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  • 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.


  • 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.


  • “This is Groundhog Day”: Spanish Stocks Battered By Catalan Vote, Bitcoin Crashes

    Spanish stocks and the euro fell, while Spanish government bond yields hit their highest levels in over a month after Catalan secessionists delivered an unexpected blow to the government of Spanish PM Rajoy by winning the Catalan regional election. Meanwhile across the Atlantic, U. S. equity futures and the dollar rose on the last trading session before the Christmas holiday. The MSCI index of world stocks was flat.
    Europe’s Stoxx 600 Index traded sideways as Spain’s Ibex 35 underperformed, dropping as much as 1.6%. Spanish stocks dominated Europe’s biggest fallers, confirming analyst expectations that any shake-out from the Catalonia vote would be mostly confined to Spain. Spain’s bonds also fell along with peripheral European government debt, though bunds were little changed after a selloff this week drove yields to five-week highs. For those who missed it, Catalan separatist parties triumphed in regional elections, outperforming some polls and reigniting Spain’s political trauma. While the Euro has stabilized since, it suffered a mini flash crash in the illiquid aftermath of the Catalan election news, momentarily dipping to $1.1817 before trimming losses to last stand at $1.1853, down 0.2 percent.

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


  • Pakistan Plans Replacing Dollar With Yuan In Trade With China

    Pakistan is considering replacing the U. S. dollar with the Chinese yuan for bilateral trade between Pakistan and China, Pakistan’s Minister for Planning and Development Ahsan Iqbal said according to Dawn Online and The Economic Times. Interior Minister Iqbal, who has been central to the planning and implementation of China-Pakistan economic ties, was reported discussing the proposal after unveiling a long-term economic development cooperation plan for the two countries, Reuters added.
    ***
    Iqbal spoke to journalists after the formal launch of Long Term Plan (LTP) for the China-Pakistan Economic Corridor (CPEC) signed by the two sides on November 21, Dawn online reported on Tuesday. The CPEC is a flagship project of China’s Belt and Road initiative. The 3,000 km, over $50 billion corridor stretches from Kashgar in western China to Gwadar port in Pakistan on the Arabian sea.
    Asked if the Chinese currency could be allowed for use in Pakistan, the minister said the Pakistani currency would be used within the country but China desired that bilateral trade should take place in yuan instead of dollars, in yet another push to de-dollarize what China considers its sphere of influence.

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


  • BOOM: AMERICAN COMPANIES RAIN DOWN CASH ON EMPLOYEES IN RESPONSE TO TRUMP TAX CUTS

    After Republicans passed sweeping tax reform Wednesday, some of the largest employers in America began dropping cash bombs on their employees. The businesses also pledged to invest hundreds of millions of dollars into the American economy.
    The GOP tax bill cuts the corporate tax rate nearly in half.
    Here is a round up, so far, of companies that are celebrating the tax cuts by enriching their employees.
    1. AT&T

    This post was published at The Daily Sheeple on DECEMBER 21, 2017.


  • Why it’s essential you keep a portion of your savings in physical cash

    [Editor’s Note: As we’re coming up on the end of the year, we thought it would be appropriate to republish some of our most popular articles. Today’s was originally published on January 6, 2016]
    Think of the word ‘money’ for moment. What’s the first image that comes to mind?
    Perhaps the folded paper in your wallet. Or the balance in your bank account.
    Or perhaps the investments in your brokerage account.
    In our modern financial system where unelected central bankers wield totalitarian control over the financial system, all three of these are forms of money.
    But the relationship between them is very tenuous, and very risky. I’ll explain:
    1) Physical cash No matter where you live in the world, just about every civilized nation on the planet has some form of physical currency in various denominations. Dollars. Pounds. Euros. Yen. Renminbi.
    We pass around these pieces of paper as a medium of exchange.

    This post was published at Sovereign Man on December 21, 2017.


  • Global Liquidity Crisis Is Over… Dollar Shortage Suddenly Disappears

    Remember last week when the world was desperately willing to pay excessive spreads to get their hands on dollar liquidity (the worst liquidity crisis since the European crisis)…
    Well that’s all over now!
    EUR-, JPY-, and GBP-cross currency basis swaps have suddenly snapped higher (less negative) as dollar liquidity is suddenly not a problem anymore…

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


  • Expand Tax Breaks to Expand Education

    The Tax Cuts and Jobs Act is working its way through both chambers in an attempt to make it onto President Trump’s desk before Christmas. One amendment added by Senator Ted Cruz (R-TX) has some advocates of the school choice movement very enthusiastic while critics say it’s a symbolic gesture unlikely to have much of an impact.
    The amendment will expand the use of 529 plans that currently allow families to save money using after tax dollars without having to pay taxes on the accumulated amount (principal and interest) when the savings are used to pay for qualified higher education expenses. Specifically, 529s allow savers and investors to save for education purposes because income gained through these accounts are subject to less taxation. Specifically, 529’s help investors better avoid dividend and capital gains taxes which can be as high as 28 percent. The plans also help taxpayers avoid income taxes on interest earned through the accounts.
    So far, 529s have only been legal for use in higher education expenses. Cruz’s amendment, however, would expand the accounts to include k-12 expenses such as private and religious schools, homeschooling materials, online education courses, as well as tutoring for students with developmental disabilities for amounts up to $10,000 per year.
    In addition to expanding the use of the savings account, the amendment also includes language allowing families to open the 529 plans at the moment of the child’s conception as opposed to their birth, thus expanding the time during which funds can be accumulated.

    This post was published at Ludwig von Mises Institute on December 21, 2017.


  • Are Bonds Really On The Run? Why One Trader Is Skeptical

    Yesterday we observed the biggest 2-day steepening in the 2s30s yield curve since the Trump election, following a confluence of events which we discussed in this post, and which resulted in a generous payday for at least one rates trader.
    ***
    So has the long-awaited moment of a long-end selloff arrived? Or, as SocGen’s FX strategist, Kit Juckes, put it, are “Bonds on the run?” Maybe not so fast, especially since much of the recent increase in yields has been for breakevens. Here are his thoughts.
    Bonds on the Run?
    The Tax Bill is still moving towards the Oval Office, and even critics concede that it boosts
    growth a bit (more from the corporate tax cut than from the income tax cuts). While the
    relationship between growth, economic slack and inflation remains as much a mystery as how
    Father Christmas gets down the chimney, an uptick in breakeven inflation and in 10-year Note
    yields isn’t shocking. The more breakevens rise, the less real yields rise, the less this affects the
    dollar, unless or until it triggers a wholesale rethink on where Fed Funds are headed. So far, the
    market remains convinced the destination is 2-point something. Bearish bond bets may make
    sense, but FX conclusions are messier. We like short yen trades for now, but as with any carrybased
    FX trades, it feels a bit like picking up pennies in front of a present-loaded sleigh…

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


  • How That $1.4 Trillion In Repatriated Cash Might Result In U.S. Job Losses, Not Gains

    Moody’s estimates that there is roughly $1.4 trillion dollars belonging to U. S. corporations that has been building up in foreign bank accounts for years now to avoid the 35% corporate tax that would be levied on them if they were brought back to the U. S. Of course, getting that $1.4 trillion back to the U. S. has been a critical component of the Trump administration’s tax reform bill as Gary Cohn and Steve Mnuchin have repeatedly argued that the money would be put to good use building factories and creating jobs for American workers.
    That said, if history, math and logic are any guide, then the overwhelming majority of that money would be promptly returned to shareholders via stock buybacks and dividends immediately upon hitting U. S. shores. In fact, as University of Chicago law professor Dhammika Dharmapala told the Wall Street Journal, when a similar tax holiday was enacted in 2004 roughly $0.94 of every $1.00 was spent on buyback and dividends…something Gary Cohn apparently found out for the first time via a recent impromptu survey that yielded some ‘surprising’ results, if only to him…

    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.


  • Taxes, Balance Of Payments, & The USDollar Paradox

    Investors were finally treated yesterday to some of the most important compromise provisions to come out of the House-Senate conference on the Tax Cuts and Jobs Act. Among them were:
    21% corporate rate Reduction of the top wage rate to 37% 20% deduction on pass-through income Full corporate expensing of capital investments for the next five years Repealed corporate AMT Mandatory one-time tax on corporate cash held overseas (taxed at 15%) and foreign-domiciled PP&E purchased with foreign earnings taxed at 10% $10K deduction on individual state, local, and property taxes Mortgage interest deduction on the first $750K of a mortgage Doubling of the estate tax exemption Lower individual rates are temporary and will be phased out over time Net, net, this tax reform bill could a few very notable things from a macroeconomic and balance of payments perspective if economic agents obey the incentives.

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


  • ‘Twas The Week Before Christmas: US Dollar Swaptions Dive To Lowest Point Since 2005 As US Treasury 30Y-2Y Curve Lowest Since Sept 2007

    Twas the night week before Christmas, when all through the (financial) house
    Not a creature trader was stirring, not even a mouse;
    With the exception being traders sending 2Y30Y Swaptions down to their lowest level since 2005. Not to mention sending the 2Y30Y Treasury curve down to 86 basis points, the lowest since September 2007.

    This post was published at Wall Street Examiner on December 18, 2017.


  • Greece Is The Patsy For Europe’s Failure (And The Ordeal Is Far From Over)

    Authored by Raul Ilargi Meijer via The Automatic Earth blog,
    I feel kind of sorry this has become such a long essay. But I still left out so much. You know by now I care a lot about Greece, and it’s high time for another look, and another update, and another chance for people to understand what is happening to the country, and why. To understand that hardly any of it is because the Greeks had so much debt and all of that narrative.
    The truth is, Greece was set up to be a patsy for the failure of Europe’s financial system, and is now being groomed simultaneously as a tourist attraction to benefit foreign investors who buy Greek assets for pennies on the dollar, and as an internment camp for refugees and migrants that Europe’s ‘leaders’ view as a threat to their political careers more than anything else.
    I would almost say: here we go again, but in reality we never stopped going. It’s just that Greece’s 15 minutes of fame may be long gone, but its ordeal is far from over. If you read through this, you will understand why that is. The EU is deliberately, and without any economic justification, destroying one of its own member states, destroying its entire economy.

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


  • 16/12/17: Remember the Russian Attack on the Internet?

    In 2016, a bot, named Mirai, wrecked havoc over the global internet with massive waves of DoS attacks on anything, from French telecoms, to U. S. web services, to Russian banks, to African airports and beyond. Per Wired, “As the 2016 US presidential election drew near, fears began to mount that the so-called Mirai botnet might be the work of a nation-state practicing for an attack that would cripple the country as voters went to the polls.”
    Of course, the minute there is any suspicion of the ‘nation-state’ actors behind the attack, we know that is the code word for ‘the Russians’. And, of course, given the sheer number of ‘security research’ lackeys eagerly awaiting for the U. S. or UK or EU dollars/pounds/euros in grants and subsidies, the ‘Russian’ spectre loomed large in the wake of Mirai havoc. Here’s a snapshot:

    This post was published at True Economics on Saturday, December 16, 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.


  • Market Talk- December 15, 2017

    Asia drifted with prices for core all closing around -0.5% lower for the day. Volumes were light but the lack of conviction as well as year end book-squaring were the key discussion topics. The Dollars decline did not help Exporters within the Nikkei, but that has been an issue for a few days this week. However, late in the US trading day, we have seen a reversal of these declines with the DXY clawing back some earlier losses and is happy playing high 112’s against the Yen. Stocks had opened weak and did well to recover into positive territory at one stage probably the result of a good Tankan print. However, that was lost again at the cash close. Late in US trading we see futures back up but lets see how cash opens again on Monday. The Hang Seng suffered most with a little over 1% decline. This was due mainly to property and financials trading heavy.

    This post was published at Armstrong Economics on Dec 15, 2017.


  • Stocks, Yield Curve Slammed After China Hike, Draghi Taper, & Tax Tumult

    Did Senators Lee and Rubio (and Hatch) just go full “Leeroy Jenkins”?
    A surprise China rate hike (and disappointing retail sales) sparked weakness in Chinese stocks…
    Mario Draghi managed to talk the Euro and Bund yields lower (despite attemptting to raise inflation forecasts)…
    Since the FOMC meeting, Bonds and Bullion are well bid as stocks and the dollar sink…

    This post was published at Zero Hedge on Dec 14, 2017.