Feds Send In Reinforcements After Baltimore Mayor Pleads For Help: “Murder Is Out Of Control”

There have been 108 homicides so far this year in the city of Baltimore. According to the Baltimore Sun, there were five murders in the city just last weekend alone.
The only year that Baltimore has ever come close to recording so many murders in just the first 4 months of the year was in 1993 during the height of America’s gang wars that plagued inner cities all across the country. In that year, some 24 years ago, 110 people were killed through the end of April. The city went on to record 353 homicides that year, the most in its history. That said, Baltimore has about 110,000 fewer residents now than in 1993, making this year’s murder rate the highest ever, on a per capita basis.
Meanwhile, if the level of violent crime in Baltimore continues at the same rate as the first four months, for the remainder of the year, the city will blow right through the previous all time record high 353 homicides from 1993.

This post was published at Zero Hedge on May 2, 2017.

U.S. Auto Sales Plunge Dramatically As The Consumer Debt Bubble Continues To Collapse

One sector of the economy that is acting as if we were already in the middle of a horrible recession is the auto industry. We just got sales figures for the month of April, and every single major U. S. auto manufacturer missed their sales projections. And compared to one year ago, sales were way down across the entire industry. When you add this latest news to all of the other signals that the U. S. economy is slowly down substantially, a very disturbing picture begins to emerge. Either the U. S. economy is steamrolling toward a major slowdown, or this is one heck of a head fake.
One analyst that has been waiting for auto sales to start declining is Graham Summers. According to Summers, the boom in auto sales that we witnessed in previous years was largely fueled by subprime lending, and now that subprime auto loan bubble is starting to burst…

This post was published at The Economic Collapse Blog on May 2nd, 2017.

Former Facebook Exec: “They’re Lying Through Their Teeth”

Authored by Antonio Garcia-Martinez (former Facebook product manager), author of Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley, originally posted at The Guardian,
For two years I was charged with turning Facebook data into money, by any legal means. If you browse the internet or buy items in physical stores, and then see ads related to those purchases on Facebook, blame me. I helped create the first versions of that, way back in 2012.
The ethics of Facebook’s micro-targeted advertising was thrust into the spotlight this week by a report out of Australia. The article, based on a leaked presentation, said that Facebook was able to identify teenagers at their most vulnerable, including when they feel ‘insecure’, ‘worthless’, ‘defeated’ and ‘stressed’.
Facebook claimed the report was misleading, assuring the public that the company does not ‘offer tools to target people based on their emotional state’. If the intention of Facebook’s public relations spin is to give the impression that such targeting is not even possible on their platform, I’m here to tell you I believe they’re lying through their teeth.

This post was published at Zero Hedge on May 2, 2017.

Has The Date Of The Economic Collapse Just Been Leaked? – Episode 1269a

The following video was published by X22Report on May 2, 2017
The collapse of Home Capital Bank could be spreading to other lenders. Greece reaches debt deal but they need to give up more and the country will sell of more of the country. The auto loan subprime bubble will mimic the subprime real estate bubble. JP Morgan is selling stocks because it sees signs the economy is collapsing. Trump preparing to replace the banking regulator. Trump says maybe we should shutdown the government in Sept. Is he telegraphing the date the economy will start to come down.

Is the City of London about to Lose its Crown Jewel?

Where will nearly 1 trillion-a-DAY in euro-clearing operations go? But other finance operations might not go to the usual suspects.
The UK economy’s prize ‘asset,’ the City of London’s gargantuan financial services industry, is at the top of the menu of the forthcoming Brexit negotiations. For Britain’s Prime Minister Theresa May, safeguarding the City of London’s operations is a top priority. But for the EU’s negotiators, those operations represent both a valuable asset to covet as well as a huge bargaining chip in the forthcoming negotiations.
One area of activity that European authorities, both political and monetary, seem determined to get their hands on, at pretty much any cost, is the City’s vast clearing operations.
The U. K. is estimated to handle 75% of all euro-denominated derivatives transactions, equivalent to around 930 billion of trades per day. It’s also home to roughly 90% of US dollar domestic interest-rate swaps. Clearing is a huge business for the City of London. The world’s largest clearinghouse for interest rate swaps, LCH, is based there and is majority-owned by London Stock Exchange Group Plc.
It functions as a middle man collecting collateral and standing between derivatives and swaps traders to prevent a default from spiraling out of control. As Bloomberg reports, the role of clearing houses like LCH in global finance has become far more entrenched since the 2008 Financial Crisis and the inexorable expansion of derivatives trading.

This post was published at Wolf Street on May 2, 2017.

Stocks and Precious Metals Charts – Il Bacio Della Morte

‘The problem is, of course, that not only is economics bankrupt, but it has always been nothing more than politics in disguise.”
Hazel Henderson
The markets are winding up tight.
Big cap techs have gone parabolic, and left a gap behind.
There are a number of scenarios that could trigger a reversal. Or not.
The broader markets, such as the Russell and the SP, are not confirming the gapping top in tech.
The tape is looking mighty taut.
These quiet moments before the storm are the toughest to time.
Hold on to your hats if and when the markets make their move.
Respice post te. Hominem te memento.

This post was published at Jesses Crossroads Cafe on 02 MAY 2017.

Silver Takes the Elevator Down – Precious Metals Supply and Demand

Election Effect Debate
Last week, we talked about the effect of the French election on the gold and silver markets, and noted:
Of course, traders want to know how this will affect gold and silver. As we write this, we see that silver went down 30 cents before rallying back up to where it closed on Friday. Gold went down about $20, and then half way back up.
At this point, we are not sure if the metals are supposed to go up because more printing. Or go down because the euro constrains France from printing. Or silver at least should go up because the economy is going to be better with France remaining in the Eurozone. Or go down because the ongoing malaise will only progress as it has been. Or some other logic… and the price gyrations this evening show that traders don’t agree either.
It didn’t take too long. Here is what happened to silver this week. The graph below shows the price of silver in real money (i.e. gold).

This post was published at Acting-Man on May 2, 2017.


Gold: $1255.10 UP 1.80
Silver: $16.83 up 1 cent(s)
Closing access prices:
Gold $1256.90
silver: $16.83!!!
Premium of Shanghai 2nd fix/NY:$11.15
LONDON FIRST GOLD FIX: 5:30 am est $1255.80
For comex gold:
For silver:
For silver: MAY
Total number of notices filed so far this month: 2713 for 13,565,000 oz
In Feb we had $7,841,000 worth of gold housed at the FRBNY valued at 42.21 dollars per oz
Last month: we had the same; $7,841,000 of gold valued at 42.21
thus 0 oz of gold moved out.

This post was published at Harvey Organ Blog on May 2, 2017.

Don’t Spend Your Tax Cut Yet

On November 16, 2016, just a week after he won the election, Donald Trump went out for steak. Not just any steak, either. The president-elect took his family to New York’s exclusive 21 Club, ditching the press pool to enjoy some privacy.
At the restaurant, surprised diners greeted Trump with applause. We know this only because a Bloomberg reporter happened to be dining there and captured video on her phone.
Trump’s response, unaware he was on camera: ‘We’ll get your taxes down, don’t worry about it.’
Many investors still assume a big tax cut is coming. That, plus promises of infrastructure spending and deregulation, set off the ‘Trumpflation’ trade following the election.
Trumpflation sort of made sense back in November, but I don’t think it does now. I think we won’t get any tax cut at all – and if we do, it won’t be bullish for most stocks. (Though Robert Ross and I have some suggestions for likely stock winners in our premium service, Macro Growth & Income Alert.)
In other words, we’re going to lose either way.
Blown-Up Deficit
The tax reform wish list the White House unveiled last week isn’t exactly a ‘plan.’ It’s more like an outline, minus the details.
Still, the goals are clear enough: Trump would reduce almost everyone’s federal tax burden and make the system somewhat less complicated.
Objections fall into two categories:

This post was published at Mauldin Economics on MAY 2, 2017.

“Technology Has Changed The Game”: Why The Rise Of Robots Will Be A Permanent Deflationary Force

Back in 2015, BofA put together a simple equation trying to explain the pervasive deflationary wave around the globe when it said that “Deflation = Debt plus Disruption plus Demographics.”
In his overnight take on recent events, Bloomberg macro commentator Mark Cudmore took another look at this underlying assumption, and specifically the “disruption” part, or the role played by technology, and machines, both of which are reducing the need for labor (and implicitly pressuring the global labor force growth), and concluded that “while those with specialized skills can continue to earn more in a wealthier world, the rise of robots provides a significant disinflationary force on the median wage globally. This effect will be most extreme in developed economies where labor costs are already elevated. (And as an aside, is the reason why increasing inequality and populism isn’t going away any time soon).”
Adding demographics into the mix, Cudmore notes that “the growth rate of the global population continues to slow, further relaxing consumer demand pressures over the long-term. All this means that, excluding isolated and idiosyncratic flare-ups, consumer prices won’t ramp higher in real terms” even and as “a lack of CPI growth doesn’t prevent financial-asset inflation.”

This post was published at Zero Hedge on May 2, 2017.

“There Was White Smoke”: Greece Reaches Deal With Lenders, Promising Even More Austerity

Greek government bond yields fell after Greece and its lenders said they reached a long-awaited deal on reforms required to release further bailout funds. With a promise to further cut pensions and give taxpayers fewer breaks, Greece paved the way for the disbursement of further rescue funds from international lenders and possibly opened the door to reworking its massive debt Reuters reported.
The deal was reached early on Tuesday morning, when officials from both sides said they had agreed on a package of bailout-mandated reforms, ending six months of staff-level haggling. Greek Finance Minister Euclid Tsakalotos announced it with a term associated with papal elections. “There was white smoke,” he told reporters.
As part of the reforms, Athens has promised to cut pensions in 2019 and cut the tax-free threshold in 2020 to produce savings worth 2 percent of gross domestic product. If Greece outperforms targets, it will be allowed to activate a set of measures offsetting the impact of the additional austerity, which includes mainly lowering taxes. Athens also agreed to sell coal-fired plants and coal mines equal to about 40% of its dominant power utility Public Power Corp’s capacity.
On the budgetary target level, the lenders are now likely to decide among themselves on Greece’s medium-term primary surplus targets, a key element for granting further debt relief.

This post was published at Zero Hedge on May 2, 2017.

Italy’s National Carrier Alitalia Files For Bankruptcy

As was widely expected, on Tuesday Italy’s national carrier Alitalia filed for its second bankruptcy in 9 years, after its board decided to formally ask the ministry of economic development to put the money-losing carrier, partly owned by UAE’s Etihad, under special administration after workers rejected its latest rescue plan meant to unlock much-needed financing.
As discussed previously, a majority of the company’s workers last week voted against a restructuring plan that envisaged cuts to jobs and salaries, making it impossible for the loss-making airline to secure funds to keep its aircraft flying. In retrospect, many more workers will now lost not only much of their compensation but also their jobs, even if for the time being the airline’s flight schedule would remain unchanged.
Once Alitalia is put under administration, the Rome government will appoint one or several commissioners who will assess whether it can be overhauled – either as a standalone company or through a partial or total sale – or should be wound up.
Quoted by Reuters, James Hogan, the CEO of Etihad Airways, which bought into Alitalia during the latest restructuring in 2014, said the Italian airline required “fundamental and far-reaching restructuring to survive and grow in future”.

This post was published at Zero Hedge on May 2, 2017.

‘Sell in May and Go Away’ – in 9 out of 11 Countries it Makes Sense to Do So

An Old Seasonal Truism

Most people are probably aware of the saying ‘sell in May and go away’. This popular seasonal Wall Street truism implies that the market’s performance is far worse in the six summer months than in the six winter months.
Numerous studies have been undertaken particularly with respect to US stock markets, which confirm the relative weakness of the stock market in the summer months.
What is the status of the ‘sell in May’ rule in other countries though? I have examined the patterns in the eleven most important stock markets in the world.
The Eleven Largest Markets in the World Under the Seasonal Microscope
I have taken a look at the popular benchmark stock indexes of the eleven countries with the largest market capitalization from 1970 onward, or starting from the earliest year as of which continuous price data are available.
The comparison divides the calendar year into a summer half-year from May to October and a winter half-year from November to April. The position is assumed to be closed out on the first trading day of the following month. In the respective half-year in which no position in stocks is taken, a cash position that earns no interest is assumed to be held, so as to avoid any distortions in the depiction of the stock market’s seasonal returns by including interest income.
This much I will say in advance: The results are clear, in all eleven countries the winter half-year outperformed the summer half-year significantly. In the majority of these eleven countries one would actually have lost money during the summer half-year on average! These countries are:

This post was published at Acting-Man on May 2, 2017.

Domestic vs. Global Indicators – A Rising Tide Lifts All Boats

I’ve made the case in recent articles that the current rally in US equities is not so much a domestic response, but rather a case of global reflation. If that thesis holds water, then weak economic data here in the US is unlikely to derail this rally, but a change in the global outlook most definitely would.
Let’s take a look at where each of those components stands now.
Last Friday the preliminary reading on Q1 GDP was released and it was somewhat disappointing, showing a lackluster 0.7% growth. While initially worrisome, a deeper look suggests that it may be advisable to simply brush off this reading for now.
See interview with Matthew Kerkhoff on ‘Trump Rally,’ Yield Curve, and Economy
At this point you’re probably well aware that first quarter GDP figures have been ‘off’ for some time. The Bureau of Economic Analysis, who compiles this report, has acknowledged deficiencies in their seasonality computations, which leave behind what they call ‘residual seasonality.’
You can see the effect in the chart below, which shows that during this expansion, Q1 GDP readings have been consistently below that of future quarters. Said differently, Q1 readings always seem to be anomalous.

This post was published at FinancialSense on 05/02/2017.

Facebook Under Fire For Selling Emotionally Vulnerable Kids’ Data To Advertisers

Less than two months after announcing it would begin using artificial intelligence tools in its marketing arm, Facebook is now being accused of letting advertisers target emotionally vulnerable children.
According to The Australian, a 23-page leaked document obtained by the outlet – marked ‘Confidential: Internal Only’ and dated 2017 – reveals that the social media giant used algorithms to sift through the posts, pictures, and reactions of 6.4 million ‘high schoolers,’ ‘tertiary students,’ and ‘young Australians and New Zealanders…in the workforce’ with the aim of learning about their emotional state.

This post was published at Zero Hedge on May 2, 2017.

This Change to the GOP Healthcare Bill Will Leave Some Americans Penniless

President Donald Trump’s tall promises about the new GOP healthcare bill expected this week ring hollow when you look at what the bill does.
He told ‘Face the Nation’ yesterday (Sunday) that the newest amendment to the controversial legislation shows the plan has ‘evolved,’ before adding that it will cover pre-existing conditions ‘beautifully.’
But there’s one yuge problem with Trump’s ‘beautiful’ and ‘evolved’ new healthcare bill…
The GOP Healthcare Bill Actually Hurts the Chronically Ill
It’s true that the latest amendment to the Republican healthcare bill would preserve the federal rule requiring insurers to cover pre-existing conditions.
But what the change doesn’t preserve is the federal rule banning insurers from charging higher premiums to a core group of chronically sick individuals – those who have experienced a lapse in coverage.
Nearly one-third of Americans with pre-existing conditions have experienced a gap in coverage over a two-year period due to job changes, other life transitions, or periods of financial difficulty, according to an April 27 report from the Center on Budget and Policy Priorities (CBPP).

This post was published at Wall Street Examiner on May 1, 2017.