Hong Kong vessel had previously visited Yeosu port on Oct. 11 to load up on Japanese oil products and departed the port while claiming its destination was Taiwan. Instead, it transferred the oil to the Sam Jong 2 and three other non-North Korean vessels in international waters

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


  • Daily Trades for December 29, 2017

    The selection algo generated 9 potential longs and 4 shorts on Thursday. I have chosen 2 longs and no shorts to be added the list. After trades closed out, there will now be 16 open longs and 5 open shorts.
    Here is today’s updated list including new buys, sells, short sales, cover shorts, and updated stops, as well as performance metrics for this month.
    Market Update Pro subscribers click here to download the report.

    This post was published at Wall Street Examiner on December 29, 2017.


  • MIFiD II Delays…

    Talk amongst many traders is that they are so unsure how the new rules and regulations surrounding the implementation of MIFiD II (Markets in Financial Instruments Directive) are to be imposed, that some even said they were keen to extend their holidays until this mess is sorted out. In other words, until they hear that regulators will grant firms a six-month delay for part of the changes about to be implemented for both the company and country, many just do not even know how to conduct business anymore.
    The most critical problem surrounding this nightmare is the fact that every trade (with a European Counterpart) will require a LEI (Legal Entity Identifier). This is not such a critical issue for Wall Street Banks since they have already won a 30-month grace period after the SEC requested time to negotiate terms with the EU. Goldman Sachs has installed another of its board members as the top negotiator inside the SEC – Alan Cohen. Goldman Sachs has now three strategic people in the Trump Administration to steer the legislation in their favor both in the USA with restoring Glass Steagall to reduce their competition (Gary Cohen & Steven Mnuchin) and they have now added Alan Cohen, who was their Head of Global Compliance.

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


  • Despite Being “Caught Red Handed”, China Denies Secretly Selling Oil To North Korea

    An official statement from Chinese officials tonight smacks of Obi Wan Kenobi – ‘these are not the secret oil trades you are looking for’.

    After being ‘caught RED HANDED’…according to South Korea’s Chosun Ilbo, U. S. recon satellites have photographed around 30 illegal transactions involving Chinese vessels selling oil to North Korea on the West Sea in October. The images allegedly showed large Chinese and North Korean ships transacting in oil in a part of the West Sea closer to China than South Korea. The satellite pictures even showed the names of the ships.

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • The EU Bad Loan Crisis to Get Much Worse – The Solution = Financial Pandemic

    The bad loan (‘non-performing loan’ (NPL)) crisis in Europe is well known and many have been calling for this issue to be addressed. In Italy, the bad loan crisis has reached 21% of GDP. While NPLs dropped to 4.8% of all loans in the EU as a whole during the first quarter of 2017, they remained well above 40% in Greece and Cyprus, at 18.5% in Portugal, and 14.8% in Italy according to the European Banking Authority.
    Now comes the bureaucrats with zero experience to save the day – or is that to create a financial pandemic in the EU? The EU Commission (EUC) along with the European Central Bank (ECB), want to ensure that banks promptly sell real estate, stocks, bonds and other assets that serve to collateralize loans according to their Mid-term Review of the Capital Markets Union Action Plan. Member States are required to adopt laws that facilitate the central directive. At this time, any bank cannot just sell a property that secures a loan. The problem is, all loans, whether secured or not, are valued the same.

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


  • Mohamed El-Erian: “The World Is Nearing A Tipping Point”

    Mohamed El-Erian, chief economic adviser at Allianz, expects a fundamental shift in the global economy that will either result in a powerful economic boom or in renewed tremors at the financial markets.
    In the world finance, there are few people as highly respected as Mohamed El-Erian. Not only is the chief economic adviser at Allianz well versed when it comes to navigating the global financial markets, he’s also brilliant at explaining complex developments in a comprehensible way. The most prominent example is the concept of the New Normal which he and his colleagues developed in early 2009 when he was at the helm of Pimco together with Bill Gross. Today, this concept of a new economic reality, defined by slow growth and super low interest rates, is widely accepted. However, Mr. El-Erian predicts that the New Normal won’t continue much longer. He sees significant changes ahead that will either lead to a powerful economic boom or to a recession with renewed tremors in the financial markets.

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • The Ghosts of Crashes Past, Recent, and Future as they Appeared on this Blog

    It’s not boasting to state plainly that you were right if you are equally direct about your errors. I have until now rightly predicted all of the stock market’s major downturns, starting with the one in 2007 that gave us the Great Recession. The first of those led to the writing of this blog. The next two were predicted and recorded as they happened on this blog, and the latest, whether it proves right or wrong, waits shortly in the future. Each time I made such a prediction here, I bet my blog on it. The blog is still here, but will it continue to be?
    I am using the term ‘crash’ loosely in this article because one time I clearly stated the impending plunge would not technically amount to a crash (a sudden drop of more than 20%) but it would be much more significant than just a correction (a decline of 10%) because of how drastically it would change the nature of the market. I’ll show here how it did. The next time, I predicted a ‘crash’ that did not quite turn out as significant as I claimed it would be, but it was an historic event in that the Dow fell further in January than it had ever done in its entire history, and it did so exactly the timing (to the day) that I laid out in advance.
    I let myself off easy on that one as being both a hit and a miss because, after all, getting timing of a major plunge right to the exact day as well as the counter-intuitive manner by which it would start on that day is not something one typically sees.
    Now we are about to see whether I will survive the prediction I made many months ago for January 2018.
    The ghost of crashes past
    On September 3rd, 2014, I wrote an article titled ‘Will There be a 2014 Stock Market Crash?’ In that article I predicted something big and wicked appeared to be coming right around the corner:

    This post was published at GoldSeek on 28 December 2017.


  • Citi Fined $11.5 Million For Telling Retail Investors To “Buy” Stocks When It Meant “Sell”

    In a fine that is on one hand bizarre, and on the other vindication for all those who claim that nearly two decades after the Henry Blodget fiasco banks still tell their customers to do one thing (i.e. “buy”) while meaning the opposite, Citigroup was ordered to pay at least $11.5 million in fines and restitution to settle charges it displayed the wrong research ratings on more than 1,800 stocks, “causing many customers to own shares they never would have bought” a market regulator ordered on Thursday.
    FINRA fined Citigroup $5.5 million and ordered it to pay at least $6 million to retail customers over errors that occurred between February 2011 and December 2015, and involved more than 38% of the equity securities that the New York-based bank covered. From the filing:
    FINRA found that from February 2011 through December 2015, Citigroup Global Markets Inc displayed to its brokers, retail customers and supervisors inaccurate research ratings for more than 1,800 equity securities -more than 38 percent of those covered by the firm. Because of errors in the electronic feed of ratings data that the firm provided to its clearing firm, the firm either displayed the wrong rating for some covered securities (e.g., ‘buy’ instead of ‘sell’), displayed ratings for other securities that CGMI did not cover or failed to display ratings for securities that CGMI, in fact, rated. The firm’s actual research reports, which were available to brokers, and the research ratings appearing in those reports, were not affected by these errors.

    This post was published at Zero Hedge on 12/28/2017 –.


  • “Too Much Tech” – The Growing Peril Of Passive Investing

    “Too much of a good thing…” – That’s the message that many passive investors are unknowingly dealing with as they approach the year-end.
    In 2012, FANG Stocks (Facebook, Amazon, Netflix, and Google) accounted for less than 3% of the market cap of the S&P 500.
    At the end of 2017, those four stocks now account for over 8% of the S&P’s market cap…
    And, as WSJ reports, this is not limited to a small handful of stocks, it is worldwide – investors who loaded up on U. S. and Asian stock-index funds might be surprised to learn just what they own now: technology stocks – a lot of them.
    Led by Apple Inc., Facebook Inc. and their peers, the weighing of technology stocks in the S&P 500 index has climbed to 23.8% as of Dec. 26, from 20.8% at the end of last year, according to S&P Dow Jones Indices.

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • Renewable Electricity Generation Surpasses Nuclear For First Time Since 1984

    U. S. monthly electricity generation from utility-scale renewable sources exceeded nuclear generation for the first time since July 1984, in March, and again in April, the EIA reports.
    This outcome reflects both seasonal and trend growth in renewable generation, as well as maintenance and refueling schedules for nuclear plants, which tend to undergo maintenance during spring and fall months, when overall electricity demand is lower than in summer or winter.
    Record generation from both wind and solar as well as recent increases in hydroelectric power as a result of high precipitation across much of the West over the past winter contributed to the overall rise in renewable electricity generation this spring, while nuclear generation in April was at its lowest monthly level since April 2014. However, EIA’s latest Short-Term Energy Outlook (STEO) projects that monthly nuclear electricity generation will surpass renewables again during the summer months of 2017 and that nuclear will generate more electricity than renewables for all of 2017.

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • Natural Time Cycles: A Dow Forecast For 2018-2020

    ‘TIME is the most important factor in determining market movements and by studying the past records of averages or individual stocks you will be able to prove for yourself that history does repeat and that by knowing the past you can tell the future.’ W. D. Gann, 1939
    The analysis and forecasts presented in this article are based on the analytical framework of W. D. Gann. Gann is an investing legend, labeled as genius by many financial historians. He reportedly accumulated $50 million in profits during his trading career. His superior track record and those of others using his methods argues that, regardless of our opinion of his methodology, we should heed the advice of his work.
    A more detailed explanation of his analytical framework is included in the last section of this article.

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • As The Yield Curve Crashes To 10 Year Lows, Trader Shows “How To Put On A Steepener”

    Yesterday saw the US Treasury yield curve collapse to a fresh cycle low – the flattest curve since Oct 2007 – erasing the hoped-for trend change shift from last week…
    And this is occurring as net positioning in the long-end has never been more bullish.
    Between that and the effect of Trump’s tax reform plan, The Macro Tourist’s Kevin Muir lays out his thesis for getting long a steepening trade into the new year and details how to do it…
    Over the Christmas break, there has been a lot of chatter about this great chart from 13d Research that has been labeled, ‘the most important chart in the world.’

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • WTI Algos Confused As Crude Production Drops For First Time In 2 Months

    WTI/RBOB had roundtripped off initial API gains into the DOE data this morning which confirmed the sixth weekly crude draw, gasoline build in a row. Production dropped for the first time in 2 months, but WTI limped lower after the data.
    Bloomberg Intelligence Energy Analyst Vince Piazza notes that attention turns to 2018 after a relatively quiet holiday season. Concerns for production growth with stout hedging likely places a ceiling on WTI in the $60 range. Domestic storage remains elevated heading into a benign 1Q, even with the tailwind of crude exports.
    It’s difficult to appreciate how it gets much better for global crude with the OPEC/Russia accord in the rear view and North Sea and Canadian pipeline issues largely transitory curtailments. Regime intrigue in Saudi Arabia and broader geopolitical concerns in the region aid uncertainty and boost risk premiums, but the WTI benchmark is likely to be range bound next year on higher domestic upstream production.

    This post was published at Zero Hedge on 12/28/2017 –.