http://www.zerohedge.com/fullrss2.xml/article/article en A Swarm Of Earthquakes Beneath The San Andreas Fault Is Making Scientists Nervous http://www.zerohedge.com/news/2017-11-22/swarm-earthquakes-beneath-san-andreas-fault-making-scientists-nervous <p>Warner Bros Pictures might want to rethink the shooting of San Andreas II &ndash; the sequel to the 2015 blockbuster about a massive earthquake striking the San Francisco Bay Area that starred the Rock, Paul Giamatti and a host of other A-list actors.</p> <p>Because if the US Geological Survey&rsquo;s worst fears are confirmed, the seismic devastation depicted in the film might hit a little too close to home. According to the <span id="cke_bm_451S" style="display: none;">&nbsp;</span><span id="cke_bm_450S" style="display: none;">&nbsp;</span><span id="cke_bm_449S" style="display: none;">&nbsp;</span><span id="cke_bm_448S" style="display: none;">&nbsp;</span><span id="cke_bm_447S" style="display: none;">&nbsp;</span><a href="http://www.dailymail.co.uk/sciencetech/article-5106621/134-earthquakes-rattle-San-Andreas-fault-just-one-week.html">Daily Mail,</a> <u><strong>134 earthquakes have hammered a three-mile stretch around Monterey County on the San Andreas fault over the last week &ndash; a pace that&rsquo;s making seismologists nervous.</strong></u></p> <p>The San Andreas fault stretches 750 miles north to south across coastal California, forming the boundary of the Pacific plate and North American plate.</p> <p>Of those earthquakes, <strong>17 were stronger than 2.5 magnitude </strong>and <strong>6 of them were stronger than 3.0.</strong> And experts at the USGS warn that more tremors are expected in the coming weeks.</p> <p>The rumblings are amplifying fears raised last week that the &#39;Big One&#39; &ndash; the mythical quake depicted in the movie &lsquo;San Andreas&rsquo; &ndash; could be about to hit. In another sign of impending disaster, ten &#39;mini quakes&#39; struck the same area last week. <strong>That swarm included one 4.6-magnitude quake that was felt in San Francisco more than 90 miles away.</strong></p> <p>&ldquo;This one has been a quite productive aftershock sequence,&rdquo; said Ole Kaven, a US Geological Survey seismologist.</p> <p><a href="http://www.dailymail.co.uk/sciencetech/article-5106621/134-earthquakes-rattle-San-Andreas-fault-just-one-week.html"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.22sanandreas_0.JPG" style="width: 500px; height: 411px;" /></a></p> <p><strong>&ldquo;We suspect there will be aftershocks in the 2 to 3 [magnitude] range for at least a few more weeks,&rdquo; </strong>he said.</p> <p>Fortunately, nobody was injured in the quake storm.&nbsp; &nbsp;</p> <p>Last week&#39;s swarm hit California&#39;s Monterey County on Monday at 11:31 am ET about 13 miles northeast of Gonzales, near Salinas.</p> <p>It dramatically increases the likelihood of a major quake in California, at least temporarily, experts claimed.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.22quakefault.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.22quakefault_0.JPG" style="width: 500px; height: 190px;" /></a></p> <p>The initial 4.6-magnitude quake was followed by nine smaller aftershocks.</p> <p>The largest of the tremors measured magnitude 2.8, according to Annemarie Baltay, a seismologist with the US Geological Survey in Menlo Park.</p> <p><strong>The quake happened at a depth of around 4 miles directly on top of the fault, close to a region where the Calaveras Fault branches off.</strong></p> <p>Experts have previously warned that any activity on the fault line is cause for concern.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.22quake.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.22quake_0.JPG" style="width: 500px; height: 394px;" /></a></p> <p>&ldquo;Any time there is significant seismic activity in the vicinity of the San Andreas fault, we seismologists get nervous,&rdquo; Thomas Jordan, director of the Southern California Earthquake Centre, said, according to the Mail.<br />&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="793" height="301" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.11.22quakefault.JPG?1511357936" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/swarm-earthquakes-beneath-san-andreas-fault-making-scientists-nervous#comments Aftershock Baja California earthquake California Disaster Earthquake Environment Geography of California Parkfield earthquake San Andreas Fault Seismic scale Seismology Southern California Southern California Earthquake Centre Wed, 22 Nov 2017 21:46:37 +0000 Tyler Durden 607742 at http://www.zerohedge.com 11 Charts Exposing The Madness Of The Stock Market Crowd http://www.zerohedge.com/news/2017-11-22/11-charts-exposing-madness-stock-market-crowd <p><a href="http://www.liabridge.com/"><em>Authored by <em>Liabridge Economic Research&#39;s </em>Atle Willems,</em></a></p> <div class="p p1"> <div class="article-summary article-width"> <p><span style="text-decoration: underline;"><strong>Summary</strong></span></p> <ul> <li><strong>There&rsquo;s more to stock market valuations than the current level of interest rates.</strong></li> <li>In this article, 11 charts are presented which expose the extraordinary level to which stock prices have dislocated from a range of economic aggregates.</li> <li>The height of these charts should send shivers down the spine of anyone concerned with minimizing losses.</li> </ul> </div> </div> <div class="sa-art article-width" id="a-body"> <div class="p p1"> <p>One of the very few good reasons left to buy equities now is historic low interest rates. Broadly speaking, this is not a recent phenomena as it has been the case, from a valuation standpoint applying a more &ldquo;normal&rdquo; level of interest rates, for at least the last three years. Many are not making decisions based on hopes and dreams are aware of this fact, but nonetheless maintain a relatively high allocation toward equities out of necessity.</p> <p><strong>The necessity of a decent return in this historic low interest rate environment has resulted in a desperate chase for yield, often motivated by the current spread between earnings and bond yields.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock1.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock1_0.png" style="width: 600px; height: 393px;" /></a></p> <p>The chase for yield also demonstrates a lack of investment opportunities since newly printed money has acted more to drive up prices in the secondary market rather than fueling additions to capital goods. This has doubtlessly helped prolong the bull market in stocks as it has had a&nbsp;<a href="https://seekingalpha.com/article/4037485-plausible-reason-longevity-bull-market-u-s-stocks">dampening effect on the business cycle</a>.</p> <p><strong>But there is more to stock market valuations than the current level of interest rates. </strong>Further declines in nominal interest rates are limited, while the upside potential is tremendous in percentage terms. The best one can hope for is perhaps that rates remain near historical lows for a long period of time. Placing your bets solely on interest rates remaining low however requires a portion of delusion.</p> <p>The nominator in any prudent appraisal of stock prices also matters, though it appears to play a minimal role these days as exposed in the charts below. <strong>Most of these charts have one thing in common &ndash; they compare stocks to a range of economic aggregates related to corporate sales and with it earnings.</strong> After all, earnings per share, no matter how &ldquo;earnings&rdquo; are calculated, cannot forever increase or even be maintained due to cost cutting and share repurchases alone.</p> <p>Some of the charts published below were included in an unexpectedly popular article I published back in February this year &ndash;&nbsp;<a href="https://seekingalpha.com/article/4045947-ten-charts-demonstrating-2017-stock-market-euphoria-one">Ten Charts Demonstrating The 2017 Stock Market Euphoria, And One That Doesn&rsquo;t</a>. Bulls should therefore be pleased as the only thing those charts have demonstrated is that the market has valued low interest rates and positive sentiment more than other fundamentals combined ever since. In other words, those charts look even worse today.</p> <p><strong>But for those of you concerned with probabilities and minimizing losses, and for those not posing in the glorious light of hindsight, the charts below should send shivers down your spine even more so today than nine months ago, especially given the&nbsp;<a href="https://seekingalpha.com/article/4125176-glum-note-u-s-savings-disaster">savings disaster</a>&nbsp;this year which have helped drive U.S. economic activity and stock prices.</strong></p> <p>My message however is unchanged from last time: &ldquo;view and decide for yourself.&rdquo;</p> <p><u><strong>Chart 1. Wilshire 4500 &amp; Disposable Personal Income</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock2.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock2_0.png" style="width: 600px; height: 435px;" /></a></p> <p><u><strong>Chart 2.&nbsp;<a href="https://seekingalpha.com/article/4043928-stock-market-prices-dislocate-bank-balance-sheets">Wilshire 4500 &amp; Commercial Banks&rsquo; Equity</a></strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock3.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock3_0.png" style="width: 600px; height: 232px;" /></a></p> <p><u><strong>Chart 3. Russell 3000 &amp; Productivity (Real Output per Hour)</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock4.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock4_0.png" style="width: 600px; height: 435px;" /></a></p> <p><u><strong>Chart 4. Wilshire &amp; Retailers Sales</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock5.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock5_0.png" style="width: 600px; height: 435px;" /></a></p> <p><u><strong>Chart 5. Wilshire 4500 &amp; Manufacturers&rsquo; New Orders</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock6.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock6_0.png" style="width: 600px; height: 435px;" /></a></p> <p><u><strong>Chart 6. Households Net Worth &amp; Disposable Personal Income</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock7.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock7_0.png" style="width: 600px; height: 232px;" /></a></p> <p><u><strong>Chart 7. Wilshire US Mid-Caps &amp; M2 Money Supply</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock8.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock8_0.png" style="width: 600px; height: 436px;" /></a></p> <p><u><strong>Chart 8. Wilshire 5000 &amp; GDP</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock9.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock9_0.png" style="width: 600px; height: 435px;" /></a></p> <p><u><strong>Chart 9.&nbsp;<a href="https://seekingalpha.com/article/4125176-glum-note-u-s-savings-disaster">Russell 3000 &amp; Personal Saving</a></strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock10.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock10_0.png" style="width: 600px; height: 435px;" /></a></p> <p><u><strong>Chart 10. Market Cap of U.S. Companies &amp; Gross Private Saving</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock11.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock11_0.png" style="width: 600px; height: 232px;" /></a></p> <p><u><strong>Chart 11. Wilshire 4500 compared to a combination of the Money Supply and a Leading Economic Indicator</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock12.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock12_0.png" style="width: 600px; height: 435px;" /></a></p> <p>*&nbsp; *&nbsp; *</p> <p><strong>Bonus Chart:&nbsp;<a href="https://seekingalpha.com/article/4042589-major-stock-market-correction-lurking-indicator-suggests-yes">The U.S. Stock Market Risk Indicator</a></strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock13.png"><strong><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_stock13_0.png" style="width: 600px; height: 436px;" /></strong></a></p> </div> </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="640" height="464" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171122_stock10.png?1511359799" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/11-charts-exposing-madness-stock-market-crowd#comments Bond Bond Business Capitalism Commodity markets Economy Finance Foreign exchange market Fundamental analysis Interest rate Investment M2 Money Money Supply Personal Income Russell 3000 Russell 3000 Stock market Wilshire Wilshire 5000 Wed, 22 Nov 2017 21:26:47 +0000 Tyler Durden 607745 at http://www.zerohedge.com John McCain’s Walking Boot Mysteriously Swaps Sides Two Weeks After Treatment For Torn Achilles Tendon http://www.zerohedge.com/news/2017-11-22/john-mccain%E2%80%99s-walking-boot-mysteriously-swaps-sides-two-weeks-after-treatment-torn-a <p style="list-style: none; margin: 0px 0px 20px; padding: 0px; border: 0px currentColor; border-image: none; color: #333333; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 16px; font-style: normal; font-weight: 400; word-spacing: 0px; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial;"><em><span style="margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; color: #000000; text-transform: none; line-height: inherit; text-indent: 0px; letter-spacing: normal; font-family: lucida_granderegular, Verdana, sans-serif; font-size: 13px; font-style: inherit; font-variant: inherit; font-weight: inherit; word-spacing: 0px; vertical-align: baseline; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; font-stretch: inherit; text-decoration-style: initial; text-decoration-color: initial;">Content originally published at&nbsp;</span><span style="font: inherit; margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; color: #1e439a; text-transform: none; text-indent: 0px; letter-spacing: normal; text-decoration: underline; word-spacing: 0px; vertical-align: baseline; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; font-stretch: inherit;"><a style="margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; color: #1e439a; line-height: 1.2; font-family: lucida_granderegular, Verdana, sans-serif; font-size: 13px; font-style: inherit; font-variant: inherit; font-weight: inherit; text-decoration: none; vertical-align: baseline; box-sizing: border-box; font-stretch: inherit;" href="http://ibankcoin.com/" target="_blank">iBankCoin.com</a></span></em></p> <p style="list-style: none; margin: 0px 0px 20px; padding: 0px; border: 0px currentColor; border-image: none; color: #333333; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 16px; font-style: normal; font-weight: 400; word-spacing: 0px; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial;">81 year old John McCain (R-AZ) has had a string of unfortuate heath issues this year. In mid-july, the Arizona Senator underwent brain surgery for aggressive&nbsp;<a style="list-style: none; margin: 0px; padding: 0px; border: 0px currentColor; transition: 0.2s ease-in-out; border-image: none; color: #00a3cc; text-decoration: none; box-sizing: border-box;" href="http://archive.is/J7WmR" target="_blank" rel="noopener noreferrer"><strong style="list-style: none; margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; box-sizing: border-box;">cancer</strong></a>&nbsp;– returning to Washington D.C. five days later to cast his vote against the healthcare bill.</p> <p style="list-style: none; margin: 0px 0px 20px; padding: 0px; border: 0px currentColor; border-image: none; color: #333333; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 16px; font-style: normal; font-weight: 400; word-spacing: 0px; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial;">Then,&nbsp;at the beginning of November McCain was treated for a<span>&nbsp;</span><a style="list-style: none; margin: 0px; padding: 0px; border: 0px currentColor; transition: 0.2s ease-in-out; border-image: none; color: #00a3cc; text-decoration: none; box-sizing: border-box;" href="http://archive.is/zsaZf" target="_blank">tear to his achilles tendon</a>&nbsp;at Walter Reed medical center – emerging on November 6th in a walking boot on his RIGHT leg:</p> <blockquote class="twitter-tweet"><p lang="en" dir="ltr">I can't tell you how much I hate wearing this boot! <a href="https://t.co/W6zClDRpFb">https://t.co/W6zClDRpFb</a> <a href="https://t.co/x3mDC4n11H">pic.twitter.com/x3mDC4n11H</a></p> <p>— John McCain (@SenJohnMcCain) <a href="https://twitter.com/SenJohnMcCain/status/927582527010824192?ref_src=twsrc%5Etfw">November 6, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p> <span style="color: #333333; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 16px; font-style: normal; font-weight: 400; word-spacing: 0px; float: none; display: inline !important; white-space: normal; orphans: 2; widows: 2; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial;">Somehow, some way, it appears McCain’s tear has&nbsp;switched sides two weeks later!<span style="color: #333333; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 16px; font-style: normal; font-weight: 400; word-spacing: 0px; float: none; display: inline !important; white-space: normal; orphans: 2; widows: 2; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial;">&nbsp;</span></span></p> <blockquote class="twitter-tweet"><p lang="en" dir="ltr">Mother, father &amp; puppy of the bride in beautiful Cornville <a href="https://twitter.com/hashtag/Arizona?src=hash&amp;ref_src=twsrc%5Etfw">#Arizona</a> yesterday! <a href="https://t.co/sd3rsye1OV">pic.twitter.com/sd3rsye1OV</a></p> <p>— John McCain (@SenJohnMcCain) <a href="https://twitter.com/SenJohnMcCain/status/933409288407736320?ref_src=twsrc%5Etfw">November 22, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p> <span style="color: #333333; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 16px; font-style: normal; font-weight: 400; word-spacing: 0px; float: none; display: inline !important; white-space: normal; orphans: 2; widows: 2; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial;">Maybe the honorable Senator from AZ is feeling<span>&nbsp;</span></span><em style="list-style: none; margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; color: #333333; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 16px; font-weight: 400; word-spacing: 0px; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial;">so great</em><span style="color: #333333; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 16px; font-style: normal; font-weight: 400; word-spacing: 0px; float: none; display: inline !important; white-space: normal; orphans: 2; widows: 2; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial;"><span>&nbsp;</span>two weeks after tearing his tendon that he forgot which side the&nbsp;injury&nbsp;was on?<span style="color: #333333; text-transform: none; text-indent: 0px; letter-spacing: normal; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 16px; font-style: normal; font-weight: 400; word-spacing: 0px; float: none; display: inline !important; white-space: normal; orphans: 2; widows: 2; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial;">&nbsp;</span></span></p> <blockquote class="twitter-tweet"><p lang="en" dir="ltr">Looks like <a href="https://twitter.com/SenJohnMcCain?ref_src=twsrc%5Etfw">@SenJohnMcCain</a> forgot which Achilles tendon tore two weeks after he walked out in a boot on Nov 6th. <a href="https://t.co/z5si5J40Bq">pic.twitter.com/z5si5J40Bq</a></p> <p>— ZeroPointNow (@ZeroPointNow) <a href="https://twitter.com/ZeroPointNow/status/933431992690937856?ref_src=twsrc%5Etfw">November 22, 2017</a></p></blockquote> <p>To verify that the images weren’t reversed, one can observe the buttons on McCain’s blazer on&nbsp;McCain’s&nbsp;<em style="list-style: none; margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; box-sizing: border-box;">right</em><span>&nbsp;</span>side in both pictures.</p> <div class="gallery-icon landscape" style="list-style: none; margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; box-sizing: border-box;"><a style="list-style: none; margin: 0px; padding: 0px; border: 0px currentColor; transition: 0.2s ease-in-out; border-image: none; color: #00a3cc; text-decoration: none; box-sizing: border-box;" href="http://ibankcoin.com/zeropointnow/2017/11/22/john-mccains-walking-boot-swaps-sides-two-weeks-after-treatment-for-torn-achilles-tendon/button1/"><img width="609" class="attachment-full size-full tie-appear" style="list-style: none; margin: 0px auto; padding: 0px; border: 0px currentColor; transition: 0.4s ease-in-out; border-image: none; height: auto; vertical-align: middle; display: block; max-width: 100%; box-sizing: border-box; opacity: 1;" src="http://ibankcoin.com/zeropointnow/files/2017/11/button1.png" height="417" /></a></div> <div class="gallery galleryid-12736 gallery-columns-2 gallery-size-full" style="list-style: none; margin: 0px auto 18px; padding: 0px; border: 0px currentColor; border-image: none; color: #333333; text-transform: none; text-indent: 0px; letter-spacing: normal; clear: both; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 13px; font-style: normal; font-weight: 400; word-spacing: 0px; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial;" id="gallery-1"> <div class="gallery-icon landscape" style="list-style: none; margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; box-sizing: border-box;"><a style="list-style: none; margin: 0px; padding: 0px; border: 0px currentColor; transition: 0.2s ease-in-out; border-image: none; color: #00a3cc; text-decoration: none; box-sizing: border-box;" href="http://ibankcoin.com/zeropointnow/2017/11/22/john-mccains-walking-boot-swaps-sides-two-weeks-after-treatment-for-torn-achilles-tendon/boot1d/"><img width="433" class="attachment-full size-full tie-appear" style="list-style: none; 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color: #333333; text-transform: none; line-height: inherit; text-indent: 0px; letter-spacing: normal; font-family: lucida_granderegular, Verdana, sans-serif; font-size: 13px; font-style: normal; font-weight: normal; word-spacing: 0px; vertical-align: baseline; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; font-stretch: inherit; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; text-decoration-style: initial; text-decoration-color: initial; font-variant-numeric: inherit;">Follow on Twitter&nbsp;</span><strong style="margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; text-align: center; color: #333333; text-transform: none; line-height: inherit; text-indent: 0px; letter-spacing: normal; font-family: lucida_granderegular, Verdana, sans-serif; font-size: 13px; font-style: normal; font-weight: bold; word-spacing: 0px; vertical-align: baseline; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; font-stretch: inherit; 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margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; vertical-align: baseline; box-sizing: border-box; font-stretch: inherit;">You<strong style="margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; line-height: inherit; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: bold; vertical-align: baseline; box-sizing: border-box; font-stretch: inherit;">Tube channel</strong></span></span></span></a></p> http://www.zerohedge.com/news/2017-11-22/john-mccain%E2%80%99s-walking-boot-mysteriously-swaps-sides-two-weeks-after-treatment-torn-a#comments Achilles tendon Arizona Health International Republican Institute John McCain John McCain McCain Military personnel Twitter Twitter United States Washington D.C. Wed, 22 Nov 2017 21:15:11 +0000 ZeroPointNow 607778 at http://www.zerohedge.com Dollar Dives To 6-Week Lows As Fed Fears Market 'Partying Like Its 1999' http://www.zerohedge.com/news/2017-11-22/dollar-dives-6-week-lows-fed-fears-market-partying-its-1999 <p>1999-like parties are breaking out everywhere across financial markets...</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/rblt2EtFfC4" width="560"></iframe></p> <p>First things first,<strong> US Financials Conditions are partying like its way easier than 1999...</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD5.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD5_0.png" style="width: 600px; height: 315px;" /></a></p> <p>&nbsp;</p> <p>The Philly Semiconductor index is partying like its 1999...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD2.png"><img height="331" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD2_0.png" width="600" /></a></p> <p>&nbsp;</p> <p>But what happens next? Meltup time?</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD1.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD1_0.png" style="width: 600px; height: 317px;" /></a></p> <p>&nbsp;</p> <p>S&amp;P 500 Valuations are partying like its 1999...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD6.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD6_0.png" style="width: 600px; height: 315px;" /></a></p> <p>The spread between German and US bond yields is partying like its 1999...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD3.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD3_0.png" style="width: 600px; height: 315px;" /></a></p> <p>&nbsp;</p> <p>And the US Treasury curve is partying like its 1999...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD4.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_EOD4_0.png" style="width: 600px; height: 323px;" /></a></p> <p>*&nbsp; *&nbsp; *</p> <p>The Fed Minutes spooked markets a bit today - USD down, gold, stocks, and bonds unch</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod17.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod17_0.png" style="width: 600px; height: 375px;" /></a></p> <p>&nbsp;</p> <p>On the day, The Dow &amp; S&amp;P were joined late on by Small Caps in the red (but the Dow was worst, Trannies were best)</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod18.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod18_0.png" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>VIX ended modestly higher but still below 10...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod19.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod19_0.png" style="width: 600px; height: 340px;" /></a></p> <p>&nbsp;</p> <p>Another day, another short-squeeze...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod11.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod11_0.png" style="width: 600px; height: 319px;" /></a></p> <p>&nbsp;</p> <p><u><strong>This is now the biggest short squeeze since the election...</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod12.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod12_0.png" style="width: 600px; height: 304px;" /></a></p> <p>&nbsp;</p> <p>And before we leave stockland, remember CHF-Solutions...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_chfs.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_chfs_0.png" style="width: 600px; height: 291px;" /></a></p> <p>&nbsp;</p> <p>High yield bond prices ralied once again - almost back to their 200DMA...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod16.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod16_0.png" style="width: 600px; height: 291px;" /></a></p> <p>&nbsp;</p> <p>Treasuries rallies across the curve today (but for a change the short-end outperformed the long-end - 2Y -4.5bps vs 30Y -1.5bps)</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod7.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod7_0.png" style="width: 600px; height: 314px;" /></a></p> <p>&nbsp;</p> <p>Quite a significant reversal today in yields after bond weakness overnight suddenly reversed this morning and then extended after the dovish FOMC...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod8.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod8_0.png" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>Stocks and bonds remain notably decoupled this week...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod10.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod10_0.png" style="width: 600px; height: 310px;" /></a></p> <p>&nbsp;</p> <p>The Dollar Index extended its losses after FOMC Minutes. Today is the worst day for the dollar index since Sept 7th...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_fedreact1.png"><img height="320" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_fedreact1_0.png" width="600" /></a></p> <p>&nbsp;</p> <p>However, stocks remain decoupled from FX carry...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod9.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod9_0.png" style="width: 600px; height: 314px;" /></a></p> <p>&nbsp;</p> <p>Bitcoin rallied once again today but failed to make a new record high...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod13.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod13_0.png" style="width: 600px; height: 544px;" /></a></p> <p>NOTE the interest patterm starting to develop intraday</p> <p>&nbsp;</p> <p>WTI rallied, bouncing back from disappointing inventory data and RBOB leaked lower...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod14.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod14_0.png" style="width: 600px; height: 291px;" /></a></p> <p>&nbsp;</p> <p>Gold and Silver gained as the dollar drooped - Gold and silver&nbsp; surged back above its 50- and 100DMA</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod15.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_eod15_0.png" style="width: 600px; height: 291px;" /></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="600" height="59" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171122_eod.png?1511382384" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/dollar-dives-6-week-lows-fed-fears-market-partying-its-1999#comments Across the Curve Bitcoin Bond Bond Business Dow 30 Economy Federal Open Market Committee Federal Reserve System Finance Financial markets High Yield High-yield debt Meltup Money Philly Semiconductor S&P 500 U.S. Treasury United States dollar US Federal Reserve Yield Wed, 22 Nov 2017 21:02:59 +0000 Tyler Durden 607777 at http://www.zerohedge.com The Silence Of The Bears http://www.zerohedge.com/news/2017-11-22/silence-bears <p><a href="https://northmantrader.com/2017/11/22/the-silence-of-the-bears-2/"><em>Authored by Sven Henrich via NorthmanTrader.com,</em></a></p> <p><em><strong>The silence of the bears is deafening. And who can blame them? </strong></em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_bears.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_bears_0.png" style="width: 501px; height: 268px;" /></a></p> <p><strong>The last 2 years have been absolutely brutal for any fans of price discovery, volatility and anything analytical mattering.</strong> Nothing matters. Be it divergences, valuations, earnings misses, slowing data, yield curve, equal weight, internals, catastrophes in nature, slowing loan growth, slowing auto sales, slowing real estate, retail apocalypse, debt levels, etc&hellip;I can drone on. Nothing matters. Markets keep drifting higher despite it all.</p> <p>Price discovery as we used to know it, the back and forth of buyers and sellers engaging in the argument of forward valuations based on expected earnings growth, has ended with the disappearance of sellers as part of the normal market functioning:</p> <p><a href="https://i1.wp.com/northmantrader.com/wp-content/uploads/2017/11/DJWM-1.png?ssl=1"><img class="alignnone wp-image-38800" src="https://i1.wp.com/northmantrader.com/wp-content/uploads/2017/11/DJWM-1.png?resize=505%2C245&amp;ssl=1" style="width: 501px; height: 243px;" /></a></p> <p>Corrections as a means of price discovery don&rsquo;t exist any more. Every day we don&rsquo;t have a 3% correction is a new record in length of time without any such correction. And the chart above illustrates this adequately. It is a global phenomenon, it&rsquo;s not only US based.</p> <p><strong>5% corrections, what also used to be regular part of markets and a bare minimum at that, have also disappeared:</strong></p> <p><a href="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/5.jpg?ssl=1"><img class="alignnone wp-image-38798" src="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/5.jpg?resize=394%2C290&amp;ssl=1" style="width: 500px; height: 368px;" /></a></p> <p>Not quite at a record, yet the message is nevertheless clear: There&rsquo;s not much happening in these markets on a day to day basis.</p> <p><strong>The abomination of what passes for intra-day trading ranges these days illustrates the point quite nicely:</strong></p> <p><a href="https://i2.wp.com/northmantrader.com/wp-content/uploads/2017/11/price.jpg?ssl=1"><img class="alignnone wp-image-38869" src="https://i2.wp.com/northmantrader.com/wp-content/uploads/2017/11/price.jpg?resize=402%2C151&amp;ssl=1" style="width: 501px; height: 188px;" /></a></p> <p>Whatever downside does occur can&rsquo;t sustain itself for more than minutes, a couple of hours at best. Case in point: The $DAX was only negative for 1 hour 16 minutes after the surprise collapse of German coalition talks on Monday. Nothing matters.</p> <p>Hence it is no surprise sentiment is as bullish as it is. Recall allocations are all bullish, people, funds, even central banks all own the same shrinking universe of stocks.</p> <p>Indeed there is not even a sense that anything could change this program:</p> <p><a href="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/DJAM.png?ssl=1"><img class="alignnone wp-image-38802" src="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/DJAM.png?resize=525%2C335&amp;ssl=1" style="width: 500px; height: 319px;" /></a></p> <p>This chart of the global Dow Jones, more than any other, shows how historically out of balance this rally has been. Red bars don&rsquo;t exist and this is the steepest uninterrupted ascent ever accompanied by the steepest volatility compression ever.</p> <p><strong>In this context yesterday&rsquo;s capitulation by Goldman Sachs was classic.</strong>&nbsp;They were the investment bank that kept citing valuations as a major concern and were the most bearish on 2017. Then they capitulated. Now their mid range target is <a href="http://www.zerohedge.com/news/2017-11-21/goldman-bets-rational-exuberance-unveils-its-sp-price-targets-sees-bull-market-lasti"><strong><em style="color: #ff0000;"><span style="color: #0000ff;">2850 for 2018.</span>&nbsp;</em></strong></a> with little to no downside risk:</p> <p><a href="https://i2.wp.com/northmantrader.com/wp-content/uploads/2017/11/gs-rational-5.jpg?ssl=1"><img class="alignnone wp-image-38878" src="https://i2.wp.com/northmantrader.com/wp-content/uploads/2017/11/gs-rational-5.jpg?resize=314%2C184&amp;ssl=1" style="width: 500px; height: 293px;" /></a></p> <p>That&rsquo;s if the exuberance stays rational they say, if it goes irrational they covered themselves with an irrational scenario of <span style="color: #0000ff;"><a href="http://www.zerohedge.com/news/2017-11-21/what-if-exuberance-irrational-then-hold-your-hats" style="color: #0000ff;"><em><strong>5300</strong></em></a>.</span></p> <p>As I said classic. It is notable how both Monday and Tuesday were suddenly flooded with bullish forecasts. I won&rsquo;t bother to recite them all here, I gave you a glimpse <span style="color: #0000ff;"><em><strong><span style="color: #0000ff;"><a href="https://northmantrader.com/2017/11/21/the-program/" style="color: #0000ff;">yesterday</a></span>.</strong></em></span></p> <p>I&rsquo;m just highlighting this as a latest example of the complete lack of any divergent views remaining in the marketplace. Which is fine. It simply illustrates market sentiment, but also again underscores the extent of the bubble.</p> <p>Bulls will counter that growth is solid. I&rsquo;ve documented variant signs of a slowdown in the works (<a href="https://northmantrader.com/2017/11/11/caution-slowdown/"><span style="color: #0000ff;"><em><strong>Caution: Slowdown</strong></em></span></a>). And I&rsquo;m not the only one to notice:</p> <p class="wsj-article-headline"><a href="https://www.wsj.com/articles/developed-economy-growth-slowed-in-third-quarter-says-oecd-1511174942?mod=e2twcb"><span style="color: #0000ff;"><em><strong>Growth in Developed Economies Slowed in Third Quarter, OECD Says</strong></em></span></a></p> <p>And yet while bulls cite supposed great growth figures the ECB keeps printing like we&rsquo;re in the middle of the financial crisis:</p> <p><a href="https://i2.wp.com/northmantrader.com/wp-content/uploads/2017/11/ECB.jpg?ssl=1"><img class="alignnone wp-image-38868" src="https://i2.wp.com/northmantrader.com/wp-content/uploads/2017/11/ECB.jpg?resize=451%2C325&amp;ssl=1" style="width: 500px; height: 360px;" /></a></p> <p>The numbers behind the chart via <span style="color: #0000ff;"><strong><a class="fullname ProfileNameTruncated-link u-textInheritColor js-nav" href="https://twitter.com/Schuldensuehner" style="color: #0000ff;">Holger Zschaepitz</a></strong></span>: &ldquo;<em>#ECB ramps up balance sheet expansion despite booming #Eurozone economy. Total assets rose by another &euro;24.1bn to a fresh life-time high of &euro;4,411.9bn on QE program, equals to 40.9% of Eurozone GDP</em>.&rdquo;</p> <p>Now that&rsquo;s just intellectually insulting. If things are so great we wouldn&rsquo;t need this level of intervention or any intervention.</p> <p>But this is what they are doing. Every day. I keep asking: What is the organic market price balance without intervention? The answer remains the same: Nobody knows as we haven&rsquo;t seen markets without intervention other than the brief moments were they produced full out panic. 2011 and early 2016 are examples coming to mind.</p> <p>So I continue to view price extensions and disconnects to be a direct result of trillions of dollars in ongoing intervention and exacerbated by record ETF inflows.</p> <p><strong>Let&rsquo;s be clear: I don&rsquo;t know how or when it ends, but it will end. Our primary mission here is to figure out what we consider good risk/reward set-ups knowing that we are finding ourselves in the most one way focused and technically disconnected markets in decades:</strong></p> <p><a href="https://i1.wp.com/northmantrader.com/wp-content/uploads/2017/11/DJIAQ-2.png?ssl=1"><img class="alignnone size-large wp-image-38867" src="https://i1.wp.com/northmantrader.com/wp-content/uploads/2017/11/DJIAQ-2.png?resize=610%2C363&amp;ssl=1" style="width: 501px; height: 298px;" /></a></p> <p>But this is precisely the point in time when the $GS capitulation takes place and all the bullish forecasts are coming out. And I understand why they are coming out. No corrections have taken place and we are in a bullish seasonal part of the year.</p> <p>Now that we have entered the seasonally most bullish time of the year I can certainly understand the silence of the bears. What is there to say? No rationally reasoned argument has mattered, prices keep going up and there appears absolutely nothing on the horizon to stop this train.</p> <p>Indeed, not only are bulls bullish, but some of the remaining bears I still see floating about have resigned themselves to talk blow-off top coming and are busily identifying higher upside targets from 2700-3000. Funny that. Bulls are bulls and bears are bulls.</p> <p>But this is the lay of the land folks.</p> <p>Add some oversold signal charts coinciding with new all time highs and I could easily argue 4 to 5 weeks of upside coming:</p> <p><a href="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/NYSI-2.png?ssl=1"><img class="alignnone wp-image-38794" src="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/NYSI-2.png?resize=554%2C331&amp;ssl=1" style="width: 500px; height: 299px;" /></a></p> <p><a href="https://i1.wp.com/northmantrader.com/wp-content/uploads/2017/11/NYHILO-4.png?ssl=1"><img class="alignnone wp-image-38793" src="https://i1.wp.com/northmantrader.com/wp-content/uploads/2017/11/NYHILO-4.png?resize=553%2C244&amp;ssl=1" style="width: 501px; height: 221px;" /></a></p> <p><u><em><strong>The message: Markets cannot possibly go down. There is no risk. Everybody is bullish, join the party.</strong></em></u></p> <p>Bottomline: <strong><em>Fading this action and sentiment is the most contrarian thing anyone can do here and for that reason it can also be the most dangerous. I have no illusions about that.</em></strong></p> <p>Folks are piling in long at the technically most disconnected market ever since the 2000 Nasdaq bubble. But that doesn&rsquo;t mean it will stop here.</p> <p><strong><em>Are there any issues with the bull case here other than technical disconnects and divergences that don&rsquo;t matter?</em></strong></p> <p>Well, here&rsquo;s a few considerations I wanted to share:</p> <p><a href="https://i1.wp.com/northmantrader.com/wp-content/uploads/2017/11/SPXM-5.png?ssl=1"><img class="alignnone size-large wp-image-38784" src="https://i1.wp.com/northmantrader.com/wp-content/uploads/2017/11/SPXM-5.png?resize=610%2C416&amp;ssl=1" style="width: 500px; height: 341px;" /></a></p> <p>This chart doesn&rsquo;t tell us we can&rsquo;t go higher. We can. But it suggests something disturbing and I&rsquo;ve made reference to it in the past, but the overlay with the 10 year gives additional context: It could be argued that these waves of bullish action were driven by one primary factor: <strong>Cheap money. Artificial low rates and debt.</strong></p> <p>Furthermore it could be argued that the bearish break on $SPX in 2008 was never technically repaired. Yes massively higher prices as a result of over $20 trillion in central bank intervention, zero rates and a global explosion in debt levels to the tune of above $145 trillion in the non financial sector. <strong>All made possible by cheap money</strong>:</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">&quot;Total debt of the nonfinancial sector amounted to $145 trillion in the first quarter of 2017, an increase of 40% since the first quarter of 2007&quot;<br />All made possible by:<a href="https://t.co/09iONTE4f6">https://t.co/09iONTE4f6</a></p> <p>h/t <a href="https://twitter.com/lisaabramowicz1?ref_src=twsrc%5Etfw">@lisaabramowicz1</a> <a href="https://t.co/rnpLCzKF3g">pic.twitter.com/rnpLCzKF3g</a></p> <p>&mdash; Sven Henrich (@NorthmanTrader) <a href="https://twitter.com/NorthmanTrader/status/933363335038414854?ref_src=twsrc%5Etfw">November 22, 2017</a></p></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script><p>The lower the rates the higher the debt :</p> <p><a href="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/fed.png?ssl=1"><img class="alignnone size-large wp-image-38778" src="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/fed.png?resize=610%2C290&amp;ssl=1" style="width: 501px; height: 238px;" /></a></p> <p>So the big question is simply this: What if that down trend in the 10 year yield bursts above its trend line for the first time since 1987?</p> <p>As you can see in the $SPX chart above we have never seen a break above trend to the upside. Yet the entire market advance has been dependent on its declining trend. All of it. To fix any downside in markets rates had to be lowered and lowered.</p> <p>None of this tells us anything about this week or next, but it highlights perhaps the precarious nature of the construct.</p> <p>While the ECB keeps printing $DAX remains at a critical long term juncture:</p> <p><a href="https://i1.wp.com/northmantrader.com/wp-content/uploads/2017/11/DAXM.png?ssl=1"><img class="alignnone size-large wp-image-38789" src="https://i1.wp.com/northmantrader.com/wp-content/uploads/2017/11/DAXM.png?resize=610%2C363&amp;ssl=1" style="width: 501px; height: 298px;" /></a></p> <p>And the quarterly chart also raises red flags:</p> <p><a href="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/DAXQ-1.png?ssl=1"><img class="alignnone wp-image-38873" src="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/DAXQ-1.png?resize=610%2C364&amp;ssl=1" style="width: 499px; height: 298px;" /></a></p> <p>The ECB is scheduled to slow down their QE program in 2018, but not end it nor will they raise rates at any time during Mario Draghi&rsquo;s reign. The ECB remains in full policy panic mode. Because that&rsquo;s what NIRP is. Panic mode. And you know why they keep pressing? Because inherently they know prices could not sustain themselves. They have to keep rates low.</p> <p>The yield curve keeps flattening, but it matters not, it is now at the flattest level since 2007:</p> <p><a href="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/yield-2.png?ssl=1"><img class="alignnone size-large wp-image-38874" src="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/yield-2.png?resize=610%2C269&amp;ssl=1" style="width: 499px; height: 220px;" /></a></p> <p><a href="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/yield.jpg?ssl=1"><img class="alignnone size-large wp-image-38807" src="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/yield.jpg?resize=610%2C284&amp;ssl=1" style="width: 500px; height: 233px;" /></a></p> <p>We are told not to worry of course:</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">If you are worried about how 2/10 UST Yield Curve flattening to below 60 bp for 1st time this cycle will affect <a href="https://twitter.com/search?q=%24SPX&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$SPX</a> - don&#39;t be. Over last three cycles, the median gain to &quot;the&quot; mkt peak from initial YC drop to 60 bp was 67%, with worst case gain of 36% last cycle</p> <p>&mdash; Tony Dwyer (@dwyerstrategy) <a href="https://twitter.com/dwyerstrategy/status/932958531782889472?ref_src=twsrc%5Etfw">November 21, 2017</a></p></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script><p>We can only go up and nothing matters.</p> <p>&nbsp;</p> <p><strong>The only thing that matters is that people keep piling long into these markets.</strong></p> <p>ETF inflows have now reached an all time history high of $400B of inflows just in 2017:</p> <p><a href="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/ETFs.jpg?ssl=1"><img class="alignnone wp-image-38809" src="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/ETFs.jpg?resize=610%2C290&amp;ssl=1" style="width: 501px; height: 238px;" /></a></p> <p>There&rsquo;s a QE program right there.</p> <p>I&rsquo;ve been mentioning the weekly 5 EMA:</p> <p><a href="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/SPXW-7.png?ssl=1"><img class="alignnone size-large wp-image-38875" src="https://i0.wp.com/northmantrader.com/wp-content/uploads/2017/11/SPXW-7.png?resize=610%2C269&amp;ssl=1" style="width: 499px; height: 220px;" /></a></p> <p>As you can see from the chart: No weekly close below the weekly 5EMA is permitted. Any break lower is saved by the end of the week.</p> <p>This is what we need to see changing before a change in trend can be considered.</p> <p>For now markets can only go up and growth is wonderful.</p> <p>Now who&rsquo;s going to tell the bond market?</p> <p><a href="https://i2.wp.com/northmantrader.com/wp-content/uploads/2017/11/yields.png?ssl=1"><img class="alignnone wp-image-38876" src="https://i2.wp.com/northmantrader.com/wp-content/uploads/2017/11/yields.png?resize=362%2C125&amp;ssl=1" style="width: 501px; height: 173px;" /></a></p> <p><strong>The screaming of the bears has ended. Their silence is deafening.</strong></p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/OLBotH5Bki8" width="560"></iframe></p> <p>And perhaps that should worry bulls more than anything.</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="1565" height="838" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171122_bears.png?1511374848" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/silence-bears#comments Auto Sales Behavioral finance Bond Business Central Banks Economy ETC European Central Bank Eurozone Finance Financial crisis of 2007–2008 Financial economics goldman sachs Goldman Sachs Market Sentiment Market sentiment Market trend Money NASDAQ OECD Real estate Stock market Stock market crashes Twitter Twitter Volatility Yield Curve Yield curve Wed, 22 Nov 2017 20:57:13 +0000 Tyler Durden 607766 at http://www.zerohedge.com Bikini-Bearing Baristas Battle Bureaucrats Who Claim They're "Turning Men Into Harvey Weinsteins" http://www.zerohedge.com/news/2017-11-22/bikini-bearing-baristas-battle-bureaucrats-who-claim-theyre-turning-men-harvey-weins <p><strong>Welcome to &#39;Grab&#39;n&#39;Go&#39; Bikini Hut </strong>- a coffee shop in Washington State that offers coffees, teas(e), and other hot liquids made by bikini-clad baristas.</p> <p><strong>The city of Everett, about 30 miles north of Seattle, is home to numerous bikini barista espresso stands, </strong>where servers dressed in everything from tasteful two-piece swimsuits to pasties and G-strings serve up lattes and Americanos at a drive-thru window.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_coffee1.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_coffee1_0.png" style="width: 500px; height: 251px;" /></a></p> <p>But these successful entrepreneurs - having found an angle that differentiates them from your ubiquitous Starbucks numbness - <strong>face being shut down by local officials who are set to tighten the city&rsquo;s regulations on what constitutes lewd behavior and push to institute a dress code that bans employees from wearing bikinis or showing too much bare skin</strong>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Jovanna Edge, who co-owns five &ldquo;Hillbilly Hotties&rdquo; stands, denies that any illegal activity is encouraged and balks at the city&rsquo;s claim that the stands -- with prices comparable to Starbucks -- attract crime or demean women.</p> <p>&nbsp;</p> <p>She added that without the bikinis, the baristas would not make as much money as they do.</p> <p>&nbsp;</p> <p><strong>&ldquo;My business generates more money than a regular, non-bikini-barista, stand because my employees express themselves through their manner of dress,&rdquo;</strong> Edge said.</p> <p>&nbsp;</p> <p>&ldquo;By wearing a bikini, my employees expose messages through tattoos and scars, and they are able to open conversations that attract customers willing to pay more at my business than other coffee stands.&rdquo;</p> </blockquote> <p><a href="http://www.foxnews.com/us/2017/11/21/bikini-baristas-turn-men-into-harvey-weinsteins-washington-city-claims.html"><em>As Fox News reports</em></a>, the laws are just the final straw in a years-long battle against bikini baristas stands.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;The Constitution doesn&rsquo;t allow the government to regulate the content of speech because the government disagrees with it,&rdquo;</strong> Derek Newman, an attorney representing one of the baristas,&nbsp;<a href="https://www.seattletimes.com/seattle-news/crime/everetts-bikini-baristas-head-to-federal-court-to-argue-for-freedom-of-exposure/" target="_blank">told the Seattle Times</a>.</p> <p>&nbsp;</p> <p>&ldquo;If the First Amendment was so limited, NFL players kneeling during the national anthem to protest police brutality would not be protected expression because the president interprets this as anti-American sentiment.&rdquo;</p> </blockquote> <p>Everett lawmakers have been steamed about the coffee stands for years &ndash; <u><em>arguing everything from obscenity to mob ties</em></u> &ndash; officials are taking a page out of the headlines and citing a new argument: <u><em><strong>The skin-flaunting coffee servers could turn men into the next Harvey Weinstein.</strong></em></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;The male gaze on bikinied women is on the continuum of sexualization of women,&rdquo; </strong>wrote Mary Anne Layden, the director of the Sexual Trauma and Psychopathology program at the University of Pennsylvania and an expert witness for the city of Everett.</p> <p>&nbsp;</p> <p><strong>&ldquo;When you make the body a commodity, and sex a product which you sell, one outcome is sexual violence... If you can sell it, you can steal it.&rdquo;</strong></p> </blockquote> <p>By this logic - the question has to be asked of every &#39;accuser&#39; that has come forward in recent weeks, calling out everyone from Kevin Spacey to John Conyers and Roy Moore, what were they wearing before they were abused? Can you imagine the leftist uproar?</p> <p>*&nbsp; *&nbsp; *</p> <p><strong>The baristas also say that their rights are being impinged</strong> upon and <strong>instead of feeling degraded when wearing a bikini, they feel empowered</strong>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;This is about women&rsquo;s rights,&rdquo; </strong>coffee server Natalie Bjerk said, according to the Daily Star.</p> <p>&nbsp;</p> <p>&ldquo;The<strong> city council should not tell me what I can and cannot wear when I go to work; it&rsquo;s a violation of my First Amendment rights.</strong>&rdquo;</p> </blockquote> <p><a href="https://www.instagram.com/p/BY2JYvjlGsI/">One such barista from Ladybug Espresso </a>strongly agrees:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_coffee2.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_coffee2.png" style="width: 500px; height: 586px;" /></a></p> <p>Welcome to the Land of The Free!!!</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="647" height="388" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171122_coffee.png?1511371719" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/bikini-bearing-baristas-battle-bureaucrats-who-claim-theyre-turning-men-harvey-weins#comments Baristas Bikini Bikini barista Bikini in popular culture Bikinis Coffee Coffee culture Coffee in Seattle Espresso First Amendment Food and drink Fox News headlines National Football League Pasties Starbucks the University of Pennsylvania Wed, 22 Nov 2017 20:31:32 +0000 Tyler Durden 607763 at http://www.zerohedge.com JPMorgan: Every Investor Class Is Now All-In Stocks http://www.zerohedge.com/news/2017-11-22/jpmorgan-every-investor-class-now-all-stocks <p>A funny thing happened as the so-called experts were looking for signs of retail euphoria (and repeatedly were unable to find it): <strong>everyone got <em>all-in</em> equities... </strong>and not just retail investors and US households, but mutual funds, hedge funds, pensions, systematic, and sovereign wealth funds.</p> <p>As JPMorgan calculated when looking at the equity positioning of the main types of investors, "<strong>allocations are near historical highs, not leaving much room for further increases</strong>." How historic? </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Starting with <strong>retail investors one can notice that margin debt (measured as percentage of market capitalization) is at its highest point ever, which includes the 2000 tech bubble episode. </strong>The percentage of <strong>US household wealth in equities is in its 94th percentile and above its 2007 peak, but slightly below 2000 levels. </strong>Sovereign wealth funds and US mutual funds are <strong>also near record levels. </strong>Pension Fund allocations appear to be in the 88% percentile, although there is some uncertainty around this number in adjusting for private asset and HF holdings. <strong>Global Hedge Funds’ allocation (as measured by equity beta) are also near record highs, and Equity Hedge funds’ allocation in their 93rd percentile (since 2005). </strong></p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/jpm%20euphroia.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/jpm%20euphroia_0.jpg" width="500" height="387" /></a></p> </blockquote> <p>Why does this matte? Because with everyone already long stocks, there is no marginal buyer left, or as JPM puts it, <strong>"there is only so much the market can rally if equity investors are already near maximal allocations." </strong></p> <p>And with increasingly more traders and momentum-chasers shifting away from the manipulated arena of stock trading, and on to cryptocurrencies, one can understand why both commercial and central banks - in addition to Jamie Dimon of course, who is "richer than you äre" only as long as you trade those instruments in which he makes markets - hate the best performing asset class of 2017.</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="630" height="420" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/equity%20positioning.jpg?1511381513" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/jpmorgan-every-investor-class-now-all-stocks#comments Business Central Banks Economy Finance Funds Hedge fund Institutional investors Investment Investor Jamie Dimon Money Mutual fund Pension Fund Wed, 22 Nov 2017 20:14:58 +0000 Tyler Durden 607775 at http://www.zerohedge.com Roy Moore's Communications Director Resigns http://www.zerohedge.com/news/2017-11-22/roy-moores-communications-director-resigns <p>Amid an ongoing barrage of sexual assault allegations, Alabama Senate candidate Roy Moore has just confirmed to the <a href="https://www.washingtonian.com/2017/11/22/john-rogers-roy-moore-communications-director-spokesman-resigns/">Washingtonian</a> that his communications director, John Rogers, has resigned.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>John Rogers has resigned as communications director from Roy Moore’s Senate campaign, according to a source familiar with the matter.</strong></p> <p>&nbsp;</p> <p>Reached by phone on Wednesday, Rogers confirmed his resignation. He declined to comment further.</p> <p>&nbsp;</p> <p>The move comes as allegations of sexual misconduct against the Alabama Republican continue to roil his campaign. Moore has denied those allegations, but several prominent Republicans, including Senators Ted Cruz and Mike Lee, have withdrawn their endorsements. The Republican National Committee and the National Republican Senatorial Committee have also dropped their support.</p> </blockquote> <p><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/11/22/2017.11.22%20-%20Moore%202_0.JPG" alt="Moore" width="600" height="351" /></p> <p>Of course, this resignation comes as Moore has repeatedly denied allegations and even went so far last week as to imply that an entry in one of his victim's yearbooks may have been a forgery (see: <a href="http://www.zerohedge.com/news/2017-11-15/roy-moore-hold-unplanned-press-conference-5pm-est">Judge Moore Doubles Down On Denial; Alleges That Gloria Allred's Yearbook Message Is A "Fraud"</a>). </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In an impromptu press conference, Roy Moore's attorneys have called upon Gloria Allred and her client Beverly Young-Nelson to release the high school yearbook, which she claims was signed in 1977 by then Assistant District Attorney Moore, so that it can be submitted to a handwriting expert for analysis to determine whether it's <strong>"genuine or a fraud." </strong></p> </blockquote> <blockquote class="twitter-video"><p dir="ltr" lang="en">HAPPENING NOW: Roy Moore's attorney demands the yearbook belonging to sexual assault accuser be released so the writing can be analyzed. <a href="https://t.co/tRKcXfYiaZ">pic.twitter.com/tRKcXfYiaZ</a></p> <p>— CBS Evening News (@CBSEveningNews) <a href="https://twitter.com/CBSEveningNews/status/930920757747699712?ref_src=twsrc%5Etfw">November 15, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>Meanwhile, Rogers' departure also comes just one day after President Trump reaffirmed his backing of Moore saying "<strong>well he denies it, Roy Moore totally denies it." </strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>"Well he denies it, Roy Moore totally denies it. And by the way, he gives a total denial.</strong> And I have to say, 40 years is a long time. He's run eight races and this has never come up. The women are Trump voters, most of them are Trump voters. So I guess you have to do what you have to do."</p> <p>&nbsp;</p> <p><strong>"I can tell you one thing for sure. We don't need a liberal person in there, a Democrat. </strong>I looked at his record he's terrible on crime terrible on borders.&nbsp; We don't need somebody who's soft on crime like Jones."</p> </blockquote> <p><iframe src="https://www.youtube.com/embed/RNOb7U-ahiM" width="600" height="337" frameborder="0"></iframe></p> <p>So what say you?&nbsp; Does the Alabama Senate race debacle all come down to a poorly crafted communications strategy or is the end near for Judge Moore?</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="628" height="341" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017.11.22%20-%20Moore%20Tease.JPG?1511378309" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/roy-moores-communications-director-resigns#comments Alabama Alabama Senate Discrimination against LGBT people in the United States Dominion Theology Donald Trump Law Politics Politics Republican National Committee Republican Senatorial Committee Roy Moore Roy Moore’s Senate Social Issues Twitter Twitter United States Wed, 22 Nov 2017 19:49:01 +0000 Tyler Durden 607772 at http://www.zerohedge.com Kolanovic Asks "How Close Are We To The Market Top" And Answers http://www.zerohedge.com/news/2017-11-22/kolanovic-asks-how-close-are-we-market-top-and-answers <p>"How close are we to the market top?"</p> <p>While that is and always has been the question on every trader and investor's lips, it is also what an increasingly greater number of more and more nervous JPMorgan clients wants to know, especially those who, according to JPM head quant Marko Kolanovic - want to protect strong YTD gains or chase year end performance. What sucks is being designated the person responsible with answering this question. In this case, that's person is the quant guru himself, who explains that "<em>to assess this question we analyze equity positioning, possible signs of irrational exuberance, and again draw attention to another form of excess which we call ‘quantitative exuberance’</em>.</p> <p>Here are Kolanovic's three answers to how much higher stocks could go before hitting the bubble ceiling. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Positioning </strong></p> <p>&nbsp;</p> <p>While we think that the Tax bill will be a positive catalyst that would move equities higher, there is only so much the market can rally if equity investors are already near maximal allocations. These allocations are near historical highs, not leaving much room for further increases. Numbers are shown as historical ‘percentiles’. Starting with retail investors one can notice that margin debt (measured as percentage of market capitalization) is at its highest point ever, which includes the 2000 tech bubble episode<strong>. The percentage of US household wealth in equities is in its 94th percentile and above its 2007 peak, but slightly below 2000 levels</strong>. Sovereign wealth funds and US mutual funds are also near record levels. Pension Fund allocations appear to be in the 88% percentile, although there is some uncertainty around this number in adjusting for private asset and HF holdings. <strong>Global Hedge Funds’ allocation (as measured by equity beta) are also near record highs, and Equity Hedge funds’ allocation in their 93rd percentile (since 2005). </strong></p> <p>&nbsp;</p> <p><strong>Irrational Exuberance </strong></p> <p>&nbsp;</p> <p>Previous market tops often coincided with the phenomenon of ‘irrational exuberance’. While we argue below that this is not needed for the market to top, we look at the signs of excesses in the marketplace. <strong>One such measure is increased interest of retail investors in equities. We note a significant spike in the pace at which retail investors open online equity accounts, comparable to 2000 levels. </strong>However this level of interest only started this year, while it persisted for over 2 years going into the tech bubble burst. We also note that retail interest in speculating this time is shared between traditional assets and cryptocurrencies (as indicated by an analysis of online searches for account opening). We see this as another sign of excess and risk as the cryptocurrency market passes 1% of US GDP (not counting stocks traded for proxy exposure). The excesses in equity markets are likely related to the internet/tech, a theme shared with cryptocurrencies<strong>. For instance, we think that many tech companies deemed to be part of the ‘secular growth’ thesis are in fact part of ‘cyclical growth’ and are exposed to large downside risks in advertising revenues during the next downturn</strong>. In fact some may also be exposed to ‘secular declines’ (rather than growth) as over time products lose appeal to new generations<strong>. It is possible that post-millennial generations abandon current online environments and platforms, deeming them mentally or physically unhealthy</strong>, overly intrusive of privacy, or controlled by special interest (e.g. issue of censorship, etc.). <strong>Valuation is another topic we discussed at length in our previous work, and new anecdotes of excesses appear every day (e.g. institutional funds investing in make believe apparel for virtual online gaming characters). </strong></p> <p>&nbsp;</p> <p><strong>Quantitative Exuberance </strong></p> <p>&nbsp;</p> <p>We also think that for the next market crisis, irrational exuberance in the ‘tech bubble’ sense is not needed. <strong>The reason is the prevalence of quantitative and passive strategies that don’t decide based on emotions, but rather based on measures such as the level of interest rates, volatility, price momentum, or bond-equity correlation. Examples of these strategies include Volatility Targeting, Low Volatility strategies, Trend Following strategies, Risk Parity strategies, Dynamical hedging strategies, Volatility selling strategies, and others. </strong>In addition, there are relative value strategies that transmit risk premia compression across asset classes and strategies. <strong>With volatility at record lows and central bank balance sheet inflows peaking this year, these strategies currently experience ‘quantitative exuberance’ that poses risk when monetary policies start normalizing in a meaningful way next year</strong>. </p> </blockquote> <p>Hmmm, a "<strong>risk when monetary policies start normalizing in a meaningful way next year</strong>" - sounds oddly similar to <a href="http://www.zerohedge.com/news/2017-11-20/bofas-apocalyptic-forecast-stocks-flash-crash-bond-bubble-bursts-h1-2018">Michal Hartnett's warning </a>that in the first half of 2018 the world will observe not only the bond bubble bursting, but also a 1987-like flash crash. But don't worry, as <a href="http://www.zerohedge.com/news/2017-11-19/financial-argmageddon-bullish-stocks-one-banks-surprisingly-honest-answer">both Macquarie's Viktor Shvets and One River's Eric Peters explained over the weekend</a>, the financial Armageddon that is coming... is bullish. Here's Shvets:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>We remain constructive on financial assets (as we have been for quite some time), not because we believe in a sustainable and private sector-led recovery but rather because we do not believe in one, and thus we do not see any viable alternatives to an ongoing financialization, which needs to be facilitated through excess liquidity, and avoiding proper price and risk discovery, and thus avoiding asset price volatilities.</em></p> </blockquote> <p>... and Peters:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The extraordinary response to the global financial crisis prevented depression. But the price of salvation is proving to be as profound as it is impossible to precisely measure -- unexpected election outcomes, political paralysis, an isolationist America, de-globalization, fake news, opioid epidemics. And connecting it all, a corrosive, woven thread; injustice, unfairness, inequality, hypocrisy, distrust, endemic, growing. “We are on the cusp of great change, the old paradigm is set to shift,” he said, at altitude, the air crisp, clear. </p> <p>&nbsp;</p> <p>“<strong>The market has an accident, monetary policy is seen to be bust, the models have been wrong, we have to change what we do, we can’t go down the same route, we need to move to a different policy mix</strong>. Fiscal expansion, infrastructure, labor over capital. <strong>We’re moving to something that may be great for the economy, but no good for asset markets. New Regime -- end of story.</strong></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="1910" height="1000" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/half%20man%20half%20god.jpg?1511378964" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/kolanovic-asks-how-close-are-we-market-top-and-answers#comments Bond Business Economic bubbles Economy Equity Markets ETC Finance Financial markets flash Hedge fund Investment Irrational Exuberance Mathematical finance Monetary Policy Money Pension Fund recovery Risk parity Stock market Systemic risk Volatility Volatility Wed, 22 Nov 2017 19:31:45 +0000 Tyler Durden 607771 at http://www.zerohedge.com Gold Jumps, Dollar Dumps After Dovish Fed Minutes http://www.zerohedge.com/news/2017-11-22/gold-jumps-dollar-dumps-after-dovosh-fed-minutes <p>The dollar index had been falling in early trading - extending its freefall from the Nov 1st Fed statement - but <strong>legged down on the dovish minutes to the lowest in 5 weeks</strong>. Gold is extending its gains, above key technical levels and while the curve is steady,<strong> long-end bond yields are sliding modestly</strong>.</p> <p>&nbsp;</p> <p>Today is the worst day for the dollar index since Sept 7th...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_fedreact1.png"><img height="320" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_fedreact1_0.png" width="600" /></a></p> <p>&nbsp;</p> <p>And Gold has erased its plunge from Monday...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_fedreact2.png"><img height="319" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_fedreact2_0.png" width="600" /></a></p> <p>&nbsp;</p> <p>Early weakness in bonds has been entirely reversed...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_fedreact4.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_fedreact4_0.png" style="width: 600px; height: 320px;" /></a></p> <p>&nbsp;</p> <p>For now the machines have not figured out how to kick stocks higher...</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171122_fedreact3_0.png" style="width: 600px; height: 463px;" /></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="936" height="499" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171122_fedreact1.png?1511378384" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-22/gold-jumps-dollar-dumps-after-dovosh-fed-minutes#comments Bond Bond US Federal Reserve Wed, 22 Nov 2017 19:23:53 +0000 Tyler Durden 607770 at http://www.zerohedge.com