Archive - Aug 2015 - Story

News that bonds and stocks of Abengoa SA - the Spanish renewable-energy company - plunged after a plan to shore up capital failed to reassure investors that it can stop burning cash is likely to have passed many by. But coming just one day after President Obama unleashed his Clean Power Plan, the fact that the company received over $230 million in US taxpayer subsidies in 2014 - despite two ongoing federal investigations - may raise an eyebrow or two as images of Solyndra's government-sponsored farce come to mind.

For those who prefer unbiased, accurately reported data, it should come as no surprise to those who have been observing the recent swoon in the economy, that according to Gallup data, July was the third month in a row in which the average American spent less than they did in the same month a year ago, confirming that the US economy is if not in a recession then certainly no longer growing. Furthermore, as the chart below shows and confirms the already week retail spending data, of the 7 months in 2015, 5 have seen a decline in consumer spending year over year.

Apple is down 12% from exuberant earnings highds just a few days ago and has broken below a crucial technical support level at its 200-day moving average (something it has not done in over 2 years). While the parade of bullish analysts and fan boys continues to have faith that Apple TV, iCar, or iWatch will bring about the next leg of the 'no brainer' rally to trillion-dollar market cap levels, perhaps, just perhaps, there is a crack in the armor of the "as goes Apple so goes America" company. As Engadget reports, Apple has slipped to third place in China -behind Xiamoi and fast-growing rival Huawei...

After trading limit-down on Monday when Greek stocks opened for trading for the first time since PM Alexis Tsipras called a referendum, shares of Greek banks once again flirted with the daily 30% loss limit on Tuesday as there were simply no bids for a set of institutions that everyone knows is insolvent. Meanwhile, Kathimerini reports that "the state’s losses from indirect taxes alone in the first couple of weeks of capital controls and the shuttering of banks [amounted to] more than half a billion euros."

In this perfection of consumerist narcissism, the only goal is maximizing private gain by whatever means are available. Clinton solidified the modern presidency's narcissistic obsession with public approval (the political equivalent of "likes" on Facebook) and the exploitation of that popularity for maximum self-enrichment.

Just days after WSJ revealed that Deutsche Bank's $2.5 billion LIBOR settlement could be in jeopardy due to the apparent mishandling of chat records dating back to 2005, Bloomberg says Loretta Lynch’s Justice Department has launched a criminal probe into the bank’s alleged role in facilitating a series of trades which may have allowed Russian clients to launder billions through the bank's trading desks.

• Unhappy Voters Shake Up Presidential Race (WSJ)
• China stock exchanges step up crackdown on short-selling (Reuters)
• China Dethroned as World’s Most Liquid Stock Market After Curbs (BBG)
• Xiaomi retakes the smartphone lead in China as Apple slips (Engadget)
• Impact of EPA’s Emissions Rule on Industry to Vary (WSJ)
• Citadel’s Ken Griffin Leaves 2008 Tumble Far Behind (WSJ)
• Greece says expects bailout deal by Aug 18 (Reuters)

After a lukewarm start by the Chinese "market", which had dropped for the past 6 out of 7 days despite ever escalating measures by Beijing to manipulate stocks higher, finally the Shanghai Composite reacted favorably to Chinese micromanagement of stock prices and closed 3.7% higher as Chinese regulators stepped up their latest measures by adjusting rules on short-selling in order to reduce trading frequency and price volatility, resulting in several large brokerages suspending short sell operations. At this pace only buy orders will soon be legal which just may send the farce of what was once a "market" limit up.

There’s nothing quite like a grotesquely lopsided “economic recovery” in which a handful of cities boom, while the rest of the nation stagnates. Even worse, millennials living in such chosen cities face one of two options. Either live in mom and dad’s basement, or face a standard of living far more similar to 19th tenement standards than the late 1990’s tech boom. With that out of the way, I want to introduce you to what a $1,000 per month rental in the San Francisco Bay area looks like. Shipping containers...

We Americans need to be humble, not arrogant. We need to acknowledge that American living standards, except for the favored One Percent, are in long-term decline and have been for two decades. If life on earth is to continue, Americans need to understand that it is not Russia and China, any more than it was Saddam Hussein, Gaddafi, Assad, Yemen, Pakistan, and Somalia, that are threats to the US. The threat to the US resides entirely in the crazed neoconservative ideology of Washington’s hegemony over the world and over the American people. This arrogant goal commits the US and its vassal states to nuclear war.

When we insist that markets are broken and the equities have been consigned to the gambling casinos, look no farther than today’s filing by Alpha Natural Resources. Markets, which were this wrong on a prominent name like ANRZ at the center of the global credit boom, did not make a one-time mistake; they are the mistake. As it now happens, the global credit boom is over; DM consumers are stranded at peak debt; and the China/EM investment frenzy is winding down rapidly. Now comes the tidal wave of global deflation...

Another weekend of glad-handing and Sunday talk-shows and still The Donald dominates the GOP Presidential nominee race. With all eyes firmly glued on this week's debate, Trump had a few choice words for those who attended the Koch brothers' biannual conference (which he was not invited to), tweeting "I wish good luck to all the Republican candidates that traveled to California to beg for money etc. from the Koch Brothers... Puppets?" As WSJ reports, Mr. Trump poses a more delicate short-term challenge for the GOP, thanks to high name recognition, celebrity appeal and a populist message that taps a powerful anti-Washington vein.  "I don’t think you should underestimate how frustrated people are," Florida Sen. Marco Rubio said Sunday during a lunch at the Koch gathering. "Mr. Trump has tapped into some of that."

Those possessing the anti-capitalist mentality — so ascendant in our culture today — often critique market actors as being solely motivated by “greed.” Surely economic systems based on nobler motivations, they say, would better promote the long-run interests of the planet. These ideas ran through my head when I read about the new probate court “fees” approved by the Connecticut legislature this month, reinforcing its status as being among the worst states in which to die. The “fees” were justified on an expected budget shortfall of $32 million that the legislature wanted to fill, but I wondered: Where was the outcry from the greed-police?

Chinese stocks are opening flat to marginally higher - still lower from Friday's close - despite the government unleashing yet more 'measures' in the name of stability. Having banned 5 accounts - reportedly including Fed-favorite Citadel - China is blaming excess market volatility on short-term short-sellers and has put in place curbs on short-selling that force traders to hold for at least one day. On the bright side, margin traders reduced exposure for the seventh day in a row, reducing outstanding balances to 5-month lows.. which leaves the median China stock trading at a remarkable 61x reported earnings (compared with 12x in Hong Kong).

Due to popular demand, we appended to the 2013 speech detail first released last week the full breakdown of Hillary's and Bill's 2014 and 2015 speeches which had been provided previously as part of her mandatory disclosure in May of this year. In summary since 2013 Bill Clinton has been paid $26.6 million for 94 speeches; Hillary's grand total is slightly less: $21.7 million for 92 private appearances.