• Tag Archives Money
  • US Homelessness Rate Rose This Year For First Time Since 2010

    Here’s one statistic about the US economy that you probably won’t find in President Trump’s twitter feed.
    Thanks to a surge in homelessness centered around several large west coast cities, the overall rate of homelessness in the US ticked higher this year, the first increase since 2010, according to a survey from the Department of Housing and Urban Development.
    The U. S. Department of Housing and Urban Development released its annual Point in Time count Wednesday, a report that showed nearly 554,000 homeless people across the country during local tallies conducted in January. That figure is up nearly 1 percent from 2016.
    Of that total, 193,000 people had no access to nightly shelter and instead were staying in vehicles, tents, the streets and other places considered uninhabitable. The unsheltered figure is up by more than 9 percent compared to two years ago.
    Increases are higher in several West Coast cities, where the explosion in homelessness has prompted at least 10 city and county governments to declare states of emergency since 2015.
    The homelessness crisis is only one byproduct of the burgeoning wealth inequality in the US caused by the Federal Reserve’s decision to pump trillions of dollars of ‘stimulus’ into the markets.
    Central-bank money printing has caused asset valuations to balloon while wages for everyone but the most highly skilled workers have stagnated, as the chart below illustrates.

    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.


  • Mount Vesuvius Anyone?

    ‘In the face of a shock, investors may be surprised to find themselves jammed running for the exit.’ That quote is from Paul Tudor Jones, who was one of the pioneers of the modern hedge fund and is considered a brilliant investor and trader. He went on to say that things are ‘on the verge of a significant change’ and that the current market reminds him of 1999.
    The current market reminds me of the demise of Pompeii, which was destroyed by the massive volcanic eruption of Mt Vesuvius in 79 AD. Pompeii was a prosperous city of the Roman Empire on the coast of southwest Italy. It sits at the base of Mt. Vesuvius, a volcano that had been dormant for a long time. Earthquakes and seismic activity, scientists believe, began to ‘warn’ the population of Pompeii roughly 17 years before the big eruption, when a massive earthquake largely leveled Pompeii. Shortly before the eruption more signs began occurring, hinting that something wasn’t right. Though some people evacuated the area, most of Pompeii’s populace was not worried. The rest is history.
    Though there are many warning signs, similar to the citizens of Pompeii living at the base of an active volcano, the American public does not seem the least worried
    about having their money in the stock market. Retail margin debt, at 100% of market capitalization, is at its highest ever. The percentage of U. S. household wealth (not including home equity) invested in stocks in some form is in its 94th percentile. This is the highest allocation to equities since just before the tech bubble popped in 2000. In other words, despite the numerous warnings for those paying attention, investors have piled most of their savings/wealth into the stock market with complete disregard to the growing probability of a down-side accident.

    This post was published at Investment Research Dynamics on December 7, 2017.


  • A Potential Government Shutdown Is Literally Just Hours Away, But Congressional Leaders Insist That Everything Will Be Just Fine

    Either the Republicans are going to give Democrats virtually everything that they want, or the federal government will shut down at the end of the day on Friday. We have been through this process time after time, and in every single instance the Republicans have always folded like a 20 dollar suit. Unfortunately, it looks like the Democrats are going to win big this time around too. The spending agreement is essentially an updated Obama budget that fully funds Planned Parenthood, that contains no money for a border wall, and that doesn’t reflect any of President Trump’s other important priorities either. On Thursday, the House is expected to pass this horrible bill, and the Senate is expected to take up the matter on Friday. According to Bloomberg, right now this plan would keep the government open through December 22nd…
    The House Rules Committee approved a rule setting the bill up for a floor vote Thursday, after which the Senate will have until the end of the day Friday to avoid a partial government shutdown. A formal check of how members would vote on the Dec. 22 deadline came back showing widespread support, said Representative Dennis Ross, a member of the vote-whipping team.
    So even if this plan gets through both the House and the Senate, we will be facing another government shutdown deadline in just a few weeks.

    This post was published at The Economic Collapse Blog on December 6th, 2017.


  • What Is Money? (Yes, We’re Talking About Bitcoin)

    Good ideas don’t require force. That describes the Internet, mobile telephony and cryptocurrencies.
    What is money? We all assume we know, because money is a commonplace feature of everyday life. Money is what we earn and exchange for goods and services. Everyone thinks the money they’re familiar with is the only possible system of money – until they run across an entirely different system of money. Then they realize money is a social construct, a confluence of social consensus and political force– what we agree to use as money, and what our government mandates we use as money under threat of punishment. We assume that our monetary system is much like a Law of Nature: since it’s ubiquitous, it must be the only possible system. But there are no financial Laws of Nature for money. In the past, notched sticks served as money. In other non-Western cultures, giant stone disks (rai, a traditional form of money on the island of Yap) and even salt served as money.

    This post was published at Charles Hugh Smith on WEDNESDAY, DECEMBER 06, 2017.


  • A Radical Critique of Universal Basic Income

    This critique reveals the unintended consequences of UBI.
    Readers have been asking me what I thought of Universal Basic Income (UBI) as the solution to the systemic problem of jobs being replaced by automation. To answer this question, I realized I had to start by taking a fresh look at work and its role in human life and society. And since UBI is fundamentally a distribution of money, I also needed to take a fresh look at our system of money. That led to a radical critique of Universal Basic Income (UBI) and an outline for a much more sustainable and just system of money and work than we have now. To adequately explore these critical topics, I ended up writing a 50,000 word book, Money and Work Unchained. Universal Basic Income (UBI) is increasingly being held up as the solution to automation’s displacement of human labor. UBI combines two powerful incentives: self-interest (who couldn’t use an extra $1,000 per month) and an idealistic commitment to guaranteeing everyone material security and reducing the rising income inequality that threatens our social contract–a topic I’ve addressed many times over the past decade.

    This post was published at Charles Hugh Smith on TUESDAY, DECEMBER 05, 2017.


  • Serially Charged Deutsche Bank Gets a Subpoena from Mueller

    If Deutsche Bank is trying to remove itself from scandalous headlines, it’s not doing a very good job at it.
    The German language newspaper, Handelsblatt, reported yesterday that Special Counsel Robert Mueller has subpoenaed bank records from Deutsche Bank relating to President Trump and his family members. Handelsblatt writes that ‘The former real-estate baron has done billions of dollars’ worth of business with Deutsche Bank over the past two decades, and First Lady Melania, daughter Ivanka and son-in-law Jared Kushner are also clients.’ The central focus of the Mueller probe is the Trump campaign’s involvement with Russia.
    On May 23 of this year, Congresswoman Maxine Walters and other House Democrats sent John Cryan, CEO of Deutsche Bank, a letter regarding its ties to the Trump family and Russia. The letter began:
    ‘We write seeking information relating to two internal reviews reportedly conducted by Deutsche Bank (‘Bank’): one regarding its 2011 Russian mirror trading scandal and the other regarding its review of the personal accounts of President Donald Trump and his family members held at the Bank. What is troubling is that the Bank to our knowledge has thus far refused to disclose or publicly comment on the results of either of its internal reviews. As a result, there is no transparency regarding who participated in, or benefited from, the Russian mirror trading scheme that allowed $10 billion to flow out of Russia. Likewise, Congress remains in the dark on whether loans Deutsche Bank made to President Trump were guaranteed by the Russian Government, or were in any way connected to Russia. It is critical that you provide this Committee with the information necessary to assess the scope, findings and conclusions of your internal reviews.
    ‘Deutsche Bank’s failure to put adequate anti-money laundering controls in place to prevent a group of traders from improperly and secretly transferring more than $10 billion out of Russia is concerning. According to press reports, this scheme was carried out by traders in Russia who converted rubles into dollars through security trades that lacked any legitimate economic rationale. The settlement agreements reached between the Bank and the New York Department of Financial Services as well as the U. K. Financial Conduct Authority raise questions about the particular Russian individuals involved in the scheme, where their money went, and who may have benefited from the vast sums transferred out of Russia. Moreover, around the same time, Deutsche Bank was involved in an elaborate scheme known as ‘The Russian Laundromat,’ ‘The Global Laundromat,’ or ‘The Moldovan Scheme,’ in which $20 billion in funds of criminal origin from Russia were processed through dozens of financial institutions.’

    This post was published at Wall Street On Parade on December 5, 2017.


  • A second passport is much cheaper than ever before

    While I was off at an annual charity event over the last several days, a few members of my team were dispatched through the Caribbean to meet with government officials at various island nations about their passport programs.
    These programs are known as economic citizenship programs, and they allow a person to obtain official citizenship, along with a passport, by donating money or making a financial investment in the country.
    One of my senior analysts wrote me from St. Kitts today.
    If you haven’t been, it’s an island in the West Indies nestled between the Caribbean and Atlantic Ocean. He’s there looking to secure special terms for Sovereign Man readers.
    St. Kitts has the most established citizenship program in the Caribbean.

    This post was published at Sovereign Man on December 5, 2017.


  • Dismissed FBI Agent Is One Who Changed Hillary Email Scandal Language From “Grossly Negligent” To “Extremely Careless”

    Over the weekend we noted that Special Counsel Robert Mueller’s top FBI investigator into ‘Russian meddling’, agent Peter Strzok, was removed from the probe due to the discovery of anti-Trump text messages exchanged with a colleague (a colleague whom he also happened to be having an extra-marital affair with).
    Not surprisingly, the discovery prompted a visceral response from Trump via Twitter:
    Tainted (no, very dishonest?) FBI ‘agent’s role in Clinton probe under review.’ Led Clinton Email probe. @foxandfriends Clinton money going to wife of another FBI agent in charge.
    — Donald J. Trump (@realDonaldTrump) December 3, 2017

    This post was published at Zero Hedge on Dec 5, 2017.


  • How Passing the Senate’s Tax Bill Could Lead to a Record High for the Dow Jones Today

    This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
    Investors are optimistic about the Dow Jones today following the Senate’s passage of the largest overhaul of the American tax code in 30 years.
    Dow Futures are up 246 points this morning after every Republican senator except for Bob Corker, of Tennessee, voted in favor of the reform bill. But not every investor is optimistic. Here’s the truth about the Senate’s tax bill you can’t afford to miss…
    Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
    Index Previous Close Point Change Percentage Change Dow Jones 24231.59 -40.76 -0.17% S&P 500 2642.22 -5.36 -0.20% Nasdaq 6847.59 -26.39 -0.38%

    This post was published at Wall Street Examiner by Garrett Baldwin ‘ December 4, 2017.


  • Anti-Trump FBI Agent Changed Language Of Hillary Email Scandal From “Grossly Negligent” To “Extremely Careless”

    Over the weekend we noted that Special Counsel Robert Mueller’s top FBI investigator into ‘Russian meddling’, agent Peter Strzok, was removed from the probe due to the discovery of anti-Trump text messages exchanged with a colleague (a colleague whom he also happened to be having an extra-marital affair with).
    Not surprisingly, the discovery prompted a visceral response from Trump via Twitter:
    Tainted (no, very dishonest?) FBI ‘agent’s role in Clinton probe under review.’ Led Clinton Email probe. @foxandfriends Clinton money going to wife of another FBI agent in charge.
    — Donald J. Trump (@realDonaldTrump) December 3, 2017

    This post was published at Zero Hedge on Dec 4, 2017.


  • THE NEXT TECH BOOM IS ABOUT TO UNFOLD HERE…

    Everyone’s heard the story about the government’s promise to spend $1 trillion on fixing America’s aging critical infrastructure. But there’s another big money story that few investors know of…
    Trump’s trillion-dollar pledge won’t come close to fixing our infrastructure. It’ll take $3.6 trillion to make this happen. And in the midst of this infrastructure crisis, one little-known company has launched an artificial intelligence coup that could save us billions.
    Consider the dire straits of a massive network of critical infrastructure that industries, the environment and human lives all count on, every minute of every day:
    S. dams are failing from coast to coast: 15,500 of our 90,500 dams now a high-hazard potential for public safety and the economy and it will take $60 billion to fix them. 180,000 people were recently evacuated in California because of fears that the largest dam in the U. S. would collapse. Pipelines have caused almost 9,000 significant accidents in only 30 years, hitting us with $8.5 billion in damages, killing hundreds and injuring thousands. The U. S. spends almost $3 billion every year just cleaning up spills in our waterways. The over 140 oil refineries in the U. S. are potential disasters waiting to happen, with more than 500 accidents since 1994, and explosions killing and threatening millions with fatal toxins.

    This post was published at The Daily Sheeple on DECEMBER 4, 2017.


  • Jim Grant Interviews Alan Fournier: “Pension Funds Are So Desperate For Yield, They’re Systemically Selling Vol…”

    In the latest installment of RealVision’s interview series featuring Jim Grant, longtime publisher of Grant’s Interest-Rate Observer, the newsletter publisher sits down with Alan Fournier, the billionaire founder of Pennant Capital, to discuss one of the most widely discussed topics across modern asset markets: Volatility – or rather, the systemic risks posed by not only the paucity of volatility in modern markets, but how risk parity and low-vol targeting strategies have created imbalances that could lead to massive dislocations should volatility spike.
    ***
    In the beginning of the talk, Fournier and Grant discuss how volatility has been artificially suppressed for so long that it’s essentially become an asset class unto itself. Investors have devised all these new volatility targeting strategies – like risk parity, for example, that have generated outsize returns since the financial crisis. But many don’t recognize the underlying risks. With so much money piled into the short-volatility trade, a large enough spike could trigger extremely painful selloffs in both bond and equity markets.

    This post was published at Zero Hedge on Dec 3, 2017.


  • Market Goes ‘Full Bitcoin’

    Authored by Lance Roberts via RealInvestmentAdvice.com,
    Market Review
    What the ‘heck’ was that?
    This past week seemed to be the story of Christmas coming early. Earlier this week the markets surged higher on hopes that ‘Ole’ St. Tax Cuts’ would soon be here. But that dream seemed to be short-lived on Friday, at least at the open, as General Mike Flynn seems to embody the ‘Grinch’ trying to steal Christmas.
    But at the end of it all, not much actually changed. Well, except for the fact that volatility not only made an appearance as stock prices swung wildly in both directions, but also in Treasury rates. As expectations of tax reform grew, rates spiked higher but then sank just as quickly as fears of turmoil in the Administration sent money into the safety of bonds.

    This post was published at Zero Hedge on Dec 3, 2017.


  • The Venture Capital Bubble Is Imploding! (The Beginning Of The Great Bubble Deflation?)

    Following The Great Recession and The Fed’s extraordinary response, there was a lot of money available that we seeking risky assets, such as equities, housing and apartments.
    Venture capital, the darling of business schools (that rarely look at the data, but focus on the snake oil-aspect of VC), has been in decline since 2014 after a meteoric rise after 2007.

    This post was published at Wall Street Examiner by Anthony B Sanders – December 1, 2017.


  • Technical Scoop – Weekend Update Dec 3

    Weekly Update
    ‘You can lead a horse to water, but you can’t make it drink’
    – old saying
    We may warn investors about the risks in the markets, but we can’t make them take action to do something about it. We recall back in late 1999/early 2000 receiving calls from people wanting to open up a brokerage account so that they could buy some tech or dot.com stock. We politely told them that to open an account would require we meet with the prospect, learn their investment goals, fill out papers, and await approval from the compliance department. The process could take more than a few days. By that time, the stock they were targeting could be up a further 10%, 20%, or even more.
    Things were moving that fast. From lows in October 1998, the tech-heavy NASDAQ index soared almost 260% to its high in March 2000. The price earnings ratio (P/E) of the NASDAQ soared to an unheard-of (and never heard of again) 175 while some individual companies had P/Es over 400. The fact that the companies did not make any money was not an issue as the focus was on their long-term potential and growth. Warnings that the market was in an unsustainable bubble and that a potential crash could follow were largely ignored. Those communicating the warnings were dismissed as doomsayers, charlatans, or worse. Some received death threats. Two years, later by October 2002, the NASDAQ had fallen 78%. The bubble had burst.
    Fast forward five years later. The Dow Jones Industrials (DJI) had soared to new all-time highs gaining 98% from October 2002 to October 2007. The NASDAQ had gained 158% in the same period but was still down 45% from the March 2000 high. But the real focus was on the hot housing market where prices had more than doubled since 2000 and where some regions saw even more spectacular growth. The growth had been spurred by the loosening of credit encouraged by government action, particularly through what was known as the Community Reinvestment Act and government agencies such as Fannie Mae and Freddie Mac.

    This post was published at GoldSeek on 3 December 2017.


  • Blow.Off.Top.

    No period is worse for bears than when it’s the best time to sell stocks. It’s the polar opposite of when conditions are worst for bulls, right when it’s the best time to buy as it was in January-March 2009. The exhaustion factor is enormous. It’s called capitulation as moves get stretched to the extreme even though the set-up is valid.
    November’s close marked the 13th consecutive month straight up for global markets. Nothing but up with fewer and ever smaller dips in between. Deutsche Bank’s Reid illustrated the point: ‘We’ve never had such a run with data going back over 90yrs’. I’d say that qualifies as the worst of time for bears.
    Yet we could be sitting on a generational opportunity to sell equities as it could be argued that conditions will never be better for bulls as the game of offering carrots of free money is coming to an end. Indeed it could be argued that the prospect of tax cuts is the final carrot the free money scheme has to offer. The carrot top. No more carrots.

    This post was published at Zero Hedge on Dec 3, 2017.


  • More on Interest Rates and Time Preference

    In a recent column for Mises Wire, Doug French raised very important issue of negative interest rates. Quoting Fleckenstein Capital He wrote,
    Yesterday a Parisian BBB-rated company (i.e., quasi junk) issued $500 million in three-year notes yielding negative 0.026%. We have been peppered with so many absurdities, nothing seems absurd anymore…
    French continues with his own observations:
    [The French utility company] Veolia Environnement S. A. floated 500 million of debt, rated just 2 notches above junk, with a three year maturity priced to yield negative 0.026%. As Grant’s Almost Daily writes, ‘Even better: Investor demand for the Veolia issue was such that the offering was oversubscribed by more than 4:1. Said another way, three out of four investors who wished to lose money on a yield-to-maturity basis were left disappointed.’
    Clearly, this supposedly contradicts the view of important thinkers such as Mises and Rothbard that individuals always assign a greater importance to present goods versus future goods (i.e.. that interest rates must be always positive). This is also known as a positive time preference.
    Before attempting to reconcile the apparent contradiction of the facts of reality and the positive time preference theory of interest let us have a look at the essence of this theory.

    This post was published at Ludwig von Mises Institute on 12/02/2017.


  • Wonder Who Was Buying Yesterday’s Market Breakout? Here’s The Answer

    Wonder who was buying the euphoria blow-off top stock market breakout yesterday? One clear answer, according to Nicholas Colas of DataTrek Research, is answer is ‘Mom and Pop’. Nick looked at the publicly available trade data on Fidelity’s retail website and found net buy orders across both single stocks (mostly tech) and ETFs. And, no surprise, some bitcoin names as well.
    Here’s what else Nick discovered.
    Retail investors have lost some of their reputation for being the ‘Dumb money’ over the last few years. After all, anyone ‘Dumb’ enough to own the largest US listed ETF (SPY) or the biggest tech names (AAPL, GOOG, etc) has done very well for over half a decade.
    Still, whenever we see a big up day for US stocks, we can’t help but wonder what the retail investor is buying when stocks hit (yet another) all time high. Are they getting cautious and lightening up? And what names do they still like?
    Fidelity Investments lets you see their customers’ Top 10 names traded, in real time if you have an account and one day-delayed if you don’t.
    Here’s some color on today’s market action, courtesy of that information source:
    Fidelity’s retail accounts were net buyers in 9 out of the top 10 names traded by their customers. The only exception: Kroger. Tech names held the top 4 positions in terms of total order volumes. Ranked by total activity, they were: Nvidia, Micron Technology, Apple and Amazon.

    This post was published at Zero Hedge on Dec 1, 2017.