Martin Shkreli Convicted Of Securities Fraud

Moments ago, the Martin Shkreli jury announced its verdict, and while the ex-pharma exec was found not guilty on 5 of 8 counts, he was also found guilty on 3 of 8 counts, namely count 3: Securities Fraud, count 6: Securities Fraud, and count 8: Conspiracy to Commit Securities Fraud.
As a result, as Bloomberg writes, Shkreli – once dubbed “the most hated man in America” – is now a convicted felon.
Absent some miracle, Shkreli is now almost certain to go to prison, where he faces as much as 20 years behind bars, although he’s likely to serve much less. It remains to be seen whether the judge in federal court in Brooklyn, New York, allows him to return home, where he’s spent hours each day on social media, or ships him off to jail right away to await sentencing later this year.
As Bloomberg adds, In the end, it was Shkreli’s lies to his investors that cost him his freedom, not his 2015 decision to jack up the price of an anti-parasitic drug. Prosecutors said Shkreli, 34, misled clients about the performance of his failing hedge funds, secretly used their money to start Retrophin, and then took $11 million from the drug-development company to repay them.
And to think there was an easier way out…

If he had worked at a bank, I'm sure he could have neither admitted nor denied guilt and paid a fine with shareholder money. — Jonathan Tepper (@jtepper2) August 4, 2017

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

More Cracks Showing In The Rally Foundation?

Via Dana Lyons’ Tumblr,
This week has seen yet more examples of poor internals despite new highs in the major averages.

Last week, we highlighted 2 recent potential examples of a weakening in the ‘internals’ of the stock market rally. Again, by internals, we are referring to the amount of participation in the rally as measured by statistics such as advancing vs. declining stocks, advancing vs. declining volume and new 52-week highs vs. 52-week lows. The broader the participation, the stronger the foundation in the rally. Last week’s posts demonstrated some possible cracks in what has been a pretty solid foundation.
Today, we highlight another example of potential internal cracks, similar to those mentioned last week. This one involves the Dow Jones Industrial Average (DJIA), which has been on a roll of late, setting now 7 consecutive all-time highs. Yesterday’s new high was interesting in its lack of participation from the rest of the market.

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

Wells Fargo Shares Dive After 10Q Reveals Potential For “Significantly” More Fake Accounts

Wells Fargo just released a lengthy 10Q revealing a number of concerns for shareholders with regard higher-than-expected legal costs, new auto loan sales ‘issues’, and the potential for “significantly” more fake accounts based on a wider review. Ironically, WFC’s CEO Tim Sloan began his press release thus… “rebuilding trust became our top priority when I became CEO last October.”
Headlines from the 10Q (via Bloomberg)
*WELLS FARGO SEES POSSIBLE LEGAL COSTS BEYOND RESERVES OF $3.3B *WELLS FARGO SAYS CFPB INVESTIGATING FREEZING OF CLIENT ACCOUNTS *WELLS FARGO TO INCREASE BOGUS ACCOUNTS REVIEW BY 3+ YEARS *WELLS FARGO:WIDER EXAM MAY FIND `SIGNIFICANTLY’ MORE FAKE ACCTS *WELLS FARGO `ANTICIPATES’ IDENTIFYING, REMEDIATING AUTO ISSUES *WELLS FARGO SAYS AUTO REVIEW MAY INCLUDE ORIGINATION, SERVICING *WELLS FARGO:AUTO INSURANCE ISSUE MAY RESULT IN REGULATOR PROBES *WELLS FARGO SAYS IT DISCLOSED CLIENT DATA LEAK TO AGENCIES “We expect that our review of the expanded time periods, which adds over three years to the initial review period of approximately four years (May 2011 to mid-2015), and our review and validation efforts for the initial review period, may lead to a significant increase in the identified number of potentially unauthorized accounts.

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

This Time, It’s a Bubble in Rentals

Sin City’s projected 5,000 new apartment units for this year makes no noise nationally in the latest real estate craze. ‘In 2017, the ongoing apartment building-boom in the US will set a new record: 346,000 new rental apartments in buildings with 50+ units are expected to hit the market,’ writes Wolf Richter on Wolf Street. That is three times the number of units that came on line in 2011.
Richter continues, ‘Deliveries in 2017 will be 21% above the prior record set in 2016, based on data going back to 1997, by Yardi Matrix, via Rent Caf. And even 2015 had set a record. Between 1997 and 2006, so pre-Financial-Crisis, annual completions averaged 212,740 units; 2017 will be 63% higher!’
I’ve written before about the high-rise crane craze in Seattle, but that’s nothing compared to New York and Dallas, that are adding 27,000 and 25,000 units, respectively. Chicago is adding 7,800 units despite a shrinking population and rents decreasing 19 percent.

This post was published at Ludwig von Mises Institute on Aug 4, 2017.

Market Talk- August 4th, 2017

Markets in Asia were looking like they have been on borrowed time a few days this week and so a small retracement ahead of todays US numbers is no real surprise. Most indices were lower but saw a deserved bounce in the KOPSI after yesterdays drumming and also a small gain for the Hang Seng with real estate stocks leading some of the gains. The Nikkei lost -0.4% with industrials and food suppliers losing more ground than the auto manufactures to gain. The yen had a quiet night and still plays with a low 110 handle just ahead of the US data release. Volumes were low, even for the summer, but we still have many players on the side-lines.

This post was published at Armstrong Economics on Aug 4, 2017.

Shocking Footage Of Saudi Siege Against Own Citizens

The Saudi regime is in the midst of an extreme and brutal crackdown against its own citizenry in the country’s Eastern province – a situation now spiraling out of control with rising civilian deaths, entire neighborhoods turned to rubble, and new reports that water and electricity have been cut to the now completely besieged town of Al-Awamiya. Though local activists continue to upload shocking ground level videos to social media revealing that entire districts have been leveled, international and US media have remained largely silent.
Tensions have been simmering in the heavily Shia populated Qatif governate throughout the past year, especially after the January execution of prominent Shia cleric and Al-Awamiya native Nimr al-Nimr. Additionally, 14 Shia citizens, among them young Mujtaba al-Sweikat – a student enrolled at Western Michigan University – currently await execution upon the signature of King Salman. The torture and mass trial of the group, charged with “protest-related” crimes has further inflamed tensions in the region. Large protests against the Saudi monarchy and security services have been frequent in Qatif going all the way back to the start of the so-called “Arab Spring” – though major international media outlets have tended to ignore such protests occurring under US/UK friendly regimes.

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

Best Day For The Dollar Since January: Here’s Why

The Bloomberg dollar index has surged, rising as much as 0.8% higher against all G-10 peers, its biggest advance since Jan. 26, and is on track for its first weekly gain since early July.

The move has been largely attributed to the “stronger-than-expected employment and wage gains”, although as several banks commented shortly after the payrolls report came out, “everything is in place for a classic short-squeeze.”
However, the real reason why the dollar is spiking today is following comments from Gary Cohn who said that he’s ‘confident’ tax reform can be accomplished by year-end and together with House Ways and Means Committee Head Brady, underscored that another Homeland Investment Act, or HIA2, plan to repatriate offshore dollars is coming:

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

Venezuela Currency Disintegrates: Down 16% Today

Venezuela’s currency, the bolivar, is disintegrating at an incredible pace under the country’s political and economic crisis that has left citizens broke, desperate and in many cases, homicidal. The depreciation accelerated this week, after a disputed vote electing an all-powerful “Constituent Assembly” filled with allies of President Nicolas Maduro, which the opposition and dozens of countries have called illegitimate.
Just two days ago, on August 2, we reported that one dollar would buy 14,100 bolivars, up from 11,280 the day before.

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

Former Fed Chairman Alan Greenspan Ominously Warns That The Biggest Bond Bubble In History Is About To Burst

Are we right on the verge of one of the greatest financial collapses in American history? I have been repeatedly warning that our ridiculously over-inflated stock market bubble could burst at any time, but former Federal Reserve Chairman Alan Greenspan believes that the bond bubble actually presents an even greater danger. When you look at the long-term charts, you will see that an epic bond bubble has been growing since the early 1980s, and when it finally collapses the financial carnage is going to be unlike anything we have ever seen before.
Since the last financial crisis, global central banks have purchased trillions of dollars worth of bonds, and this has pushed interest rates to absurdly low levels. But of course this state of affairs cannot go on indefinitely, and Greenspan is extremely concerned about what will happen when interest rates start going in the other direction…
Former Federal Reserve Chairman Alan Greenspan issued a bold warning Friday that the bond market is on the cusp of a collapse that also will threaten stock prices.
In a CNBC interview, the longtime central bank chief said the prolonged period of low interest rates is about to end and, with it, a bull market in fixed income that has lasted more than three decades.

This post was published at The Economic Collapse Blog on August 4th, 2017.

The “Dusenberry Effect” In The U.S. Economy

Via Global Macro Monitor,
Just saw this chart on Zero Hedge yesterday, which takes me back to the days of graduate school and an unfinished Ph. D. dissertation.

One part of the ‘Dusenberry Effect’ basically states that consumers do not give up their consumption patterns very easy even if their incomes decline.
They, in effect, ‘ratchet’ down their living standard very slowly by first having a second wage earner enter the workforce as we saw in the 1970’s when women began to enter the workforce en masse and then by taking on debt to finance their previous standard of living.

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

STUNNING RESULTS: Four Top Primary Silver Miners Production Plummets

In an interesting change of events, production at four of the top primary silver miners plummeted during the second quarter of 2017. This goes well beyond normal fluctuations in mining companies production figures during different quarterly reporting statements. The company with the least percentage decline in silver production still suffered a 20% reduction of mine supply in the second quarter.
According to the recently released information, silver production declined between 20-34% from these four primary silver mining companies during the second quarter. The company that suffered the biggest decline in silver production was Hecla at -34%, followed by Endeavour Silver at -26%, Silver Standard at -24% and First Majestic with a decrease of 20%.

This post was published at SRSrocco Report on August 4, 2017.

Blue Apron Tumbles To Record Lows After Slashing Workforce By 24% (Just 36 Days After IPO)

As one veteran market participant exclaimed: “Seriously, how is that not illegal?”
Just 36 days after the company IPO’d to much CNBC-based applause and “the IPO market is back”, Blue Apron shares are languishing at record low $6.01 (down 45% from its highs of $11) drastically below the IPO price of $10.
It is tumbling to fresh lows today after announcing – ahead of its earnings next week – that the company is cutting 1,270 jobs from its New Jersey facility according to a public notice Friday. It had 5,202 workers as of March 31.

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

Yanking the Bank of Japan’s Chain

Mathematical Certainties
Based on the simple reflection that arithmetic is more than just an abstraction, we offer a modest observation. The social safety nets of industrialized economies, including the United States, have frayed at the edges. Soon the safety net’s fabric will snap. This recognition is not an opinion. Rather, it’s a matter of basic arithmetic. The economy cannot sustain the government obligations that have been piled up upon it over the last 70 years.
In other words, the post-World War II boom is nearly over and the bills are coming due. What’s more, greater and greater amounts of future growth are already claimed by existing debt obligations. This, in turn, inhibits that growth from making its way into the larger economy, thus limiting future economic growth.
Perhaps this is why mature economies are finding it near impossible to attain 3 percent GDP growth. In fact, the last time U. S. GDP grew by 3 percent or more for a calendar year was 2005, about 12 years ago. Unfortunately, it doesn’t look like U. S. GDP growth will ramp up any time soon.

This post was published at Acting-Man on August 4, 2017.

Rig Count Drops For 3rd Time In 6 Weeks As US Shale Heavyweights Boost Production

The pace of US oil rig count growth has slowed dramatically in the last six weeks as the lagged response to oil prices indicated. While US oil production continues to trend higher, in lagged response to the rise in rigs, it is also nearing its apex. However, four U. S. shale companies recently reported second-quarter production that beat targets and increased their respective full-year output growth guidance.
This is the 3rd weekly drop in the US oil rig count in the last six weeks…

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

The Trump Administration Reaches for a Trade Sledgehammer

The White House is planning to launch new investigations into China’s trade and intellectual property practices, and soon. The move underscores how talks between the United States and China have broken down over Washington’s expectations that Beijing would help rein in North Korea’s nuclear program. With the 100-day action plan on trade that followed US President Donald Trump’s April meeting with Chinese President Xi Jinping over, and with Pyongyang still aggressively pursuing a fully functional and deliverable nuclear weapon, the White House already had signaled it would no longer be constrained when dealing with China before Trump tweeted July 29 that he was “very disappointed in China” for its inaction on North Korea. And now that comprehensive trade talks are frozen, the United States is pursuing far more aggressive measures against China’s economic policy – though it still retains the option to walk this pursuit back if needed.
According to several reports, the Office of the US Trade Representative will investigate technology transfers mandated by China pursuant to Section 301 of the Trade Act of 1974. Beijing requires foreign companies to share technology in exchange for allowing them to invest in China or access the massive and lucrative Chinese market. The investigation could be announced this week and is likely to be rolled into an executive order by Trump that includes other enforcement actions related to trade, investment, and intellectual property.

This post was published at FinancialSense on 08/04/2017.