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 –.

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

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

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

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.

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 –.

The Wall Street Journal Does a Hit Piece on Trump’s Vacations

The Wall Street Journal is trying to match The Washington Post for anti-Trump investigative journalism.
Consider this article: President Trump Spent Nearly One-Third of First Year in Office at Trump-Owned Properties. It is a screed on Trump’s time spent vacationing.
It has a subhead: “Unlike his predecessors, president traveled frequently to places he owns but where others pay to stay.” That is because his predecessors did not own several billion dollars’ worth of prime vacation real estate.
Would you rather stay at a Motel 6 or Mir-a-Lago if someone else was picking up the tab? To ask the question is to answer it.
I, for one, applaud the time that he spends vacationing. Any time that a politician spends doing anything other than legislating is time well spent. When they are busy “making things better” by expanding the government, citizens are losers. They lose a little more of their liberty.
Earlier this year, The Washington Examiner reported this.

This post was published at Gary North on December 28, 2017.

Peak Good Times? Stock Market Risk Spikes to New High

Leverage, the great accelerator on the way up and on the way down.
Margin debt is the embodiment of stock market risk. As reported by the New York Stock Exchange today, it jumped 3.5%, or $19.5 billion, in November from October, to a new record of $580.9 billion. After having jumped from one record to the next, it is now up 16% from a year ago.
Even on an inflation-adjusted basis, the surge in margin debt has been breath-taking: The chart by Advisor Perspectives compares margin debt (red line) and the S&P 500 index (blue line), both adjusted for inflation (in today’s dollars). Note how margin debt spiked into March 2000, the month when the dotcom crash began, how it spiked into July 2007, three months before the Financial-Crisis crash began, and how it bottomed out in February 2009, a month before the great stock market rally began:

This post was published at Wolf Street on Dec 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.

Global Stocks Rise, Copper Soars In Thin Holiday Volumes

European stocks are steady in post-Christmas trading if struggling for traction after a mixed session in Asia, amid trading thinned by a holiday-shortened week and ongoing worries about the tech sector; however a strong rally in commodities – including copper and oil – buoyed expectations for a strong 2018 and helped offset concerns over the technology sector triggered by reports of soft iPhone X demand.
U. S. equity futures nudged higher while the dollar weakened against most G-10 peers as investors await the release of U. S. consumer-confidence data, with much of the spotlight falling on commodity currencies. The OZ dollar holds onto gains as copper surges to a three-year high; oil retreats after reaching the highest close in more than two years following a pipeline explosion in Libya on Tuesday. Treasuries and core European core bond yields are a touch lower.
The Stoxx Europe 600 Index edged lower, with tech stocks hit for the third day amid rumors of weak iPhone demand and leading the decline as chipmakers slumped after analysts lowered iPhone X shipment projections, sending the Nasdaq Composite Index lower overnight. While mining and oil stocks strengthened due to a surge in copper prices to a 3.5 year high (see below), the European STOXX 600 index slipped 0.1% as European tech stocks tumbled on reports that demand for Apple’s iPhone X may be weaker than expected. The equity benchmark index is poised for an annual gain of 8.1%, the best advance in four years. Elsewhere, Volvo rose as China’s Geely bought Cevian’s stake in the truckmaker, making it Volvo AB’s largest stakeholder. IWG surged the most since 2009 after confirming it has received a a non-binding takeover offer from a consortium backed by Brookfield Asset Management and Onex.

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

Venezuelans Abandon Bolivar – Merchants Insist On Being Paid In Dollars

Venezuelans are struggling to carry out basic transactions like purchasing food as the value of their currency, the bolivar, has plunged against the dollar amid the country’s worsening economic collapse.
According to Reuters, over the past year, Venezuela’s currency weakened 97.5% against the greenback: Put another way, $1,000 of local currency purchased in early January would be worth just $25 now. The annual inflation rate in 2017 could reach $2,000. Though at least one other estimate puts the real rate of inflation closer to 2,800%.
Of course, President Maduro has blamed websites like DolarToday – which publishes the closest thing to an official black-market rate by surveying clandestine exchanges in Caracas and other cities – for the spread of black-market activity, part of a conspiracy organized by Washington and his local political opponents to force him from power.

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

The Integrated Non-USD Platforms

The many new integrated non-USD platforms devised and constructed by China finally have critical mass. They threaten the King Dollar as global currency reserve. Clearly, the USDollar cannot be displaced in trade and banking without a viable replacement for widespread daily usage. Two years ago, critics could not point to a viable integrated system outside the USD realm. Now they can. The integration of commercial, construction, financial, transaction, investment, and even security systems can finally be described as having critical mass in displacing the USDollar. The King Dollar faces competition of a very real nature. The Jackass has promoted a major theme in the last several months, that of the Dual Universe. At first the USGovt will admit that it cannot fight the non-USD movement globally. To do so with forceful means would involve sanctions against multiple nations, and a war with both Russia & China. Their value together is formidable in halting the financial battles from becoming a global war. The United States prefers to invade and destroy indefensible nations like Libya, Iraq, Ukraine, Syria, and by proxy Yemen. The USMilitary appears formidable against undeveloped nations, seeking to destroy their infra-structure and their entire economies, in pursuit of the common Langley theme of destabilization. In the process, the USMilitary since the Korean War has killed 25 million civilians, a figure receiving increased publicity. The Eastern nations and the opponents to US financial hegemony will not tolerate the abuse any longer. They have been organizing on a massive scale in the last several years. Ironically, the absent stability can be seen in the United States after coming full circle. The deep division of good versus evil, of honest versus corrupt, of renewed development versus endless war, has come to light front and center within numerous important USGovt offices and agencies.
The shape of the US nation will change with the loss of the USDollar’s status as global currency reserve. The starting point for the global resistance against the King Dollar was 9/11 and the onset of the War on Terror. It has been more aptly described as a war of terror waged by the USGovt as a smokescreen for global narcotics monopoly and tighter control of USD movements. Then later, following the Lehman failure (killjob by JPMorgan and Goldman Sachs) and the installation of the Zero Interest Rate Policy and Quantitative Easing as fixed monetary policies, the community of nations has been objecting fiercely. The zero bound on rates greatly distorted all asset valuations and financial markets. The hyper monetary inflation works to destroy capital in recognized steps. These (ZIRP & QE) are last ditch desperation policies designed to enable much larger liquidity for the insolvent banking structures. Without them, the big US banks would suffer failure. They also provide cover for the amplified relief efforts directed at the multi-$trillion derivative mountain. In no way, can the global tolerate unbridled monetary inflation which undermines the global banking reserves.

This post was published at GoldSeek on 26 December 2017.

California renters will come out ahead with new tax plan while homeowners will see a higher tax bill under GOP plan.

You constantly hear that owning a home is a no brainer in California because you will always get major tax benefits. Well the new GOP tax plan is actually going to benefit California renters while California homeowners in crap shacks will see higher tax bills. It is an interesting tax proposal because the typical US household owning a typical $200,000 home is going to come out ahead. This is your bread and butter ‘American’ family. However, Taco Tuesday Baby Boomers and Gen X’rs in California have been getting mega subsidies for buying hyper expensive crap shacks. Every tax bill that comes out seems to favor homeowners. In fact, I haven’t seen one that hasn’t favored homeownership. But the way the tax bill is setup, crap shack owners are going to actually have to pay more and renters are going to benefit nicely from the much larger standard deduction. We are now seeing some scenarios where this is playing out.
Crap shacks getting more expensive
The L. A. Times has a piece where they examine various households in regards to the proposed tax plan. In one example you have a professional couple that bought a crap shack in Redondo Beach (3 bedrooms and 2 bathrooms – your standard million-dollar SoCal home). They paid $915,000 for the place back in 2016. They are going to see an increase in their tax bill:

This post was published at Doctor Housing Bubble on December 26, 2017.

Mystery Buyer Of ‘Most Expensive Apartment In Asia’ Revealed

A month ago, we highlighted a disturbing new record in the Hong Kong real-estate market – a market that received a ranking of ‘high’ from Algebris Investment’s Alberto Gallo in his annual ranking of the world’s biggest asset bubbles.
According to a report in the South China Morning Post, the record price per square foot for a residence in Hong Kong was obliterated when a mystery buyer purchased two apartments in ‘The Peak’ – an exclusive district.
At 132,000 Hong Kong dollars per square foot, the purchases made them the two most expensive apartments in Asia in terms of square footage. In total, the mystery buyer spent an astonishing 1.16 billion Hong Kong dollars (nearly $200 million) on the two apartments.

This post was published at Zero Hedge on Dec 24, 2017.

Busted Billion-Dollar-Baby Fraud Finds Another Greater Fool – Softbank Lends Theranos $100 Million!

Japan’s Softbank Group is coming to the rescue of yet another embattled Silicon Valley ‘unicorn’. The Wall Street Journal reported Saturday that Fortress Capital, the publicly traded private-equity firm that agreed to sell itself to the Japanese conglomerate earlier this year, has extended a $100 million loan to Theranos, which is still facing multiple lawsuits and investigations for misleading investors, business partners and clients about the efficacy of its core technology.
The loan, which will avert a bankruptcy filing for the former poster-child of tech-centric “disruption”, which was once one of Silicon Valley’s most valuable private companies with a valuation of $10 billion. Theranos famously marketed itself to investors by playing up its core innovation: A diagnostic machine that could supposedly run tests for hundreds of medical conditions with only a single drop of blood.
The company’s founder, Elizabeth Holmes, honed the perfect marketing pitch: A Stanford dropout, she claimed she was inspired to create the ‘nanotainer’ fingerstick that would become Theranos’s signature product by her irrational fear of needles.

This post was published at Zero Hedge on Dec 24, 2017.

Consumers Are Smarter than Bureaucrats Think

Despite the name of this government agency, Canada’s Competition Bureau lacks an appreciation of the nature of competition. Moreover, the Bureau’s actions can be seen as an insult to Canadians, as it fails to acknowledge the ability of discriminating consumers to recognize uncompetitive offerings. As the Bureau pretends to be the consumers’ guardian angel, it wastes taxpayers’ dollars on counterproductive activities.
The Hudson’s Bay Company (HBC) operates numerous department stores in Canada. They say they have spent more than US$425,000 and invested more than 6,500 person-hours to produce 37,000 documents in response to the Competition Bureau’s complaint made last February. According to The Canadian Press, the Competition Bureau
is suing Hudson’s Bay Co., alleging that the retailer engaged in deceptive pricing practices for four years …
The Competition Bureau claims HBC misled customers over the prices of mattresses and box springs sold together since at least March 2013 …
‘The regular prices of the sleep sets were so inflated above what the market would bear that sales at the regular price were virtually non-existent,’ reads the filing.
HBC listed a Mount Royal tight top queen sleep set at $1,998 and then a sale price of $788 in 2014, for example, but never sold one at the regular price, the agency says.
So, HBC supposedly ‘engaged in deceptive pricing practices’ which the Bureau defines as misleading customers about prices. Nonsense. The Bureau reveals its own bureaucratic idiocy when it contradicts itself by admitting that no sales were made at the inflated price.

This post was published at Ludwig von Mises Institute on December 23, 2017.