Blue Apron Is Crashing (Again) After Analyst Slaps $2 Price Target On New IPO

Blue Apron is trading down 7% in the pre-market, down over 30% from its IPO-day highs and down 25% from the IPO/Open price… in 10 days. Today’s decline, following SNAP’s crash yesterday, seems catalyzed by the first analyst rating since the IPO.. at $2!
As Bloomberg reports, the stock got its first analyst rating since the June 28 IPO; the company’s business model has severe cost challenges and intensifying competition,:

This post was published at Zero Hedge on Jul 11, 2017.

Who’s Going To Pay For It?

This sort of article makes my blood boil.
Life has a way of reminding its benefactors of what an inexpressible miracle it truly is at times. Sometimes doctors play a critical part in making the miracle possible. And sometimes, the miracle comes even when the most well-meaning experts believe that science says there is no hope.
But somehow in the twisted, upside-down case of a little 11-month-old baby boy named Charlie Gard, doctors and the judiciary have said that, not only is there no hope, but rather than release Charlie to the care of his parents, they have also omnisciently decided to literally hold him hostage – insisting not only that Charlie must die but that he also must be in their “care” when he does. It is a case that rocks America to our core, because if something like this can happen across the pond, it can certainly happen here.
The “solution” being proposed is to grant him and his family permanent residency in the United States so that (1) they can travel here and, unsaid, (2) that we the taxpayers will wind up expending unlimited amounts of money on a futile “treatment.”
There is a reason we should not permit drug advertising in the United States (it’s banned in most other nations) and it’s the same reason this sort of “law”, if it was to pass, is a monstrously bad idea. The reason is science is easily trumped by emotion and there is, in fact a scale between “worthless” or “futile” and “useful.”

This post was published at Market-Ticker on 2017-07-11.

Pet Rock Revisited

It was almost precisely two years ago that the WSJ published their infamous “gold is a pet rock” article. Just as that article and a few others marked the conclusion of the bear market, could a new article published ten days ago in the Washington Post be ringing the same bell?
Here’s a link to the original article…though the WSJ now has it behind its paywall: And of course, here’s the wonderful cartoon that accompanied the piece:

This post was published at GoldSeek on Tuesday, 11 July 2017.

MAN ARRESTED FOR SENDING THE IRS A FAKE BOMB, MARIJUANA, AND…HIS OWN FINGER

Well, I guess this is one way to let the IRS know how you feel about them…
A Washington man is facing federal charges for sending an assortment of unusual and disturbing items to an IRS office in Utah.
Federal prosecutors in Tacoma say Normand Lariviere, 68, sent a fake bomb, a bullet, and a marijuana joint.
Oh, and he also sent one of his own fingers.
From SeattlePi:
Writing the court, a special agent with the Federal Protective Service said Lariviere has been upset with the IRS and other federal agencies since he was laid off in the 1990s from his position as a civilian defense contractor.

This post was published at The Daily Sheeple on JULY 11, 2017.

Fed Or Fed? Why One Trader Is Watching Wimbledon Closer Than The Market

Bored as you wait for Yellen’s Wednesday testimony? Finding yourself switching over to Wimbledown every now and then? Not only are you not alone (Bloomberg has a note out overnight titled “Fedspeak Takes Second Place to Wimbledon Fed”), but you may actually be conducting “fundamental analysis.” As Bloomberg’s macro commentator Marc Dumore explains, “there’s some historical evidence that investors might be better off watching the other Fed’s performance at Wimbledon.”
Here is Cudmore’s explanation why.
You’re Watching the Wrong Fed!
Markets have had a quiet start to the week as we await Fed Chair Janet Yellen’s testimony to Congress and then the Fed’s Beige book. While both events have potential to cause some short-term volatility, there’s some historical evidence that investors might be better off watching the other Fed’s performance at Wimbledon.
Roger Federer is the betting market’s favorite to win the Men’s Singles tournament at Wimbledon for a record eighth time. While watching his matches will almost certainly provide more entertainment than observation of this week’s markets, his past successes have a curious — or is it spurious? — correlation with global asset performance.

This post was published at Zero Hedge on Jul 11, 2017.

Peter Krauth Says Price of Silver Won’t Stay at These 15-Month Lows for Long

It seems the price of silver has been spiraling out of control lately, down 13.2% from its $17.71 peak on June 6. This morning, it traded 1.3% lower at $15.37 – the lowest since prices closed at $15.38 on April 8, 2016, over 15 months ago.
The metal took an undeserved punch in the gut last Friday, July 7, when silver prices fell 2.3% following the stronger-than-expected June jobs report.
But the even bigger news for the silver price last week may not be its latest weakness, but rather a flash crash on Thursday evening around 7:00 p.m.
Some are calling the event a ‘market glitch,’ but experts are blaming high-frequency trading by computer algorithms, whereby selling feeds on itself at lightning speed. And sadly, these events are becoming increasingly common.
You’ll note this flash crash was significant, pulling silver down 8.7% very briefly from around $16.10 to $14.70. Although silver recovered quickly, it may have set the tone for Friday’s session alongside the jobs report.
All of this begs the question of whether or not silver prices are at a bottom yet. Judging by certain technical indicators, we may be near a bottom now, and I think the metal will rally higher as demand from one of the world’s biggest silver markets continues to explode.

This post was published at Wall Street Examiner on July 10, 2017.

Morgan Stanley Slashes SNAP Price Target To $16 From $28 After Sub-IPO Plunge

Just hours after Snap(chat), or rather its shareholders, were gravely injured when the stock tumbled below its IPO price, one of the company’s IPO underwriters Morgan Stanley decided to add some insult, when its analyst Brian Nowak downgraded the social network, or photo app, or whatever it is these days, to equal-weight, cutting its price target to $16 from $28 on ad product and competition concerns. Shares promptly tumbled another 2.7% to $16.50 in pre-market trading on the downgrade .
According to the MS analyst, the company’s ad products are taking longer to improve and evolve than previously expected, noting “our latest industry conversations indicate many advertisers are struggling to develop SNAP ad units with sufficient completion rates and consistent return on investment.” He also cited increasing competition from Instagram, which appears to be giving advisers sponsored lenses for free, according to checks. Nowak calls this troubling as he estimates sponsored lenses and similar products accounting for ~50% of SNAP’s ad revenue.
MS alslo listed 4 larger than expected challenges:

This post was published at Zero Hedge on Jul 11, 2017.

Former Investor Says Shkreli Reminded Him Of “Rain Man”

The prosecution in the trial of former Turing Pharmaceuticals CEO Martin Shkreli called more investors to testify about alleged malfeasance by Shkreli during his time as a hedge-fund manager on Monday. And while two witnesses echoed earlier descriptions of Shkreli being evasive when investors asked for their money, both ultimately admitted that they were paid back with interest.
One corroborated an earlier witness’s claim that Shkreli became evasive when asked to return clients’ money, stalling for more than a year before making investors whole with questionable payouts from Retrophin, the pharmaceutical company he co-founded, as well as grants of Retrophin stock, which is now worth $20 a share.
Another played into the portrayal of Shkreli that defense attorney Benjamin Brafman has sought to sell to the jury: That any liberties taken by Shkreli were ultimately made in good faith, but his clients’ odd behavior and personality quirks at times caused friction between him and his clients.

This post was published at Zero Hedge on Jul 11, 2017.

Packaged-Goods Companies Slash Marketing Spending As Amazon Makes Sales “All About Price”

Amazon’s dominance of all things retail-related in the US is starting to effect on how packaged goods are marketed: Big Brands are starting to give up on expensive advertising campaigns because customers no longer see the value in expert branding. Now, thanks to Jeff Bezos and his algorithms, they’re fixated at finding the lowest price available.
According to MarketWatch, as Amazon and Wal-Mart make bigger pushes into the packaged-goods categories, brand names are spending less on marketing and backing away from their original models, James Cakmak, an analyst at Monness, Crespi, Hardt wrote in a Monday note. The $800 billion consumer packaged-goods category includes name-brand detergents, foods and personal care items, with large companies such as PepsiCo Inc., Johnson & JNJ and Mondelez International Inc.
***
Amazon’s Prime Service, which attracted millions of customers by offering two-day shipping, comprehensive music and movie libraries, monthly deals and even discounts to customers on government assistance. According to estimates from Morningstar, nearly 79 million U. S. households now have an Amazon Prime membership, up from around 66 million at the end of last year – a number that rivals the total cable subscribers in the US.

This post was published at Zero Hedge on Jul 10, 2017.

‘Silver’s Plunge Is Nearing Completion’

– Silver’s plunge is nearing completion – Bloomberg analyst
– Silver’s 10% sharp fall in seconds remains ‘mystery’
– Plunge despite anemic global supply and strong demand
– Total silver supply declined in ’16 – lowest level since ’13
– Silver mine production down in ’16, first time in 14 years
– Total silver supply decreased by 32.6 Mln Ozs in 2016
– Supply deficit in 2016- fourth consecutive year (see table)
– ‘Falling knife’ caution but opportunity presenting itself
***
Silver has had a torrid time of late with a the ‘flash crash’ seeing a massive $450 million silver futures sell order pushing silver 10% lower in seconds and follow through selling later Friday after the better than expected U. S. jobs number.
The electronic futures silver and gold exchanges continue to ‘wag the dog’ of the global silver and gold markets … for now.
If one had just looked at the short-term trends of silver at the end of 2016, you would have thought we would be mad to predict that 2017 would be a bearish year.

This post was published at Gold Core on July 11, 2017.

Here’s How (Rich & Poor) Americans Spend Their Time

Today’s visualization comes from data scientist Henrik Lindberg, and it shows America’s favorite past-times based on the participation of people in different income brackets.
It uses data from the American Time Use Survey that is produced by the Bureau of Labor Statistics (BLS) to break down these activities.
***
Team sports and solo pursuits both are represented well in the center. In fact, reading for personal interest, dancing, computer use, hunting, hiking, walking, playing basketball, or playing baseball can all be found in the middle of the spectrum, appealing to Americans in every income group.
Closer to the top and bottom of the visualization, however, we see where income groups diverge in how they spend their time. It’s probably not surprising to see that people with higher incomes spend more time golfing, playing racket sports, attending performing arts, and doing yoga than average. On the flipside, lower income Americans spend more time watching television, listening to the radio, and listening to/playing music.

This post was published at Zero Hedge on Jul 11, 2017.

Silicon Valley’s ‘Death by Overfunding’: Next Unicorn Collapses

When the ocean of hype turns toxic.
San Francisco-based Jawbone was a unicorn whose valuation peaked at $3.2 billion in 2014. Past tense because the maker of fitness trackers and other gadgets began quietly liquidating last month. And it’s being sued by vendors that claim they’re owed money, according to Reuters. Yet, Jawbone had raised nearly $900 million in equity and debt capital. And it blew this money.
Jawbone’s liquidation was first reported by The Information on July 6 and confirmed on Monday by Reuters. It’s the second largest failure of a venture-backed startup in terms of money raised, behind the bankruptcy in 2011 of solar-panel maker Solyndra.
Top venture capital firms – including Sequoia, Andreessen Horowitz, Khosla Ventures, and Kleiner Perkins – had invested in Jawbone. In September 2014, it raised $147 million at a valuation of $3.2 billion. In February 2015, it raised $400 million in debt, of which $300 million from BlackRock. By November 2015, with prospects curdling, it laid off 15% of its workforce.
In January 2016, when VC firms refused to throw more money at it, Jawbone’s president Sameer Samat, who’d arrived from Google seven months earlier, went back to Google, and in the same breath, the Kuwait Investment Authority led a $165-million Hail Mary investment in the company.

This post was published at Wolf Street by Wolf Richter ‘ Jul 11, 2017.

INCOMING!

Here we go.…
Were it not for the provision that Pat Toomey, the Pennsylvania Republican, put into the Senate’s proposed health care reform, this legislation would be moderately important but hardly momentous. Toomey’s provision, however, makes it this century’s most significant domestic policy reform.
It required tenacity by Toomey to insert into the bill a gradually arriving, but meaningful, cap on the rate of growth of per-beneficiary Medicaid spending. It is requiring of Toomey and kindred spirits strenuous efforts to keep it there, which reveals the Republican Party’s itch to slouch away from its uncomfortable but indispensable role as custodian of realism about arithmetic.
Well, no it doesn’t and he isn’t — that is, being realistic about arithmetic.
The argument in this article is that the expansion in cost is all about “mission creep.” Nonsense.
The facts are that medical spending has gone from ~3-4% of GDP to nearly 20% and continues to accelerate. This of course means that ultimately it would exceed 100%, which is impossible.

This post was published at Market-Ticker on 2017-07-11.

Wonderful Monetary Policy and Beautiful Deleveragings — Doug Noland

While traditional analysis would look first to U.S. economic fundamentals (including household and corporate debt, earnings, employment and inflation) for indications of underlying market vulnerability, I would point instead to Global Market Bubble Dynamics – while reminding readers that the current backdrop is distinct to previous Bubble experiences. As such, market indicators this week at the periphery – EM as well as European – were flashing heightened susceptibility to de-risking/de-leveraging and the potential for liquidity challenges. Considering the enormity of recent flows, perhaps EM will provide an early test for the thesis of Market Structural Vulnerabilities.
Here at home, 10-year Treasury yields rose eight bps to 2.39%. In equities, there was more of this choppy topping action rotation away from tech/high-flyers and into financials/laggards. Corporate debt markets are beginning to feel the strain of rising global yields. High-yield bond funds saw another $1.1bn of outflows, though investment-grade corporates are still attracting large inflows. The high-yield ETF (HYG) traded near a two-month low. Commodities, as well, seemed to support the thesis of fledgling ‘Risk Off’ and waning liquidity. With crude down almost 4%, the GSCI Commodities Index dropped 1.8%. Copper fell 2.4% and gold lost 2.3%. But it was wild trading in silver (down 7.2%) that might have provided a harbinger of more general market liquidity issues to come.
That Treasuries, equities, corporate Credit and commodities all seem to be indicating a (thus far subtle) shift in market liquidity, we can look to ‘risk parity’ – and similar multi-asset class strategies that incorporate leverage – as a possible weak link in a Vulnerable Global Market Structure. And we’re supposed to savor this moment and pay a debt of gratitude to courageous central bankers? Strange world.

This post was published at Credit Bubble Bulletin

Volcker Says Trump Changes to Volcker Rule Won’t Erode Principle

Paul Volcker said he isn’t worried that the Trump administration will undermine the financial rule that bears his name.
‘If they can do it in a more efficient way, God bless them,’ the former Federal Reserve chairman said in a phone interview about proposed revisions to the regulation. ‘The basic principle remains valid. I hope that won’t go away, and I expect that it won’t.’
The Volcker Rule, part of the 2010 Dodd-Frank Act, restricts trading by banks to ensure they don’t make risky bets that lead to big losses. It took five regulatory agencies more than three years to hammer out the details of how firms can continue to help clients trade without engaging in so-called proprietary bets with their own money. A report released by Treasury Secretary Steven Mnuchin last month recommended that regulators simplify some of those directions and exempt community banks.
‘Everybody wants to see it more simple,’ said Volcker, 89, who served as Fed chairman under presidents Jimmy Carter and Ronald Reagan. ‘The basic premise is hard to fight against. Yet the banks have powerful lobbyists who have been fighting it from day one.’

This post was published at bloomberg

In America’s Richest State, the Capital Flirts With Bankruptcy

The hedge-fund enclave of Greenwich, on the Connecticut Gold Coast, is about 100 miles and a world away from the state capital.
But the fiscal crisis in Hartford, the historic center of the American insurance industry, is fast becoming more representative than mansions or yachts of the wealthiest state in the U.S. The city is edging closer than ever to the breaking point, waiting for the financially troubled state government to step in.
It may seem crazy that a place as rich as the Nutmeg State, which counts among its residents hedge-funds masters like Ray Dalio and Steven A. Cohen and legions of Wall Street bankers, could be in such fiscal trouble. Last year, the per-capita income there was $71,033, the highest in the nation, according to the U.S. Bureau of Economic Analysis.
For all that, state-worker pensions have been underfunded for decades. Tax increases aimed at closing deficits have put a strain on an economy struggling from the loss of high-paying finance jobs, leaving it among the few that still haven’t recovered from the recession. The hedge fund industry fell on hard times, with about 1,060 shuttering globally last year. UBS Group AG abandoned the world’s largest trading floor in Stamford after the financial crisis, and the Royal Bank of Scotland downsized its office there. Pension, debt and health-care costs just kept growing.
‘There’s a limit to how much you can tax and there’s a limit to how much you can cut before you damage the viability and attractiveness of the city,’ Mayor Luke Bronin said in May. ‘Right now, from a fiscal standpoint, you have a capital city fighting with its hands behind its back.”

This post was published at bloomberg

Catalonia to Move to Referendum October 1st to Break From Spain

The Spanish region of Catalonia is preparing to hold a second referendum on separating from of Spain on October 1st, despite warnings from Madrid. Naturally, the EU is against any such separation. However, the regional tensions are historic and Catalonia is the rich and prosperous region of Spain with Barcelona being perhaps the most beautiful city in Europe. The separatist movement are generally small but rising on a global scale primarily because of governments going broke everywhere.
***
Spain was actually formed by the marriage of the Catholic Monarchs of Queen Isabella I of Castile (Spain) and King Ferdinand II of Aragon in general. Both regions were historically two separate nations. That distinction has lived on and it is economics that is driving the separatist movement as we see in Canada with Quebec and in the United States with movements building in Texas and California, albeit small minorities so far. Catalonia was not part of Aragon but to some degree much more isolated from Madrid as you can see on this map.

This post was published at Armstrong Economics on Jul 11, 2017.

Is This The End Of China’s Second Housing Bubble?

When the economy started to cool in the beginning of 2016, China opened up the debt spigots again to stimulate the economy. After the failed initiative with the stock market in 2015, Chinese central planners chose residential real estate again.
And it worked. As mortgages made up 40.5 percent of new bank loans in 2016, house prices were rising at more than 10 percent year over year for most of 2016 and the beginning of 2017. Overall, they got so expensive that the average Chinese would have had to spend more than 160 times his annual income to purchase an average housing unit at the end of 2016.
Because housing uses a lot of human resources and raw material inputs, the economy also stabilized and has been doing rather well in 2017, according to both the official numbers and unofficial reports from organizations like the China Beige Book (CBB), which collects independent, on-the-ground data about the Chinese economy.

This post was published at Zero Hedge on Jul 10, 2017.