• Sprott Money
    05/05/2016 - 06:02
    Why is a Deutsche Bank mouthpiece suggesting “negative retail deposit rates or perhaps wealth taxes”? The answer is to (supposedly) stimulate our economies.

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Haunting Pictures Of A Transportation Recession As Freight Rail Traffic Plunges

The impact of the transportation recession on railroads is now very visible. Here’s how Union Pacific is dealing with this issue, via Google Earth, on May 3: 292 engines idled on a siding west of Benson, Arizona, along I-10, for a stretch of nearly 4 miles. Note how the line of locomotives curves and fades into the left edge of the photo – an once majestic and haunting sight, all these powerful machines idled on a track in the Arizona desert...


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"Rich" Americans Confidence Crashes Most Since 2013

Despite equity prices soaring to within inches of all-time record highs, it appears 'rich' Americans are no longer impressed by The Fed's handiwork. As Bloomberg's Consumer Comfort index slumps to its weakest since Dec 2015, high-income (over $75k) Americans suffered their biggest plunge in confidence since October 2013 seemingly unable to revive their animal spirits as much as CFOs and their buybacks.


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Trumped! Why It Happened And What Comes Next, Part 1

First there were seventeen. At length, there was one. Donald Trump’s wildly improbable capture of the GOP nomination, therefore, is the most significant upheaval in American politics since Ronald Reagan. And the proximate cause is essentially the same. Like back then, an era of drastic bipartisan mis-governance has finally generated an electoral impulse to sweep out the stables.


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Tesla Is Tumbling In The Pre-Market

The battle between Elon Musk and Jim Chanos continues in the pre-market as non-GAAP exuberance is trumped by epic cash burns and reality-checks from hedge fund managers. The after-hours panic-buying algos appear to have enabled more than a few to exit in a hurry...


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Commodities Are Surging As The Dollar Rolls Over

Overnight strength in the USDollar has begun to rollover, most notably against the Yen, and that is sparking a bid in commodities - industrial and precious metals. Canada headlines (and Libya) along with dismal US jobs data have also piled on, sending WTI Crude to test $46 (and copper is rallying) as Gold and Silver surge...


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The Fallout From The "Devastating" Canadian Wildfire: Over 500,000 Barrels Offline, $1 Billion In Losses

Now that Canada has had a chance to evaluate the damage from the historic Alberta fire, the question on everyone's lips is what will be the near-term impact on oil production.  The most comprehensive answer provided so far comes from Morgan Stanley's Benny Wong who estimates that the total number of offline capacity will be anywhere between 400 and 500 mbbl/d, with the shut-in expected to last about 10 days, potentially reducing total market output by as much as 5 million barrels.

 


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Turkey PM To Quit, Handing Even More Power To Erdogan: What This Means For Turkey

Turkey's Prime Minister Ahmet Davutoglu says he will stand down at an extraordinary congress of his ruling AK Party later this month. Speculation about his resignation has been rife since Mr Davutoglu met President Recep Tayyip Erdogan on Wednesday. He is long thought to have disapproved of Mr Erdogan's plans to move Turkey to a presidential system of government. He announced his resignation after holding talks with party leaders. The congress would be held on 22 May.


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A "Recovery" Paradox: Job Cuts In 2016 Are Highest Since 2009 As Initial Jobless Claims Tumble

The paradoxical divergence between the government's data on initial jobless claims, which in just over half an hour is expected to print at or close to another multi-decade low, and the actual number of layoff announcements by employers as tracked by Challenger Gray, and which continues to soar is puzzling to say the least. In the first four months of 2016, employers have announced a total of 250,061 planned job cuts, up 24% from the 201,796 job cuts tracked during the same period a year ago. This represents the highest January-April total since 2009, when the opening four months of the year saw 695,100 job cuts in the aftermath of the biggest financial crisis in modern history.


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Frontrunning: May 5

  • Europe shares, oil snap four-day losing streaks (Reuters)
  • Oil rallies as Canada fire and Libya violence threaten supply (Reuters)
  • How Trump Won—and How the GOP Let Him (WSJ)
  • Hedge Fudge Managers Lose Their Swagger (BBG)
  • Turkey Premier Said to Give Up as Erdogan Tightens Grip (BBG)

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"Global LIBOR Scapegoat" Turns To Public Crowdfunding To Fund Appeal

While UBS agreed to pay $1.5 billion to quickly settle charges that the bank manipulated LIBOR, trader Tom "Libor is too high, 'cos I've kept it artificially high" Hayes wasn't so lucky however. Alas, Hayes' pockets weren't that deep and he was the scapegoat UBS chose to offer up to the masses in the wake of the scandal, eventually being found guilty and sentenced to 14 years in jail (later reduced to 11 years).


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Futures Rebound As Crude Regains $45 On Canada Fears; Turkey Hammered

While markets remain relatively subdued ahead of tomorrow's nonfarm payrolls report, after several days of losses in US stocks which pushed the S&P500 to three week lows, overnight markets ignored the latest weak data out of China where the Caixin Services PMI was the latest indicator to disappoint (dropping from 52.2 to 51.8), and instead focused on crude, which rebounded from yesterday's post inventory-build lows and briefly printed above $45/bbl over uncertainty related to the impact of Canada wildfires on production and how long will last. The bounce in WTI has meant Brent briefly traded at parity with West Texas for the first time in 6 weeks. 


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A Very Bearish Stanley Druckenmiller Blows Up At The Fed; Reveals His Biggest "Currency" Position

If anyone had wondered if Stanley Druckenmiller's recent bearishness had dissipated, or transformed into at least modest bullishness as a result of the market meltup, we have bad news.


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Another Deadlocked Election Coming Up In Spain

After six months of failed coalition attempts, Spain’s King Felipe dissolved parliament and announced new elections. I reported on this last week, but the official document dissolving parliament was signed today. New elections are on June 26. Will the results be any different?


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