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  • Four Charts Prove The ‘Economic Recovery’ Is Just A Fed-Induced Entitlement Program For The Wealthy

    “Economic recovery” in America no longer means what it used to mean. Historically “economic recovery” was largely characterized by job and wage growth, distributed across the income spectrum, and a rebound in GDP growth to north of ~3%-5%. These days, the notion of “economic recovery” has been hijacked by the Fed and bastardized in such a way that they celebrate “asset bubbles” rather than real growth in economic output.
    Presented as ‘exhibit A’, here is the Fed’s modern-day definition of “economic recovery” (chart per Bloomberg):

    This post was published at Zero Hedge on Dec 15, 2017.


  • Global Dollar Liquidity Shortage Explodes – Worse Than European Crisis

    Very quietly, in the last few days, cross currency basis swaps (CCBS) related to the dollar have reversed their rise and started collapsing deeper into negative territory… again. This might not be of much interest to buyers of global equity markets at this point, but it is signalling ominous signs of growing funding stress in the financial ‘plumbing’.

    As Bloomberg notes ‘cross-currency basis swaps, which money managers and corporate treasurers outside the U. S. can use to borrow in dollars, remain close to the widest levels since January even after quarter-end, when such financing strains typically dissipate. The market was a key indicator of stress during the financial crisis, and while it’s nowhere near the alarming levels of that era, it’s still garnering the attention of analysts.’

    This post was published at Zero Hedge on Dec 15, 2017.


  • Bond Markets Really Are Signalling A Slowdown

    Authored by Lakshman Achuthan and Anirvan Banerji via Bloomberg.com,
    Analysts shouldn’t dismiss the yield curve’s message just because inflation expectations have been declining in recent years. When it comes to the economic outlook, the bond market is smarter than the stock market. That Wall Street adage appears to be on the money from a cyclical vantage point, with key indicators in the fixed-income markets independently corroborating slowdown signals from the Economic Cycle Research Institute’s leading indexes.
    The yield curve is widely considered to be among the most prescient indicators. That’s why its flattening this year has been troublesome for an otherwise optimistic consensus to explain away.
    This hasn’t stopped optimistic analysts from dismissing the yield curve’s message on the grounds that inflation expectations have been declining in recent years, or that foreign central banks like the European Central Bank and the Bank of Japan continue to artificially suppress their bond yields, pulling down U. S. yields. We’re reminded of Sir John Templeton’s warning that ‘this time it’s different’ are the “four most costly words in the annals of investing” — but that’s effectively what it means to simply ignore the slowdown signals emanating from the fixed-income markets.
    Of course, there’s no Holy Grail in the world of forecasting, which is why we look at a wide array of leading indexes that each includes many inputs. From that vantage point, the yield curve flattening actually makes a lot of sense.

    This post was published at Zero Hedge on Dec 15, 2017.


  • “Suspense Mounts” – Timing Of Tax-Reform Votes In Limbo As More Senators Get Cold Feet

    With Bloomberg writing this morning that “Mystery, Suspense Mount” two days after President Donald Trump told the American public that Congress was ‘just days away’ on tax reform, two more senators – including one-time Trump rival – Marco Rubio appear to be getting cold feet – much to the market’s chagrin. Yesterday afternoon, stocks dropped and the VIX jumped above 10 as Rubio and Utah’s Mike Lee said they had reservations about the draft bill being put together by the conference committee.
    Worries about the bill’s impact on the deficit have persisted, and if anything, they only intensified after the Treasury Department released a laughable one-page report about the tax plan’s impact on GDP and revenue that was widely ridiculed.
    As the fast-moving Republican tax package has evolved, it has tilted increasingly toward benefiting businesses and wealthy taxpayers, a trend that aides were saying privately is a growing concern for some lawmakers. Provisions for offsetting the revenue costs of last-minute changes also were becoming worrisomely unclear, they said.

    This post was published at Zero Hedge on Dec 15, 2017.


  • “A Violent Downside Break”: Why One Trader Thinks The Christmas “Pain Trade” Will Be Especially Painful

    Before you shut down that terminal for the year, hoping that the year is – mercifully – finally over, you may want to consider that according to former Lehman trader and current Bloomberg macro commentator Mark Cudmore, the Christmas pain trade is about to be unveiled, and it will be especially painful for all those short Treasurys. As Cudmore warns, with ten-years stuck in a 2.3%-2.43% range for the past seven weeks, “the arguments are adding up for a violent downside break during the weeks ahead.”
    Here are his arguments why, as laid out in Cudmore’s latest Macro View :
    A Treasuries Rally May Be the Christmas Pain Trade Post-Fed price-action suggests Treasury bulls may stampede while traders are in holiday mode.
    Ten-year yields have been stuck in a 2.3%-2.43% range for the past seven weeks. The arguments are adding up for a violent downside break during the weeks ahead.

    This post was published at Zero Hedge on Dec 15, 2017.


  • 15 Market Red Flag: Stocks May Be About To Tank: ‘If There’s One Thing That You Need To Pay Attention To It’s This…’

    Stock and bond markets may be teetering on the edge of a widespread crash following a stellar year that has seen all-time highs across just about every major asset class. Earlier today Zero Hedge reported that Bloomberg market commentator Mark Cudmore says markets could be in for a violent downside break in the weeks ahead.
    It’s a sentiment also shared by Traders Choice analyst Greg Mannarino, who up until this point has been generally bullish on short-term market movements. On Thursday, however, Mannarino reports that bond buying, which has been used to prop up stocks through massive cash injections in recent weeks and months, failed to keep stocks from falling.
    This, says Mannarino, is a major red flag that could signal a reversal going forward:
    If there’s one thing that you need to pay attention to it’s this… savage bond buying occurred today in an attempt to re-prop up the stock market and it didn’t work…
    They’re trying to play a game here and it’s been working time and time again…
    Without fail every single time… except for today… that has worked.

    This post was published at shtfplan on December 15th, 2017.


  • Stocks Rebound From “Bama Shock”, All Eyes On Yellen’s Last Rate Hike

    After an early slide last night following the stunning news that Doug Jones had defeated Republican Roy Moore in the Alabama special election, becoming the first Democratic senator from Alabama in a quarter century and reducing the GOP’s Senate majority to the absolute minimum 51-49, US equity futures have quickly rebounded and are once again in the green with the S&P index set for another record high, as European stocks ease slightly, and Asian stocks gain ahead of today’s Fed rate hike and US CPI print.
    ‘The big issue now is whether Republicans will push through their tax bill before Christmas,’ said Sue Trinh, head of Asia foreign-exchange strategy at RBC Capital Markets in Hong Kong. ‘And more broadly, U. S. dollar bulls will be more worried that this marks a Democratic revival into 2018 mid-term Congressional elections.’
    The negative sentiment faded quick, however, because according to Bloomberg, despite the loss of a Senate seat, it probably won’t affect the expected vote on business-friendly tax cuts, however, as the winner won’t be certified until late December.

    This post was published at Zero Hedge on Dec 13, 2017.


  • Toronto’s Housing Bubble Is Crushing The Strip Club Industry

    Until now, Canada’s soaring housing prices were just another innocent asset bubble spawned by low interest rates and an endless supply of Chinese cash that needed to get laundered. That said, massive bubbles are almost always followed by severe unintended consequences that can have a crippling impact on society as a whole…and in Toronto those unintended consequences are now manifesting themselves in the form of a rapidly deteriorating supply of strip clubs.
    As Bloomberg points out today, the soaring value of Toronto real estate has made it all but impossible for strip club owners to turn down multi-million offers from condo developers leaving only a dozen strip clubs in a city whose purple neon lights used to be easily visible from the distant fringes of our solar system.
    Condos are killing the Toronto strip club. In a city that once had more than 60 bars with nude dancers, only a dozen remain, the rest replaced by condominiums, restaurants, and housewares stores. Demand for homes downtown and for the retailers that serve them is driving land prices to records, tempting owners of the clubs, most of which are family-run, to sell at a time when business is slowing.
    ‘Sometimes I feel like the last living dinosaur along Yonge Street,’ says Allen Cooper, the second-generation owner of the famous – or infamous – Zanzibar Tavern. The former divorce lawyer says he has been approached by at least 30 suitors for his property in the past few years but is holding out for a ‘blow my socks off’ offer. ‘I don’t know how many condos we’re going to get, but it seems like just a wall’ of them, Cooper says.

    This post was published at Zero Hedge on Dec 12, 2017.


  • Stocks Pop After Cornyn Suggests Tax Bill Deal “Possible” Today

    Despite numerous headlines indicating a tax bill deal early next week, Republican Senator John Cornyn just told media that there “may be a tentative tax bill deal today.” Algos liked the news and immediately bid stocks higher (despite no knowledge of what is in the ‘deal’).
    ‘It’s possible,’ John Cornyn, the No. 2 Senate Republican, tells reporters of tax bill, according to Bloomberg.
    The Senate has ‘ping-ponged’ offers back and forth with House and is making good progress, he says.
    And stocks popped on it…

    This post was published at Zero Hedge on Dec 12, 2017.


  • John Burbank Shuts Flagship Hedge Fund, Plans Launch Of Cryptocurrency Unit

    The writing for John Burbank’s Passport Capital was on the wall back in August, when as we reported, in his latest letter to investors Burbank reported that at what was once a multi-billion fund, total firm assets at Passport had shrunk to just $900 million as of June 30 as a result of net outflows totaling a whopping $565 million, or a nearly 40% loss of AUM due to redemptions. The collapse in assets took place just a few months after Passport announced it was liquidating its long/short strategy in April.
    And unfortunately for Burbank, just four month later, a chapter of Passport Capital’s history comes to a close, because as Bloomberg reported, the fund would shutter its flagship hedge fund after returns slumped and following unprecedented redemptions. Passport – which shot to fame for its lucrative bet against subprime housing ahead of the global financial crisis – peaked at around $5 billion but lately managed a fraction of that after a double digit loss last year and further losses in 2017.
    The fund’s “returns over the past two years are unacceptable and cause me to rethink how to manage money in this environment,” Burbank wrote in a Dec. 11 letter to investors, the Wall Street Journal first reported overnight. Passport will continue to operate its roughly $300 million special opportunities fund, which holds some of the firm’s more successful bets on companies such as Alibaba Group Holding Ltd.

    This post was published at Zero Hedge on Dec 12, 2017.


  • Huge Hub Explosion Sparks Surge In UK NatGas Prices

    It has been a tough week already for those that heat their homes in Britain (and those that trade Natural Gas). Following extreme weather warnings and the forties pipeline crack shutdown, an explosion at one of the Europe’s biggest gas hubs further tightened supplies sending gas futures prices up by the most in 8 years.
    As Bloomberg reports, gas futures rose the most in more than eight years in Britain, which already is struggling to absorb the impact of a crack that shut down a North Sea pipeline network. After snow fell for two days in London, cooler-than-normal temperatures spread from the Alps to Scandinavia, raising demand for heating fuels.


    This post was published at Zero Hedge on Dec 12, 2017.


  • Mark Carney Forced To Explain Surge In UK Inflation To Highest In Almost 6 Years

    The market expected Mark Carney to avoid it but it was just not meant to be.
    The BoE Governor will suffer the ignominy of a bizarre tradition of having to write a letter to the Chancellor of the Exchequer explaining why UK inflation is more than 1.0% above the target of 2.0%. The market had expected the UK CPI to rise by a modest 0.2% month-on-month, taking the year-on-year rate up to 3.0%. Instead the month-on-month rate hit 0.3% pushing the annual rate to 3.1%, its highest rate since March 2012.
    As Bloomberg writes, “U. K. inflation unexpectedly accelerated to the fastest in more than 5 1/2 years in November, forcing Bank of England Governor Mark Carney to explain why price growth is so far above target. Consumer prices rose 3.1 percent from a year earlier, driven by the cost of air fares and computer games, the Office for National Statistics said on Tuesday. That’s up from 3 percent in October and the highest since March 2012.”

    This post was published at Zero Hedge on Dec 12, 2017.


  • Warning From The World’s Biggest Shipping Line On Outlook for World Trade

    The optimism on world trade didn’t last very long.
    It was only late September when the WTO issued a ‘strong upward revision’ to their estimate for 2017 world trade. WTO economists raised their forecast to 3.6% from 2.4%, which was at the top end of the previous 1.8-3.6% range. This marked a sharp acceleration from the 1.3% growth in 2016. The IMF’s forecast for 2017 world trade, also made in September, was even higher at 4.2%. Now the Copenhagen-based Maersk, the world’s number one container shipping company, is sounding a warning about softer demand and downward pressure on freight rates. According to Bloomberg.
    The world’s largest container shipping line says international freight rates are reversing after climbing for most of this year, raising questions about the sustainability of the global trade recovery. Decade-old oversupply issues swamped demand for containerized sea trade in the third quarter, a senior official at Maersk Line Ltd. said in an interview last week. Over 90 percent of trade is routed through ships, making the industry a bellwether for the worldwide economy. “We have started to see some pockets of downward pressure,” said Steve Felder, Mumbai-based managing director of Maersk’s South Asian unit. The global trade order book at around 13.5 percent of capacity isn’t high, “however, given that freight rates are largely determined on the basis of supply-demand balance, they remain fragile,” he said.

    This post was published at Zero Hedge on Dec 12, 2017.


  • Wisconsin Governor Pushes Forward With Plan To Drug Test Food Stamp Recipients

    After yesterday’s latest botched hit job by CNN on president Trump, which came exactly one week after the fiasco where erroneous ABC reporting on the Flynn affair sent the market tumbling, it was only a matter of time before Trump lashed out at the news network whose credibility and influence is evaporating with every fabricated story.
    A little after 8am on Saturday, he did just that slamming CNN of making a “vicious and intentional mistake” over the network’s effective retraction, when it was forced to correct an erroneous news report related to the Trump/Russia probe. Having been on the receiving end of three “fake news” stories in the past week, betwee the ABC Flynn debacle, the Bloomberg Deutsche Bank subpoena, and now CNN, Trump demanded that CNN fire “those responsible,” and commented that an ABC reporter who was suspended for a separate erroneous report should be fired as well.
    “Fake News CNN made a vicious and purposeful mistake yesterday. They were caught red handed, just like lonely Brian Ross at ABC News (who should be immediately fired for his ‘mistake’),” Trump wrote. “Watch to see if @CNN fires those responsible, or was it just gross incompetence?” It is worth noting that Ross was not fired but rather suspended for 4 weeks.
    In a second tweet, the president suggested CNN change their slogan after the report to “the least trusted name in news.”
    “CNN’S slogan is CNN, THE MOST TRUSTED NAME IN NEWS. Everyone knows this is not true, that this could, in fact, be a fraud on the American Public. There are many outlets that are far more trusted than Fake News CNN. Their slogan should be CNN, THE LEAST TRUSTED NAME IN NEWS!” the president tweeted.
    Fake News CNN made a vicious and purposeful mistake yesterday. They were caught red handed, just like lonely Brian Ross at ABC News (who should be immediately fired for his ‘mistake’). Watch to see if @CNN fires those responsible, or was it just gross incompetence?
    — Donald J. Trump (@realDonaldTrump) December 9, 2017

    This post was published at Zero Hedge on Dec 9, 2017.


  • Trump Lashes Out At “Fake News” CNN For “Vicious And Purposeful” Mistake, Demands Terminations

    After yesterday’s latest botched hit job by CNN on president Trump, which came exactly one week after the fiasco where erroneous ABC reporting on the Flynn affair sent the market tumbling, it was only a matter of time before Trump lashed out at the news network whose credibility and influence is evaporating with every fabricated story.
    A little after 8am on Saturday, he did just that slamming CNN of making a “vicious and intentional mistake” over the network’s effective retraction, when it was forced to correct an erroneous news report related to the Trump/Russia probe. Having been on the receiving end of three “fake news” stories in the past week, betwee the ABC Flynn debacle, the Bloomberg Deutsche Bank subpoena, and now CNN, Trump demanded that CNN fire “those responsible,” and commented that an ABC reporter who was suspended for a separate erroneous report should be fired as well.
    “Fake News CNN made a vicious and purposeful mistake yesterday. They were caught red handed, just like lonely Brian Ross at ABC News (who should be immediately fired for his ‘mistake’),” Trump wrote. “Watch to see if @CNN fires those responsible, or was it just gross incompetence?” It is worth noting that Ross was not fired but rather suspended for 4 weeks.
    In a second tweet, the president suggested CNN change their slogan after the report to “the least trusted name in news.”
    “CNN’S slogan is CNN, THE MOST TRUSTED NAME IN NEWS. Everyone knows this is not true, that this could, in fact, be a fraud on the American Public. There are many outlets that are far more trusted than Fake News CNN. Their slogan should be CNN, THE LEAST TRUSTED NAME IN NEWS!” the president tweeted.

    This post was published at Zero Hedge on Dec 9, 2017.


  • Are US Shale Stocks Finally Set for a Rebound?

    After years of meager returns and overspending to boost production at all costs, US shale explorers and drillers are finally about to see their share prices rise next year, according to veteran energy investor Shawn Reynolds.
    The new wave of a more disciplined approach to spending and the focus on higher returns will benefit mostly the exploration and production companies. Drilling firms and oilfield services providers are also set to benefit, Reynolds told Bloomberg in an interview published on Friday.
    Read Energy Analyst: “Meaningful Upside” for Oil Prices…
    Shale companies have already started to realize the need to finally reward their shareholders, and firms are now planning within their means, not just spending to grow production at any cost.
    Shale companies now have more growth potential than conventional oil and gas producers, because shale firms face lowered risks in resources extraction, said Reynolds, a fund manager at Van Eck Associates.
    ‘With shale, you have incredible visibility on growth, possibly the best visibility of any industry in the entire market, and lower risk,’ Reynolds told Bloomberg.

    This post was published at FinancialSense on 12/08/201.


  • WeWork: London’s Soon-To-Be Biggest Property Renter Makes Massive Bet On Office Market Despite Brexit

    The rationale for creating WeWork, the eco-friendly serviced workspace provider, was simple as co-founder Adam Neumann explained to the New York Daily News.
    ‘During the economic crises, there were these empty buildings and these people freelancing or starting companies. I knew there was a way to match the two. What separates us, though, is community.’ It wasn’t a bad idea since the company was recently valued at $20 billion. The first WeWork location was established in New York’s fashionable SoHo district (above) in 2010. Only four years later, Wikipedia notes that WeWork was the ‘fastest growing lessee of new office space in New York’. The company currently manages office space in 23 cities across the United States and in 21 other countries including China, Hong Kong, India, Japan, France, Germany and the UK.
    WeWork’s growth has been little short of stratospheric, and investors have included heavyweight financial names such as JP Morgan. T. Rowe Price, Goldman, Wellington Management and Softbank. As Bloomberg reports, WeWork is about to repeat its success in New York and other cities by becoming the largest private lessee of office space in London. However, some old-school property developers are predicting that WeWork’s break-neck expansion is ill-timed.

    This post was published at Zero Hedge on Dec 8, 2017.


  • Crackdown Comes To Wall Street: Morgan Stanley Fires Harold Ford Jr Over Alleged Sexual Misconduct

    Ten years after leaving Congress, Harold Ford Jr could be the canary in the coal-mine for Wall Street as the global awakening to sexual abuse strikes a bulge-bracket bank.
    Harold Ford Jr. ‘has been terminated for conduct inconsistent with our values and in violation of our policies,’ Morgan Stanley spokeswoman Michele Davis said in a statement to Bloomberg News.
    Huffington Post reports that the bank’s human resources department investigated claims he harassed a woman he met in a professional capacity.
    In two interviews with HuffPost, the woman alleged that Ford engaged in harassment, intimidation, and forcibly grabbed her one evening in Manhattan, leading her to seek aid from a building security guard. The incident took place several years ago when Ford and the woman were supposed to be meeting for professional reasons. Ford continued to contact her after the encounter until she wrote an email asking him to cease contact.
    The email, which was reviewed by HuffPost, shows that the woman emailed Ford after he repeatedly asked her to drinks. She asked him not to contact her anymore, citing his inappropriate conduct the evening where he forcibly grabbed and harassed her. Ford replied to the email by apologizing and agreeing not to contact her.

    This post was published at Zero Hedge on Dec 7, 2017.


  • Finally, An Honest Inflation Index – Guess What It Shows

    Central bankers keep lamenting the fact that record low interest rates and record high currency creation haven’t generated enough inflation (because remember, for these guys inflation is a good thing rather than a dangerous disease).
    To which the sound money community keeps responding, ‘You’re looking in the wrong place! Include the prices of stocks, bonds and real estate in your models and you’ll see that inflation is high and rising.’
    Well it appears that someone at the Fed has finally decided to see what would happen if the CPI included those assets, and surprise! the result is inflation of 3%, or half again as high as the Fed’s target rate.
    New York Fed Inflation Gauge is Bad News for Bulls (Bloomberg) – More than 20 years ago, former Fed Chairman Alan Greenspan asked an important question ‘what prices are important for the conduct of monetary policy?’ The query was directly related to asset prices and whether their stability was essential for economic stability and good performance. No one has ever offered a coherent answer even though the recessions of 2001 and 2008-2009 were primarily due to a sharp correction in asset prices.

    This post was published at DollarCollapse on DECEMBER 6, 2017.