http://www.zerohedge.com/fullrss2.xml/feed en Scheme To Pay Off Trump Accusers Emerges, One Woman Was Offered $750,000 http://www.zerohedge.com/news/2017-12-15/scheme-pay-trump-accusers-emerges-one-woman-was-offered-750000 <p>California woman&#39;s rights Attorney Lisa Bloom operated behind a scheme to compensate Trump accusers and potential accusers using money from donors and tabloid media outlets&nbsp;during the final months of the 2016 presidential race, in an effort which intensified as the election neared, report John Solomon and Alison Spann of <em><a href="http://thehill.com/homenews/administration/365068-exclusive-prominent-lawyer-sought-donor-cash-for-two-trump-accusers" target="_blank">The Hill</a></em>.&nbsp;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Lisa Bloom&rsquo;s efforts included <strong>offering to sell alleged victims&rsquo; stories to TV outlets in return for a commission for herself</strong>, <strong>arranging a donor to pay off one Trump accuser&rsquo;s mortgage</strong> and attempting to secure a six-figure payment for another woman <strong>who ultimately declined to come forward after being offered as much as $750,000</strong>, the clients told The Hill. -<em>The Hill</em></p> </blockquote> <p>The various accounts of Bloom&#39;s scheme were detailed in documents, emails and text messages reviewed by <em>The Hill, </em>and come on the heels of Bill O&#39;Reilly&#39;s claim that there is a secret tape of a women who was <a href="http://www.zerohedge.com/news/2017-12-13/bill-oreilly-secret-tape-exists-woman-offered-200k-file-sexual-harassment-charges-ag" target="_blank">offered $200,000</a> to file sexual harassment charges against Trump. It is unknown whether or not O&#39;Reilly&#39;s claim is related to Bloom&#39;s activities.&nbsp;</p> <p><em><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/Gloria%2BAllred%2BLisa%2BBloom%2BWarner%2BBros%2BPremiere%2B1CMurMeFi9rl.jpg"><img height="276" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/Gloria%2BAllred%2BLisa%2BBloom%2BWarner%2BBros%2BPremiere%2B1CMurMeFi9rl.jpg" width="401" /></a><br />Lisa Bloom with mother Gloria Allred</em></p> <p>Bloom, the daughter of activist Attorney Gloria Allred who initially&nbsp;defended Harvey Weinstein against sexual assault allegations earlier this year and was publicly shamed by anti-Trump comedian&nbsp;<a href="https://pagesix.com/2017/10/24/kathy-griffin-slams-lisa-bloom-and-spineless-heiress-anderson-cooper/" style="font-size: 13.008px;" target="_blank">Kathy Griffin</a>, represented four women considering launching allegations against Trump last year. Two of the women went public, while the other two declined.&nbsp;</p> <p>Bloom says that the goal of her accusation mill was to simply raise funds to help women &quot;relocate or arrange security if they felt unsafe during the waning days of a vitriolic election.&quot; <strong>With a commission to Bloom as high as 33 percent, if she was able to sell their stories to media outlets</strong>.&nbsp;</p> <p>&ldquo;Our standard pro bono agreement for legal services provides that if a media entity offers to compensate a client for sharing his or her story we receive a percentage of those fees. This rarely happens. But, on occasion, a case generates media interest and sometimes (not always) a client may receive an appearance fee,&rdquo; said Bloom.</p> <p><em><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/1767.jpg"><img height="241" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/1767_0.jpg" width="401" /></a><br />Jill Harth</em></p> <p>One client of Bloom&#39;s who received money was Trump accuser Jill Harth, who filed a sexual harassment lawsuit against trump in 1997, but withdrew it after Trump settled a separate lawsuit from Harth and her boyfriend for alleged breach of contract when trump backed out of a business deal. After Bloom began representing Harth, <strong>she arranged for a donor to help Harth pay off her Queens, NY mortgage</strong>, which was recorded as extinguished on Dec. 19, 2016. Bloom also&nbsp;&quot;<strong style="font-size: 13.008px;">arranged a small payment from the licensing of some photos to the news media, then set up a&nbsp;<em>GoFundMe</em>&nbsp;page</strong>&nbsp;for Harth&#39;s benefit which raised a little over $2,300.</p> <p>Harth maintains Bloom&#39;s financial incentives had nothing to do with her decision to reignite her claims:</p> <p>&ldquo;Nothing that you&rsquo;ve said to me about my mortgage or the Go Fund Me that was created to help me out financially affects the facts or the veracity of my 1997 federal complaint against Donald J. Trump for sexual harassment and assault,&rdquo; Harth told The Hill.</p> <p>One woman who spoke with <em>The Hill</em>&nbsp;under the condition of anonymity said that she was friends with Bloom and Harth, and said that Bloom never encouraged them to make false statements - however their texts and emails &quot;<strong>indicate Bloom held a strong dislike of Trump</strong>,&quot; telling the potential Trump accuser in one email that her story was &quot;further evidence of what a sick predator this man is.&quot;&nbsp;</p> <p>Other documents reveal that Bloom&#39;s efforts to peddle accusers intensified as the 2016 election neared.&nbsp;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>When Harth, for instance, informed Bloom she had just made a Facebook post urging other women to come forward about Trump in October 2016, the lawyer texted back: &ldquo;Wow Jill that would be amazing. 27 days until the election.&rdquo;</p> <p>&nbsp;</p> <p>And <strong>when a potential client abruptly backed out of a pre-election news conference in which she was supposed to allege she was sexually assaulted at age 13, Bloom turned her attention to another woman</strong>.</p> <p>&nbsp;</p> <p>That woman, Harth&rsquo;s friend, went back and forth for weeks with Bloom in 2016 about going public with an allegation of an unsolicited advance by Trump on the 1990s beauty contest circuit.</p> </blockquote> <p>&ldquo;<strong>Give us a clear sense of what you need and we will see if it we can get it</strong>,&rdquo; Bloom texted the woman a week before Election Day.</p> <p>&ldquo;<strong>I&rsquo;m scared Lisa. I can&rsquo;t relocate. I don&rsquo;t like taking other people&rsquo;s money</strong>,&rdquo; the woman wrote to Bloom.</p> <p>&ldquo;<strong>Ok let&rsquo;s not do this then</strong>,&rdquo; Bloom responded. &ldquo;<strong>We are just about out of time anyway</strong>.&rdquo;</p> <p>This angered the potential Trump accuser, who texted Bloom back about the deadline: &ldquo;<strong>What does time have to do with this? Time to bury Trump??? You want my story to bury trump for what? Personal gain? See that &#39;s why I have trust issues</strong>!!&rdquo;</p> <p>Another exchange of text messages between Bloom and a potential client reveal a negotiation which started out at $50,000. When the woman demanded more, Bloom came back with an offer of $100,000 from a donor, which the woman balked at.</p> <p>&ldquo;<strong>Hey after thinking about all this, I need more than $100,000.00</strong>. College money would be nice&rdquo; for her daughter. &ldquo;Plus relocation fees, as we discussed.&rdquo;</p> <p>After their discussion, the figure <strong>jumped to $200,000</strong>&nbsp;after a series of phone calls. <strong>The support was promised to be tax-free, and included relocation complete with a new identity</strong>.&nbsp;</p> <p>Bloom told <em>The Hill</em>&nbsp;that the woman eventually demanded as much a <strong>$2 million</strong>, which eventually became a low six-figure offer:&nbsp;</p> <p>&ldquo;She asked to be compensated, citing concerns for her safety and security and over time, increased her request for financial compensation to $2 million, which we told her was a non-starter,&rdquo; Bloom told The Hill. &ldquo;We did relay her security concerns to donors, but none were willing to offer more than a number in the low six figures, which they felt was more appropriate to address her security and relocation expenses.&rdquo;</p> <p>When the woman fell ill and ended up in the hospital days before the election, <strong>Bloom scrambled to reach her</strong>, sending repeated texts to a friend of the potential accuser, who replied with a picture of the client in a hospital bed. Bloom did not give up, <strong>warning the woman&#39;s friend that if she did not go through with the accusation, it could have &quot;a significant impact on her life,&quot; and a &quot;big impact on her daughter.&quot;</strong></p> <p>&quot;She is in no condition for visitors,&quot; the friend responded, adding &quot;If you care about her you need to leave her be until she is feeling better.&quot;&nbsp;</p> <p>Bloom then <strong>flew out from California</strong>&nbsp;to visit the woman, who then decided she would <em>not</em>&nbsp;move forward with her allegations against Trump. Via&nbsp;<em>The Hill:&nbsp;</em></p> <p>&ldquo;I am confused because you sent me so many nice texts Wednesday night after my other client wasted so much of my time and canceled the press conference,&rdquo; Bloom texted on Nov. 5, 2016. &ldquo;That meant a lot to me. <strong>Thursday you said you wanted to do this if you could be protected/relocated. I begged you not to jerk me around after what I had just gone through</strong>.&rdquo;</p> <p>Bloom then browbeat the woman, texting &quot;<strong>You have treated me very poorly.</strong> I have treated you with great respect as much as humanly possible. <strong>I have not made a dime off your case and I have devoted a great deal of time.</strong> It doesn&rsquo;t matter. I could have done so much for you. <strong>But you can&rsquo;t stick to your word even when you swear you will.</strong>&rdquo;</p> <p>The woman eventually agreed to meet Bloom after she got out of the hospital, two days before the election - where she told <em>The Hill</em>&nbsp;that Bloom had upped her offer to <strong>$750,000</strong>, which was declined.&nbsp;</p> <p><strong>Another woman</strong>&nbsp;who declined to come forward with accusations says that Bloom made it very clear that she would be paid fees from arranging compensated media appearances.&nbsp;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Outlets with which I have good relationships that may pay for your first on camera interview, revealing your name and face: <strong>Inside Edition, Dr. Phil, LawNewz.com,</strong>&rdquo; Bloom texted the woman just weeks before Election Day. <strong>&ldquo;My best estimate of what I could get for you would be $10-15,000 (less our 1/3 attorney fee).&quot;</strong></p> </blockquote> <p>After Bloom found out that one of her clients had already spoken with CBS News right before the election about a paid interview, she told the accuser &quot;You and your friends should not be shopping the story it will come back to bite you,&quot; adding &quot;<strong>And this whole thing we have worked so hard to make happen will go away</strong>.&quot;&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="392" height="219" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/alred%20teaser.jpg?1513362455" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-15/scheme-pay-trump-accusers-emerges-one-woman-was-offered-750000#comments Big Fish California Donald Trump Donald Trump sexual misconduct allegations Fiction with unreliable narrators Gloria Allred Harold Bloom Lisa Bloom None United States Fri, 15 Dec 2017 21:45:18 +0000 Tyler Durden 609241 at http://www.zerohedge.com Crypto Envy? Beware Greed and FOMO - Jeff Tomasulo http://www.zerohedge.com/news/2017-12-15/crypto-envy-beware-greed-and-fomo-jeff-tomasulo <h3>Crypto Envy</h3> <p><em>To&nbsp;us, Jeff is describing what he knows from&nbsp;his years of experience and some&nbsp;call the "psychology of regret". It is also closely related to the concept of a Giffen good in&nbsp;economics. That is an item in which its demand goes&nbsp; up as its price does, like perfume. Cryptos are right now exhibiting <a href="https://en.wikipedia.org/wiki/Giffen_good">Giffen Good&nbsp;</a> qualities because of the press and hype surrounding the launch of futures for sure.&nbsp;&nbsp;This is why it is all the more important to not forget your discipline.&nbsp; When the world is telling you to buy something&nbsp;because it went up, the Fear of Missing Out (FOMO) that Jeff describes so well can be&nbsp;overwhelming. &nbsp;</em></p> <p><em>The message is clear to&nbsp; us. There will be other opportunities, don't chase the last one. Ignore the fact that your next door neighbor who just bought a Rolls with his Bitcoin winnings is just lucky, not good. Stick to your rules, and&nbsp;remember trading, as well as investing,&nbsp;is&nbsp;a marathon, not a sprint. The market will be there tomorrow - Soren K</em>.&nbsp;</p> <h2>GREED and FOMO</h2> <p><strong><a href="https://jefftomasulo.com/author/jprice/"><em>Written by&nbsp;Jeff Tomasulo, CEO Vespula Capital</em></a></strong></p> <p>Every month, I speak to around a hundred retail investors at a conference in Utah. Over past six months, I’ve been getting pretty much the same two questions. “Where do you think the market will go?” and “Would you invest in Bitcoin?” keep coming up. Both questions are obviously very subjective. The more interesting question, the one that has plagued me at times throughout my career, is about the thought processes of investors. Why do investors find it so compelling to invest in assets and projects where the risks are hard to measure and the probabilities of success are so low? It mainly comes down to two consistent killers of returns, <strong>Greed and Fear Of Missing Out </strong>(FOMO).</p> <p>Greed and FOMO have been affecting investors and people outside of the investing world for centuries. That is why get rich quick infomercials still work today. Most of us have an inner desire to catch that one special stock that goes from 50 cents all the way up to 100 dollars. This is the allure of the penny stocks. It is also why bitcoin is getting so much attention today. Yes, it is a new technology that can, maybe, possibly, someday change the world. That’s why Greed and FOMO are kicking in.</p> <p>Greed and FOMO are the main reasons why certain stocks go parabolic. We like to dig deep into our pasts and remember all the times we wanted to invest in a stock like Apple at $12 in 1997 but didn’t do it. Or when Google broke above $500, and people told you it was overvalued. Or that time you had an opportunity to invest in that start-up with a few of your friends, but you didn’t. They walked away with a few hundred thousand dollars. You do not want to miss out again! Greed and FOMO! That is how we justify buying Boeing at $295 or AMAZON $1165 even after they have both soared over 50% this year.</p> <p>Ironically, we usually do not recall all the times that we missed out on losing a ton of money. For me, it was Bear Stearns the Friday before it was bought by JP Morgan for $2 a share. By not pulling the trigger at $30.85 a share, I saved myself $200,000. Was I jealous of my friends who invested in an energy drink company when I didn’t? The four of them lost a total of a million dollars because the CEO was stealing money from the company. We have to remind ourselves that when our Greed and FOMO is high, it can cut both ways. More often than not, it usually goes the wrong way.</p> <p>One thing I have learned over the past 22 years of investing is that there is no need to fear missing out. The 1960s and early 70s had the Nifty Fifty, the 1990s had the Internet, and today we have the FANG stocks. There will always be new opportunities, but they probably won’t be the same companies. <strong>[EDIT- And jumping on bandwagons can be <a href="https://jefftomasulo.com/are-you-diversified/">detrimental to healthy diversification</a>&nbsp;- Soren K]</strong></p> <p>To me, there is a difference between investing to make consistent returns and trying to hit that magic home run. There is nothing wrong with home runs. The keys are how you go about it and how much money you allocate to it. This is what I tell anyone who will listen: If you have Greed and FOMO running through your veins, take a very small portion of your overall portfolio and make small bets on these types of ideas. That way, you can satisfy your Greed and FOMO without losing a fortune. Hopefully, over time you will even hit one or two of them and actually make some money.</p> <p>Read more observations by Jeff Tomasulo <a href="https://jefftomasulo.com/">HERE</a></p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="1007" height="568" alt="" src="http://www.zerohedge.com/sites/default/files/images/user238352/imageroot/2.PNG?1513373606" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-15/crypto-envy-beware-greed-and-fomo-jeff-tomasulo#comments Advertising Anxiety Apple Bear Stearns Bitcoin Bitcoin Boeing Cinema of the United States Communication Economy Fear of missing out Film FOMO Google Greed and fear Internet culture Social media Fri, 15 Dec 2017 21:35:35 +0000 Vince Lanci 609256 at http://www.zerohedge.com Weekend Reading: Ignorance Is No Excuse http://www.zerohedge.com/news/2017-12-15/weekend-reading-ignorance-no-excuse <p><a href="https://realinvestmentadvice.com/weekend-reading-ignorance-is-no-excuse/"><em>Authored by Lance Roberts via RealInvestmentAdvice.com,</em></a></p> <p><strong>The <em>&ldquo;tax bill cometh.&rdquo;</em>&nbsp;</strong>According to the press, this is going to be the single biggest factor to jump-starting economic growth since the invention of the wheel.</p> <p>Interestingly, even the Fed&rsquo;s economic projections are suggesting that economic growth will pick up over the next two years from the impact of tax cuts. <em>(Chart is the average of the range of the Fed&rsquo;s estimates.)</em></p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/12/Fed-Projections-GDP-121417.png"><img class="alignnone size-full wp-image-26040" src="http://realinvestmentadvice.com/wp-content/uploads/2017/12/Fed-Projections-GDP-121417.png" style="width: 600px; height: 591px;" /></a></p> <p><strong>Of course, you should note the Federal Reserve has NEVER accurately forecasted future economic growth.</strong> In fact, it has become an annual tradition of over-estimating growth and then slowly ratcheting down estimates as reality failed to achieve overly optimistic assumptions.</p> <p>However, despite the Administrations hopes of long-term economic growth rates of 3% or more, in order to pay for the deficits created by cutting revenue, <strong>even the Fed has maintained their long-run outlook of less that 2% annualized growth. </strong><em><strong>(Down from 2.7% in 2011)</strong>&nbsp;</em>Hardly the supportive stamp of endorsement for the <em>&ldquo;greatest tax cut&rdquo;</em> of all-time.</p> <p>But for economic growth to blossom, the consumer will have to pull their weight given consumption makes up roughly 70% of GDP. The problem, as witnessed by the latest retail sales report, is that consumptive spending is far weaker than headlines suggest.</p> <p>On Thursday, the retail sales report for November clicked up 0.8%. Good news, right?</p> <p><strong>Not so fast.</strong></p> <p>First, sales of gasoline, which directly impacts consumers ability to spend money on other stuff, rose sharply due to higher oil prices and comprised 1/3rd of the increase. <strong>Secondly, building products also rose sharply from the ongoing impact of rebuilding from recent hurricanes and fires.</strong> Again, this isn&rsquo;t healthy longer-term either as replacing lost possessions drags forward future consumptive capacity.</p> <p>But what the headlines miss is the growth in the population. The chart below shows retails sales divided by those actually counted as part of the labor force. <em>(You&rsquo;ve got to have a job to buy stuff, right?)&nbsp;</em></p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/12/Retail-Sales-LFP-121417-3.png"><img class="alignnone size-full wp-image-26041" src="http://realinvestmentadvice.com/wp-content/uploads/2017/12/Retail-Sales-LFP-121417-3.png" style="width: 599px; height: 343px;" /></a></p> <p>As you can see, retail sales per labor force participant was on a 5% annualized growth trend beginning in 1992. <strong>However, after the financial crisis, the gap below that long-term trend has yet to be filled as there is a 22.7% deficit from the long-term trend.</strong>&nbsp;<em>(If we included the entirety of the population, given the number of people outside of the labor force that are still consuming, the trajectory would be worse.)</em></p> <p>But wait, retail sales were really strong in November?</p> <p><strong>Again, not so fast.</strong></p> <p>The chart below shows the annual % change of retail sales per labor force participant. The trend has been weakening since the beginning of 2017 and shows little sign of increasing currently.</p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/12/Retail-Sales-LFP-121417.png"><img class="alignnone size-full wp-image-26042" src="http://realinvestmentadvice.com/wp-content/uploads/2017/12/Retail-Sales-LFP-121417.png" style="width: 601px; height: 347px;" /></a></p> <p>While tax cuts may provide a temporary boost to after-tax incomes, that income will simply be absorbed by higher energy, gasoline, health care and borrowing costs. <strong>This is why, 80% of Americans continue to live paycheck-to-paycheck and have little saved in the bank</strong>. It is also why, as wages have continued to stagnate, that the cost of living now exceeds what incomes and debt increases can sustain.</p> <p>Yes, corporations will do well under the<em> &ldquo;tax reform&rdquo;</em> plan, and while the average American may well see an increase in take-home pay, it will unlikely change their financial situation much. <strong>As a result, economic growth will likely remain weak as the deficit expands to $1 Trillion over the next couple of years and Federal debt marches toward $32 trillion. </strong>As noted by <a href="http://thehill.com/opinion/finance/364441-avoid-budgetary-wrecking-ball-by-making-key-changes-to-tax-bill" rel="noopener" target="_blank">the&nbsp;CFRB</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Fiscal conservatives on the right have lost a massive amount of credibility based on the GOP budget they passed this year. After many years of calling for a budget that cut spending, reformed entitlements, controlled the debt and balanced the budget, they failed to enact even one of those goals when they finally had a chance.&quot;</p> <p>&nbsp;</p> <p>&quot;Out of a possible $47 trillion in spending over 10 years, the budget called for cutting an utterly pathetic $1 billion. Their fiscal credibility died with a whimper. I doubt that credibility can be regained, but it seems quite likely that some of the more conservative GOP members will call for letting the sequester hit.&rdquo;</p> </blockquote> <p><strong>So, when someone acts astonished that things didn&rsquo;t work out as planned&hellip;just remind them that <em>&ldquo;ignorance is no excuse.&rdquo;&nbsp;</em></strong></p> <p>Just something to think about as you catch up on your weekend reading list.</p> <div class="site-content" id="content"> <div class="entry-content"> <hr /> <h2><strong>Trump, Economy &amp; Fed</strong></h2> <ul> <li><strong>Is 3% Growth The New Normal&nbsp;</strong><a href="https://www.marketwatch.com/story/is-3-growth-the-new-normal-2017-12-13" rel="noopener" target="_blank">by Caroline Baum via MarketWatch</a></li> <li><strong>Drop In Public Investment Picks Up Steam&nbsp;</strong><a href="https://www.brookings.edu/blog/up-front/2017/12/06/drop-in-public-investment-picks-up-steam-under-gop-tax-plan/" rel="noopener" target="_blank">by Gary Burtless via Brookings Institute</a></li> <li><strong>Could The Tax Plan Still Fall Apart&nbsp;</strong><a href="http://www.slate.com/articles/news_and_politics/politics/2017/12/how_the_tax_deal_could_fall_apart.html" rel="noopener" target="_blank">by Jim Newell via Slate</a></li> <li><strong><span style="color: #ff0000;">Avoid The Budgetary Wrecking Ball With Tax Bill</span>&nbsp;</strong><a href="http://thehill.com/opinion/finance/364441-avoid-budgetary-wrecking-ball-by-making-key-changes-to-tax-bill" rel="noopener" target="_blank">by Committee For A Responsible Federal Budget</a></li> <li><strong>Economy On Sugar High, Tax Cuts Won&rsquo;t Help&nbsp;</strong><a href="https://www.washingtonpost.com/opinions/the-economy-is-on-a-sugar-high-and-tax-cuts-wont-help/2017/12/10/6d365950-dc51-11e7-b859-fb0995360725_story.html?tid=ss_tw&amp;utm_term=.3079a13c75b4" rel="noopener" target="_blank">by Larry Summers via Washington Post</a></li> <li><strong><span style="color: #000000;">Minsky&rsquo;s Financial Instability Hypothesis &amp; The Fed</span>&nbsp;</strong><a href="https://pro.creditwritedowns.com/2017/12/minskys-financial-instability-hypothesis-and-the-feds-reaction-function.html" rel="noopener" target="_blank">by Edward Harrison via Credit Writedowns</a></li> <li><strong>Fed&rsquo;s Failure To Tighten Conditions A Mistake&nbsp;</strong><a href="https://www.ft.com/content/881b6e6a-df33-11e7-a8a4-0a1e63a52f9c" rel="noopener" target="_blank">by Michael Heise via FT</a></li> <li><strong>Is Tax Reform Falling Apart&nbsp;</strong><a href="http://www.themoneyillusion.com/?p=32740" rel="noopener" target="_blank">by Scott Sumner via Econolog</a></li> <li><strong><span style="color: #ff0000;">Don&rsquo;t Expect An Investment Boom</span>&nbsp;</strong><a href="https://www.financialsense.com/paul-kasriel/dont-expect-investment-boom-if-corporate-tax-rate-cut" rel="noopener" target="_blank">by Paul Kasriel via Financial Sense</a></li> <li><strong>Republicans Say They Have A Tax Deal&nbsp;</strong><a href="https://www.nytimes.com/2017/12/13/us/politics/tax-bill-republicans-deal.html?partner=rss&amp;emc=rss" rel="noopener" target="_blank">by Jim Tankersley via NYT</a></li> <li><strong><span style="color: #ff0000;">Job Creators The Victim Of The GOP Tax Plan</span>&nbsp;</strong><a href="https://www.investors.com/politics/commentary/job-creators-are-collateral-damage-in-gops-vain-attempt-to-be-fair/" rel="noopener" target="_blank">by Rob Arnott &amp; John Tamny via IBD</a></li> <li><strong>Biggest Cuts Could Be To Living Standards&nbsp;</strong><a href="https://www.nytimes.com/2017/12/12/business/economy/tax-plan-standard-of-living.html" rel="noopener" target="_blank">by Eduardo Porter via NY Times</a></li> <li><span style="color: #ff0000;"><strong><span style="color: #000000;">Best Ways To Improve GOP Tax Bill</span>&nbsp;</strong></span><a href="https://www.washingtontimes.com/news/2017/dec/10/small-tweaks-to-gop-tax-bill-would-make-huge-diffe/" rel="noopener" target="_blank">by Stephen Moore via The Washington Times</a></li> <li><strong>Tax Changes Coming In 2018, Prepare Now&nbsp;</strong><a href="https://www.nytimes.com/2017/12/07/your-money/tax-overhaul-wealth.html" rel="noopener" target="_blank">by Paul Sullivan via NYT</a></li> <li><strong>A Proposal To Reform Corporate Taxation&nbsp;</strong><a href="http://assets.realclear.com/files/2017/12/756_corporate.pdf" rel="noopener" target="_blank">by Eric Toder via AEI</a></li> </ul> </div> </div> <hr /> <h2><strong>Markets</strong></h2> <ul> <li><strong>Ms. Yellen: Here Is Your Risk&nbsp;</strong><a href="http://www.zerohedge.com/news/2017-12-14/dear-janet-yellen-here-your-own-watchdog-warning-about-financial-stability-risks-red" rel="noopener" target="_blank">by Tyler Durden via ZeroHedge</a></li> <li><strong>A Sing Of Frothy Markets&nbsp;</strong><a href="https://www.wsj.com/articles/another-sign-of-frothy-markets-blank-check-boom-1512995623" rel="noopener" target="_blank">by Paul Davies via WSJ</a></li> <li><span style="color: #000000;"><strong>Bitcoin, Most Obvious Bubble Ever</strong></span><strong>&nbsp;</strong><a href="https://www.theatlantic.com/business/archive/2017/12/bitcoin-bubble/547952/?utm_source=feed" rel="noopener" target="_blank">by Derek Thompson via The Atlantic</a></li> <li><strong>4-Paths To Retirement Income&nbsp;</strong><a href="https://seekingalpha.com/article/4131355-4-paths-retirement-income-financial-advisors-daily-digest" rel="noopener" target="_blank">by SA Gil Weinreich via Seeking Alpha</a></li> <li><strong>Instant Gratification&nbsp;</strong><a href="http://www.marketanthropology.com/2017/12/instant-gratifications-gonna-get-you.html" rel="noopener" target="_blank">by Erik Swarts via Market Anthropology</a></li> <li><strong>Trading Bitcoin Is A Bad Way To Invest&nbsp;</strong><a href="https://money.usnews.com/investing/cryptocurrency/articles/2017-12-12/trading-bitcoin-is-a-bad-way-to-invest" rel="noopener" target="_blank">by Simon Constable via US News</a></li> <li><strong><span style="color: #ff0000;"><span style="color: #000000;">Investors Wish List Is Reality Catches Up With Prices</span>&nbsp;</span></strong><a href="http://www.realclearmarkets.com/2017/12/14/investors039_2018_wish_is_that_reality_catches_up_with_prices_210228.html" rel="noopener" target="_blank">by Mohamed El-Erian via MarketWatch</a></li> <li><strong>Bitcoin &ndash; A Miracle Of Any Price&nbsp;</strong><a href="https://www.bloomberg.com/amp/view/articles/2017-12-11/bitcoin-is-a-bit-of-a-miracle-at-any-price?__twitter_impression=true" rel="noopener" target="_blank">by Tyler Cowen via Bloomberg</a></li> <li><strong>Cryptos In One Graph&nbsp;</strong><a href="https://www.marketwatch.com/story/the-voracious-appetite-for-new-cryptos-in-one-mesmerizing-animated-graphic-2017-12-12" rel="noopener" target="_blank">by Shawn Langlois via MarketWatch</a></li> <li><strong>Markets Point To Lower Interest Rates&nbsp;</strong><a href="https://www.barrons.com/articles/markets-point-to-lower-interest-rates-1513024528?mod=rss_barrons_getting_technical" rel="noopener" target="_blank">by Michael Kahn via Barron&rsquo;s</a></li> <li><strong>Corporate Profits Are Soaring, Why It Can&rsquo;t Last&nbsp;</strong><a href="http://fortune.com/2017/12/07/corporate-earnings-profit-boom-end/" rel="noopener" target="_blank">by Shawn Tully via Fortune</a></li> <li><strong>The Double-Edged Sword&nbsp;</strong><a href="https://ofdollarsanddata.com/the-double-edged-sword-d4a8297f022d" rel="noopener" target="_blank">by Nick Maggiulli via Dollars and Data</a></li> <li><strong>A Disaster Waiting To Happen&nbsp;</strong><a href="https://www.marketwatch.com/story/yes-the-rise-of-bitcoin-has-all-the-hallmarks-of-a-disaster-waiting-to-happen-2017-12-12" rel="noopener" target="_blank">by Jeff Reeves via MarketWatch</a></li> <li><strong><span style="color: #ff0000;">Bitcoin &amp; A Dead Parrot</span>&nbsp;</strong><a href="https://www.economist.com/blogs/buttonwood/2017/12/crypto-through-tulips?fsrc=rss" rel="noopener" target="_blank">by Buttonwood via The Economist</a></li> <li><strong>A Question For Every Investor&nbsp;</strong><a href="https://realinvestmentadvice.com/a-question-for-every-investor/" rel="noopener" target="_blank">by Michael Lebowitz via RIA</a></li> <li><strong>An Unhealthy Absence Of Doubt &amp; Fear&nbsp;</strong><a href="https://realinvestmentadvice.com/an-unhealthy-absence-of-doubt-fear/" rel="noopener" target="_blank">by Doug Kass via RIA</a></li> </ul> <hr /> <h2>Research&nbsp;/ Interesting&nbsp;Reads</h2> <ul> <li><strong>Yellen Shrugs Off Risk&nbsp;</strong><a href="https://wolfstreet.com/2017/12/13/yellen-bitcoin-not-full-blown-financial-stability-risk-no-fed-bailout/" rel="noopener" target="_blank">by Wolf Richter via Wolf Street</a></li> <li><span style="color: #ff0000;"><strong><span style="color: #000000;">Must-Have Tools For Retirement Planning</span><span style="color: #ff0000;">&nbsp;</span></strong></span><a href="https://www.usatoday.com/story/money/personalfinance/2017/12/08/must-have-tools-and-tips-year-end-retirement-planning-tips/905088001/" rel="noopener" target="_blank">by Robert Powell via USA Today</a></li> <li><strong><span style="color: #ff0000;">Jim Simons, The Numbers King</span>&nbsp;</strong><a href="https://www.newyorker.com/magazine/2017/12/18/jim-simons-the-numbers-king" rel="noopener" target="_blank">by DT Max via The New Yorker</a></li> <li><strong>Active Fans Are Wrong, Bogle Is Right&nbsp;</strong><a href="https://www.aqr.com/cliffs-perspective/fixed-income-fantasies?utm_term=Fixed%20Income%20Fantasies&amp;utm_campaign=New%20post%20from%20Cliff%20Asness&amp;utm_content=email&amp;utm_source=Act-On+Software&amp;utm_medium=email&amp;cm_mmc=Act-On%20Software-_-email-_-New%20p" rel="noopener" target="_blank">by Cliff Asness via AQR Capital Management</a></li> <li><strong>How To Sort Facts From Fictions&nbsp;</strong><a href="https://www.nytimes.com/2017/12/08/business/economic-facts-political-fictions.html?mtrref=t.co&amp;gwh=746D3907576F8F707F0823C1DF2C178F&amp;gwt=pay" rel="noopener" target="_blank">by Justin Wolfers via NYT</a></li> <li><strong>Inequality &amp; The Coming Storm&nbsp;</strong><a href="https://www.project-syndicate.org/onpoint/inequality-and-the-coming-storm-by-edoardo-campanella-2017-12?barrier=accesspaylog" rel="noopener" target="_blank">by Eduardo Campanella via Project Syndicate</a></li> <li><strong>Free Markets Are Hard&nbsp;</strong><a href="https://johnhcochrane.blogspot.com/2017/12/the-hard-road-of-free-markets.html" rel="noopener" target="_blank">by John Cochrane via The Grumpy Economist</a></li> <li><strong>Who Broke The Economy&nbsp;</strong><a href="https://www.theatlantic.com/business/archive/2017/12/captured-economy/547967/?utm_source=feed" rel="noopener" target="_blank">by Annie Lowrey via The Atlantic</a></li> <li><strong>Bonds Versus Economists&nbsp;</strong><a href="http://www.alhambrapartners.com/2017/12/11/bonds-vs-economists-the-means-to-the-end/" rel="noopener" target="_blank">by Jeffrey Snider via Alhambra Partners</a></li> <li><strong>Everyone In The Pool&nbsp;</strong><a href="http://jlfmi.tumblr.com/post/168324976530/everyone-in-the-stock-market-pool" rel="noopener" target="_blank">by Dana Lyons via The Lyons Share</a></li> <li><strong>Time To Get Real With Your Portfolio&nbsp;</strong><a href="https://thefelderreport.com/2017/12/07/its-time-to-get-real-with-your-investment-portfolio/" rel="noopener" target="_blank">by&nbsp;Jesse Felder via The Felder Report</a></li> </ul> <hr /> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div> <p><span style="color: #993300;"><strong><em>&ldquo;When the music stops in terms of liquidity, things will get complicated. But as long as the music is playing, you&rsquo;ve got to get up and dance. We&rsquo;re still dancing.</em><em>&rdquo; &ndash; </em></strong><em>Chuck Prince, Citigroup</em></span></p> </blockquote> <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="716" height="338" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171215_ignore.jpg?1513363599" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-15/weekend-reading-ignorance-no-excuse#comments Bitcoin Borrowing Costs Business Citigroup Cliff Asness Doug Kass Economy Federal Reserve Financial crisis of 2007–2008 headlines Larry Summers New Normal Political debates about the United States federal budget Presidency of Barack Obama Presidency of George W. Bush Reality Republican Party Tax Tyler Durden United States federal budget US Federal Reserve Value-added tax Fri, 15 Dec 2017 21:24:16 +0000 Tyler Durden 609243 at http://www.zerohedge.com US Yield Curve Crashes Most In 6 Years As Stocks, Bitcoin Hit Record Highs http://www.zerohedge.com/news/2017-12-15/us-yield-curve-crashes-most-6-years-stocks-bitcoin-hit-record-highs <p>What could go wrong?</p> <p><iframe allow="encrypted-media" allowfullscreen="" frameborder="0" gesture="media" height="315" src="https://www.youtube.com/embed/EYX1rIe3SaQ" width="560"></iframe></p> <p>&nbsp;</p> <p>Small Caps exploded higher today, driven by financials, presumably on tax reform hype.. but after Bob Corker said &quot;yes&quot; there was some notable &quot;sell the news&quot;...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod11.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod11_0.jpg" style="width: 600px; height: 360px;" /></a></p> <p>Notably, as soon as the cash market closed, futures ripped to the highs of the day...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod13.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod13_0.jpg" style="width: 600px; height: 343px;" /></a></p> <p>&nbsp;</p> <p>On the week, Nasdaq (green) and Dow (red) outperformed as Trannies (blue lagged)...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod12.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod12_0.jpg" style="width: 600px; height: 298px;" /></a></p> <p>&nbsp;</p> <p>Tech outperformed on the week but financials lagged...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod10.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod10_0.jpg" style="width: 600px; height: 374px;" /></a></p> <p>&nbsp;</p> <p>Oddly, high-tax companies notably undeperformed low-tac companies on the week....</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod5.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod5_0.jpg" style="width: 600px; height: 302px;" /></a></p> <p>High yield bonds lagged notably on the week...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_HY.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_HY_0.jpg" style="width: 600px; height: 313px;" /></a></p> <p>&nbsp;</p> <p>Yields were mixed on the week with the short-end higher and long-end outperforming...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod6.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod6_0.jpg" style="width: 600px; height: 312px;" /></a></p> <p>&nbsp;</p> <p>30Y Treasury yields are at their lowest since September&#39;s Draghi taper tantrum...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod4.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod4_0.jpg" style="width: 600px; height: 315px;" /></a></p> <p>&nbsp;</p> <p>The 5s30s yield curve crashed 10bps this week to 52bps <em><strong>(the last two days post-Fed have seen the biggest curve flattening since June 2009)</strong></em>...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod1.jpg"><img height="305" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod1_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>The weekly plunge is the biggest percentage flattening of the Treasury curve since the US downgrade in the fall of 2011...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod2.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod2_0.jpg" style="width: 600px; height: 320px;" /></a></p> <p><em><strong>The yield curve is down 5 straight weeks</strong></em></p> <p>&nbsp;</p> <p>The Dollar ended the week modestly lower, after chopping around on The Fed and tax headlines (and CPI)</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod3_0.jpg" style="width: 600px; height: 307px;" /></a></p> <p>&nbsp;</p> <p>Huuge week for copper but crude ended the week lower...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod8.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod8_0.jpg" style="width: 600px; height: 309px;" /></a></p> <p>&nbsp;</p> <p>Bitcoin rose 13.5% this week - the 5th weekly gain in a row to a new record high...and gold managed to hold gains...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod7.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod7.jpg" style="width: 599px; height: 307px;" /></a></p> <p>&nbsp;</p> <p>And Futures compressed their premium to spot...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod9.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_eod9_0.jpg" style="width: 600px; height: 312px;" /></a></p> <p>&nbsp;</p> <p>And finally, there is a very serious dollar shortage around the world...signalling<strong> ominous signs of growing funding stress in the financial &ldquo;plumbing&rdquo;.</strong></p> <p><strong><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_basis.jpg"><img height="306" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_basis_0.jpg" width="600" /></a></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="600" height="59" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171215_eod.jpg?1513370855" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-15/us-yield-curve-crashes-most-6-years-stocks-bitcoin-hit-record-highs#comments Bitcoin Bob Corker Bond Business Copper CPI Crude Financial markets Fixed income headlines High Yield NASDAQ US Federal Reserve Yield Yield Curve Yield curve Fri, 15 Dec 2017 21:02:04 +0000 Tyler Durden 609253 at http://www.zerohedge.com What We Learned This Week... http://www.zerohedge.com/news/2017-12-15/what-we-learned-week <p><em>"<a href="http://www.zerohedge.com/news/2017-12-14/wsj-exposes-real-election-meddling-fbi">They're with her.</a>.."</em></p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_fbi.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_fbi_0.jpg" width="600" height="436" /></a></p> <p><a href="http://comicallyincorrect.com/"><em>Source: Branco</em><br /></a></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="476" height="200" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171215_fbi1.jpg?1513349898" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-15/what-we-learned-week#comments André Caio Association football Branco Brazilian footballers Campeonato Acriano Entertainment Football in Portugal Politics Technology Fri, 15 Dec 2017 20:55:00 +0000 Tyler Durden 609219 at http://www.zerohedge.com Bank Of America: "This Is The First Sign That A Bubble Has Arrived" http://www.zerohedge.com/news/2017-12-15/bank-america-first-sign-bubble-has-arrived <p>Lately, fund flow data has all the credibility of a NYT presidential poll two days before the Trump defeats Hillary.&nbsp; On one hand<a href="https://www.reuters.com/article/us-investment-mutualfunds-lipper/investors-pull-most-money-in-2017-from-u-s-stock-funds-lipper-idUSKBN1E8383">, you have Lipper reporting </a>that investors pulled $16.2bn from U.S.-based equity funds in the past week, the largest withdrawals since December 2016. The same Lipper also reported that taxable-bond mutual funds and ETFs recorded $1.2bn in outflows, with U.S.-based high-yield junk bond funds posting outflows of $922 million. On the other hand, you have EPFR which looking at the same data, and the same time interval, concluded that there was $8.7bn <strong>inflows </strong>into equities, of which total flows into the US amounted to $7.8bn, the largest in 26 weeks. </p> <p>How does any of this make sense? We are not sure, although it may be that while Lipper ignores ETF flows, EPFR includes these. Indeed, when breaking down the latest flow data, which still does not foot with the Lipper numbers, Bank of America notes that the $8.7bn in equity inflows is the result of a $31.4bn in ETF inflows <strong>- the second largest on record </strong>- offset by $22.7bn in mutual fund outflows, <strong>the 4th largest on record.</strong></p> <p>When looking at this staggering divergence, BofA's Michael Hartnett put it best: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Passive hubris, active humiliation: </strong>2nd largest week of inflows ($31.4bn) ever into equity ETFs vs 4th largest week ever of outflows from equity mutual funds (Chart 1)</p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/fund%20flows%20passive.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/fund%20flows%20passive_0.jpg" width="500" height="296" /></a></p> <p>And while we can agree with Hartnett that hedge funds are begging for a market crash (and if they aren't, they should be), as the alternative is slow, painful, uncompensated extinction, we still have no idea if last week was near record in inflows or outflows... and we certainly don't know how much of these funds flows were sourced from the SNB, BOJ and other activist central banks who print money to buy stocks.</p> <p>Less controversial are the rest of Hartnett's fund flows observations, the first of which is that&nbsp; "<strong>investors respond to Fed hike &amp; US tax reform with biggest inflows to US large cap since Apr'17 and biggest inflows to US value since Mar'17;" </strong>These were offset by&nbsp;redemptions from Europe (largest in 65 weeks), EM equities.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/BofA%20flows%20Europe.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/BofA%20flows%20Europe_0.jpg" width="500" height="212" /></a></p> <p>The flows led to a historic moment: whether due to the latest inflows into ETFs (and outflows from active funds), or some other reason, in November, <strong>US equities rose to an all-time high vs government bonds, exceeding Dec'99 peak</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/equities%20to%20bonds%20record%20high.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/equities%20to%20bonds%20record%20high_0.jpg" width="500" height="289" /></a></p> <p>Taking a step back from fund flows, Hartnett reminds us the <strong>he has aggressive "Icarus" bullish Q1 targets of SPX 2863, CCMP 8000, GT10 2.85%, EUR 1.10, JPY 119; </strong>he also maintains a view of Big Top in risk assets early-18, which means the crash will take place in just a few months.</p> <p>He near-term optimism is justified by, what he calculates, to be a run-rate GDP of over 5%: "<strong>US small business, manufacturing, homebuilders and consumer confidence strongest in aggregate since the early-1980s, consistent with 5-6% US real GDP growth (Chart 4)."</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/gdp%205%25%20survey%20data.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/gdp%205%25%20survey%20data_0.jpg" width="500" height="301" /></a></p> <p>However, this soaring growth - granted almost entirely in the realm of meaningless, self-reported surveys - comes at a time of zero inflationary expectations. To wit, rate expectations remain extraordinarily low: <strong>next 3 years total market-implied tightening by the Fed, ECB &amp; BoJ is 81bps, 46bps and 4bps respectively.</strong></p> <p>And while excess bullishness won't take long, the big missing ingredient for Big Top &amp; Big Rotation is inflation: <strong>recent BoE study shows most important driver of bond bear markets is inflation, not GDP or budget deficits</strong>.<br /><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/bofa%20driver%20bond%20bear%20market.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/bofa%20driver%20bond%20bear%20market_0.jpg" width="500" height="298" /></a></p> <p>* * * </p> <p>Putting all of the above together, Hartnett again warns that the Big Risk therefore remains <strong>the absence of Main St inflation inducing Wall St inflation (i.e. bubble), which in turn becomes driver for big tightening of financial conditions and volatility.</strong> Said otherwise, sooner or later, the Fed will be forced to pull Wall Street's punchbowl, and since this is the biggest equity bubble of all time, the results would be catastrophic.</p> <p>Hartnett is kind enough to leave us roadmaps for what happens next: <strong>Japan 1989, US 1999, China 2007 are the bubble roadmaps</strong> because <strong>they all saw bull markets mutate into bubbles and higher bond yields; </strong>To wit: <strong>the NKY jumped 31% as JGB yields rose 170bps; CCMP jumped 230% as Treasury yields rose 220bps, SHCOMP rose 200% as Chinese yields rose 160bps.</strong><br /><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/dot%20com%20bofa.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/dot%20com%20bofa_0.jpg" width="500" height="285" /></a></p> <p>Finally, here - according to BofA's Chief Investment Strategist - is the first warning sign of bubble (besides "Da Vinci, bitcoin"), <strong>which would be the divergence between credit and equity prices in technology </strong>(Chart 7).</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/bofa%20bubble%20is%20here.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/bofa%20bubble%20is%20here_0.jpg" width="500" height="297" /></a></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="1077" height="639" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/bofa%20bubble%20is%20here.jpg?1513370456" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-15/bank-america-first-sign-bubble-has-arrived#comments Bank of America Bank of America Bank of Japan Bitcoin BOE Bond Business Central Banks China Consumer Confidence European Central Bank Exchange-traded funds Finance Fund Flows Investment Japan Lipper Market Crash Money Mutual fund SNB US Federal Reserve Volatility Fri, 15 Dec 2017 20:42:05 +0000 Tyler Durden 609252 at http://www.zerohedge.com Stocks Surge To All Time High As Corker Unexpectedly Joins Rubio In Supporting GOP Tax Bill http://www.zerohedge.com/news/2017-12-15/stocks-yields-dollar-surge-news-rubio-yes-tax-bill <p><strong>Update: </strong>Just hours after Rubio announced that he would support the reconciled Republican tax plan, Tennessee Sen. Bob Corker - the only Republican who voted against the Senate tax bill - has said he, too, will support the legislation. </p> <p>By supporting the bill, Corker - who has publicly feuded with President Trump, famously comparing the West Wing to an "adult daycare center" - has surprised many observers. A self-styled "deficit hawk", Corker said in a statement that "while the bill is far from perfect," he didn't want to miss out on the <strong>"once-in-a-generation opportunity to make US businesses domestically more productive and internationally more competitive is one we shouldnot miss." </strong></p> <p><span style="text-decoration: underline;"><strong>Read his full statement below:</strong></span></p> <p>&nbsp;</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Bob Corker endorses the Republican tax bill, abandoning his deficit concerns. <a href="https://t.co/eVVqag2e0q">pic.twitter.com/eVVqag2e0q</a></p> <p>— Sahil Kapur (@sahilkapur) <a href="https://twitter.com/sahilkapur/status/941766991886667776?ref_src=twsrc%5Etfw">December 15, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>&nbsp;</p> <p>With Corker and Rubio now firmly in the 'yes' column (though of course there's still time for them to walk back there support), there are still three Republican senators who are still undecided... </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Five Senators to look out for who could stop passage of the tax legislation:<br />Susan Collins ?<br />Bob Corker ?<br />Jeff Flake ?<br />Mike Lee ?<br />Marco Rubio ? <a href="https://t.co/9lzNV7T5MC">https://t.co/9lzNV7T5MC</a></p> <p>— RANsquawk (@RANsquawk) <a href="https://twitter.com/RANsquawk/status/941756580390981632?ref_src=twsrc%5Etfw">December 15, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>&nbsp;</p> <p>That's still more than enough votes to kill the bill in the Senate. As things stand now, VP Mike Pence could still be called in to break a tie and send the bill to the president's desk. Indeed, the Senate was the last major obstacle for the bill, which is widely expected to pass the Trump-friendly House. </p> <p>* * * </p> <p><strong>Update: </strong>minutes after the trial balloon was floated, the initial Fox report has been denied: </p> <ul> <li><strong>SEN. RUBIO STILL A `NO' ON TAX BILL, HASN'T SEEN TEXT YET: AIDE</strong></li> </ul> <p>Yet somehow, despite sliding on yesterday's Rubio news, stocks have refused to react to today's rejection, and are now trading at all time highs clearly certain that nothing can derail tax reform now. </p> <p>Earlier GOP Rep. Kristi Noem said that the child tax credit demanded by Rubio, is being made refundable to $1,400 per child, Bloomberg reports. "We’re in a good spot," she say. As a reminder, yesterday Marco Rubio said the credit had to expand from $1,100 to win his vote for the overall tax legislation. </p> <p>For now, however, Rubio spokeswoman said he hasn’t yet seen bill text: “We have not seen bill text, and until we see if the percentage of the refundable credit is significantly higher, then our position remains the same,” Rubio spokeswoman Olivia Perez-Cubas said in email Friday morning.</p> <p>GOP Sen. Mike Lee’s office also says he hasn’t seen text; Lee has voiced similar concerns about child tax credit as Rubio.</p> <p>* * *</p> <p><strong>Earlier</strong></p> <p>And just like that, stocks priced in tax reform for the n<sup>th</sup> consecutive day, because one day after speculation that Marco Rubio would be a hurdle to the passage of tax reform, which pushed stocks modestly lower, moments ago Fox - or is that Disney - reported that Marcio Rubio is a "yes" on the tax bill, sending risk assets soaring in the latest "buy-everything" euphoria. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Source to FBN: Sen. <a href="https://twitter.com/marcorubio?ref_src=twsrc%5Etfw">@marcorubio</a> will be a 'yes' on tax bill. <a href="https://t.co/qd4OXaUawR">pic.twitter.com/qd4OXaUawR</a></p> <p>— FOX Business (@FoxBusiness) <a href="https://twitter.com/FoxBusiness/status/941688659648106496?ref_src=twsrc%5Etfw">December 15, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>Rubio's turn comes shortly after Speaker Paul Ryan told the media that the Senate and House are both planning to hold votes on the bill by end-of-day Wednsday with the first vote likely coming in the House Tuesday and the Senate following either Tuesday or Wednesday. Separately, Senator Brady announced that the tax measure is now done, and should win every senator's support.</p> <ul> <li><strong>BRADY: TAX MEASURE DONE, SHOULD WIN EVERY SENATOR'S SUPPORT</strong></li> </ul> <p>The result in markets was fast and furious, with the S&amp;P, dollar, yields and the USDJPY all surging following the report.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/2017-12-15%20%283%29.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/2017-12-15%20%283%29_0.jpg" width="500" height="279" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/2017-12-15.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/2017-12-15_0.jpg" width="500" height="310" /></a></p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/2017-12-15%20%281%29.jpg" width="506" height="267" /></p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/2017-12-15%20%282%29.jpg" width="505" height="266" /></p> <p>And putting yesterday's and today's moves in context:</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Yesterday - SPX down 10 on news Rubio wont vote yes on principle... </p> <p>Today - SPX up 17 on news he will vote yes and has no principles.</p> <p>— DMW (@dmwlsw) <a href="https://twitter.com/dmwlsw/status/941693770776621057?ref_src=twsrc%5Etfw">December 15, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></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="512" height="286" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017-12-15%20%283%29.jpg?1513351922" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-15/stocks-yields-dollar-surge-news-rubio-yes-tax-bill#comments American literature Bob Corker Bob Corker Child tax credit Economy Florida Florida Republicans Fox Business Marco Rubio Marco Rubio presidential campaign Political positions of Marco Rubio Politics Politics of the United States RANSquawk Republican Party Republican Party United States) Senate Tax Tax credit Twitter Twitter United States United States Senate Fri, 15 Dec 2017 20:39:29 +0000 Tyler Durden 609223 at http://www.zerohedge.com Bond Markets Really Are Signalling A Slowdown http://www.zerohedge.com/news/2017-12-15/bond-markets-really-are-signalling-slowdown <p><a href="https://www.bloomberg.com/view/articles/2017-12-13/bond-markets-really-are-signalling-a-slowdown?utm_content=view&amp;utm_campaign=socialflow-organic&amp;utm_source=twitter&amp;utm_medium=social&amp;cmpid%3D=socialflow-twitter-view"><em>Authored by Lakshman Achuthan and Anirvan Banerji via Bloomberg.com,</em></a></p> <div class="lede-text-only__dek"><span class="lede-text-only__highlight"><strong>Analysts shouldn&rsquo;t dismiss the yield curve&rsquo;s message</strong> just because inflation expectations have been declining in recent years. </span></div> <div class="lede-text-only__dek">&nbsp;</div> <div class="lede-text-only__dek"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_bonds1.jpg" style="width: 561px; height: 320px;" /> <p>When it comes to the economic outlook, <strong>the bond market is smarter than the stock market.</strong> That Wall Street adage appears to be on the money from a cyclical vantage point, with key indicators in the fixed-income markets independently corroborating slowdown signals from the Economic Cycle Research Institute&rsquo;s leading indexes.</p> <p>The yield curve is widely considered to be among the most prescient indicators.<strong> That&rsquo;s why its flattening this year has been troublesome for an otherwise optimistic consensus to explain away.</strong></p> <p>This hasn&rsquo;t stopped optimistic analysts from dismissing the yield curve&rsquo;s message on the grounds that inflation expectations have been declining in recent years, or that foreign central banks like the European Central Bank and the Bank of Japan continue to artificially suppress their bond yields, pulling down U.S. yields. <strong><em>We&rsquo;re reminded of Sir John Templeton&rsquo;s warning that &ldquo;this time it&rsquo;s different&rdquo; are the &quot;<a href="https://www.franklintempleton.com/forms-literature/download/TL-R16" rel="nofollow noopener" target="_blank">four most costly words</a> in the annals of investing&quot; -- but that&rsquo;s effectively what it means to simply ignore the slowdown signals emanating from the fixed-income markets.</em></strong></p> <p>Of course, there&rsquo;s no Holy Grail in the world of forecasting, which is why we look at a wide array of leading indexes that each includes many inputs. From that vantage point, the yield curve flattening actually makes a lot of sense.</p> <p><strong>Growth in ECRI&rsquo;s U.S. Short Leading Index, which doesn&rsquo;t include the yield curve, has been falling since early this year</strong> (top line in chart),<strong> pointing to a U.S. growth rate cycle downturn that should become evident in coming months.</strong></p> <div class="image"> <div class="lazy-img" id="lazy-img-321510910"><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171214_bondds.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171214_bondds_0.png" style="width: 560px; height: 441px;" /></a></div> </div> <p><strong>Next, please note the separate slowdown signal coming from the difference between the yields on junk bonds and investment-grade corporate bonds -- also known as the quality spread </strong>(middle line, shown inverted). It has widened in recent months because the rising default risk for junk bonds during economic slowdowns makes their yields climb faster than those of investment grade bonds, which are less likely to default.</p> <p>That the quality spread has little to do with the term spread is telling. Please note how closely the (inverted) quality spread has followed the Short Leading Index growth rate, not only this year, but also in past cycles.</p> <p><strong>Finally, we turn to the term spread between 10-year and two-year Treasury yields, which has been falling all year (bottom line), flattening the yield curve.</strong> Again, this is being dismissed by some analysts who attribute the phenomenon to foreign central banks&#39; suppression of their bond yields, even though this is nothing new. And while declining longer-term inflation expectations and trend growth expectations help explain the long-term downtrend in the term spread, they don&#39;t explain its cyclical fluctuations.</p> <p>Of course, the quality spread doesn&rsquo;t exhibit a similar long-term downtrend. That&rsquo;s because it&rsquo;s unaffected by both foreign monetary policy and the years-long downgrading of long-term growth and inflation expectations.</p> <p>Nevertheless, the chart shows that the cyclical ups and downs of both the quality spread and the term spread have followed those of the Short Leading Index&#39;s growth rate. In other words, our leading indexes, as well as two very different bond market spreads, are telegraphing an economic slowdown that nobody sees coming. It certainly threatens to blindside the Fed, which -- <a href="https://www.bloomberg.com/view/articles/2017-07-18/all-signs-point-to-a-cyclical-slowdown-in-inflation" target="_blank">fixated on the Phillips curve</a> -- keeps projecting multiple rate hikes over the next year.</p> <p><u><strong>There&rsquo;s a choice.</strong></u> Perhaps it is different this time, with the Fed, the stock market and Wall Street analysts all outsmarting the bond market and ECRI&rsquo;s leading indexes. <strong><em>Or you can heed these slowdown signals, and begin thinking through the implications.</em></strong></p> </div> <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="559" height="319" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171215_bonds1.jpg?1513362948" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-15/bond-markets-really-are-signalling-slowdown#comments Bank of Japan Bank of Japan Bond Bond Business Business cycle Central Banks Corporate bond default Economic Cycle Research Institute Economy European Central Bank European Central Bank Finance Fixed income Foreign Central Banks High-yield debt Inflation Investment Grade Japan Monetary Policy Money Recession Short Leading US Federal Reserve Yield Yield Curve Yield curve Fri, 15 Dec 2017 20:18:24 +0000 Tyler Durden 609242 at http://www.zerohedge.com Researchers Warn: Humans Have Hit Their "Biological Limitations" http://www.zerohedge.com/news/2017-12-12/researchers-warn-humans-have-hit-their-biological-limitations <p>The twentieth century was an unbelievable&nbsp;era for the progression of human beings,<em><strong> with a&nbsp;significant increase in lifespan, adult height, and physiological performance.</strong></em></p> <p>As humans advance seventeen years into the 21st century, French researchers&nbsp;have now signaled a possible top in biological limitations of the human body,<strong> otherwise known as a biological plateau.</strong></p> <p><strong>Researchers blame climate change and pollution among some of the effects, but also insist the human body design has limits.</strong></p> <p>The <a href="https://www.frontiersin.org/articles/10.3389/fphys.2017.00812/full">study</a>, a first of its kind, dissected 120-years worth of historical data while considering both genetic and environmental parameters, said <a href="https://www.sciencedaily.com/releases/2017/12/171206122502.htm">Science Daily.</a></p> <p>Making sense of it all, each generation has the notion that future generations will live longer and longer,<strong> this study suggests there may be a maximum threshold to our biological limits.</strong></p> <p><a href="https://stockboardasset.com/wp-content/uploads/2017/12/evolution-stop-following-me-1.png"><img src="https://stockboardasset.com/wp-content/uploads/2017/12/evolution-stop-following-me-1.png" style="width: 600px; height: 556px;" /></a></p> <p>A research&nbsp;team across various academic&nbsp;institutions&nbsp;in France,&nbsp; analyzed &ldquo;trends emerging from historical records, concluding that <strong>there appears to be a plateau in the maximum biological limits for humans&rsquo; height, age, and physical abilities</strong>,&rdquo; said Science Daily.</p> <p>Professor Jean-François Toussaint from Paris Descartes University, France, cited&nbsp;in the study, explained &ldquo;these traits no longer increase, despite further continuous nutritional, medical, and scientific progress. This suggests that modern societies have allowed our species to reach its limits. We are the first generation to become aware of this.&rdquo;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;This will be one of the biggest challenges of this century as the added pressure from anthropogenic activities will be responsible for damaging effects on human health and the environment.&rdquo; Prof. Toussaint forecasts.</p> <p>&nbsp;</p> <p><strong>&ldquo;The current declines in human capacities we can see today are a sign that environmental changes, including climate, are already contributing to the increasing constraints we now have to consider.&rdquo;</strong></p> <p>&nbsp;</p> <p>&ldquo;Observing decreasing tendencies may provide an early signal that something has changed but not for the better. Human height has decreased in the last decade in some African countries; this suggests some societies are no longer able to provide sufficient nutrition for each of their children and maintain the health of their younger inhabitants,&rdquo; Prof. Toussaint said.</p> </blockquote> <p>The study describes human natural limits have already been enhanced through artificial means, but a ceiling still remains in place due to the &ldquo;evolutionary constraints of body design.&rdquo;</p> <div> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div> <p><strong>In fact, it is probable that human natural limits have already been enhanced by artificial means for both maximal longevity and maximal physical performance. </strong>These &ldquo;manufactured times&rdquo;, represent an increase in life duration or sport performance, beyond the limits imposed by our biology (Carnes and Olshansky, 2007).</p> <p>&nbsp;</p> <p>In this sense, a scientific breakthrough may point to another future substantial &ldquo;manufactured&rdquo; gain that will shift the upper limits beyond the current values in addition to the healthy living standards that will increase the number of people reaching old age. However, such artificial enhancements will also have &ldquo;Achilles heels&rdquo;, i.e., maximal progress that cannot surpass an imposed ceiling.</p> <p>&nbsp;</p> <p>For example, the evolutionary constraints of body design that lead to structural and functional limitations or environmental factors hinder increased progress. The emergence of new major artificial enhancements may be less favorable in light of ever increasing environmental boundaries.</p> </blockquote> </div> <p><strong>Further, the study said any story claiming humans can live for hundreds of years in the near future, thanks to medical scientific progress, is absolutely &ldquo;meaningless.&rdquo;</strong></p> <div> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div> <p>For such reasons, it is meaningless to claim that most human will live for 200&ndash;500 years in the near future (de Grey, 2003), thanks to medical or scientific progress, or that &ldquo;within 15 years, we&rsquo;ll be adding more than a year every year to our remaining life expectancy&rdquo; (Kurzweil and Grossman, 2010). Raising false hopes without taking into account that human beings are already extremely &ldquo;optimized&rdquo; for lifespan seems inappropriate. &nbsp;</p> </blockquote> </div> <p>In this new phase of human history, where biological limitations for human beings have peaked, as per the study above, a sense of panic or urgency has been seen from academia and government&nbsp;to correct this trend.&nbsp;&nbsp;<strong>We start to realize the push for&nbsp;artificial intelligence, robots, and transhumanist media content has never been greater.</strong> But why is that? Perhaps, when one connects the dots,<strong> those who hold the power are conditioning the masses for the next evolutionary jump, however this time, it will involve technology.</strong></p> <p>The evolutionary jump has already started:</p> <ul> <li>&nbsp;U.S. Army has certainly gotten the memo (See:&nbsp;<a href="http://www.zerohedge.com/news/2017-11-27/army-tests-new-ai-controlled-exoskeleton-super-soldier">Army Tests New &lsquo;AI-Controlled-Exoskeleton&rsquo; Super-Soldier</a>)</li> <li>Ford wraps workers in robots (See: <a href="http://www.zerohedge.com/news/2017-11-10/skynet-makes-its-move-ford-wraps-workers-exoskeleton">Ford Wraps Workers In Exoskeleton</a>)</li> <li> <div>Merging humans with robots&nbsp; (See: <a href="http://www.zerohedge.com/news/2017-11-26/worlds-first-robot-citizen-hopes-harmony-humans-future-or-civilization-collapses">World&rsquo;s&nbsp;First Robot Citizen Hopes For &ldquo;Harmony With Humans&rdquo; In The Future Or &ldquo;Civilization Collapses&rdquo;</a>)</div> </li> <li> <div>Wall Street got the memo (See:&nbsp;<a href="http://www.zerohedge.com/news/2017-10-21/first-ai-etf-claims-it-can-replace-army-research-analysts">First A.I. ETF Claims It Can Replace An Army Of Research Analysts</a>)</div> </li> <li>Amazon loves robots, not people (See: <a href="http://www.zerohedge.com/news/2017-12-04/less-retail-jobs-more-amazon-robots-get-used-it">Less Retail Jobs, More Amazon Robots: Get Used To It</a>)</li> </ul> <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="754" height="494" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171212_behave.jpg?1513104295" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-12/researchers-warn-humans-have-hit-their-biological-limitations#comments Ageing artificial intelligence Artificial intelligence Computational neuroscience Emerging technologies Ford France Future Human Outline of transhumanism Paris Descartes University Robot Robotics Science and technology Technology United States Army Fri, 15 Dec 2017 19:55:14 +0000 Tyler Durden 609008 at http://www.zerohedge.com Global Dollar Liquidity Shortage Explodes - Worse Than European Crisis http://www.zerohedge.com/news/2017-12-15/global-dollar-liquidity-shortage-explodes-worse-european-crisis <p>Very quietly, in the last few days, cross currency basis swaps (CCBS) related to the dollar have reversed their rise and<strong> started collapsing deeper into negative territory</strong>&hellip; again. This might not be of much interest to buyers of global equity markets at this point, but it is signalling<strong> ominous signs of growing funding stress in the financial &ldquo;plumbing&rdquo;.</strong></p> <p><strong><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_basis.jpg"><img height="306" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_basis_0.jpg" width="600" /></a></strong></p> <p>As Bloomberg <a href="https://www.bloomberg.com/news/articles/2017-10-17/global-dollar-funding-shortage-back-on-radar-may-yet-get-worse">notes </a>&ldquo;cross-currency basis swaps, which money managers and corporate treasurers outside the U.S. can use to borrow in dollars, remain close to the widest levels since January even after quarter-end, when such financing strains typically dissipate. <strong>The market was a key indicator of stress during the financial crisis</strong>, and while it&rsquo;s nowhere near the alarming levels of that era, it&rsquo;s still garnering the attention of analysts.&rdquo;</p> <p>The shortage is across all the majors...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_basis111.jpg"><img height="293" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_basis111_0.jpg" width="600" /></a></p> <p>The shortage in Europe is the worst since the EU Crisis and the shortage in UK is the worst since Lehman as Japanese dollar shortage is extreme too.</p> <p>In simple terms, the CCBS is the cost in basis points (typically for three months) of swapping these currencies into dollars over and above prevailing interest rate differentials<strong>. In a benign environment the CCBS should trade at zero, not in negative territory. The latter implies a shortage of US dollar balance sheet (credit) offered by the global banking system</strong>. As the chart above shows, dollar liquidity became extremely tight in December 2016, especially for Yen borrowers, although it not nearly as bad as what <a href="http://www.zerohedge.com/news/2015-03-08/global-dollar-funding-shortage-back-vengeance-set-surpass-lehman-crisis-levels">happened in May of 2015 </a>when we first brought attention to this little followed corner of the financial system. Despite the weakness in the dollar during much of the current year, the dollar liquidity issue never completely disappeared.</p> <p><strong>There are several reasons why,</strong> like in recent years, financing in dollars is becoming more expensive, but this very sudden spike in dollar funding costs - i.e. a sudden dollar shortage - likely combines the effects of&nbsp; the perception of credit risk for the European region&rsquo;s banks (Italy), the prospect that a U.S. tax overhaul could trigger dollar repatriation, and the outlook for monetary-policy divergence with the Federal Reserve starting to unwind its balance sheet, and analysts see the trend only worsening (even as Draghi promises to taper).</p> <p>As is clear above,<strong> there are always year-end liquidity strains but this collapse is drastically beyond just that.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;My first take on this a week or two ago was that a lot of the stress was just people preparing for the end of the year earlier,&rdquo; Lyn Graham-Taylor, senior rates strategist at Rabobank.</p> <p>&nbsp;</p> <p><u><strong>&ldquo;But now it does look pretty bad.&rdquo;</strong></u></p> </blockquote> <p><a href="https://www.wsj.com/articles/dollar-funding-costs-in-europe-highest-since-euro-crisis-1513333226"><em>As WSJ reports,</em></a> the scarcity is having other effects, boosting some markets.</p> <p>The widening of the basis swap makes it more lucrative for any U.S. investors who can expand their balance sheets to buy euro-denominated assets, given banks are so keen to get their hands on their dollars. As a result, the eurozone&rsquo;s safest short-dated bonds have rallied in recent weeks.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;The combination of a decline in excess reserves, higher short-term rates, and dollars coming back to the US from overseas earnings should <strong>result in a structural shift in the money markets and dollar-funding availability</strong>,&rdquo; said Nomura in a research note this week.</p> </blockquote> <p>Emerging markets are even more exposed to the U.S. dollar than advanced economies like the eurozone.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;The reliance on US dollar funding has become increasingly marked for emerging markets since the global financial crisis in international debt markets,&rdquo; </strong>the research noted.</p> </blockquote> <p>And it appears the cracks are starting to show as The Fed increases its normalization liquidty suck out.</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="995" height="508" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171215_basis.jpg?1513346784" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-15/global-dollar-liquidity-shortage-explodes-worse-european-crisis#comments Business Central bank liquidity swap Currency swap Economic bubbles Economy Equity Markets European Union Eurozone Excess Reserves Federal Reserve Financial crisis of 2007–2008 Global financial system Great Recession International trade Italy Lehman Nomura Stock market crashes Systemic risk US Federal Reserve Yen Fri, 15 Dec 2017 19:42:40 +0000 Tyler Durden 609213 at http://www.zerohedge.com