en Hedge Fund CIO: "The Market Doesn’t Care About Health Care. Poor People Care About Health Care" <p><em>From Eric Peters, CIO of One River Asset Management, here is a topical anecdote, as well as a review of the key events in the past week. </em></p> <p><strong>Weekend Notes</strong></p> <p>“Where’s the beef?” bellowed Biggie Too. “Health care, regulation reform, tax cuts – where’s it at?” continued the Chief Global Strategist for one of those too big to fail affairs. </p> <p>“You boys were always gonna face this moment,” barked Biggie, sliding into a slow groove. </p> <p>“But here’s the thing brotha. The market doesn’t care about health care - you know that. Poor people care about health care. And the market doesn’t care about poor people. No one cares about poor people.” Biggie nodded, smiled, a big golden smile. </p> <p>And pulled out a roll; crisp $100 notes. “<strong>The market only cares about taxes, regulations baby. It’s all about the Benjamins.” </strong><br /><strong></strong></p> <p><strong>Overall: </strong></p> <ul> <li>“You cannot spend all the money on drinks and women, then ask for help,” said some Dutch dude with an utterly unpronounceable name, trying on a little Trump, just to see how it feels to call it as you see it. “Dijsselbloem lost a great opportunity to be quiet,” responded Italy’s failed former prime minister Renzi. “Dijsselbloem’s European vision is evident in the union’s policies: a presumed economic, moral and even cultural superiority coming from northern countries, to the detriment of the South,” announced the Five Star Movement, memories of Berlusconi’s Bunga Bunga parties echoing off the ruins of Caligula’s castle. </li> <li>“It’s worth bearing in mind that the UK helped restructure Germany’s post-war debts at the 1953 London conference,” said Sir Bill Cash, presiding over the EU Exit Committee, reminding Europeans of the devastation inflicted by Germany. You see, Sir Cash wants nothing of the E60bln Brexit bill. “It might be worth tactfully reminding people - not one of my strongest points - that there’s a realistic position here that we don’t really owe anything to the EU,” concluded Cash, Europe’s endless war with itself always a scratch below the surface. </li> <li>The European Central Bank urged Brussels to toughen sanction procedures against governments who persistently fall foul of its economic rules, as over 90 per cent of its reform recommendations had been ignored by member states last year.</li> <li> “If they weren’t ashamed, they would revive the gas chambers,” said Turkish President Erdogan, referring to the Dutch and Germans for their opposition to his revival of the Ottomon Empire. “Turks in Europe should have five children, not three, because you are the future,” ordered Erdogan, fanning the Far Right’s anti-Islam flames. And in America, the Republican majority refused to deny 24mm poor people health care. Then moved on to our only real problems, like over-regulation and complex taxation. </li> </ul> <p><strong>Week-in-Review (expressed in YoY terms): </strong></p> <p>Mon: May to trigger Article 50 on Mar 29th, German PPI +3.1% (5yr high), Macron takes lead in 1st round poll with 25.5% (Le Pen 25.0%), Comey testifies on Russia links to Trump (discredits Trump claims of Obama wiretapping and other conspiracy theories), S&amp;P -0.2%; Tue: Japan sovereign CDS hits 2008 lows (45bps), RBA warns of housing market froth, Macron performs well in debate (Le Pen shows poorly), UK CPI +2.3% (3.5yr high), UK home prices +6.2%, US Q4 current account deficit -0.1 to 2.4%, fears rise that Trump running into legislative obstacles, Trump record low 37% approval rating (58% disapproval), small-cap stocks surrender 2017 gains, S&amp;P -1.2% (largest fall since Oct); Wed: Chinese banks ordered to rein in home loan growth (iron ore -6%), Japan exports +11.7% (+28.2% to China, +0.4% to US) imports +1.2%, UK terror attack (4 dead), EU current account surplus 15mth low, US oil stocks jump (imports surge), existing home sales slow (limited supply, high prices), S&amp;P +0.2%; Thur: EU banks borrow E223bln from TLTRO, UK retail sales +3.7% (online +20.7%), Fed’s Williams “3-4 rate hikes make sense in 2017,” new home sales rise most since July, unemployment claims +15k to 258k (highest since Jan), S&amp;P -0.1%; Fri: Japan PMI -0.7 to 52.6, Egypt’s Hosni Mubarak released, Russia cuts 25bps to 9.75% (1st cut in 7mths), EU PMIs hit 6yr high, Le Pen meets Putin and says “Russia will not interfere in French elections,” Pope Francis urges Europe to “show solidarity” as the antidote to populism, Portuguese budget deficit 40yr low of 2.1%, US drillers wkly rig count +21 to 652 (vs 372 last March), US M&amp;A deals -21% vs Feb 2016, Trump approves Keystone pipeline, Republicans abandon healthcare vote (Trump moves on to tax reform), VIX index jumps to 2017 high of 14.16 (settled 12.96), Mnuchin “Tax reform much simpler than healthcare,” durable goods orders rise, S&amp;P -0.1%; Sat: 60th anniversary for the EU. </p> <p><strong>Weekly Close:</strong></p> <p> S&amp;P 500 -1.4% and VIX +1.68 at +12.96. Nikkei -1.3%, Shanghai +1.0%, Euro Stoxx -0.5%, Bovespa -0.6%, MSCI World -1.0%, and MSCI Emerging +0.2%. USD rose +1.0% vs Australia, +0.6% vs Brazil, and +0.2% vs Canada. USD fell -1.6% vs Mexico, -1.3% vs Yen, -0.8% vs Turkey, -0.7% vs Sterling, -0.6% vs Euro, -0.5% vs Russia, -0.3% vs China, -0.3% vs Chile, -0.1% vs Indonesia, and -0.1% vs India. Gold +1.3%, Silver +2.0%, Oil -2.3%, Copper -1.8%, Iron Ore -7.9%, Corn -3.3%. 5y5y inflation swaps (EU -3bps at 1.65%, US -2bps at 2.39%, JP flat at 0.49%, and UK +8bps at 3.51%). 2yr Notes -6bps at 1.26% and 10yr Notes -9bps at 2.42%.</p> <p><strong>YTD Equity Indexes: </strong></p> <p>Poland +20.9% priced in US dollars (+14.1% priced in zloty), Argentina +18.9% in dollars (+16.5% in pesos), Mexico +18.1% (+7.5%), Chile +16.5% (+14.7%), Korea +15.9% (+7.0%), India +15.6% (+11.3%), Taiwan +14.3% (+7.0%), Spain +12.9% (+10.2%), Singapore +12.9% (+9.1%), Turkey +12.9% (+15.7%), South Africa +12.3% (+1.7%), Austria +10.7% (+8.1%), Brazil +10.7% (+6.0%), HK +10.5% (+10.7%), Czech Republic +9.2% (+6.6%), Netherlands +8.4% (+5.9%), NASDAQ +8.3% (+8.3%), Malaysia +7.8% (+6.3%), Germany +7.6% (+5.1%), Switzerland +7.6% (+4.8%), Italy +7.5% (+5.0%), Sweden +7.4% (+4.1%), Australia +7.2% (+1.5%), Euro Stoxx 50 +7.2% (+4.7%), Indonesia +6.9% (+5.1%), Belgium +6.4% (+3.9%), China +6.2% (+5.3%), Japan +6.0% (+0.8%), Thailand +5.9% (+2.0%), France +5.8% (+3.3%), Finland +5.0% (+2.5%), Philippines +4.9% (+6.3%), Denmark +4.7% (+2.3%), S&amp;P 500 +4.7% (+4.7%), New Zealand +4.1% (+2.8%), UK +4.0% (+2.7%), Israel +4.0% (-1.3%), Ireland +3.9% (+1.5%), Portugal +3.9% (+1.4%), Colombia +3.3% (-0.4%), Hungary +2.4% (+0.3%), Norway +2.4% (+0.8%), Canada +1.6% (+1.0%), Greece +1.2% (-1.2%), Russell -0.2% (-0.2%), UAE -1.1% (-1.1%), Russia -1.9% (-8.6%), and Saudi Arabia -4.5% (-4.6%).</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="460" height="272" alt="" src="" /> </div> </div> </div> Australia Belgium Bovespa Brazil Budget Deficit CDS China Copper CPI Czech DJ Euro Stoxx 50 EU Exit Committee European Central Bank European Central Bank European Union Fail federal government Finland France Germany Greece Housing Market Hungary India Ireland Israel Italy Japan Mexico NASDAQ Netherlands New Home Sales New Zealand Nikkei Norway Poland Portugal Reserve Bank of Australia S&P 500 Saudi Arabia Sovereign CDS Star Movement Switzerland Too Big To Fail Turkey Unemployment Unemployment Claims VIX Yen Sun, 26 Mar 2017 16:53:33 +0000 Tyler Durden 591768 at America's March To Default <p><em>Authored by <a href="">MN Gordon</a> via <a href=""></a>,</em></p> <h3><u><strong>Style Over Substance</strong></u></h3> <p style="text-align: left;"><em><strong>&ldquo;May you live in interesting times,&rdquo; </strong></em>says the ancient Chinese curse.&nbsp; No doubt about it, we live in interesting times.&nbsp; Hardly a day goes by that we&rsquo;re not aghast and astounded by a series of grotesque caricatures of the world as at devolves towards vulgarity. Just this week, for instance, U.S. Representative Maxine Waters&nbsp;<a href="">tweeted</a>, &ldquo;Get ready for impeachment.&rdquo;</p> <p style="text-align: left;"><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p style="text-align: left;">Well, Maxine Waters is obviously right &ndash; impeaching the president is an urgent task of the utmost importance. As everybody knows, he is best friends with Vladimir Putin, the shirtless barbarian who rules the Evil Russian Empire (they were seen drinking <em>kompromat</em> together in Moscow, a vile Russian liquor that reportedly tastes a bit like urine. Senator McCain has the details on that story). And as Maxine Waters has just disclosed, <em>Putin&rsquo;s armies are recently advancing into Korea! </em>We cannot let this stand, or he&rsquo;ll invade Kekistan next (note that he already <a href="">controls Limpopo and Gabon</a>). <strong>Who knows where it will end?</strong></p> <p>We assume this was directed at President Trump.&nbsp; But what Waters meant by this was sufficiently vague.&nbsp; There was no guidance as to how President Trump should be getting ready.</p> <p>Should he pack his bags?&nbsp; Should he double knot his shoelaces?&nbsp; Should he say a prayer? Naturally, the specifics don&rsquo;t matter in the darnedest.&nbsp; Rather, these days, it&rsquo;s style over substance in just about everything.&nbsp; This is why Waters &ndash; a committed moron &ndash; rises to the top of class in the lost republic of the early 21st century.</p> <p>At the same time, the individual has been displaced by the almighty aggregate.&nbsp; Economists pencil out the unemployment rate, with certain omissions, as if it represents something meaningful.&nbsp; Then lunkheads like Waters repeat it as if it&rsquo;s the gospel truth.</p> <p><em><strong>Somehow, through all of this, our representatives are oblivious to what&rsquo;s really going on; that the U.S. government is just months away from a possible default.</strong></em></p> <p>&nbsp;</p> <h3><u><strong>The Dutch Experience</strong></u></h3> <p>Last week, via our friends at&nbsp;<a href="">Zero Hedge</a>, we came across as article by Simon Black of <a href="">Sovereign Man</a>&nbsp;titled, The U.S. Government Now Has Less Cash Than Google.&nbsp; Inside, Black details the invention of the government bond in 1517 Amsterdam and the long term ramifications for the Dutch government.&nbsp; Here we turn to Black for edification:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;It caught on slowly.&nbsp; But eventually government bonds became an extremely popular asset class.&nbsp; Secondary markets developed where people who owned bonds could sell them to other investors.&nbsp; Even simple coffee shops turned into financial exchanges where investors and traders would buy and sell bonds.&nbsp; In time, the government realized that its creditworthiness was paramount, and the Dutch developed a reputation as being a rock-solid bet.</p> <p>&nbsp;</p> <p>&ldquo;This practice caught on across the world.&nbsp; International markets developed.&nbsp; English investors bought French bonds.&nbsp; French investors bought Dutch bonds.&nbsp; Dutch investors bought American bonds.&nbsp; (By 1803, Dutch investors owned a full 25 percent of U.S. federal debt.&nbsp; By comparison, the Chinese own about 5.5 percent of U.S. debt today.)</p> <p>&nbsp;</p> <p>&ldquo;Throughout it all, debt levels kept rising.&nbsp; The Dutch government used government bonds to live beyond its means, borrowing money to fund everything imaginable&ndash; wars, infrastructure, and ballooning deficits.&nbsp; But people kept buying the bonds, convinced that the Dutch government will never default.</p> <p>&nbsp;</p> <p>&ldquo;Everyone was brainwashed; the mere suggestion that the Dutch government would default was tantamount to blasphemy.&nbsp; It didn&rsquo;t matter that the debt level was so high that by the early 1800s the Dutch government was spending 68 percent of tax revenue just to service the debt.</p> <p>&nbsp;</p> <p>&ldquo;Well, in 1814 the impossible happened: the Dutch government defaulted.&nbsp; And the effects were devastating.</p> <p>&nbsp;</p> <p>&ldquo;In their excellent book The First Modern Economy, financial historians Jan De Vries and Ad Van der Woude estimate that the Dutch government default wiped out between 1/3 and 1/2 of the country&rsquo;s wealth.</p> <p>&nbsp;</p> <p>&ldquo;That, of course, is just one example.&nbsp; History is full of events that people thought were impossible.&nbsp; And yet they happened.&nbsp; Looking back, they always seem so obvious.&rdquo;</p> </blockquote> <p>&nbsp;</p> <p style="text-align: center;"><img class="aligncenter size-full wp-image-48926" height="531" src="" width="640" /></p> <p style="text-align: center;">Amsterdamsche Wisselbank, a.k.a. the Bank of Amsterdam. The bank&rsquo;s history is deeply intertwined with the Dutch march toward default in 1814. When the bank was originally founded, it was rightly considered the soundest bank in Europe &ndash; it was 100% reserved and for a long time its notes were indeed &ldquo;as good as gold&rdquo; and were accepted in payment all over Europe. Holland&rsquo;s downfall was closely tied to the decision to abuse the bank&rsquo;s hard-won reputation by surreptitiously forcing it to adopt fractional reserve banking in order the fund the government (in particular, in order to fund its wars).</p> <p>&nbsp;</p> <h3><u><strong>March to Default</strong></u></h3> <p>Like the Dutch several hundred years ago, <strong><em>everyone believes it&rsquo;s impossible for the U.S. government to default on its debt obligations.</em></strong>&nbsp; U.S. Treasuries are considered the safest investment in the world.</p> <p>Nonetheless, a series of events are coming down the turnpike in such rapid succession that <strong>Washington will be incapable of dealing with them.</strong>&nbsp; Before Congress can say knife, irreparable damage will be done to the government&rsquo;s financial standing.</p> <p>No doubt, the great story of our time, that few seem to appreciate, is the increasing likelihood the U.S. government will default on its debt before the year is over.&nbsp; Of course, this isn&rsquo;t a certainty.&nbsp; But by simply connecting a dot or two, one can construct a highly plausible scenario where this happens.</p> <p style="text-align: center;">&nbsp;</p> <p style="text-align: center;"><a href="" target="_blank"><img class="aligncenter wp-image-48925" height="307" src="" width="640" /></a></p> <p style="text-align: center;">The federal debtberg. As Ludwig von Mises noted: &ldquo;<em>The long-term public and semi-public credit is a foreign and disturbing element in the structure of a market society. Its establishment was a futile attempt to go beyond the limits of human action and to create an orbit of security and eternity removed from the transitoriness and instability of earthly affairs. What an arrogant presumption to borrow and to lend money for ever and ever, to make contracts for eternity, to stipulate for all times to come!</em>&rdquo; &ndash; click to enlarge.</p> <p>&nbsp;</p> <p>Presently, the&nbsp;<a href="">national debt</a>&nbsp;is over $19.8 trillion.&nbsp; The $20.1 trillion debt ceiling will be reached in the second quarter.&nbsp; After that, Treasury Secretary Steven Mnuchin will be forced to take extraordinary measures to avoid a default.</p> <p>However, <strong>Mnuchin can only rob Peter to pay Paul for so long.</strong>&nbsp; By summer&rsquo;s end, Congress will have to increase the borrowing limit or suffer a default. Most likely Congress will wait until the 11th hour to take action. &nbsp;They have in the past.&nbsp; But this time, given its complete dysfunction, Congress may not get it done.</p> <p>Yesterday, the Obamacare repeal and replace vote was pulled.&nbsp;<strong> Regardless of the outcome, this highlights why Congress will be unable to raise the debt ceiling.&nbsp; There&rsquo;s just plain too much animosity to get it done.</strong></p> <p>Ultimately, the quickest way to reduce the size of government is to cut off its funding.&nbsp; Here at the Economic Prism, where we believe in smaller government and greater individual autonomy, a U.S. government default sooner rather than later is more preferable.</p> <p><strong>Still, the march to default is a stoic trudge.&nbsp; For the looming chaos to financial markets, the economy, and everything else will be unconditionally ruthless.</strong></p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="207" height="153" alt="" src="" /> </div> </div> </div> Bond Bond Business Congress Debt Debt Ceiling default Dutch government Economy Economy of the United States Finance Fractional Reserve Banking Google Government bond Government debt Ludwig von Mises Maxine Waters Money National Debt National debt of the United States Obamacare Politics PrISM Tax Revenue Unemployment United States debt ceiling United States fiscal cliff United States housing bubble US government Vladimir Putin Sun, 26 Mar 2017 16:21:52 +0000 Tyler Durden 591739 at Caught On Tape: Trump Rally Turns Violent After Provocations From 'Counter-Protesters' <p>Roughly two thousand Trump supporters showed up in Huntington Beach, California yesterday to show their continued support for President Trump in the wake of what was unarguably a really bad week for his nascent administration.&nbsp; Of course, it didn't take long for the opposition snowflakes to show up to provoke fights in hopes to progress the narrative that Trump supporters are just a bunch of hateful racists.</p> <p>One of the scuffles was caught on film here:</p> <blockquote class="twitter-video"><p dir="ltr" lang="en"><a href="">@theCindyCarcamo</a><br />pepper spraying anti Trump protestor get his due in Huntington Beach <a href=""></a> later arrested / waaaa!</p> <p>— l b fowler jr md (@lbfjrmd) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><p>&nbsp;</p> <p>As <a href="">Reuters</a> points out, the fights broke out after just a dozen or so 'counter-protesters' attempted to block the Trump rally's progression.&nbsp; In all, <strong>at least 4 snowflakes were arrested for illegal use of pepper spray and one for assault and battery</strong>...but the Trump supporters are the 'violent' ones, right?</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Multiple fights broke out and at least one Trump supporter was doused with pepper spray</strong> when pro-Trump demonstrators marching along Bolsa Chica State Beach encountered a small group opposed to the Republican president who had gathered to denounce the rally.</p> <p>&nbsp;</p> <p><strong>Four counter-protesters were arrested, three for illegal use of pepper spray and one for assault and battery,</strong> Kevin Pearsall, a spokesman for the California State Parks Police said on Saturday evening.</p> <p>&nbsp;</p> <p>The fights appeared to start in the early afternoon when around a dozen anti-Trump protesters dressed in all black refused to move from a bike path to allow a larger group of pro-Trump supporters taking part in the Make America Great Again rally to pass. The confrontation escalated into a fight with more skirmishes quickly breaking out.</p> <p>&nbsp;</p> <p>At least one person was pepper-sprayed by an anti-Trump protester, Pearsall said. Park police estimated that 2,000 Trump supporters flocked to the stretch of coastline located south of the ocean-side community of Huntington Beach. Around 20 counter-protesters attended, Pearsall said. </p> </blockquote> <p>Of course, absent the provoked drama, the rally was intended to be a peaceful march along the California beach.</p> <blockquote class="twitter-video"><p dir="ltr" lang="en">YUGE support in Huntington Beach, CA for Trump <a href=""></a> <a href="">#MAGAMARCH</a> <a href=""></a></p> <p>— Deplorable Serrano (@USSMAGA) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><blockquote class="twitter-video"> <p dir="ltr" lang="en"><a href="">@realDonaldTrump</a> <a href="">#MAGA</a> TRUMP rally in Huntington Beach,CA today. What an awesome experience! Many patriotic ppl supporting our POTUS. <a href=""></a></p> <p>— Absolutely TRUMP (@bizbeegirl) <a href="">March 25, 2017</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">President Trump March Huntington Beach, CA : MSM won't show this! <a href="">#MAGA</a> <a href=""></a></p> <p>— Seth Morton (@FiIibuster) <a href="">March 25, 2017</a></p></blockquote> <script src="//"></script><p>&nbsp;</p> <p>Meanwhile, supporters got a shout out tweet from President Trump for their efforts.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Thanks you for all of the Trump Rallies today. Amazing support. We will all MAKE AMERICA GREAT AGAIN!</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="">March 25, 2017</a></p></blockquote> <script src="//"></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="696" height="426" alt="" src="" /> </div> </div> </div> B+ Bolsa California State Parks Police Climate change skepticism and denial Donald Trump March 4 Trump Park police Politics Presidency of Donald Trump Reuters Twitter Twitter United States Sun, 26 Mar 2017 15:46:36 +0000 Tyler Durden 591765 at Buckle Up, the Bank of Japan Has Blown Up the Markets (Again) <p>If you have been long US stocks since Election night, you have been a Yen bear and nothing else.</p> <p>Last September the Bank of Japan announced a new policy of targeting a 0% yield on its 10-Year Japanese Government Bonds. Many in the investment community took this to represent a &ldquo;tightening&rdquo; of policy.</p> <p>It was no such thing.</p> <p>Targeting a 0% rate on 10-Year JGBs opens the door to unlimited currency devaluation as the Bank of Japan prints Yen to buy JGBs.</p> <p>Note the collapse of the Yen that followed this announcement.</p> <p><img alt="" src="" style="width: 460px; height: 284px;" /></p> <p>This policy was implemented <strong><u>strictly </u></strong>to devalue the Yen which had been appreciating rapidly due to the BoJ&rsquo;s policy mistake of implementing NIRP earlier in 2016 (NIRP is highly deflationary as both the BoJ and ECB have discovered).</p> <p>Since this time, the Yen has been the single largest driving force for the markets, as Gold and Bonds sold off and the $USD and US stocks rallied based on the BoJ&rsquo;s interventions.</p> <p>Yen Down=Bonds and Gold down.</p> <p><img alt="" src="" style="width: 460px; height: 681px;" /></p> <p>Yen down= US stocks up.</p> <p><img alt="" src="" style="width: 460px; height: 511px;" /></p> <p>If you were trading in any of these assets since September 2016, you were effectively trading the Yen and nothing else.</p> <p>But this period has ended.</p> <p>The $USD/Yen pair has taken out critical support. The Yen carry trade has begun to blow up. Yes we will have bounces here and there (like the one late last week) but this trend is OVER.</p> <p><img alt="" src="" style="width: 460px; height: 284px;" /></p> <p>And stocks are about to play &ldquo;catch up.&rdquo;</p> <p><img alt="" src="" style="width: 460px; height: 284px;" /></p> <p>On that note, we are already preparing our clients for a sharp correction. Market &quot;rigs&quot; such as this&nbsp;<strong><u>never end well</u></strong>.</p> <p>We just pu</p> <p>In it, our &nbsp;<strong>Stock Market Crash Survival Guide </strong>we detail how the coming drop will unfold&hellip;which investments will perform best&hellip; and how to take out &quot;market insurance&quot; trades that will pay out substantial returns when the inevitable hits.</p> <p>We are giving away just 99 copies of this report for FREE to the public.</p> <p>We&#39;re down the last 5.</p> <p>To pick up yours, swing by:</p> <p><strong><a href=""></a></strong></p> <p>Best Regards</p> <p>Graham Summers</p> <p>Chief Market Strategist</p> <p>Phoenix Capital Research</p> <p>&nbsp;</p> <p>&nbsp;</p> Bank of Japan Bank of Japan Bank of Japan Bond Business Carry Carry Trade Currency intervention Economy Endaka European Central Bank Finance Japan Japanese yen Market Crash Money National debt of Japan Yen Sun, 26 Mar 2017 15:33:14 +0000 Phoenix Capital Research 591764 at Cook County Illinois Suffers Largest Population Drop In Entire US <p><a href=""><em>Authored by Mike Shedlock via,</em></a></p> <p><strong>Illinois voters are voting with their feet.</strong> Not only are people scrambling to get out of Cook County,<strong> but the entire state is suffering.</strong></p> <p>Illinois Policy Institute writer Michael Lucci explains in this guest post on <a href="" target="_blank">Cook County Migration</a>.</p> <h3><u><strong>Cook County has Largest Population Loss of Any County in U.S. </strong></u></h3> <p>Cook County lost more population than any other county in the United States from July 2015 to July 2016, according to a <a href="">new data release</a> from the U.S. Census Bureau.</p> <p>Cook County shrank by 21,324 people. The county had more births than deaths and gained 18,434 people from international immigration. However, Cook County had a net loss of 66,244 people to other parts of the United States, which more than offset the components of population growth.</p> <p><a href=""><img class="alignnone size-large wp-image-44918" height="399" src=";h=399" width="529" /></a></p> <p>However, the people leaving Cook County aren&rsquo;t showing up in other parts of Illinois when the net movements of people are considered.</p> <p>In fact, most of Illinois is depopulating &ndash; 93 of Illinois&rsquo; 102 counties are experiencing net out-migration, and 89 of Illinois&rsquo; 102 counties have shrinking populations. Illinois&rsquo; dysfunctional government, weak job creation, and ever-increasing tax burden help explain why. A Paul Simon Public Policy Institute poll released in October 2016 found that taxes were the No. 1 reason people want to leave Illinois.</p> <h3 class="headline"><strong>Cook, DuPage, Lake, Kane, McHenry, Will counties see net out-migration to other parts of the U.S.</strong></h3> <p>The major driver of Cook County&rsquo;s shrinking population is that the county&rsquo;s domestic migration losses have doubled over the last five years, while international gains have remained flat and gains from more births than deaths have declined.</p> <p>The flow of people out of Cook County did not result in net in-migration for the collar counties. Cook County&rsquo;s net out-migration of 66,244 people was followed by net out-migration of 9,171 people from DuPage; 5,179 from Lake; 1,824 from Kane; 1,589 from McHenry; and 1,253 from Will. Kendall County is the nearest to Cook to have net inflows, with Kendall gaining 553 more people than it lost to other parts of the country.</p> <p><a href=""><img class="alignnone size-large wp-image-44919" height="444" src=";h=444" width="529" /></a></p> <p>The out-migration from Cook, DuPage, Lake and McHenry counties was large enough to make all those counties shrink in total population. Kane County and Will County managed to have population gains despite their out-migration problems.</p> <p>It should worry policymakers in Chicago and Cook County that out-migration and population loss were already so strong in the July 2015 &ndash; July 2016 timeframe. That&rsquo;s because Chicago and Cook County&rsquo;s major property and sales tax hikes had not yet taken effect at the time of this out-migration. When those tax hikes are in place, the Chicago area will likely lose more population due to taxation. And the economic effects of increased taxation will be felt a few years later, with fewer jobs and economic growth than would have occurred without the tax hikes. Population loss in the Chicago area is likely to get worse.</p> <h3 class="headline"><strong>Not just the collar counties: All of Illinois is seeing population losses</strong></h3> <p>The problem is not just with Cook and the collar counties: The majority of Illinois counties are shrinking. Eighty-nine of Illinois&rsquo; 102 counties are shrinking in total population. Northeast Illinois is shrinking most in terms of total population, but many downstate counties are shrinking and seeing more out-migration as a percentage of population. For example, Rock Island and Peoria counties both have more out-migration as a percentage of population than Cook County.</p> <p><a href=""><img class="alignnone size-large wp-image-44920" height="517" src=";h=517" width="529" /></a></p> <p>Most of Illinois&rsquo; metropolitan statistical areas are also shrinking due to large migration losses to other parts of the country, with only Elgin and Champaign showing slow population growth. The Chicago metro division saw a net migration loss of nearly 78,000 people, driving a population decline of more than 19,000 people for the Chicago metro division.</p> <p>Elgin had net migration losses to other parts of the country. However, Elgin&rsquo;s population growth is attributable to an unusually high birth rate and a solid gain of international immigrants. Champaign similarly relies on international immigration to avoid a shrinking population size. Champaign showed a large gain from international immigration, likely a flow of international students to the University of Illinois.</p> <p><a href=""><img class="alignnone size-large wp-image-44921" height="439" src=";h=439" width="529" /></a></p> <p>The U.S. Census Bureau&rsquo;s report does not come as a surprise, but it should serve as a warning to state and local governments. Illinois is depopulating, and no area is immune from its effects. Downstate communities are especially stressed due to the loss of manufacturing jobs and other blue-collar industries. And the Chicago area is likely to face additional stress as <a href="">nearly $2 billion dollars</a> in tax hikes are phased in over the next few years.</p> <p>Lawmakers can take on two key measures to give taxpayers hope. The first is to freeze property taxes statewide so Illinoisans can feel secure in their homes. The second is to pass a balanced budget without any tax increases to give residents confidence that lawmakers can rein in out-of-control spending and not repeatedly hit up taxpayers for more of their hard-earned dollars.</p> <p>Before considering any more tax increases, policymakers statewide should consider the sobering reality of how quickly people are leaving the state.</p> <p><em>Michael Lucci</em></p> <h3><u><strong>Mish Getaway</strong></u></h3> <p>People keep asking &ldquo;When are you leaving?&rdquo; Rest assured plans are in progress and have been for some time.</p> <p>But some people are stuck here. Others want to be here for personal reasons even though they are fed up with the state of affairs.</p> <h3><u><strong>IPI Push</strong></u></h3> <ol> <li>Give Illinoisans much-needed property tax relief</li> <li>Consolidate Illinois&rsquo; many layers of duplicative government</li> <li>Cut burdensome regulations to attract businesses and jobs to Illinois</li> </ol> <p>The Illinois Policy Institute is fighting on your behalf every day in Springfield. Please consider <a href="" target="_blank">Making a Contribution to Illinois Policy Institute</a>.</p> <p>I am an unpaid senior fellow at the IPI and receive no part of donations. My benefit is the same as yours. The IPI is fighting on our behalf.</p> <p>The Illinois Policy Institute is a 501(c)(3) charitable organization, and contributions are tax-deductible to the fullest extent allowed by law.</p> <p>Few organizations work as hard as the IPI to support Illinois taxpayers.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="513" height="383" alt="" src="" /> </div> </div> </div> Census Bureau Chicago Chicago metropolitan area Collar counties Cook County, Illinois Geography of Illinois Geography of the United States Guest Post Illinois Illinois Illinois Policy Institute Northeast Illinois Northern Illinois Paul Simon Public Policy Institute Reality Social Issues U.S. Census Bureau United States University of Illinois US Federal Reserve Sun, 26 Mar 2017 15:10:36 +0000 Tyler Durden 591762 at Watch Live: Navalny Arrested As Opposition Protests Sweep Russia <p>In a day of anti-corruption protests across Russia, thousands of people crowded into Moscow's Pushkin Square on Sunday for an unsanctioned protest against the Russian government, part of a wave of demonstrations taking place throughout the country. For the Moscow demonstration, around 8,000 people took to the streets according to police. As the rally continued, police used loudspeakers to call on the protesters to disperse. A number of people were detained for disorderly conduct, among whom was the prominent leader of the anti-Putin opposition.</p> <p>Alexei Navalny, the anti-corruption campaigner who is leading the opposition to President Vladimir Putin, was arrested while walking from a nearby subway station to the demonstration, according to Associated Press <a href="">journalists at the scene</a>. </p> <p><a href=""><img src="" width="500" height="278" /></a><br /><em>Opposition figure Aleksey Navalny waves as he sits inside a police van after </em><br /><em>after being detained during a rally in Moscow, Russia, March 26, 2017</em></p> <p>Navalny and his Foundation for Fighting Corruption had called for the protests, which attracted crowds of hundreds or thousands in most sizeable Russian cities, from the Far East port of Vladivostok to the European heartland. The protests were the largest coordinated outpourings of dissatisfaction in Russia since the massive 2011-12 demonstrations that followed a fraud-tainted parliamentary election. </p> <p>There were no immediate figures on the demonstration size in Moscow, but the one-hectare Pushkin Square was densely crowded as were sidewalks on the adjacent Tverskaya Street, suggesting that more than 10,000 people had showed up. Law enforcement say that somebody sprayed “irritant gas” in the square, but rejected reports that it was part of a police action.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="ru">?????????? ?????? <a href="">#????????????</a> <a href=""></a></p> <p>— An Bo (@ann_bo_) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><p>Scuffles with police erupted sporadically and some demonstrators were arrested, including a gray-haired man whom police dragged along the pavement. "It's scary, but if everyone is afraid, no one would come out onto the streets," said 19-year-old Yana Aksyonova, explaining why she attended.</p> <p>According to AP, the protests Sunday focused on reports by Navalny's group claiming that Prime Minister Dmitry Medvedev has amassed a collection of mansions, yachts and vineyards. The alleged luxuries include a house for raising ducks, so many placards in Sunday's protests showed mocking images of yellow duck toys.</p> <p>"People are unhappy with the fact that there's been no investigation" of the corruption allegations, said Moscow protester Ivan Gronstein.</p> <p>Protests, some sanctioned and others in violation of a municipal ban, also took place in other Russian cities on Sunday, including Novosibirsk, Barnaul, Tomsk, Krasnoyarsk, Khabarovsk, and Vladivostok.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="ru">?????? ????????? <a href="">#????????????</a> <a href="">#26?????</a> <a href=""></a></p> <p>— Egor Sakhonenko (@EgorSakhonenko) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><p>In the Pacific port city of Vladivostok, police forcefully detained some demonstrators near the city's railway terminal, in one case falling down a small grassy slope as they wrestled with a detainee.</p> <p>In St. Petersburg, an unsanctioned opposition rally was held just next to another unconnected gathering of demonstrators who rallied for traditional values. Police estimated the number of participants in the opposition event at around 3,000 in St. Petersburg, and said that three individuals were facing administrative action for minor violations.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="ru">???????? ??????? ?? ????????? ? ??? <a href="">#????????????</a> <a href=""></a></p> <p>— ??????? ?????? (@ars_ves) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><p>The rally in Novosibirsk, which was sanctioned by the local authorities after a court ordered them to overturn a ban, attracted around 1,500 people, according to the mayor’s office. At another sanctioned event in Tomsk, around 400 protesters showed up, according to local law enforcement.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="ru">4 ?????? ????? ??????? ?????? ? ????????????? <a href="">#????????????</a> <a href="">@navalny</a> <a href=""></a></p> <p>— d (@ltfitw) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><p>In Vladivostok, 25 activists have been detained by police for trying to violate a ban on public gatherings. Police released those detained shortly afterwards. The usual procedure for such cases of detention (which is not an actual 'arrest') is to identify the individuals for potential administrative action and then release them.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="ru">????????? ????? ? ?????????? <a href="">#????????????</a> <a href=""></a></p> <p>— ??????? ?????? (@ars_ves) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><p>Some demonstrators showed up with their faces painted green, a reference to a recent attack on Navalny when an assailant threw a green antiseptic liquid onto his face.</p> <p>It is unlikely that anti-Putin sentiment will sweep Russia, however. As <a href="">recently as last Devember</a>, the approval rating of the Russian President hit a near-record high reaching 86.8%. according to the Russian Center for Public Opinion Research (VTSIOM). The share of respondents who said that they trusted the president was at 62.1 percent, a slight rise from 61.3 percent a week ago, trending upwards from the 59.2 percent recorded in early December.</p> <p><strong>Live from Moscow:</strong></p> <p> <iframe src="" width="500" height="281" frameborder="0"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="974" height="596" alt="" src="" /> </div> </div> </div> 2011–13 Russian protests Alexei Navalny Alexei Navalny mayoral campaign Anti-Putin opposition in the Russian Federation Corruption Corruption in Russia Dissenters' March Far East Human rights in Russia Moscow: Politics Politics Politics of Russia Russian Center Russian government Sergei Udaltsov Twitter Twitter Vladimir Putin Vladimir Putin Sun, 26 Mar 2017 14:40:02 +0000 Tyler Durden 591761 at Condo Flippers In Miami-Dade Left Twisting In The Wind <p><em>By Wolf Richter of <a href="">Wolf Street</a></em></p> <p><strong>Ballooning Condo Glut ensnares preconstruction speculators.</strong></p> <p>Miami-Dade&rsquo;s spectacular condo flipping mania is in turmoil, with sales plunging, inventory-for-sale soaring, and new supply flooding the market. It&rsquo;s not like Miami hasn&rsquo;t been through this before.</p> <p>In February, existing home sales of all types fell 10% year-over-year, to 1,835 homes. These sales &ldquo;do not include Miami&rsquo;s multi-billion dollar new construction condo market,&rdquo; the Miami Association of Realtors clarified in its <a href="" target="_blank">report</a> on March 23.</p> <p>And this&nbsp;new construction market that is not included has become distressed.</p> <p>Sales of single-family homes fell 10% in February, to 881 houses. The report blamed the shortage of properties &ldquo;in popular price points.&rdquo; Prices have been rising sharply, and at the price points where people could actually buy a house &ndash; below $250,000 &ndash; few sellers were playing ball. Hence a stalling market. Sales of high-priced units rose, but they weren&rsquo;t enough to pull out the totals.</p> <p>Condo sales fell 10% as well, to 954 units. This time, the report didn&rsquo;t blame the lack of supply. Instead: &ldquo;Existing condo sales are competing with a robust new construction market.&rdquo; At the same time, inventory of existing condos for sale, not including new units, rose 10% to 15,289. At the current sales rate, supply soared 29% to 14 months.</p> <p>This chart by <a href="" target="_blank">StatFunding</a> shows the plunge in sales and the surge in condos listed for sale. I circled the last five Februaries on the sales line (red). From February 2014 to February 2017, condo sales have plunged 25%. Andrew Stearns, StatFunding&rsquo;s founder and CEO, calls the resale inventory &ndash; the dark green line that has soared 90% since early 2013 &ndash; &ldquo;scary&rdquo;:</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 414px;" /></a></p> <p>Even this &ldquo;scary&rdquo; inventory understates the total number of condos for sale. It only includes units listed for sale on the Multiple Listing Service (MLS). But developers normally don&rsquo;t list their new units on the MLS, and thus they&rsquo;re not included in the above chart.</p> <p>This is the distressed market that preconstruction condo flippers are facing.</p> <p>Preconstruction condo flippers make a highly leveraged bet. They buy the condo from the developer during the construction phase. The initial deposit is small. Additional payments are required as construction progresses. But in a booming market, lenders are eager to lend. Then, often around the time the building is completed, flippers try to unload the condo at a profit. This bet has been hot in the condo construction boom around the country. But in Miami, the bet is now collapsing.</p> <p>During good times, developers sell all their units either to end-users or to flippers within a few months of completion. But now, developers are getting stuck with unsold units, which, as Stearns points out, marked the &ldquo;inflection points of previous condo cycles.&rdquo;</p> <p>The 12 large developments completed between late 2015 and late 2016 have added 2,743 condos to the market. Developers still own&nbsp;433 of them (15.8%).</p> <p>In addition, preconstruction flippers are also trying to unload their units. In those 12 developments alone, 451 condos, or 16.4% of the total, have been listed for sale on the MLS.</p> <p>Here is the granular detail as of March 22 per&nbsp;<a href="" target="_blank">StatFunding</a> (sources: MLS, Miami-Dade Recorder; completion date in parenthesis):</p> <ul> <li><strong>Echo Aventura</strong>, 190 units (8/2015). Developer sits on 13 units (7%) and took out a bridge loan secured by those&nbsp;units. 36 units have appeared on the MLS.</li> <li><strong>Crimson</strong>, 90 units (12/2015). Developer is stuck with 30 units (34%!) and has sold only 1 unit since December 2016. 12 units listed for sale on MLS.</li> <li><strong>Peloro Miami Beach</strong>, 114 units (3/2016). Developer has sold all but 2 units. This includes 3 units sold via bulk sale this year. But 38 units &ndash; 33% of the total! &ndash; are listed on the MLS for resale.</li> <li><strong>CityCenter Reach</strong>, 390 units (4/2016). Developer is stuck with 46 units (12%). Meanwhile, 47 units have appeared on the MLS for resale.</li> <li><strong>Le Parc Brickell</strong>, 128 units (6/2016). The developer has listed the 9 units that haven&rsquo;t sold yet on the MLS, in addition to 23 units listed on the MLS by condo flippers, for a total of 32 units &ndash; 25% of the total!</li> <li><strong>Centro</strong>, 352 units (7/2016). Developer sits on 34 units and has not sold any in 2017. Meanwhile, 56 units (16% of total) are listed on MLS.</li> <li><strong>Bond</strong>, 328 units (8/2016). Developer still has&nbsp;23 units, including 12 that an affiliate of the developer purchased in bulk in March. And 72 units (22%) have been listed for sale on MLS.</li> <li><strong>Grove Grand Bay</strong>, 98 units (8/2016). Developer owns&nbsp;7&nbsp;units; 31 units (32%!) have been listed on MLS.</li> <li><strong>CityCenter Rise</strong>, 390 units (9/2016). Developer still sits on 212 units (54%). According to Stearns, &ldquo;developer closings have slowed to a trickle, and it appears the initial sell-through is nearly complete.&rdquo; Already, 24 units are listed on MLS.</li> <li><strong>SLS Brickell</strong>, 450 units (11/2016). Developer is down to 8 units, four months after completion. &ldquo;This is what a successful sell-through looks like,&rdquo; Stearns says. Condo flippers have listed 55 units for sale.</li> <li><strong>Casa Brickell</strong>, 81 units (11/2016). Developer sits on 22 units (27%); 8 units (10%) have already appeared on MLS.</li> <li><strong>Porsche Design</strong>, 132 units (12/2016). Developer still has 27 units (20%). &ldquo;Initial sell-through closings are slowing,&rdquo; and only 4 developer units sold in March, Stearns says. But 40 units (30% of total) have been listed for resale on MLS.</li> </ul> <p>This sort of data begs the question: How many people <em>actually live in units</em> they own in these buildings?</p> <p>For developers, the equation is getting dicey. Stearns:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Stuck with unsold units, some developers have not repaid their construction loans, others have taken out bridge loans to carry unsold units. The developer is responsible for taxes, maintenance fees, and insurance for unsold units, and unsold units are probably negative carry for the developer.</p> <p>&nbsp;</p> <p>Developers may resort to mark-down liquidation or bulk sales of unsold condos as the cycle progresses&hellip;.</p> </blockquote> <p>Part of the problem? The market teems with foreign buyers. But the Treasury Department&rsquo;s Financial Crimes Enforcement Network has figured out that there is a large amount of money laundering in housing. It has started making noises. And cash deals are&nbsp;plunging in &nbsp;Miami-Dade. In February they were down 17.5% year-over-year to 580 condo deals, or 61% of all condos sold. Other money-laundering hotspots too are being targeted, and answers are starting to emerge.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="599" height="496" alt="" src="" /> </div> </div> </div> Bond Business CityCenter Condominium Crimson Department of the Treasury Las Vegas Strip Las Vegas Valley Major League Soccer MGM Resorts International Miami Association of Realtors Multiple listing service Multiple Listing Service Paid parking Porsche Real estate Real estate in Canada Real property law Treasury Department Sun, 26 Mar 2017 14:00:45 +0000 Tyler Durden 591760 at Ring The Alarm: UK Entering Meltdown Mode <p><a href="" rel="attachment wp-att-112134"><img src="" alt="brexit" width="599" height="336" style="display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-112134" /></a> </p> <p> Last week, the Office for National Statistics released the <a href="">inflation results</a> for the British economy. Even though most analysts weren’t expecting any huge differences, the numbers (updated until February) paint a completely different picture. In February, the inflation rate increased rather sharply. On a month-on-month basis, the CPI increased by 0.7% (whereas January was a month with deflation). The current YoY inflation rate based on the CPI is 2.3%. </p> <p> ‘No big deal’, you might think. But in this case it is. </p> <p> Just one year ago, in February 2016, the annual inflation rate was just 0.3%. This means the inflation rate has almost EIGHTFOLDED in the past year, with a very clear acceleration since October. </p> <p> <a href="" rel="attachment wp-att-112627"><img src="" alt="Inflation UK 3" width="627" height="127" style="display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-112627" /></a> </p> <p> Source: RBC, <a href="">ONS Data</a> </p> <p> Could it be worse? </p> <p> Yes, definitely. </p> <p> Not only does the ONS release an update on the CPI numbers, it also releases a RPI update. That’s the Retail Price Index, which basically measures the cost increase of goods and services. And in February, this index revealed some shocking numbers. </p> <p> In just one month, the retail prices of a basket of normal goods and services became 1.1% more expensive. When compared to the results of the previous year, the retail inflation rate is in excess of 3%. That’s right, life has become more than 3% more expensive for the average UK citizen! </p> <p> And this proves how fast and quiet inflation can come back in our lives. Forget about deflation, the only way is up. That’s why the Federal Reserve is hiking the interest rates, and it’s why the ECB has been hinting at a higher benchmark rate as well. </p> <p> But this might actually cause a huge problem in Great Britain. Not only is the inflation increasing – and will the Bank of England undoubtedly have to increase its interest rates again, the total debt in the United Kingdom is increasing. Fast. </p> <p> In fact, several politicians and officials have been ringing the alarm bell, as the <a href="">savings ratio</a> in the United Kingdom hasn’t been this low since the Global Financial Crisis, and in its latest update, the Office of Budget Responsibility (OBR) has confirmed the savings ratio in the UK has now turned negative. </p> <p> <a href="" rel="attachment wp-att-112628"><img src="" alt="Inflation UK 1" width="931" height="613" style="display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-112628" /></a> </p> <p> Source: Bank of England </p> <p> Indeed, the British citizens are spending more than they are earning. This means it won’t be just the government debt level which will increase, but the total amount of <a href="">household debt</a> will increase as well. The average British household has almost <a href="">13,000 GBP</a> in debt (on top of the mortgage) and the Office for National Statistics confirmed the total unsecured debt has increased to almost 350 billion pounds. </p> <p> This also means the ratio of unsecured debt as a percentage of the average household income has increased to almost 30%, which is once again the highest ratio since the global financial crisis. </p> <p> Even if you would exclude student debt (although there’s no good reason to do so), the total amount of unsecured debt would be close to 200B GBP, of which <a href="">1/3<sup>rd</sup> is credit card debt</a>. Meanwhile, the total market share of ultra-long mortgages (30 years or longer) is increasing as well. </p> <p> <a href="" rel="attachment wp-att-112629"><img src="" alt="Inflation UK 2" width="693" height="567" style="display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-112629" /></a> </p> <p> Source: Bank of England </p> <p> That’s a very worrisome situation; the gross and net debt position of the households is increasing whilst the savings ratio continues to drop. And that’s a deathly combination which can’t&nbsp;end well. </p> <p> <strong><a href="">&gt; Gold is your best insurance policy against a failing monetary system. Read our Guide to Gold right now, and be prepared!</a></strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the&nbsp;<strong><a href="">Gold &amp; Silver Report</a></strong>&nbsp;and the&nbsp;<strong><a href="">Commodity Report</a></strong>.<br /></em></p> </blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Follow us on&nbsp;<strong>Facebook&nbsp;<a href="">@SecularInvestor</a>&nbsp;[NEW]</strong>&nbsp;and&nbsp;<strong>Twitter&nbsp;<a href="">@SecularInvest</a></strong></p></blockquote> Bank of England Bank of England Business Consumer price index CPI Debt Deflation Economy Economy of the United Kingdom European Central Bank Federal Reserve Finance Government debt Household debt Inflation Market Share Meltdown Money office of Budget Responsibility Price indices Retail Price Retail price index Twitter Twitter United Kingdom US Federal Reserve Sun, 26 Mar 2017 12:48:05 +0000 Secular Investor 591759 at One Dead, 14 Injured After Ohio Nightclub Shooting; Shooter At Large <p>One person was killed and 14 injured after gunfire erupted inside a packed nightclub in Cincinnati, Ohio, just after 1 am on Sunday morning, with the shooter said to still be at large. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Update: Cameo Night Club 15 gun shot victims, 1 deceased. Homicide unit and all available resources are being utilized. Next update after 11</p> <p>— Cincinnati Police (@CincyPD) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><p>The motive was unclear, but Cincinnati Assistant Police Chief Paul Neudigate said on Twitter that "there are no indications this incident is terrorism related." The shooting took place around 1 a.m. when hundreds of people were inside the Cameo Nightlife club, which the Cincinnati Police Department said has had "multiple problems" in the past. </p> <p><iframe src="" width="500" height="281" frameborder="0"></iframe></p> <p>The University of Cincinnati Medical Center admitted eight people injured in the shooting, one of them in critical condition, a spokeswoman told NBC News. A representative of the hospital could not be reached immediately for comment. </p> <p>Cameo Nightlife's Facebook page says it features "College Friday's" for students 18 and older and "Saturday's 21+ grown and sexy night." The club, a large single-story structure, is a 7-mile (11 km) drive from downtown Cincinnati near the southeast corner of the city, the heart of the second largest metropolitan area in Ohio with more than 2 million residents. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">All victims have been transported from the scene, more victims are arriving at local hospitals and fire stations, unknown total number <a href=""></a></p> <p>— Cincinnati News (@CinciNews) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><p>"At this point it's unclear exactly what instigated the shooting," Captain Kimberly Williams said at a televised briefing. "Just a lot of chaos when the shots went off." </p> <p>The shooting comes less than a year after a gunman opened fire at a gay nightclub in Orlando, Florida, killing 49 people. It was the deadliest mass shooting in U.S. history. </p> <p>Police initially said they believed at least two shooters were involved in Cincinnati, but later Neudigate said in a Twitter message that there was only one reported gunman, though police were still trying to determine if there were others. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Medic units lining up to take victims from inside the club, at least one DOA on scene <a href=""></a></p> <p>— Cincinnati News (@CinciNews) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><p><strong>Hours after the shooting, the suspect was still at large, </strong>and police did not have a good description, in part because witnesses were reluctant to cooperate, Williams told WCPO.</p> <p>"We are in the middle of a very horrific situation that occurred at the nightclub with multiple victims," Neudigate told NBC News.&nbsp; "It's going to be a long night for our homicide units to investigate this incident, but right now things are stable." </p> <p>Several of the victims in Cincinnati had life-threatening injuries, WLWT-TV reported on its website, quoting Neudigate, who said hundreds of people were in the nightclub at the time of shooting.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1008" height="504" alt="" src="" /> </div> </div> </div> Cameo Night Club Cincinnati Cincinnati Assistant Police Cincinnati Medical Center Cincinnati Police Cincinnati Police Department Florida Mass shootings NBC Ohio Orlando nightclub shooting Television in the United States Twitter Twitter University of Cincinnati WCPO-TV WLWT Sun, 26 Mar 2017 12:18:58 +0000 Tyler Durden 591758 at OPEC, Non-OPEC Oil Producers Recommend Extending Production Cuts By Six Months <p>Having failed to &quot;rebalance&quot; the oil market in the first six months following the implementation of the Vienna production cut agreement, with crude inventories in the US hitting all time highs in the interim...</p> <p><a href=""><img height="265" src="" width="500" /></a></p> <p>... OPEC and non-OPEC oil producers found themselves in the unpleasant position of scrambling for solutions at this weekend&#39;s Kuwait meeting - <strong>in which Saudi Arabia was conspicuously missing</strong> - where just two things were discussed: deal compliance, which OPEC paradoxically claims is more than satisfactory despite the relentless climb in inventories, and whether to extend the production cuts by another six month.</p> <p>And as the Kuwait meeting in which OPEC and rival N-OPEC producing countries met to review progress with their pact to cut supplies drew to a close, a joint committee of ministers from OPEC and non-OPEC oil producers recommended extending by six months the global deal to reduce oil output by 1.8 million barrels, a draft press release from their meeting on Sunday showed.</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 244px;" /></a></p> <p>The oil ministerial committee &quot;expressed its satisfaction with the progress made toward full conformity with the voluntary production adjustments and encouraged all participating countries to press on toward 100 percent conformity,&quot; said the draft, seen by Reuters.</p> <p>The December accord, aimed at supporting the oil market, has lifted crude LCOc1 to more than $50 a barrel. But the price gain has encouraged U.S. shale oil producers, which are not part of the pact, to boost output.</p> <p>In its statement, the committee said that &ldquo;certain factors, such as low seasonal demand, refinery maintenance, and rising non-OPEC supply, have led to a further increase in crude oil stocks. At the same time, the liquidation of positions by financial players in the market was also observed.&rdquo;&nbsp; In other words, the committee blamed everything, including &quot;evil selling speculators&quot; except non-compliance with the deal, of course as that would crush what little credibility OPEC had.</p> <p>Oil inventories are high because of low U.S. demand and higher supply, and the market should re-balance in the second half of the year, OPEC Secretary-General Mohammad Barkindo told reporters in Kuwait. Inventories in countries in the Organisation for Economic Co-operation and Development are currently 282 million barrels higher than their five-year average, he said at the meeting on Sunday.</p> <p>It also left on a positive note: &quot;However, the end of the refinery maintenance season and noticeable slowdown in U.S. stock build as well as the reduction in floating storage will support the positive efforts undertaken to achieve stability in the market,&quot; it said.</p> <p>&quot;Oddly&quot;, there was no mention of US shale production, which has soared in recent months, happy to grab market share from OPEC which has allegedly cut production by nearly 2 million barrels daily, and whose output continues to ramp higher in line with the <a href="">resurgence in US oil rigs</a>.</p> <p><a href=""><img height="261" src="" width="498" /></a></p> <p>Before the meeting, Iraqi Oil Minister Jabar Ali al-Luaibi told reporters there were some encouraging elements that suggested the oil market was improving, and that if all OPEC members agreed measures to help price stability, Iraq would support such steps. &quot;Any decisions taken unanimously by members of OPEC ... Iraq will be part of the decision and will not be deviating from this,&quot; Luaibi <a href="">said quoted by Reuters</a>.&nbsp;</p> <p>Iraq&#39;s oil production is running at 4.312 million bpd this month, Luaibi said, adding that his country had cut its oil exports by 187,000 bpd so far and would reach 210,000 bpd in a few days. Compliance with the supply-cut deal was 94 percent in February among OPEC and non-OPEC oil producers combined, Russian Energy Minister Alexander Novak said.</p> <p>Russia is committed to cuts of 300,000 bpd by the end of April, Novak said, adding that a deal extension could be discussed on Sunday. &quot;For today, obviously, this is within the sphere of our questions,&quot; Novak said and added that he expects global oil stockpiles to decrease in the second quarter of this year. &quot;The dynamics are positive here, I believe,&quot; Novak said, adding that inventories in the United States and other industrialized countries had risen by less than in the past.</p> <p>OPEC&rsquo;s compliance rate was 106% in February, and non-OPEC nations, including Russia, have reached compliance of 64 percent, Kuwait&rsquo;s Almarzooq said Sunday. The combined compliance rate of both was 94 percent, he said.</p> <p>Kuwaiti Oil Minister Essam al-Marzouq said the oil market may return to balance by the third quarter of this year if producers comply fully with their production targets.</p> <p>&quot;More has to be done. We need to see conformity across the board. We assured ourselves and the world that we would reach our adjustment to 100 percent conformity,&quot; Marzouq said.</p> <p>The biggest question, however, how OPEC plans to deal with the rising shale threat, which as <a href="">Goldman noted last week has become the global oil price setter</a>, was unanswered.</p> <p><a href=""><img height="355" src="" width="500" /></a></p> <p>This is how Goldman explained the dramatic change in the global oil cost curve over the past three years:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Shale&rsquo;s short time to market and ongoing productivity improvements have provided an efficient answer to the industry&rsquo;s decade-long search for incremental hydrocarbon resources in technically challenging, high cost areas and has kicked off a competition amongst oil producing countries to offer attractive enough contracts and tax terms to attract incremental capital. </strong>This is instigating a structural deflationary change in the oil cost curve, as shown in Exhibit 2. This shift has driven low cost OPEC producers to respond by focusing on market share, ramping up production where possible, using their own domestic resources or incentivizing higher activity from the international oil companies through more attractive contract structures and tax regimes. In the rest of the world, projects and countries have to compete for capital, trying to drive costs down to become competitive through deflation, FX and potentially lower tax rates.</p> </blockquote> <p>The implications of this curve shift are major, all of which are very adverse to the Saudis, who have been relegated from the post of long-term price setter to inventory manager, and thus the loss of leverage. Here are some further thoughts from Goldman:</p> <ul> <li><strong>OPEC role</strong>: from price setter to inventory manager In the New Oil Order, we believe OPEC&rsquo;s role has structurally changed from <strong>long-term price setter to inventory manager</strong>. In the past, large-scale developments required seven years+ from FID to peak production, giving OPEC long-term control over oil prices. <strong>US shale oil currently offers large-scale development opportunities with 6-9 months to peak production. </strong>This short-cycle opportunity has structurally changed the cost dynamics, <strong>eliminating the need for high cost frontier developments and instigating a competition for capital amongst oil producing countries that is lowering and flattening the cost curve through improved contract terms and taxes. </strong></li> <li><strong>OPEC&rsquo;s November decision had unintended consequences</strong>: OPEC&rsquo;s decision to cut production was rational and fit into the inventory management role. Inventory builds led to an extreme contango in the Brent forward curve, with 2-year fwd Brent trading at a US$5.5/bl (11%) premium to spot. As OPEC countries sell spot, but US E&amp;Ps sell 30%+ of their production forward, this was giving the E&amp;Ps a competitive advantage. Within one month of the OPEC announcement, the contango declined to US$1.1/bl (2%), achieving the cartel&rsquo;s purpose. However, the unintended consequence was to underwrite shale activity through the credit market.</li> <li><strong>Stability and credit fuel overconfidence and strong activity: </strong>A period of stability (1% Brent Coefficient of Variation ytd vs. 6% 3-year average) has allowed E&amp;Ps to hedge (35% of 2017 oil production vs. 21% in November) and access the credit market, with high yield reopen after a 10- month closure (largest issuance in 4Q16 since 3Q14). Successful cost repositioning and abundant funding are boosting a short-cycle revival, with c.85% of oil companies under our coverage increasing capex in 2017.</li> </ul> <p>Finally, with Saudi Arabia absent, the Kuwait meeting was largely moot. Khalid Al-Falih, the Saudi energy minister said in a Bloomberg Television interview on March 17 that the deal will be maintained if oil stockpiles are still above their five-year average.</p> <p><strong>In summary: </strong>It&rsquo;s too early to decide on an extension of the output cuts, and OPEC will take up the issue in May, Barkindo said at Sunday&rsquo;s meeting, during which ministers will monitor compliance with the targeted reductions.</p> <p>* * *</p> <p><em>For those curious, here is the full blast of Bloomberg overnight headlines covering the Kuwait meeting</em></p> <p>KUWAIT OIL MINISTER OPEC COMPLIANCE IN FEB BETTER THAN JAN<br />KUWAIT: WE ARE ASKING COUNTRIES TO INCREASE COMPLIANCE<br />KUWAIT: WE SHOULD SEE MARKET REBALANCE END OF YEAR<br />KUWAIT: WE SHOULD SEE OIL STOCKS DRAWDOWN IN 3Q<br />KUWAIT OIL MINISTER: INDUSTRY NEEDS TO ADDRESS CHALLENGES<br />KUWAIT: SAUDI ARABIA, ANGOLA EXCEEDED COMMITMENTS TO CUT OUTPUT<br />KUWAIT: OIL MARKET WILL BE IN BALANCE IN 3Q IF COMPLIANCE 100%<br />KUWAIT: OIL COMMITEE REPORTS HIGH LEVEL OF CONFORMITY<br />KUWAIT: OPEC IS STUDYING EXTENSION OF CUTS DEAL FOR SIX MONTHS<br />KUWAIT MINISTER: OPEC, NON-OPEC COMPLIANCE WITH CUTS IS AT 94%<br /><strong>KUWAIT: COMMITTEE CALLS FOR OPEC TO MAKE RECOMMENDATION ON CUTS</strong></p> <p><strong>RUSSIA&#39;S ENERGY MINISTER: MINISTERS DISCUSS EXTENDING CUTS DEAL</strong><br />RUSSIA&rsquo;S NOVAK: OPEC/NON OPEC COMPLIANCE 94% AS OF END OF FEB<br />RUSSIA&rsquo;S NOVAK: OPEC, NON-OPEC DISCUSS EXTENDING OIL-CUTS DEAL<br />RUSSIA: OPEC, NON-OPEC COOPERATING AT `VERY HIGH LEVEL&rsquo;</p> <p><strong>IRAQ TO SUPPORT EXTENDING OIL CUTS IF OTHERS IN OPEC AGREE</strong><br />IRAQ PRODUCED 4.312M B/D OF OIL IN MARCH: MINISTER<br />IRAQ&rsquo;S MARCH OIL EXPORTS IN AGREED RANGE: MINISTER<br />IRAQ CUT OIL OUTPUT BY 187M B/D UNDER OPEC DEAL: LUAIBI<br />IRAQ TO CUT 210K B/D OF OIL OUTPUT IN FEW DAYS: LUAIBI</p> <p>OPEC CHIEF SEES MARKET REBALANCE IN SECOND HALF OF 2017<br />OPEC: PRODUCERS REACHED HIGH LEVEL OF COMPLIANCE WITH CUTS<br />OPEC HOPES FOR HIGHER LEVEL OF COMPLIANCE WITH OUTPUT CUTS<br />OPEC CHIEF: TOO EARLY TO DECIDE ON EXTENSION OF OIL CUTS DEAL<br />OPEC CHIEF: OIL MARKET OPTIMISM IMPROVED ON OUTPUT CUTS<br />OPEC: OIL STOCKS ARE HIGH ON LOW U.S. DEMAND, RISING SUPPLY<br />OPEC: OIL STOCKS TO DECREASE IN SECOND HALF OF THIS YEAR</p> <p>OMAN OIL MINISTER SAYS MAKES SENSE TO EXTEND OUTPUT CUTS 6 MOS<br /><strong>OMAN SUPPORTS OIL OUTPUT CUTS UNTIL END OF YEAR: MINISTER</strong></p> <p><strong>VENEZUELA OIL MIN: WE ARE READY TO BACK EXTENDING OUPTUT CUTS</strong></p> <p><strong>OPEC, NON-OPEC COMMITTEE SAID TO RECOMMEND OIL-CUTS EXTENSION<br />BARKINDO: OPEC TO DECIDE ON EXTENSION OF OIL CUTS DEAL IN MAY</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="780" height="380" alt="" src="" /> </div> </div> </div> 1990–99 world oil market chronology B+ Business Cartels Chronology of world oil market events Contango Crude Crude Oil Economy Energy crisis Energy economics headlines High Yield Iraq Kuwait Market Share Mohammad OPEC OPEC Organisation for Economic Co-operation and Development Organization of Petroleum-Exporting Countries Petroleum Petroleum industry Petroleum politics Price of oil Reuters Saudi Arabia Sun, 26 Mar 2017 12:05:47 +0000 Tyler Durden 591757 at