The US Suffered 15 Billion-Dollar-Plus Weather Disasters In 2017

In the year that President Donald Trump pulled out of the Paris accord and downplayed global warming as a security threat, the US received a harsh reminder of the perils of the rise in the planet’s temperature: a destructive rash of hurricanes, fires and floods.
According to Bloomberg, the US recorded 15 weather events costing $1 billion or more each through early October, one short of the record 16 in 2011, according to the federal government’s National Centers for Environmental Information in Asheville, North Carolina. And that tally doesn’t include the recent wildfires in southern California, one of which grew to be the largest fire in state history, according to Bloomberg.
Among the most devastating events were hurricanes Harvey, Irma and Maria and wildfires in northern California. The killer storms caused economic losses of more than $210 billion in the U. S. and across the Caribbean, and about $100 billion in insured damages, according to Mark Bove, a senior research scientist with Munich Reinsurance America in Princeton, New Jersey.

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

Jihadist Group Blows Up Oil Pipeline In Iran, In Midst Of Protests

In the year that President Donald Trump pulled out of the Paris accord and downplayed global warming as a security threat, the US received a harsh reminder of the perils of the rise in the planet’s temperature: a destructive rash of hurricanes, fires and floods.
According to Bloomberg, the US recorded 15 weather events costing $1 billion or more each through early October, one short of the record 16 in 2011, according to the federal government’s National Centers for Environmental Information in Asheville, North Carolina. And that tally doesn’t include the recent wildfires in southern California, one of which grew to be the largest fire in state history, according to Bloomberg.
Among the most devastating events were hurricanes Harvey, Irma and Maria and wildfires in northern California. The killer storms caused economic losses of more than $210 billion in the U. S. and across the Caribbean, and about $100 billion in insured damages, according to Mark Bove, a senior research scientist with Munich Reinsurance America in Princeton, New Jersey.

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

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 –.

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 –.

China Beige Book Warns Economic Slowdown Has Begun

When it comes to the global economy, few things matter as much as China, the trajectory of its economy and especially the pace and impulse of its credit creation, which is ironic because virtually all data coming out of China is fabricated and manipulated, and thoroughly untrustworthy, either on purpose or “by accident.”
The latest example of the former was highlighted over the weekend, when we discussed that a nationwide Chinese audit found some local governments inflated revenue levels and raised debt illegally, once again making a mockery of China’s credibility on the global stage. As Bloomberg reported ten cities, counties or districts in the Yunnan, Hunan and Jilin provinces, as well as the southwestern city of Chongqing, inflated fiscal revenues by 1.55 billion yuan, the National Audit Office said in a statement on its website dated Dec. 8.
An even more blatant example of the former was highlighted in October ahead of China’s Communist Party Congress, when the local securities watchdog literally “advised” some loss-making companies to avoid publishing quarterly results ahead of the Congress as authorities sought to ensure stock-market stability during the critical gathering of China’s political elite. As a result, at least 17 Shenzhen-listed companies announced delays to their earnings reports from Oct. 20 to Oct. 24, up from three during the same period last year.

This post was published at Zero Hedge on Wed, 12/27/2017.

The Rich Got Richer In 2017… One Trillion Dollars Richer

2017 has been a banner year for the world’s richest individuals.
Pumped by a tidal wave of central-bank driven liquidity and corporate buybacks, equity indexes around the world climbed to all-time highs this year – a phenomenon that has disproportionately benefited the world’s wealthiest, particularly the 500 individuals included in Bloomberg’s billionaires index.
By the end of trading Tuesday, Dec. 26, the 500 billionaires controlled an aggregate $5.3 trillion, a $1.1 trillion increase from their holdings on Dec. 27 2016.
Unsurprisingly, the biggest beneficiary of this Federal Reserve inspired rally was Amazon.com Inc. founder Jeff Bezos, who added a staggering $34.2 billion to his net worth in 2017 as Amazon shares soared above $1,000.

This post was published at Zero Hedge on Dec 27, 2017.

In An Unexpected Outcome, Trump Tax Reform Blew Up The Treasury Market

Over the past week we have shown on several occasions that there once again appears to be a sharp, sudden dollar-funding liquidity strain in global markets, manifesting itself in a dramatic widening in FX basis swaps, which – in this particular case – has flowed through in the forward discount for USDJPY spiking from around 0.04 yen to around 0.23 yen overnight. As Bloomberg speculated, this discount for buying yen at future dates widened sharply as non-U. S. banks, which typically buy dollars now with sell-back contracts at a future date, scrambled to procure greenbacks for the year-end.
However, as Deutsche Bank’s Masao Muraki explains, this particular dollar funding shortage is more than just the traditional year-end window dressing or some secret bank funding panic.
Instead, the DB strategist observes that the USD funding costs for Japanese insurers and banks to invest in US Treasuries – which have surged reaching a post-financial-crisis high of 2.35% on 15 Dec – are determined by three things, namely (1) the difference in US and Japanese risk-free rates (OIS), (2) the difference in US and Japanese interbank risk premiums (Libor-OIS), and (3) basis swaps, which illustrate the imbalance in currency-hedged US and Japanese investments.

This post was published at Zero Hedge on Dec 27, 2017.

THE U.S. SHALE OIL INDUSTRY: Swindling & Stealing Energy To Stay Alive

While the U. S. Shale Energy Industry continues to borrow money to produce uneconomical oil and gas, there is another important phenomenon that is not understood by the analyst community. The critical factor overlooked by the media is the fact that the U. S. shale industry is swindling and stealing energy from other areas to stay alive. Let me explain.
First, let’s take a look at some interesting graphs done by the Bloomberg Gadfly. The first chart below shows how the U. S. shale industry continues to burn through investor cash regardless of $100 or $50 oil prices:

This post was published at SRSrocco Report on DECEMBER 26, 2017.

Asian Stocks Slide On iPhone X Demand Fears; US Futures Flat In Thin Holiday Trading

For the second day in a row, most Asian markets – at least the ones that are open – were dragged lower by tech stocks and Apple suppliers, with the MSCI Asia Pacific Index down 0.2% led by Samsung Electronics and Taiwan Semiconductor Manufacturing in response to the previously noted report that Apple will slash Q1 sales forecasts for iPhone X sales by 40% from 50 million to 30 million. Most Asian equity benchmarks fell except those in China. European stocks were mixed in a quiet session while U. S. equity futures are little changed as markets reopen after the Christmas holiday.
Away from Asia, stocks remained closed across the large European markets, as well as in parts of Asia including Australia, Hong Kong, Indonesia, the Philippines and New Zealand. Japanese benchmarks slipped from the highest levels since the early 1990s, helping to pull the MSCI Asia Pacific Index down, while shares in Dubai, Qatar and Russia were among the big losers in emerging markets. S&P 500 futures were flat as those for the Dow Jones slipped. The euro edged lower with the pound – although there were no reverberations from Monday’s odd EURUSD flash crash which was only observed on Bloomberg feeds, while Reuters ignored it even if the FT did note it…

This post was published at Zero Hedge on Dec 26, 2017.

Kushner’s Records At Deutsche Bank Subpoenaed As Mueller Avoids Trump

As it turns out, President Trump’s legal team was telling the truth when it said that Special Counsel Robert Mueller hadn’t subpoenaed financial records related to the president’s business activities from German lender Deutsche Bank, contrary to Bloomberg reporting.
On Friday, the New York Times reported that Deutsche Bank had received a subpoena for records on accounts linked to the Kushner Companies, the family real-estate empire of Trump son-in-law and senior adviser Jared Kushner. This contradicts reports by both German and US media organizations dating back to July which insinuated that Mueller had been digging into Trump’s multi-decade career in real estate. Even after his infamous bankruptcies in the 1990s, Trump managed to maintain a functioning lending relationship with Deutsche, which has lent him and his businesses hundreds of millions of dollars over the years.

This post was published at Zero Hedge on Dec 22, 2017.

We Give Up! Part 2: Consumers And Corporations Join The Debt Orgy

Late cycle behavior is everywhere these days. Governments have stopped worrying about deficits, and now the rest of us are apparently joining the orgy.
Corporations, for instance, are buying each other out – mostly with borrowed money – at a record pace:
December’s $361 Billion Deal Haul Is the Busiest in a Decade
(Bloomberg) – Just as most people are packing up for Christmas, dealmakers across the world are rushing to finish up a slew of transactions in industries ranging from consumer to telecom and health care to gambling. Companies have announced about $361 billion of mergers and acquisitions this month, making it the busiest December in at least 12 years, according to data compiled by Bloomberg. On Friday, the last work day before bankers and executives break for the holiday, GVC Holdings Plc of the U. K. agreed to buy bookmaker Ladbrokes Coral Group Plc for as much as 4 billion pounds ($5.4 billion), Deutsche Telekom AG said it will buy Liberty Global Plc’s Austrian unit and Roche Holding AG announced the $1.7 billion acquisition of U. S. biotech Ignyta Inc.

This post was published at DollarCollapse on DECEMBER 22, 2017.

These PE Firms Are About To Get Crushed By Their Subprime Auto Bets

In the aftermath of the ‘great recession,’ private equity firms placed massive bets on subprime auto finance companies with the typical “thesis” going something like this: “well, people have to get to work don’t they?”…genius, if we understand it correctly.
Of course, the “thesis” seemed to be confirmed when auto securitizations performed relatively well throughout the financial crisis, amid a sea of mortgage bonds getting wiped out, and private equity titans were off to the races with wall street titans from Perella Weinberg to Blackstone and KKR scooping stakes in small niche lenders.
Unfortunately, as Bloomberg points out today, the $3 billion bet on subprime auto lenders hasn’t played out precisely to plan as the “well, people have to get to work” thesis has proved to be somewhat less than full proof.
A Perella Weinberg Partners fund has been sitting on an IPO of Flagship Credit Acceptance for two years as bad loan write-offs push it into the red. Blackstone Group LP has struggled to make Exeter Finance profitable, despite sinking almost a half-billion dollars into the lender since 2011 and shaking up the C-suite multiple times. And Wall Street bankers in private say others would love to cash out too, but there’s currently no market for such exits.
Since the turn of the decade, buyout firms, hedge funds and other private investors have staked at least $3 billion on non-bank auto lenders, according to Colonnade. Among PE firms, everyone from Blackstone and KKR & Co. to Lee Equity Partners, Altamont Capital and CIVC Partners waded in.

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

Why A Scathing Wall Street Is Furious At The Trump Tax Plan

Back in October 2016, the “millionaire, billionaire, private jet owners” of America’s elitist, liberal mega-cities (A. K. A. New York and San Francisco) celebrated the tax hikes that a Hillary Clinton presidency would have undoubtedly jammed down their throats proclaiming them to be a ‘patriotic duty’. Unfortunately, now that Trump has given them exactly what they apparently wanted…an amazing opportunity to ‘spread their wealth around”…they’re suddenly feeling a lot less patriotic.
Of course, as we’ve noted numerous times, while most people across the country and across the income spectrum will benefit from the Republican tax reform package, the folks who stand to lose are those living in high-tax states with expensive real estate as their SALT, mortgage interest and property tax deductions will suddenly be capped. And, as Bloomberg points out today, that has a lot of Wall Street Traders in New York drowning their sorrows in expensive vodka and considering a move to Florida.

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

Is The GOP Tax Cut Finally Priced In? Here’s What Wall Street Thinks

Having passed the Senate, and – moments ago, for the second time – the House, the Republican Tax Cuts and Jobs Act, aka the Trump Tax Cuts is officially a done deal, just waiting for the President’s signature, at which point the longest “rumor” of 2017 will become the news. But does that mean that after “pricing it in” in some part virtually every day of the past year, the market can now sell the news? Or, as exasperated traders would put it, “is it finally fully priced in?”
Indeed, analysts, economics and investors are starting to look beyond the soon-to-be-completed tax overhaul, and judging by today’s reaction, the answer may well be yes as stocks, including tax-sensitive banks, are little-changed amid expectations tax cuts may not boost growth that much, and as likely benefits may already be priced-in to stock prices.
In fact, as Bloomberg adds, the S&P 500 and KBW bank indexes are both little changed, with top bank gainer PNC paring gains of as much as 1.1%; other rising banks include Huntington, Wells Fargo, Northern Trust, and BofA

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

ECB Trapped: Steinhoff Liquidity Collapses As Lenders Pull Credit Lines

When yesterday we discussed the latest troubles facing embattled retailer Steinhoff, whose bonds are owned by none other than the ECB, we said that while the company’s bonds mature in 2025, its bankruptcy is at most months away. In retrospect, and in light of the latest news, that may have been optimistic, because it now appears that a bankruptcy may be imminent and is at most just weeks away. According to Bloomberg, Steinhoff – which is facing an accounting scandal that led to the recent departure of its CEO and destroyed most of the company’s value – said lenders are starting to cut off support.
The reason why Steinhoff is suddenly facing not only a solvency but liquidity crisis is that the company which owns Conforama in France, Mattress Firm in the U. S. and Poundland in the U. K. isn’t yet able to assess the magnitude of financial irregularities disclosed two weeks ago, it said in a presentation to lenders in London on Tuesday (presentation below). The South African company also said it didn’t know when it would be able to publish audited results for 2017 and 2016, nor whether additional years will need to be restated.
Furthermore, Steinhoff also revealed that it didn’t have ‘detailed visibility’ of the cash flows of individual operating companies. The units rely on the company for working capital and ‘the forecast position for each operating company is evolving daily,’ it said. PricewaterhouseCoopers has been hired to investigate the accounts, while AlixPartners LLP is working on an analysis of the cash flow.
In short, the company is flying blind with no budgeting and no corporate overnight.

This post was published at Zero Hedge on Dec 19, 2017.

A Nightmare Before Christmas: China Set to Launch Yuan-Denominated Oil Contracts

China wants to dethrone the dollar and it could take a step in that direction before the end of the year.
According to numerous reports, China is prepared to launch a yuan-denominated oil futures contract before Christmas. Last week, the Shanghai International Energy Exchange successfully completed a fifth round of yuan-backed oil futures testing. According to a report by RT, the organization has met all the listing requirements and is set for an official launch.
Chinese trader Yuan Quwei told Bloomberg the holiday season would be the perfect time to get oil trading in yuan off the ground.
An official launch during Christmas would be appropriate. The Western market would be quiet and allow the Shanghai exchange as well as Chinese investors to adjust in the early days.’
This could be a nightmare before Christmas for the petrodollar.

This post was published at Schiffgold on DECEMBER 19, 2017.

Global Stocks Rise To Record Highs As Tax Reform Is “Priced In” All Over Again

Yesterday we joked that with the US House of Representatives set to vote for the GOP tax bill on Tuesday, markets would “price in” the same tax legislation they have been pricing in every day for the past year, all over again…
Get ready for US markets to price in tax reform all over again in just a few short hours
— zerohedge (@zerohedge) December 19, 2017

… and sure enough, that’s precisely the narrative being spun this morning to explain why US futures and global stocks are once again, drumroll, higher. To wit, from Bloomberg: “European stocks struggled to build on Monday’s jump as the common currency advanced, while U. S. equity futures edged higher as the prospects for tax cuts in the world’s largest economy continued to buoy sentiment.” Of course, US equity futures have been doing that precisely that every single day for weeks and months on end, but now that Congressional passage finally appears imminent, it may finally be time to stop buying the endless rumor and sell the news. As a reminder, on Monday Republican Senator Susan Collins of Maine said she’ll back the GOP tax bill, a move that all but clinches the votes necessary to pass the legislation. Both the House and Senate plan to vote by Wednesday on final legislation before sending it to the president.
As markets grind toward the end of a stellar year for global stocks, the biggest focus for investors still chasing gains is the progress of U. S. tax reform, which is inching toward a denouement. The House is scheduled to vote Tuesday on the tax bill following a floor debate that morning. It then goes to the Senate, where Republican leaders intend to bring it up as soon as they get it. ‘It will help sustain a very strong year of earnings growth for U. S. and for global equities,’ said Timothy Graf, State Street Bank & Trust head of macro strategy EMEA., speaking on Bloomberg TV. ‘It will keep sentiment robust.’

This post was published at Zero Hedge on Dec 19, 2017.

Wall Street Bonuses Set To Shrink Again This Year

Bankers were thrilled last year when Wall Street bonuses climbed for the first time in years after falling more than 15% in 2015. But unfortunately, even with equity markets around the world at record highs in 2017, volatility across asset class plunged this year – with the Dow seeing its least volatile year on record by some measures – has plunged, decimating bonus pools across asset classes, Bloomberg said.
As bank earnings have portended, a drop in trading revenue across asset classes over the past year will likely lead to cutbacks in the bonus pool for equity and fixed income traders.

This post was published at Zero Hedge on Dec 18, 2017.