Always, Always Income

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
Just before Christmas 2014, the Bureau of Economic Analysis upgraded Q3 2014 Real GDP to +5.0%. That represented a huge acceleration from earlier that year when during the depths of its Polar Vortex infused winter Q1 2014 GDP had contracted sharply (according to contemporary estimates). One need not be a betting man to hazard a correct guess as to which quarter gained all the attention and focus.
The statement from the White House three years ago was rather typical:
Today’s upward revision indicates that the economy grew in the third quarter at the fastest pace in over a decade. The strong GDP growth is consistent with a broad range of other indicators showing improvement in the labor market, increasing domestic energy security, and continued low health cost growth. The steps that we took early on to rescue our economy and rebuild it on a new foundation helped make 2014 already the strongest year for job growth since the 1990s.
This was a sentiment widely shared, an assurance, almost, that the worst was finally over and the recovery about to commence – if, indeed, it hadn’t already during that 5% whirlwind of activity.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ December 26, 2017.

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.

Europe’s Runaway Train Towards Full Digitization Of Money & Labor

Authored by Peter Koenig via The Saker blog,
The other day I was in a shopping mall looking for an ATM to get some cash. There was no ATM. A week ago, there was still a branch office of a local bank – no more, gone. A Starbucks will replace the space left empty by the bank. I asked around – there will be no more cash automats in this mall – and this pattern is repeated over and over throughout Switzerland and throughout western Europe. Cash machines gradually but ever so faster disappear, not only from shopping malls, also from street corners. Will Switzerland become the first country fully running on digital money?
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This new cashless money model is progressively but brutally introduced to the Swiss and Europeans at large – as they are not told what’s really happening behind the scene. If anything, the populace is being told that paying will become much easier. You just swipe your card – and bingo. No more signatures, no more looking for cash machines – your bank account is directly charged for whatever small or large amount you are spending. And naturally and gradually a ‘small fee’ will be introduced by the banks. And you are powerless, as a cash alternative will have been wiped out.

This post was published at Zero Hedge on Dec 26, 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.

From ‘Definitely Transitory’ to ‘Imperfect Understanding’ In One Press Conference

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
When Janet Yellen spoke at her regular press conference following the FOMC decision in September 2017 to begin reducing the Fed’s balance sheet, the Chairman was forced to acknowledge that while the unemployment rate was well below what the central bank’s models view as inflationary it hadn’t yet shown up in the PCE Deflator. Of course, this was nothing new since policymakers had been expecting accelerating inflation since 2014. In the interim, they have tried very hard to stretch the meaning of the word ‘transitory’ into utter meaninglessness; as in supposedly non-economic factors are to blame for this consumer price disparity, but once they naturally dissipate all will be as predicted according to their mandate.
That is, actually, exactly what Ms. Yellen said in September, unusually coloring her assessment some details as to those ‘transitory’ issues:
For quite some time, inflation has been running below the Committee’s 2 percent longer-run objective. However, we believe this year’s shortfall in inflation primarily reflects developments that are largely unrelated to broader economic conditions. For example, one-off reductions earlier this year in certain categories of prices, such as wireless telephone services, are currently holding down inflation, but these effects should be transitory. Such developments are not uncommon and, as long as inflation expectations remain reasonably well anchored, are not of great concern from a policy perspective because their effects fade away.
Appealing to Verizon’s reluctant embrace of unlimited data plans for cellphone service was more than a little desperate on her part. Even if that was the primary reason for the PCE Deflator’s continued miss, it still didn’t and doesn’t necessarily mean what telecoms were up to was some non-economic trivia.

This post was published at Wall Street Examiner on December 26, 2017.

Is This The Most Important Chart In The World?

“This is possibly the most important chart in the world…” As 13D Global Strategy and Research noted:
A breach of the top-line of the channel could signal a major reversal in the multi-decade downtrend in UST bond yields.“
So the question is – is an event engineered to slam rates lower, in order to avoid interest expense soaring beyond US government capabilities; or is the event a reaction to over-exuberant bubble-fueled positioning in risk assets?
What is perhaps most worrisome for that channel breakout is that speculative traders have almost never been more net long the long-bond…

This post was published at Zero Hedge on Dec 27, 2017.

Hysertianomics: S&P 500 Index UP 25% Since Trump Election As Fed Keeps Raising Rates (Krugman Said Markets Would Never Recover)

This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.
Nobel Laureate Economist Paul Krugman said on November 8, 2016 that markets will never recover from the stock market decline that occurred on November 7th, the day before the Presidential election.

This post was published at Wall Street Examiner by Anthony B Sanders ‘ December 26, 2017.

BRICS the Rise & Fall

The first thing to go when a country is moving into economic crisis is the arts. This is intermixed with various social programs. As the economic crisis broadens, demand for taxing the rich rise. However, all this accomplishes is to cause capital to hide and hoard even more refusing to invest or spend and this then adds to the economic decline.
The BRICS were touted as the new rage in the world economy. The BRICS were even holding their own summits and they were supposed to surpass the G7, were all the forecasts. Brazil, Russia, India, China and South Africa became known as the ‘BRIC’ nations back in 2001 which was a term coined by of course Goldman Sachs.

This post was published at Armstrong Economics on Dec 27, 2017.

The Chinese: Liars In Trade AND Sanctions

Tell me again why we don’t toss our so-called “free trade” with China right here and now…..
According to South Korean government sources, the satellites have pictured large Chinese and North Korean ships illegally trading in oil in a part of the West Sea closer to China than South Korea.
The satellite pictures even show the names of the ships. A government source said, “We need to focus on the fact that the illicit trade started after a UN Security Council resolution in September drastically capped North Korea’s imports of refined petroleum products.”

This post was published at Market-Ticker on 2017-12-27.