http://www.zerohedge.com/fullrss2.xml/%2A en Crypto Is Suddenly Crashing - Bitcoin Back Below $16,000 http://www.zerohedge.com/news/2017-12-13/crypto-suddenly-crashing-bitcoin-back-below-16000 <p>While Ethereum remains solidly higher on the day,<strong><em> the entire crypto space just took a notable leg lower...</em></strong></p> <p>The day&#39;s slide started around 9amET.</p> <p>Bitcoin is back below $16,000</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/13/20171213_crypto1.jpg"><img height="297" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/13/20171213_crypto1_0.jpg" width="600" /></a></p> <p>Litecoin - yesterday&#39;s big winner - is tumbling...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/13/20171213_crypto3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/13/20171213_crypto3_0.jpg" style="width: 600px; height: 303px;" /></a></p> <p>And while Ethereum is up 11% still, it is roling over...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/13/20171213_crypto2.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/13/20171213_crypto2_0.jpg" style="width: 600px; height: 293px;" /></a></p> <p>&nbsp;</p> <p>Futures are underperforming spot and collapsing the arbitrage...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/13/20171213_crypto4.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/13/20171213_crypto4_0.jpg" style="width: 600px; height: 316px;" /></a></p> <p>While no immediate catalyst for the moves is obvious, we note that <strong>Interactive Brokers has allowed clients to short Bitcoin futures</strong> (with a massive $40,000 margin) and <a href="https://www.reuters.com/article/us-markets-bitcoin-southkorea/south-korea-considers-cryptocurrency-tax-as-regulators-grapple-with-speculative-mania-idUSKBN1E703O"><strong>South Korea said on Wednesday it may tax capital gains from cryptocurrency trading</strong> </a>as global regulators worried about a bubble, with Australia&rsquo;s central bank chief warning of a &lsquo;speculative mania&rdquo; that has seen the digital asset making rip-roaring gains.</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="898" height="453" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171213_crypto3.jpg?1513189753" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-13/crypto-suddenly-crashing-bitcoin-back-below-16000#comments Alternative currencies Arbitrage Australia Bitcoin Bitcoin Blockchains Book:20 Crypto Currencies you should know about Cross-platform software Cryptocurrencies Cryptography Ethereum Finance Futures contract Joseph Lubin Litecoin Money Reserve Bank of Australia Wed, 13 Dec 2017 18:29:21 +0000 Tyler Durden 609086 at http://www.zerohedge.com Another Peak Alert: The Blank Check "SPACs" Boom Has Just Surpassed 2007 http://www.zerohedge.com/news/2017-12-12/uh-oh-peak-alert-blank-check-spacs-boom-has-just-surpassed-2007 <p>In 2017, stock issuance by SPACs has made a new post-crisis high, surpassing the last peak in 2007 which saw the equity market peak in October of that year prior to the crisis. Before we go any further,<strong> we&rsquo;d better define a &quot;SPAC&quot; just in case you&rsquo;re unfamiliar with the acronym, although they are also often known as &ldquo;blank check&rdquo; companies or &ldquo;blank check&quot; IPOs.</strong> From <a href="https://www.investopedia.com/ask/answers/08/blank-check-company.asp">Investopedia</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A popular type of blank-check company is a special purpose acquisition corporation (SPAC). The founder of a SPAC pools money from investors and he or she may contribute to the SPAC to form a blank-check company with the sole purpose of acquiring another company or companies.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Investors do not have knowledge of how their money will be spent, so they issue blank checks to the SPAC. In turn, the SPAC must receive shareholder approval for all acquisitions and 80% of investor funds must be used in any single deal. If the SPAC fails to find a shareholder-approved deal within two years of creation, it is liquidated and the SPAC&#39;s founder loses the investment. Blank-check companies present investors with an alternative similar to private equity.</p> </blockquote> <p>Here is the <a href="https://www.wsj.com/articles/another-sign-of-frothy-markets-blank-check-boom-1512995623">Wall Street Journal</a> on the latest iteration of a SPACs boom.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><em><strong>Would you invest in a company that couldn&rsquo;t tell you what its business was going to be? </strong></em></u>Some would, in fact they are doing so in record amounts. Blank-check companies, otherwise known as special purpose acquisition companies, or SPACs, are listed companies that raise money from investors to go and buy a company as yet unidentified. The returns to investors can be stellar&mdash;but on average they aren&rsquo;t great. Investing blind looks to be as high-risk as it sounds.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>This year, there have been almost $14 billion worth of new listed shares in blank-check companies, a record, outstripping 2007&rsquo;s $12.3 billion global issuance, and giving it all a peak-of-the-markets feel. Between 2007 and 2017, listings were fewer and issuance averaged less than $3 billion a year.</p> </blockquote> <p><u><strong>Equity raised by special purpose acquisition companies</strong></u><br /><a href="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/spac2_0.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/spac2_0.png" style="width: 500px; height: 224px;" /></a><br /><span style="font-size:9px;">Note: 2017 is year to date; issuance in 2009 was negligible<br />Source: Dealogic</span></p> <p><strong>In terms of peak signals, the primary drivers of the current SPACs boom are euphoric markets and excess liquidity. </strong>The WSJ draws the comparison.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Today&rsquo;s SPAC boom is driven by the same thing as 2007: vast sums of money trying to find a home and any kind of half-decent returns. And private-equity deal makers, who already have more buyout money to invest than at any time in history, are increasingly sponsoring SPACs too, to buy assets that wouldn&rsquo;t fit the return aims of their private funds.</p> <p>&nbsp;</p> <p>Firms such as Carlyle , Fortress , Riverstone and TPG have been all behind large deals this year.</p> </blockquote> <p>Aside from the often illusory lure of high returns (see below), the appeal of investing in a SPACs is a manager or management team with a strong track record. For example, the largest SPAC in 2017 is J2 Acquisition, which raised $1.21 billion. J2 Acquisition is headed by Martin Franklin, which built up the Jarden Corporation through the acquisition of more than 20 consumer businesses. Investors in Jarden made fifty times their initial investment.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/spac1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/spac1_0.jpg" style="width: 500px; height: 314px;" /></a></p> <p>The second largest SPAC in 2017 is Silver Run Acquisition Corp. II, which raised $1.035 billion. It boasts the services of former Anadarko CEO, James Hackett.</p> <p><strong>Money raised by the top five SPACs globally in 2017</strong><br /><a href="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/spac3_0.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/spac3_0.png" style="width: 500px; height: 288px;" /></a><br /><span style="font-size:9px;">Source: Dealogic</span></p> <p>The major problem for SPACs right now is twofold, firstly the very high valuations of targets and, secondly, the competition for deals between SPACs, private equity and existing corporate buyers has never been more intense. While not specifying this directly, the WSJ ponders on the varying performance of SPACs.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The performance of blank-check companies vary. Plenty close and hand back investors&rsquo; cash by reaching the end of their typical two-to-three-year lifespan without finding a deal. Of nearly 300 SPACs that have listed in the U.S. since 2003, 80 have closed and handed back cash, while the total returns to shareholders for the 151 that have completed a deal up to the end of last week amount to an annualized average of 5.1%, according to specialist website Spacanalytics. That compares to 9.4% for the S&amp;P 500 over the same period. (Another 40 SPACs are looking for their acquisition, while 12 have announced a deal but are yet to complete it).</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Milos Vulanovic, a professor at Edhec business school in Paris, who studies SPACs, says on average they perform poorly, but he has found common factors to some that do well. SPACs focused on the shipping industry, for example, happen to have performed particularly well, returning on average 154%. But again, that&rsquo;s a small sample. Some do very well: Centennial Resource Development , which began as a Riverstone-sponsored SPAC, has delivered total returns of 107% since April 2016. Others do poorly: Freedom Acquisition bought U.S. hedge-fund manager GLG in 2007, but after losing roughly half its value it was taken out three-years later by U.K.-listed Man Group.</p> </blockquote> <p>In the end, the WSJ almost throws up its hands, lamenting that its nigh on impossible to tell which SPACs will be successful before the fact. It notes that some management teams can do both good deals and bad deals. SPACs, it concludes are a &ldquo;high risk play&rdquo; and we wouldn&rsquo;t disagree. <strong>However, given they have also acted as a signal for a market top, they are a far higher risk play than they&rsquo;ve been for a decade.</strong><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="946" height="548" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/checkbook.jpg?1513189754" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-12/uh-oh-peak-alert-blank-check-spacs-boom-has-just-surpassed-2007#comments Business Carlyle Corporate finance Economy Edhec Finance Money Private Equity Private equity S&P 500 Special-purpose acquisition company Wall Street Journal Wed, 13 Dec 2017 18:06:03 +0000 Tyler Durden 608997 at http://www.zerohedge.com Full Preview Of Janet Yellen's Last Ever Rate Hike http://www.zerohedge.com/news/2017-12-13/full-preview-janet-yellens-last-ever-rate-hike <p>In previewing today&#39;s FOMC decision, which will also be Janet Yellen&#39;s last rate hike decision and press conference before she is replaced by Jay Powell, there is a TL/DR version, which is summarized by the chart below and which shows that according to the market, the probability of a rate hike today is 100%... which is really all you need to know as the rest is Fed explanations and forecasts, both of which are always wrong:</p> <p><img height="220" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/dec%20rate%20hike%20odds_0.jpg" width="500" /></p> <p>Desperate to get more excited about today&#39;s episode of central planning? Below is <a href="http://www.ransquawk.com">RanSquawk</a>&#39;s full preview of what to expect from Yellen today:</p> <ul> <li><strong>The FOMC will release its rate decision and economic forecasts at 1900 GMT (1400 ET/1300 CT) on Wednesday</strong></li> <li><strong>13 December 2017; Chair Janet Yellen will begin her press conference at 1930 GMT (1430 ET/1330 CT)</strong></li> <li><strong>The central bank is expected to lift the Federal Funds Rate target by 25bps to 1.25-1.50%</strong></li> <li><strong>Little change is seen in the &lsquo;dots&rsquo;; there is potential for upward revisions to growth in 2018 and beyond, factoring in US fiscal reform; however, analysts still forecast that inflation will undershoot the Fed&rsquo;s forecasts</strong></li> </ul> <p><strong>EXPECTATIONS:</strong></p> <p>Money markets have been pricing in a 25bps FOMC hike at the 13 December meeting for some time, which would take the Federal Funds Rate target range to 1.25%-1.50%, and represent the third hike this year (and fifth of this hiking cycle).</p> <p>Minneapolis Fed&rsquo;s Neel Kashkari is likely to continue his dissent over the lifting of the Federal Funds Rate target, while there will also be attention on Chicago Fed&rsquo;s Charles Evans, who has also recently cautioned on hikes.</p> <p><strong>INFLATION CONCERNS MAY EASE:</strong></p> <p>Concerns regarding the inflation outlook were noted in the minutes of the FOMC&rsquo;s October/November meeting minutes. But the recent run of data will likely provide support to the hawks. The October CPI data ticked up slightly, with the core Y/Y rate now at 1.8%, and the headline rate at 2.0%.</p> <p>November&rsquo;s inflation data will also be released on Wednesday 13 December - which the FOMC will likely have sight of during its two-day meeting &ndash; and the consensus expects the headline to tick up further, while the core rate is seen steady. The Fed will have been encouraged by the better-than-expected November PPI data, which suggests that pipeline inflation pressures may be emerging.</p> <p><strong>ECONOMIC PROJECTIONS: </strong></p> <p>The FOMC is due to update its economic projections, and there may be scope for upward revisions to the growth estimates made in September - analysts are certainly more optimistic than the Fed&rsquo;s current projections.</p> <p>The forecasts made in September did not include any of the proposed fiscal stimulus into its projections; while there remains uncertainty about the exact impact the recent tax cuts are likely to have on the US economy, some Fed policymakers have argued that there will be only limited upside potential at the very minimum.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/econ%20projections%20ran.jpg"><img height="304" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/econ%20projections%20ran_0.jpg" width="500" /></a></p> <p>However, the consensus view for PCE and core PCE is below the Fed&rsquo;s September forecasts, and meanwhile, the market and the Fed are more-or-less in-line on the rate of joblessness from 2018 onwards.</p> <p>It is worth noting that, as at the previous five Fed meetings, there will only be nine voters at the December meeting, rather than the full contingent of 12. IFR points out that, this means there will only be 16 (of a possible 19) dots on the dot plot.</p> <p>There will be speculation around the forecasts of newly instated Governor Randall Quarles. &ldquo;Although Fed Governor Quarles voted in the last meeting, this will be the first time we see his dot,&rdquo; IFR writes, &ldquo;we suppose, for now, his dots will fall next to the median projections for end-2018, end-2019 and end-2020.&rdquo;</p> <p><strong>HIKE TRAJECTORY: </strong></p> <p>Federal Funds futures are currently pricing in just over three hikes (including one at this meeting) through to the end of 2020, undershooting the Fed&rsquo;s view of another seven hikes over that horizon. Analysts at ING suggest that there will be two factors to consider on this front:</p> <p>1) Persistently low US inflation dynamics: &ldquo;such signs remain few and far between &ndash; and trackers of long-run US inflation expectations (like the 5Y5Y break-evens) are right to be pricing in structurally lower price dynamics,&rdquo; ING writes, &rdquo;it&rsquo;s a tall order for the median Fed dots to shift lower, but we may see a slight downshift in the distribution.&rdquo;</p> <p>2) The impact of fiscal stimulus on the Fed&rsquo;s outlook: &ldquo;Odds of the Trump Tax Bill being passed have increased since the Sep FOMC projections and it will be interesting to see whether officials will incorporate any fiscal stimulus into their forecasts,&rdquo; ING writes. &ldquo;We think it is too early for this, while some Fed officials have also downplayed the reflationary effects of proposed policies.&rdquo;</p> <p><strong>POST-MEETING PRESS CONFERENCE: </strong></p> <p>The post-meeting press conference with Chair Janet Yellen will be her last, and she is expected to strike a balanced tone regarding future policy, HSBC says, reiterating her view that the FOMC will tighten policy gradually (as the incoming Fed Chair Powell recently endorsed in his confirmation hearing).</p> <p><strong>WHAT BANKS DESKS ARE SAYING: </strong></p> <p><strong>ABN AMRO: </strong>We expect the FOMC to raise its target range for the Fed funds rate by 25bp to 1.25-1.5% at its meeting on Wednesday, with the policy rate (the IOER) also moving up by the same amount to 1.5%. This is widely expected by economists and is virtually fully priced in by financial markets (98.3% according to the Bloomberg probability calculator based on futures pricing). So investors will be largely focused on the Fed&rsquo;s guidance for 2018, which will be shaped by the dot plot and communication in the press conference. Our sense is that the FOMC must be torn by conflicting signals on the economy and inflation. Its confidence in a continued positive outlook for economic growth and the labour market must have strengthened in recent months. On the other hand, its confidence in its view that inflation will return to target over the medium term must have softened somewhat given continued subdued readings for wage growth, unit labour cost growth and core inflation numbers (even though the latter appear to have stabilised recently after falling for much of the year). Against these conflicting signals, we think the FOMC may continue to project 3 rate hikes in 2018. Given that financial markets are pricing in less than two hikes, this might be negative for Treasury markets in the near term (in particular the short-end), but positive for the US dollar. Our own view is that the Fed will eventually deliver less rate increases than it is signalling (two rather than three) given that underlying inflationary pressures are likely to remain subdued.</p> <p><strong>BARCLAYS: </strong>We expect a 25bp increase in the federal funds rate in December. We expect a modest upgrade to the description of labour markets following the landfall of the major hurricanes which disrupted labor markets temporarily. In the updated SEPs, we expect a modest upgrade to growth in 2017 and 2018 alongside a lower unemployment rate path along the forecast horizon. This should lead to increased confidence about the outlook for inflation and, in our view, will result in a 12.5bp firming in the average funds rate over the next two years. We no longer expect a delay in the rate hike cycle early next year and restore our outlook for three further rate increases in 2018 in March, June, and December.</p> <p><strong>BAML: </strong>The final FOMC meeting of the year will give us a sense of how FOMC officials see the economy evolving as we head into 2018. A key question is whether FOMC officials include the potential impact of tax reform. Moreover, Randy Quarles will be submitting his forecasts for this meeting, replacing Stanley Fischer&#39;s submissions. In our view, the forecasts are likely to be quite similar, but there is a risk Quarles has a more positive outlook for the longer term, buying into the argument fiscal stimulus and de-regulation could boost longer-term growth prospects. On balance we think the risk is that the dots shift slightly higher in 2019 and beyond, sending the forecast for long-run rates back to 3.0%, therefore reversing the move in September. This would send a more hawkish signal. However, we believe the risks are that Chair Yellen strikes a more cautious tone in the press conference as she expresses the need for caution as the hiking cycle progresses. She will also likely have to answer questions on the recent flattening of the curve.</p> <p><strong>CAPITAL ECONOMICS: </strong>A 25bp rate hike at next week&rsquo;s FOMC meeting is all-but guaranteed. Of more interest will be whether the increased prospect of a near-term fiscal stimulus prompts officials to revise up their projections for GDP growth, inflation and interest rates. Regardless, we still expect a rebound in inflation to convince the Fed to raise rates an above consensus four times in 2018.</p> <p><strong>GOLDMAN SACHS</strong>: FOMC to hike by 25bps as widely expected (95%+ priced). The pressing question is how much tax reform makes its way into the FOMC forecasts; we think for now more into the &ldquo;balance of risks&rdquo; around the forecasts than the forecasts themselves. Otherwise more of the same: strong labor market, solid activity data, easing financial conditions and somewhat sluggish inflation. We expect lower Unemployment Rate forecasts (including Nairu) and slightly higher real GDP forecasts with upside risks. We expect an unchanged three hike median for 2018 but see hawkish risks to September&rsquo;s 2.25 median pace of hikes for 2019. We don&rsquo;t expect explicit mention of tax reform progress in the policy statement but near-term upside risks to be acknowledged by finally moving from &ldquo;roughly balanced&rdquo; to &ldquo;balanced&rdquo;. Without material surprises, Wednesday morning&rsquo;s CPI might matter more than the FOMC release. A stronger print might also lead to an upgrade of the inflation language in the policy statement. Our baseline below is likely slightly dovish to market expectations but as flagged we see risks almost entirely to the hawkish side.</p> <p><strong>HSBC: </strong>We expect the FOMC to raise the federal funds rate by 25bp, lifting the target range to 1.25%- 1.50% from 1.00- 1.25%. This would be the third hike this year and the fifth increase since the FOMC first began to raise policy interest rates at the end of 2015. Minneapolis Fed President Neel Kashkari is likely to dissent in favour of leaving rates unchanged, as he did in March and June. It is possible that Chicago Fed President Charles Evans could also vote against the rate hike; this would be his first dissent this year. We do not expect any major surprises from the policy statement. The statement will probably repeat that economic activity has been rising at a solid rate, while dropping earlier references to hurricane-related disruptions. The FOMC will likely repeat that near-term risks appear roughly balanced and that inflation developments will be monitored closely. Finally, the statement will likely reiterate the guidance that the Committee anticipates gradual increases in the federal funds rate. We expect the FOMC&#39;s median projection for GDP growth to be lifted slightly for the next several years. The projection for 2017 could be increased to 2.5%, up from 2.4% in September. The 2018 projection could be raised to 2.3% from 2.1%, and the 2019 projection could be raised to 2.1% from 2.0%. We expect the FOMC&#39;s median projection for unemployment at the end of 2018 to be lowered slightly to 4.0% from 4.1%. The FOMC&#39;s median estimates for core PCE inflation in 2018 and 2019 could be left unchanged, at 1.9% and 2.0%, respectively. We expect the FOMC&#39;s median projection for policy rates at the end of 2018 to remain at 2.1%, implying three 25bp rate hikes over the course of next year. Some of the policymakers may shift their rate projections for 2019 and 2020, but on balance we expect the median projections for those years will stay at 2.7% and 2.9%, respectively. This will be Ms Yellen&#39;s final post-meeting press conference as Fed Chair. She is likely to strike a balanced tone with respect to the future course of policy, continuing to endorse the FOMC&#39;s message that gradual rate hikes are likely to be warranted in the coming year. The Chair may be asked about the potential macroeconomic effects of the tax reform efforts currently under consideration in Congress.</p> <p><strong>LLOYDS: </strong>We expect the US Federal Reserve to raise interest rates by 0.25% at its December policy meeting As markets already attach a very high probability to a hike there should be little reaction to the announcement Also of interest will be what the Fed signals of its policy intentions for next year We forecast that the &lsquo;dot plot&rsquo; will continue to show that the majority expect to increase rates three times in 2018 The gap between market pricing and the Fed&rsquo;s interest rate forecasts has shrunk sharply in recent weeks Nevertheless there remains room for markets to be surprised by the extent of the Fed&rsquo;s actions</p> <p><strong>MORGAN STANLEY: </strong>We expect the Fed to hike its target range by 25bp at its December meeting with little change in its economic or rate projections. We expect the Fed to remain on a gradual path through September 2018, then pause in December. Our strategists suggest a neutral stance on the yield curve into year-end.</p> <p><strong>OXFORD ECONOMICS: </strong>We expect the FOMC to take another step in the slow climb back to normalizing monetary policy with a hike in the fed funds rate target range of 25 basis points to 1.25% - 1.50%. The majority of FOMC participants will continue to forecast that inflation will reach its 2% target in the medium-term. The recent uptick in core inflation readings, albeit modest, provides support to their forecasts. it looks very likely that the $1.5 trillion fiscal stimulus bill will soon be passed into law. Since most Fed officials had not factored fiscal stimulus into their forecasts. Doing so would support further rate hikes next year with monetary policy still deemed accommodative. There is the possibility that higher economic and inflation growth estimates will boost the interest rate dot plot estimates for 2018 and 2019.</p> <p><strong>RABOBANK: </strong>Although puzzled by this year&rsquo;s decline in inflation when unemployment has dropped below its own estimate of the NAIRU, the FOMC seems determined to deliver its third rate hike of the year on December 13. However, by trying to squeeze in a third hike before the end of the year they may also reduce the probability of delivering three hikes next year.</p> <p><strong>RBC: </strong>The FOMC meeting is the highlight of the week but it is likely to come and go with very little fanfare. An increase in rates is baked in the cake with the market pricing in 98% odds of a 25bps hike, according to Bloomberg. Likewise, Chair Yellen&rsquo;s press conference should prove to be a non-event. She just testified before the Joint Economic Committee (Nov 29th) and thus her most recent views are out there and well-known. She is also leaving once Powell is confirmed (really a formality now as his nomination cleared the Senate Banking Committee with a bipartisan 22-1 vote) so expect the news conference to look more like a deferential send-off than a grilling. The bigger question is whether the Fed will significantly alter their economic and rates projections. We think not and believe it is more likely the committee will seek flexibility on this front and wait until March to make significant upgrades. For starters, the Fed will want to wait until they can model the impact&nbsp;&nbsp; of the looming tax plan. Even if it is signed into law by the time the committee meets, there will not be enough time to do a proper vetting of what the plan means for economic growth/inflation/rates. Moreover, by waiting until March to release new estimates, the Fed can still maintain flexibility to raise rates 4 times next year or not. Contingent on tax policy being signed into law, we think members will be out in force on the speaking circuit promoting their upgraded views on the economic backdrop, thus moving the probability of a March hike up sharply through early 1Q (it&rsquo;s around 60% at present). Then they couple a hike in March with a boost in growth/inflation and their dots profile (moving to 4 hikes in 2018).</p> <p><strong>UBS: </strong>The 25bp FOMC rate hike that we&#39;ve long forecast is now almost fully priced into markets&mdash;and therefore unremarkable. More interesting will be how the FOMC incorporates tax reform into their projections. Most FOMC members had not built tax reform into their September projections, and progress has been much more rapid than they (or we) expected. With the FOMC putting the tax cuts into their baseline forecasts, the Summary of Economic Projections is likely to show faster growth, a lower unemployment rate, and a faster pace of rate hikes, but no revision to inflation. They&#39;ll also likely build in an additional rate hike in 2018 and 2019, with the fed funds rate above its long-run neutral level by the end of 2019.For our part, we have said that the single largest upside risk to our baseline forecast is that the Congress passes a large tax cut, which now looks much more likely. The details and timing of the tax cuts matter and are still being negotiated. Without any specifics, we have estimated that a tax cut on the order of what is being debated could result in a boost to real GDP growth on the order of &frac14; to &frac12; percent per year in 2018-19.</p> <p><strong>WESTPAC: </strong>A rate hike at this meeting is the expectation of all in the market, having been well telegraphed by the FOMC since the decision to begin balance sheet normalisation back in September. Justification for the decision can be found in continued above trend GDP growth, led by the consumer, as well as a labour market that has well and truly achieved full employment. Wages growth continues to lag, but the FOMC remain expectant. Confidence and financial conditions are also very supportive for the economy, hence the downside risks of a rate hike are negligible. &ndash; Inflation on a PCE basis is expected to firm slowly to target over the coming two to three years. If this occurs and we see two additional hikes in 2018, then the Fed Funds rate will remain neutral to the economy, sustaining growth.</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="1024" height="576" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/yellen%20teaser%205_5.jpg?1513187512" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-13/full-preview-janet-yellens-last-ever-rate-hike#comments Barclays Business Chicago Fed Congress CPI Economy fed Federal funds rate Federal Open Market Committee Federal Reserve Federal Reserve System goldman sachs Goldman Sachs Inflation James B. Bullard Janet Yellen Janet Yellen Joint Economic Committee Joint Economic Committee Lloyds Macroeconomics Minneapolis Fed Monetary Policy Money Morgan Stanley Neel Kashkari Nomination RANSquawk Senate Banking Committee Unemployment Yield Curve Wed, 13 Dec 2017 17:53:30 +0000 Tyler Durden 609084 at http://www.zerohedge.com Overstock.com CEO Exploring Sale To Fund Blockchain-Backed Global Property Venture http://www.zerohedge.com/news/2017-12-13/overstockcom-ceo-exploring-sale-fund-blcokchain-backed-global-property-venture <p>It&rsquo;s fairly easy to categorize Patrick Byrne, the founder of Overstock.com, as a visionary, although he is usually described in less glowing terms in the mainstream media, a typical adjective being &ldquo;controversial&rdquo;. Byrne founded the $1.4 billion internet retailer of mainly &ldquo;closeout&rdquo; merchandise in 1997. In January 2014, Overstock became the first major online retailer to accept Bitcoin in payment for goods. Byrne explained how he became an advocate of cryptocurrencies in an <a href="http://www.zerohedge.com/news/2017-07-31/patrick-byrne-why-cryptocurrencies-matter">interview</a> with Adam Taggart of PeakProsperity.com.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>In the 1980s, I was a graduate student at Stanford in philosophy, but with a heavy quantitative and logic approach. I studied the mathematics that underlies cryptography. It&rsquo;s called computation theory. It was a fascinating field, probably the only religious experience I&rsquo;ve ever had in my life. I felt like I was seeing the face of God -- I loved it. So, in about 2012, I was reading Fast Company or Wired, and I saw this blurb about this new form of money that no government was behind, based on cryptography. And, I realized, Gee, this is like an application of that math I&rsquo;d studied 30 years earlier. Someday I want Overstock.com to be one of the first companies to take it.</p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/byrne1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/byrne1_0.jpg" style="width: 500px; height: 281px;" /></a></p> <p>In 2017, Overstock&rsquo;s share price has more than doubled due to its blockchain investments rather than its online retailing activities, which have seen it categorised as a cryptocurrency &ldquo;play&rdquo;. Blockchain investments are contained in its Medici Ventures business and include a digital currency trading platform tZero. As the <a href="https://www.ft.com/content/d4a6d698-dfa6-11e7-8f9f-de1c2175f5ce">Financial Times</a> notes.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Medici&rsquo;s most closely watched bet is tZERO, a regulation compliant exchange geared towards initial coin offerings, which has been touted as Wall St meets blockchain. It will launch its own much-hyped initial coin offering to raise funds next week.</p> </blockquote> <p>On Monday, Overstock&rsquo;s share price surged 23% after Morgan Stanley Investment Management disclosed an 11.4% stake in the company.&nbsp;</p> <p>In an interview published in the Financial Times today, Byrne discussed how he&rsquo;s planning on selling the online retailing business to develop a global blockchain business focused on the property sector. According to the FT.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Patrick Byrne, the controversial entrepreneur who runs Overstock.com, is exploring options to sell the online retailer, whose stock has soared amid this year&rsquo;s cryptocurrency mania, to fund an ambitious attempt to make a global property registry on blockchain. Hernando de Soto, a well-known Peruvian economist who argues that formalising land rights is key to alleviating poverty, has joined forces with Mr Byrne in the latest attempt to leverage the distributed ledger technology to tackle social problems. Mr de Soto and Mr Byrne, a long-term cryptocurrency and blockchain enthusiast who waged a campaign against short selling, have formed a non-profit venture called De Soto, Inc. that intends to gather local informal ownership records into a blockchain database. A pilot is expected early 2018.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;One of the possibilities is I sell the (Overstock) business and we have all the capital we need&rdquo; to fund the new venture, Mr Byrne told the Financial Times on Tuesday, adding that he would cherry-pick a dozen of Overstock&rsquo;s top talent to take over to De Soto by late January. &ldquo;I feel a great moral obligation to refocus my life around this,&rdquo; he added.</p> </blockquote> <p>You could be forgiven for getting confused between Hernando de Soto the Spanish conquistador who led the first European expedition deep into the modern United States (he was the first European to cross the Mississippi) and Hernando de Soto Polar, the economist and President of the Institute for Liberty and Democracy (ILD) in Lima. The ILD is credited with more than 400 initiatives, laws and regulations which have changed the Peruvian economy. On de Soto Polar, <a href="https://en.wikipedia.org/wiki/Hernando_de_Soto_Polar">Wikipedia</a> notes.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The main message of de Soto&#39;s work and writings is that no nation can have a strong market economy without adequate participation in an information framework that records ownership of property and other economic information. Unreported, unrecorded economic activity results in many small entrepreneurs who lack legal ownership of their property, making it difficult for them to obtain credit, sell the business, or expand. They cannot seek legal remedies to business conflicts in court, since they do not have legal ownership. Lack of information on income prevents governments from collecting taxes and acting for the public welfare.</p> </blockquote> <p>In its special May 1999 issue, Time Magazine named de Soto as one of the &ldquo;five leading innovators of the century&rdquo; while Forbes&rsquo; 85th anniversary edition named him as one of the fifteen innovators &ldquo;who will reinvent your future&rdquo;.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/byrne.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/byrne_0.png" style="width: 500px; height: 218px;" /></a></p> <p>In May 2015, de Soto attended the 1st Annual Block Chain Summit hosted by British billionaire, Richard Branson, at this private Caribbean residence, Necker Island. De Soto was one of three moderators along with a former WSJ columnist and an editor of The Economist.</p> <p>Byrne, who owns 40% of Overstock&rsquo;s equity with other family members, has committed himself for five years to set up the blockchain property registry. The FT reviews the three options for selling Overstock which Byrne is mulling.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>One option is selling Overstock&rsquo;s retail business to a bricks and mortar company seeking a strong online presence, to avoid disruption by Amazon. &ldquo;Really, since this summer there&rsquo;s a mass freak-out in corporate America,&rdquo; Mr Byrne observed.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The second is for the entire company to be bought by or take a large investment from a multibillion-dollar investment fund that does not &ldquo;want to cede the earth to Amazon&rdquo;. Mr Byrne claimed that one such fund had approached the company two months ago. He would not name the fund, but hinted that interest from Asia was especially strong.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The third option is to be bought out by a large private equity firm, which would allow Mr Byrne to step away from Overstock to pursue the De Soto project. Mr de Soto, a recipient of the $500,000 Milton Friedman Prize from the Cato Institute, a conservative think-tank, was linked to a land registry blockchain project with the Republic of Georgia in April 2016. But he says that after the inauguration ceremony, he was not consulted further.</p> </blockquote> <p>The combination of Byrne and de Soto could be powerful force for good, exploiting blockchain technology in a positive way for free market capitalism. However, they will no doubt have to contend with central planners and central bankers who will attempt to hijack the technology for collectivist purposes. This was Ronald Reagan&rsquo;s view on de Soto&rsquo;s work.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;De Soto and his colleagues have examined the only ladder for upward mobility. The free market is the other path to development and the one true path. It is the people&#39;s path&hellip; it leads somewhere. It works.&rdquo;</p> </blockquote> <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="1920" height="1080" alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/byrne1.jpg?1513163628" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-13/overstockcom-ceo-exploring-sale-fund-blcokchain-backed-global-property-venture#comments Alternative currencies Bitcoin Bitcoin Blockchains Business Caribbean Cato Institute CATO Institute Corporate America Cryptocurrencies cryptography Decentralization distributed ledger technology Economy Finance Hernando de Soto Polar Institute for Liberty and Democracy Institute for Liberty and Democracy Milton Friedman Money Morgan Stanley Overstock.com Private Equity Stanford The Economist The Other Path: The Economic Answer to Terrorism Time Magazine Wed, 13 Dec 2017 17:25:20 +0000 Tyler Durden 609046 at http://www.zerohedge.com The Fed is Arranging Deck Chairs on the Titanic (the Iceberg Comes in 2018). http://www.zerohedge.com/news/2017-12-13/fed-arranging-deck-chairs-titanic-iceberg-comes-2018 <p>The Fed concludes its final FOMC meeting of the year today.</p> <p>The entire financial world expects the Fed to raise rates a final time. This will mark the fifth rate hike since December 2015, and the fourth of the last 12 months.</p> <p>Throughout this time period, the Fed has routinely stated that it is confused as to why inflation is &ldquo;too low.&rdquo;</p> <p>Inflation is not too low. The method the Fed uses to measure inflation is intentionally incorrect. As a result, the official inflation numbers reflect whatever the Fed wants, as opposed to reality.</p> <p>Alan Greenspan devised this entire gimmick back in the 1990s. At that point, the amount of debt in the US financial had already become a systemic issue.</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user20289/imageroot/2017/11/30/GPC121317.jpg" style="width: 460px; height: 287px;" /></p> <p>So Greenspan opted to &ldquo;paper over&rdquo; this fact via inflation&hellip; hoping that by aggressively devaluing the US Dollar he could keep this game going.</p> <p>The only problem as far as the Fed was concerned was that the inflation numbers would reveal the Fed&rsquo;s strategy. So Greenspan started tinkering with how the Fed measured inflation, removing various components (food and energy) and tweaking things so the Fed would no longer measure the cost of maintaining the same quality of life.</p> <p>Greenspan hoped understating inflation publicly he would give him the cover he needed to pursue an aggressive devaluation of the US Dollar. The flip side of this was that the Fed would begin intentionally creating asset bubbles by maintaining loose monetary policy ad infinitum.</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user20289/imageroot/2017/11/30/GPC1213172.png" style="width: 460px; height: 284px;" /></p> <p>The late &lsquo;90s was the Tech Bubble.</p> <p>When that burst in the mid-&lsquo;00s, the Fed created a bubble in housing.</p> <p>When that burst in &rsquo;08 the Fed created a bubble in US sovereign bonds or Treasuries.</p> <p>And because these bonds are the bedrock of the US financial system, the &ldquo;risk-free rate&rdquo; of return against which ALL risk assets are valued, when the Fed did this it created a bubble in EVERYTHING.</p> <p>That bubble is now beginning to burst. And ironically it is inflation (which the Fed claims is too low) that will do it.</p> <p>It will take time for this to unfold, but as I recently told clients, we&#39;re currently in &quot;late 2007&quot; for the coming crisis.</p> <p>The time to prepare for this is NOW before the carnage hits.</p> <p>On that note, we are putting together an Executive Summary outlining all of these issues as well as what&rsquo;s to come when The Everything Bubble bursts.</p> <p>It will be available exclusively to our clients. If you&rsquo;d like to have a copy delivered to your inbox when it&rsquo;s completed, you can join the wait-list here:</p> <p><a data-mce-="" href="https://phoenixcapitalmarketing.com/TEB.html"><strong>https://phoenixcapitalmarketing.com/TEB.html</strong></a></p> <p>Best Regards</p> <p>Graham Summers</p> <p>Chief Market Strategist</p> <p>Phoenix Capital Research</p> http://www.zerohedge.com/news/2017-12-13/fed-arranging-deck-chairs-titanic-iceberg-comes-2018#comments Alan Greenspan Alan Greenspan Business Economic bubble Economy fed Federal Open Market Committee Federal Reserve System Financial crises Freemen of the City of London Greenspan put Inflation James B. Bullard Macroeconomics Monetary Policy Monetary policy Reality US Federal Reserve Wed, 13 Dec 2017 17:22:06 +0000 Phoenix Capital Research 609080 at http://www.zerohedge.com House, Senate Republicans Reach Tax Deal: Here Are The Initial Details http://www.zerohedge.com/news/2017-12-13/house-senate-republicans-reach-tax-package-deal-stocks-pump-then-dump <p>One day after we reported that "<a href="http://www.zerohedge.com/news/2017-12-12/republicans-reach-tentative-tax-agreement-raise-corporate-tax-21-cut-individual-tax-">Congressional Republicans reached a tentative tax agreement</a>", the news of which sparked another risk surge into the close of trading, moments ago we got the second tax deal in 24 hours - if only for algo consumption - when the AP reported that House and Senate GOP leaders have reached a "tentative deal" on tax overhaul "in principle." </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/trump%20tax%20teaser%202.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/trump%20tax%20teaser%202_0.jpg" width="500" height="281" /></a></p> <p>The AP quoted a "person familiar with the conversations who asked not to be named because the discussions are private" and who is certainly long stocks, as the replica headline was enough to send the S&amp;P to new all time highs.&nbsp; </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The agreement "in principle" paves the way for final votes next week to slash taxes for businesses and give most people tax cuts starting next year. Top GOP aides say the deal was reached on Wednesday. They spoke on condition of anonymity because they were not authorized to speak publicly about the deal. Details still need to be drafted and assessed by congressional scorekeepers but the final House-Senate compromise is on track to be unveiled this week.&nbsp; </p> </blockquote> <p>The details, virtually <a href="http://www.zerohedge.com/news/2017-12-12/republicans-reach-tentative-tax-agreement-raise-corporate-tax-21-cut-individual-tax-">identical to what we reported yesterday</a>: <strong>the top individual tax rate would be lowered to 37% as and set the corporate tax rate at 21%, slightly higher than the 20% initially favored by President Trump</strong>. The mortgage interest deduction would be capped at $750,000, a mid-point compromise between the Senate and House bills. </p> <p><strong>The deduction for pass-through companies will be set at 20 percent, somewhat lower than the 23 percent included in the Senate-passed bill. That will be offset by lowering the top individual income rate to 37%. It is now 39.6%. </strong></p> <p>* * * </p> <p>Still, lawmakers will need to get a cost analysis of their agreement, so it’s not yet definite, "the person" said, who clearly gets around and was this time quoted by Bloomberg.</p> <p>And since lawmakers still need to get a cost analysis of their agreement, not only is today's "tentative deal" not yet definite, but it will almost surely be unwound when someone actually brings a calculator into the room.</p> <p>Curiously, after jumping higher, stocks have since faded the kneejerk reaction higher, perhaps realizing that the more fiscal stimulus that is injected, the more tightening the Fed will have to unleash in the coming months as inflation become red hot. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/2017-12-13%20%282%29.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/2017-12-13%20%282%29_0.jpg" width="500" height="327" /></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="640" height="360" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trump%20tax%20teaser%202.jpg?1513185456" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-13/house-senate-republicans-reach-tax-package-deal-stocks-pump-then-dump#comments 112th United States Congress Amazon tax Business Congress Politics Presidency of Barack Obama Rates Republican Party S&P Senate Tax Tax Cuts and Jobs Act Tax incidence US Federal Reserve Wed, 13 Dec 2017 17:06:56 +0000 Tyler Durden 609079 at http://www.zerohedge.com How GDP Became A Joke, In One Chart http://www.zerohedge.com/news/2017-12-13/how-gdp-became-joke-one-chart <p>For all the rhetoric about above-trend US growth, <a href="http://www.zerohedge.com/news/2017-11-13/ubs-makes-striking-discovery-ex-energy-us-gdp-growth-slowest-2010">one month ago UBS shattered the narrative of surging GDP </a>by showing just one chart, which revealed that excluding contributions from energy investment, which are about to hit a brick wall now that the price of oil has peaked and is reverting lower once again, US growth for the past 2 years has been slowing.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/07/UBS%20summary%201.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/07/UBS%20summary%201.png" width="525" height="399" /></a></p> <p>On the other hand, things get even more complicated thank to a chart released yesterday by UBS' global chief economist Paul Donovan who makes a point we have repeatedly underscored over the past decade, namely that economic data is largely worthless, and any instant snapshot reveals more about the political and "goalseeking" climate of the agency releasing the "data" than about the underlying economy itself. </p> <p>As Donovan shows, here are the <em><strong>no less than 6 answers </strong></em>one gets to the question of "<strong>how fast was the US growing at the start of 2015?</strong>."</p> <p>By way of context, recall that this was the quarter when the US was blanketed by deep snow, and when every "expert" was rushing to convince those who bothered to listen that the economy would suffer a sharp slowdown as a result of the weather and nothing but the weather (and yes, that included UBS). And when the number was first reported, that was indeed the case: <strong>with Q1 2015 GDP reportedly growing only 0.2%. The problem is that within just over a year, that 0.2% initial GDP print turned to -0.7%, before subsequently surging to 2% and ultimately 3.2%!</strong> </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/UBS%20GDP%20Q1%202015.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/UBS%20GDP%20Q1%202015_0.jpg" width="500" height="408" /></a></p> <p>Here is the sarcastic take of UBS' own chief economist on this GDP travesty, which is even more sarcastic&nbsp; - and ironic - considering <em><strong>his </strong></em>entire job is to predict the exact number associated with said travesty:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Economic data is not very precise. Economists are trying to hit a target that is moving rapidly. Economic data is being revised more often, and the revisions are larger than in the past. The following chart shows annualized US GDP growth in the first quarter of 2015. </p> <p>&nbsp;</p> <p>Growth was initially reported very weak, below consensus and barely moving. Then the data was revised to show the US economy was shrinking – and shrinking a lot (the number was –0.7% annualized). Then it was revised to show the economy was shrinking a bit. Then it was revised to show the economy was growing, but a long way below trend growth. </p> <p>&nbsp;</p> <p>The growth number was then revised to be basically in line with trend growth. Now, US growth at the start of 2015 is thought to be 3.2%. </p> <p>&nbsp;</p> <p><strong>So which number in the range of –0.7% to 3.2% is the economist supposed to be forecasting? An economist predicting 3.2% growth when the data was first released would have been ridiculed. According to the latest information we have, that economist would have been right.</strong></p> </blockquote> <p>In other words, that terrible weather which at the time was used to justify why the economy ground to a halt - when in reality it was all a function of China's credit impulse crashing - would eventually serve as a the catalyst to grow the economy at a pace that has been recorded on just a handful of occasions in the past decade.</p> <p>No wonder then economists - especially those who work at the Fed but all of them really - their predictions and their analyses have become the butt of all jokes; and by implication, no wonder traders and algos no longer respond to economic "data."</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="725" height="444" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/ubs%20gdp%20teaser.jpg?1513183189" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-13/how-gdp-became-joke-one-chart#comments Business Economic growth Economy Economy of the United States Finance Financial services Gross domestic product Reality The Economist UBS US Federal Reserve Wed, 13 Dec 2017 16:51:04 +0000 Tyler Durden 609078 at http://www.zerohedge.com Bill O'Reilly: Secret Tape Exists Of Woman Offered $200K To File Sexual Harassment Charges Against Trump (AUDIO) http://www.zerohedge.com/news/2017-12-13/bill-oreilly-secret-tape-exists-woman-offered-200k-file-sexual-harassment-charges-ag <p><em style="box-sizing: border-box; border-color: currentcolor; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit; color: #333333;"><span style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 13px; line-height: inherit; font-family: lucida_granderegular, Verdana, sans-serif; color: #000000;">Content originally published at&nbsp;</span><span style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit; color: #1e439a; text-decoration-line: underline;"><a href="http://ibankcoin.com/" target="_blank" style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 13px; line-height: 1.2; font-family: lucida_granderegular, Verdana, sans-serif; word-wrap: break-word; color: #1e439a;">iBankCoin.com</a></span></em></p> <p>Hours after several of Donald Trump's accusers <a href="http://www.zerohedge.com/news/2017-12-11/theyre-baaaaack-trump-accusers-call-congressional-investigation" target="_blank">assembled</a>&nbsp;for a Monday press conference to call on congress to launch an investigation into allegations of sexual misconduct lodged against the President, Bill O'Reilly appeared on Glenn Beck's radio show to discuss what he claims is <strong>the existence of&nbsp;a tape showing a woman being offered $200,000 to accuse Donald Trump of 'untoward behavior.'&nbsp;</strong></p> <p><strong><img src="http://www.zerohedge.com/sites/default/files/images/user237925/imageroot/2017/12/10/BOR.jpg" width="500" height="281" /><br /></strong></p> <p>O'Reilly told Beck that his lawyer listened to the tape and that there are at least <strong>three crimes </strong>contained on it:&nbsp;</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>O'Reilly:<strong>&nbsp;There is a tape, Beck, an audio tape of an anti-Trump person offering $200,000 to a woman to accuse Donald Trump of untoward behavior.&nbsp;</strong></p> <p>&nbsp;</p> <p>Beck: Is this tape going to be released?&nbsp;</p> <p>&nbsp;</p> <p>O'Reilly: I may have to go to the US Attorney myself. I don't wanna have to do that and inject myself into the story, but <strong>I had my lawyer listen to the tape. He's listened to it. There are at least three crimes on the tape. </strong>So as a citizen, I may have to do this.&nbsp;</p> <p>&nbsp;</p> <p>Beck: I will tell you Bill, the first thing that you say - well I'm trying to get it, I'm trying to get it so it can be released. You weren't talking about getting it for YOU to release it, but it had to be out there. And I think the first time I said to you, I mean, if they don't - you've gotta bring it to the US Attorney.</p> <p>&nbsp;</p> <p>O'Reilly: Again, it's in the hands of someone who knows the seriousness of the situation.&nbsp;</p> <p>&nbsp;</p> <p>Beck: What is their hesitancy?</p> <p>&nbsp;</p> <p><strong>O'Reilly</strong>:&nbsp;You know, I can't really get into that at this point. <strong>But I can tell you that Donald Trump knows about the tape</strong>. And I'm, for the life of me, sitting here going "Why on earth are you allowing a movement to try to smear you when you have a powerful - <strong>and I mean it's powerful</strong>&nbsp;- piece of evidence that shows that this is an industry. That there are false charges and money changing hands." It's so frustrating but I wanted your listeners to know it, it's there, it's amazing, and <strong>it will change the whole discussion if it ever gets out</strong>.&nbsp;</p> </blockquote> <p><strong>Watch below:&nbsp;</strong></p> <p><iframe src="https://www.youtube.com/embed/1tLStFrZqLg" width="560" height="315" frameborder="0"></iframe></p> <p>O'Reilly first divulged the existence of the tape six weeks ago in a largely unnoticed interview with <em><a href="https://www.newsmax.com/Newsfront/bill-oreilly-allegations-tape-trump/2017/10/24/id/821821/" target="_blank">Newsmax</a><strong>:&nbsp;</strong></em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>O'Reilly told Newsmax on Monday that investigators working for him had uncovered an audio recording of "an anti-Trump attorney" offering an unidentified woman $200,000 to file sexual harassment charges against then-presidential candidate Donald J. Trump.</p> <p>&nbsp;</p> <p><strong>"It exists</strong>," O'Reilly said. "<strong>We have urged the person who has the tape to hand it over to the U.S. attorney, because my investigative team believes there are three separate crimes on the audio tape.</strong>"</p> <p>&nbsp;</p> <p>O'Reilly tells Newsmax his attorneys have listened to the tape. O'Reilly stated he is not in possession of the recording, but the conversation is believed to have taken place before last year's presidential election.</p> <p>&nbsp;</p> <p><strong>"It's related to my situation</strong>," O'Reilly insists, "<strong>and when the tape emerges, you will see why. I can't say any more than that, but it is related to my situation.</strong>"</p> </blockquote> <p>With the 'Russiagate' witch hunt fizzling out amid revelations that Special Counsel Robert Mueller's probe is stacked with several anti-Trump team investigators, O'Reilly warns that there's going to be a huge push to rehash sexual misconduct allegations against the President. While several of these claims have been <a href="http://www.thegatewaypundit.com/2016/10/list-debunked-groper-allegations-corrupt-media-donald-trump/" target="_blank">debunked</a>&nbsp;or refuted, and Trump even <a href="http://www.zerohedge.com/news/2016-10-13/trump-threatens-sue-nyt-story-he-groped-and-kissed-women" target="_blank">threatening to sue</a> the NYT at one point, it will come as a surprise to exactly nobody if and when 'Russiagate' shifts into 'Gropegate' in 2018.</p> <p style="text-align: center;"><span style="box-sizing: border-box; border-color: currentcolor; font-variant-numeric: inherit; font-stretch: inherit; font-size: 13px; line-height: inherit; font-family: lucida_granderegular, Verdana, sans-serif; text-align: center; color: #333333;">Follow on Twitter&nbsp;</span><strong style="box-sizing: border-box; border-color: currentcolor; font-variant-numeric: inherit; font-stretch: inherit; font-size: 13px; line-height: inherit; font-family: lucida_granderegular, Verdana, sans-serif; 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text-align: center;"><span style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit; text-decoration-line: underline;"><span style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit; color: #0066cc;"><span style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit;">You<strong style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit;">Tube channel</strong></span></span></span></a></p> http://www.zerohedge.com/news/2017-12-13/bill-oreilly-secret-tape-exists-woman-offered-200k-file-sexual-harassment-charges-ag#comments American people of German descent Bill O'Reilly Conservatism in the United States Donald Trump Donald Trump Glenn Beck Law Mass media Political views of Bill O'Reilly Politics of the United States Twitter Twitter United States Wed, 13 Dec 2017 16:36:34 +0000 ZeroPointNow 609077 at http://www.zerohedge.com Cyberattacks: The Biggest Threat To OPEC http://www.zerohedge.com/news/2017-12-13/cyberattacks-biggest-threat-opec <p><a href="https://oilprice.com/Energy/Energy-General/Cyberattacks-The-Biggest-Threat-To-OPEC.html"><em>Authored by Irina Slav via OilPrice.com,</em></a></p> <p>Oil and cybersecurity in one sentence certainly makes for a thrilling read, and there will be an increasing amount of information on the topic <strong>as the Internet of Things expands and the global oil industry adopts automation and digital technology.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/12/20171213_oil.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/12/20171213_oil.jpg" style="width: 599px; height: 260px;" /></a></p> <p><strong>OPEC is no exception in this digitalization drive,</strong> but unlike its non-OPEC counterparts, the cartel has emerged as <strong>much more vulnerable to cybersecurity threats.</strong></p> <p>An analysis of <a href="http://www.itu.int/en/ITU-D/Cybersecurity/Pages/GCI-2017.aspx">data</a> collected from 134 countries by the International Telecommunication Union has revealed that <u><strong>some of the world&rsquo;s biggest oil producers, including Iraq, Saudi Arabia, Venezuela, Iran, and the UAE, are <a href="http://energyfuse.org/wp-content/uploads/2017/12/cyberreadiness-1.png">lacking</a> in the cybersecurity department. </strong></u>This means that, compared to European producers and the United States, OPEC members are pretty much unprepared for a major cyberthreat.</p> <p><u><em><strong>What is the likelihood of such a threat actually materializing?</strong></em></u> Well, the general opinion in cybersecurity circles is that everything that can be hacked will be hacked at some point. Saudi Arabia&rsquo;s oil and gas industry, for example, has been a favorite target for <a href="http://www.arabianbusiness.com/160-000-cyberattacks-day-in-saudi-arabia-630120.html">numerous attacks</a> over the last few years, including the Shamoon virus, which in 2012 wiped clean the disks of more than 30,000 computers at Aramco, and according to reports from the cybersecurity industry, <a href="https://www.reuters.com/article/us-cyber-saudi-shamoon/shamoon-virus-returns-in-new-gulf-cyber-attacks-after-four-year-hiatus-idUSKBN13Q38B">reared its ugly head again</a> in 2016.</p> <p><strong>Overall, about half of all cyberattacks in the Middle East target the oil and gas industry, which suggests the answer to the above question is &ldquo;Pretty high,&rdquo;</strong> but the worse thing is that this likelihood is only going to get higher in the future. <span style="color: #800000;"><strong class="related"> <a href="https://oilprice.com/Energy/Oil-Prices/Brent-Spikes-As-This-Major-Pipeline-Breaks-Down.html">Related:&nbsp;Brent Spikes As This Major Pipeline Breaks Down</a></strong></span></p> <p>Middle Eastern producers are following in the footsteps of their non-OPEC counterparts in adopting digital technology and automation to improve efficiencies in the post-2014 world, where efficiency has come to the fore in oil and gas. The problem, of course, is that the more you digitalize, the more vulnerable you become to attacks through digital channels.</p> <p>A recent <a href="http://www.tradearabia.com/news/OGN_332980.html">study</a> from Siemens and Ponemon Institute found that as digital tech adoption in the Middle East oil industry rises, so does cyber risk. What&rsquo;s more, this risk is no longer limited to IT operations: the operational technology area is gaining prominence as a preferred target for cybercriminals.</p> <p>The reason, according to Siemens and Ponemon Institute, is the convergence between IT and OT in the oil and gas industry. &ldquo;Attackers have identified this convergence of IT and OT as a key opportunity to penetrate an organisation. As a result, an emerging trend of cyberattacks is designed to disrupt physical devices or processes used in operations. In a digital environment, industrial cyber is the new risk frontier,&rdquo; says Siemens&rsquo; Vice President and Global Head of Industrial Cyber, Leo Simonovich.</p> <p><strong>The cybersecurity industry is sounding an alarm and it seems those in the Middle East that can afford it are hearing it and heeding the warning to improve their cybersecurity capabilities.</strong></p> <p>The UAE has a Dubai Cyber Security Strategy. Earlier this year, Saudi Arabia launched a National Cyber Security Center, and last month <a href="https://globalriskinsights.com/2017/11/saudi-arabia-cyber-security-authority-challenges/">announced</a> the set-up of a National Authority for Cyber Security, seeking to utilize international expertise and best practices to prop up government and critical infrastructure defenses. Iraq is seriously lagging behind and Iran is seen by cybersecurity insiders as more a <a href="https://theconversation.com/following-the-developing-iranian-cyberthreat-85162">source</a> of cyberthreats than as a potential victim.</p> <p><strong>This sounds all well and good, but the trends in cybercrime point to a desperate need to do more.</strong> Cybercriminals do not sit on their hands while potential victims work to improve their defenses. While cybersecurity service providers continue to warn businesses and other organizations that they need to become more pro-active with regard to their cybersecurity measures, the hackers are coming up with new ways to undermine existing defenses. This is true for all industries, but it is especially true for oil and gas in the Middle East&mdash;national energy infrastructures are called critical for a reason, after all.</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="611" height="265" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171213_oil.jpg?1513176907" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-13/cyberattacks-biggest-threat-opec#comments Arms industry Computer network security Computer security Cyberattack Cybercrime Cyberwarfare Dubai Economy Information governance International Telecommunication Union Iran Iraq Middle East Middle East National Authority for Cyber Security National Cyber Security Center National security OPEC OPEC Organization of Petroleum-Exporting Countries Ponemon Institute Saudi Arabia Security Security engineering Siemens and Ponemon Institute Technology Wed, 13 Dec 2017 16:28:48 +0000 Tyler Durden 609067 at http://www.zerohedge.com America's Wage Hope Hammered - Real Earnings Suffer Longest Slump Since 2009 http://www.zerohedge.com/news/2017-12-13/americas-wage-hope-hammered-real-earnings-suffer-longest-slump-2009 <p>For the first time since November 2009, <strong>real average hourly earnings tumbled for the 4th month in a row.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/12/20171213_low1.jpg"><img height="315" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/12/20171213_low1_0.jpg" width="600" /></a></p> <p>Despite all the hype, all the hope, and all the Phillips-curve-ian academic discussion...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/12/20171213_low11.jpg"><img height="315" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/12/20171213_low11_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p><strong>Real wage growth just is not there</strong>...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/12/20171213_low.jpg"><img height="313" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/12/20171213_low_0.jpg" width="600" /></a></p> <p>Still it must happen soon, right?</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="965" height="506" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171213_low1.jpg?1513176643" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-13/americas-wage-hope-hammered-real-earnings-suffer-longest-slump-2009#comments Income in the United States Real wages Wage Wages and salaries Wed, 13 Dec 2017 16:06:50 +0000 Tyler Durden 609066 at http://www.zerohedge.com