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.

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.