B+

A new academic study from researchers at Stanford, UCLA, and the Arison School of Business in Israel suggests that ETFs are contributing to a lack of liquidity for the stocks they hold. Essentially, the argument is that increased ETF ownership leads to wider bid-asks, less analyst coverage, and higher correlations with broad market moves.

Poverty is better than wealth in one crucial way: The poor are still under the illusion that money can make them happy. But just as the common man is deceived by money (he thinks more of it will make him happier), so are policymakers. Their belief is a little more sophisticated. They know it is the economy, not money, that creates wealth. But they believe that adding money (and more demand) will make the economy function better… and make people wealthier. Never, since the beginning of time, has government ever added to wealth. It has no way to do so. And no intention of doing so. All it can do is to increase the power, wealth, or status of some people – at others’ expense.

We've been brainwashed into financializing the human experience. This is not a problem that can be fixed by tweaking state-cartel policies (Obamacare, banking, etc.) i.e. fake fixes. This is a problem that requires a complete rethinking of centralization, money creation, empire, wealth, prosperity, consumption and how we live.

With the usual two year delay, others such as Reuters, are starting to notice that under the Tesla hood there are nothing but cockroaches. And now that the growth "story" has taken a back seat following the latest guidance cut in deliveries, fears that the company will have to dilute shareholders to keep the "story" afloat, are rapidly emerging. Case in point, Reuters calculation of a fact that was known to most observers but certainly not to retail enthusiasts who "bought the stock just because others bought the stock", i.e., that Tesla loses about $4000 on ever car it makes.

What a pathetic nation of entitled whiners we’ve become. When did participation in a sport or any competition deserve a trophy? Trophies are for winners. Trophies are for the people who excelled. Trophies are for the people who worked harder than their competitors and won. You get ahead in life by hard work, using your brain, and refining your social skills. The free shit army mentality permeating our culture drives the participation trophy bullshit. Real free market capitalism (not the crony capitalism/socialism) has winners and losers. Losers need to work harder to become winners. Not in America today. The losers have a million excuses and think they deserve exactly what the winners have achieved.

Six years ago, hardly anybody outside financial circles had any idea what Quantitative Easing was – hell, many within financial circles had no idea what QE entailed. The success of the narrative created around QE; that it is the mythical ‘free lunch’ that we all intuitively know can’t exist but secretly hope does, has played perfectly to the public and now, having endured for two electoral cycles, the next wave of politicians also believe it will have no consequences and are actually using it when planning the message they feel will endear them to the electorate. What plays better than free money?

The "main event" GOP debate isn’t until 9 p.m. ET on Thursday, but for some, the anticipation surrounding Donald Trump’s debate debut will be too much to handle. For those folks, there’s the so-called "undercard", which kicks of four hours earlier and should suffice as an appetizer until the Trump-sized entree is served up piping hot on Fox later this evening. Here is your full undercard preview.

WTI Crude is back below $45 again this morning - pressing towards 2015 and cycle lows -after Goldman Sachs' Jeffrey Currie warns 'lower for longer' is here to stay, with price risk "substantially skewed to the downside." His reasoning are manifold, as detailed below, but overarching is oversupply (Saudi Arabia has a challenge in Asia as it battles to maintain mkt share, the Russians are coming, andother OPEC members want a bigger slice) and, even more crucially, storage is running out. As Currie concludes, this time it is different. Financial metrics for the oil industry are far worse.

It has been more of the same in the latest quiet overnight session where many await tomorrow's NFP data for much needed guidance, and where Chinese markets opened weaker, rose during the day, then went through a mini rollercoaster, then sold off in the afternoon.  The Shanghai Composite and HS China Enterprises indices finished down .9% and .3%, respectively. Trading volume continued to be very subdued, running at half the thirty day average as some 20 million "investors" have pulled out of the market to be replaced with HFTs such as Virtu.  But while stock action has been muted, the story of the night so far is oil and the energy complex broke out of a tight overnight range early in the European session to continue yesterday's downward trend, seeing WTI Sep'15 futures fall below the USD 45.00 handle after yesterday's DoE crude oil inventories saw US crude output rise by 0.552%. As of this moment oil was trading at $44.72, just pennies above the low print of 2015.

Pervasive “occupancy fraud in lending” – purposely misidentifying “investment” properties as “second/vacation” for the purpose of obtaining prime, “owner-occupied”, low-down payment mortgages vs expensive “investment” property loans — is back in a big way and driving housing demand, based on NAR’s “2015 Investment and Vacation Home Buyers Survey”. It comes on the heels of a multi-year cycle of increasingly “bad” appraisals – a widespread problem — by the Appraisal Management Companies (AMC) that in Bubble 2.0 are similarly conflicted, as independent residential appraisers were during Bubble 1.0 . Both appraisal and occupancy fraud are primary features to a speculative, house-price bubble. This is an identical replay of 2005 to 2007 that nobody recognizes, expects, or is even looking for, which will present an opportunity at some point.

"Ilias Zagoraios, the chief prosecutor of the Athens First Instance Court, has asked Greece’s cyber crime unit to investigate whether the public revenues service was hacked as part of an effort to create a parallel payment system under ex-Finance Minister Yanis Varoufakis," Kathimerini reports.

Overly myopic investors/creditors will continue to be confident in various drillers, based on the numbers of initial production (IP) data extrapolations and balance sheets, but will in the near future spend sleepless nights wondering why such good IPs and strong balance sheets produces poor or no profits and/or why they do not fully receive the money lent. Their worries will gradually morph from being focused on return on investment to return of investment. The mysteries created by Nature’s lack of cooperation with the balance sheets will surpass any other existential questions.

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.

We are delighted to report that about 7 years after it was glaringly obvious to everyone except the Fed of course, now - with the usual half decade delay - even the NY Fed has finally figured out what even 5 year olds get. "A new study from the New York Federal Reserve faults these policies for enabling college institutions to aggressively raise tuitions. The implication is the federal government is fueling a vicious cycle of higher prices and government aid that ultimately could cost taxpayers and price some Americans out of higher education, similar to what some economists contend happened with the housing bubble."