en Hillary Clinton: Class President Of A Failed Generation <p><a href=""><em>Excerpted from David Stockman&#39;s forthcoming book &quot;Trumped! A Nation On The Brink Of Ruin... And How To Bring It Back&quot;,</em></a></p> <p>Hillary Clinton has always been at the head of her class. <strong>That includes being among the leading edge of the 80-million strong baby boom generation that first started arriving in 1946-1947.</strong></p> <p>She did everything they did: Got out for Barry Goldwater in high school; got upwardly mobile to Wellesley and social liberation during college; got &ldquo;Clean for Gene&rdquo; and manned the anti-war barricades in the late 1960s; got to Washington to uplift the world in the 1970s; got down to the pursuit of power and position in the 1980s; joined the ruling class in the 1990&rsquo;s; and has helped make a stupendous mess of things ever since.</p> <p><strong>The baby boom generation which started with so much promise when it came of age in the 1960s has ended up a colossal failure.</strong> It has turned America into a bloody imperial hegemon aboard and a bankrupt Spy State at home where financialization and the 1% thrive, half the population lives off the state and real main street prosperity has virtually disappeared from the land.</p> <p><strong>Quite a deplorable legacy, that. And all the while Hillary has been our class president. </strong>God help the world if she becomes our nation&rsquo;s President. She has betrayed all that was right about the baby boomers in the 1960s; and has embraced all the wrong they did during their subsequent years in power.</p> <p><strong>It starts during our defining moment when peace finally had a chance in the spring of 1968. We drove a sitting President from office, and, at that, one whose megalomaniacal will-to-power was terrifying.</strong></p> <p>We called bull on the cold war hysteria that had once put us under our desks at school and now claimed that peasants in far off rice paddies threatened our security. We stopped the Vietnam War cold, dented the Cold War deep and put the whole Warfare State apparatus on the run&mdash;&ndash;the Pentagon, CIA, the generals and admirals, the military-industrial complex. Within a few years the warfare state budget was down by 40% in constant dollars.</p> <p><strong>So it was an epochal chance to break the deadly cycle of war that had started a half-century earlier </strong>in the bloody trenches of northern France during the Great War; that had been rebooted for a future reprise in the vengeful folly of Versailles; that had been made inexorable by the rise of nationalism, statism, autarky and militarism during the 1930s; and that had been unnecessarily and dangerously extended by the clash of military machines that both victors refused to demobilize after they won the peace in 1945, supplanting the silence of the German and Japanese war guns with the nuclear nightmare of the Cold War.</p> <p>True enough, the defeat and retreat of the American Imperium by the idealism and defiance of the baby boomers was interrupted by the Reagan defense and Cold War revival. <u><strong>But that historical error is what makes the Clintons all the more culpable&hellip;..</strong></u></p> <p>It was their job as the first baby boom co-Presidents to finish the work of 1968, and by the time they entered the White House it was a lay-up. The Soviet Union was no more and Mr. Deng had just declared that to get rich is glorious.</p> <p><em><strong>The Clintons&rsquo;&nbsp;job in 1993&nbsp;was to have at least the vision of Warren G. Harding</strong></em>. After all, he did demobilize the US war machine completely, eschewed the imperial pretensions of Woodrow Wilson and actually launched a disarmament movement which resulted in the melting down of the world&rsquo;s navies and the Kellogg-Briand treaty to outlaw war.</p> <p>Yet the opportunity at the Cold War&rsquo;s end was even more compelling. There was absolutely no military threat to American security anywhere in the world. The Clintons could have drastically reduced the defense budget by mothballing much of the navy and air force and demobilizing the army.</p> <p>They should have cancelled all new weapons programs and dismantled the military-industrial complex. They could have declared &ldquo;mission accomplished&rdquo; with respect to NATO and made good on Bush&rsquo;s pledge to Gorbachev to not expand it &ldquo;by an inch&rdquo; by actually disbanding it. And, as legatees of 1968, they were positioned to lead a global disarmament movement and to end the arms export trade once and for all.</p> <p><em><strong>That was their job&mdash;-the unfinished business of peace. But they blew it in the name of political opportunism and failure to recognize that the American public was ready to end the century of war, too.</strong></em></p> <p><em><strong>And you can&rsquo;t let Hillary off the hook on the grounds that she had the health care file and Bill the bombs and planes. On becoming Senator she did not miss a stride betraying the opening for peace that had first broken-through in 1968.</strong></em></p> <p>She embraced Bush&rsquo;s &ldquo;shock and awe&rdquo; campaign in Iraq and was thereby complicit in destroying the artificial nation created by Sykes-Picot in 1916. So doing, Clinton helped unleash the furies of Islamic sectarian conflict that eventually led to the mayhem and brutality of the Shiite militias and the rise of the ISIS butchers on the backs of the dispossessed Sunni tribes and the demobilized officer corps of Saddam.</p> <p>Tellingly, Hillary Clinton made a beeline for the Senate Armed Services Committee, the domain of the Jackson war democrats, not the Foreign Affairs Committee, where Frank Church had exposed the folly of Vietnam and the treacherous deeds of the CIA. Undoubtedly, this was to burnish her commander-in-chief credentials, but it spoke volumes.</p> <p>By the time Hillary got to the seat of power, the idealism and defiance of the warfare state that had animated her and the baby boomers of 1968 had dissipated entirety. For her and most of them, it was now all and only about getting and keeping power. In that respect, Hillary&rsquo;s term at the State Department was a downright betrayal.</p> <p>Whether by accident or not, Obama had actually been elected as the &ldquo;peace candidate&rdquo; by echoing the rhetoric of 1968 that he had apparently read in a book but had been too young to actually hear. What this untutored and inexperienced idealist needed to hear from his Secretary of State was a way forward for peace and the dismantlement of a war machine that had rained havoc on the world, left behind 4 million damaged and disabled veterans who had sacrificed for no good reason and a multi-trillion dollar war tab that had bloated the national debt.</p> <p><strong><em>What he got was Hillary The Hawk</em></strong>. When Obama took Bush&rsquo;s already bloated $650 billion war budget (2005$) to a level that was almost <em><strong>2X</strong></em> the&nbsp;level Eisenhower thought adequate at the peak of the cold war and upon his parting speech warning of the military-industrial complex, Hillary was completely on board. When Obama was bamboozled into a &ldquo;surge&rdquo; of forces in the god forsaken expanse of the Hindu Kush, Hillary busied herself rounding up NATO support.</p> <p>When her neocon and R2P (responsibility to protect) advisers and Administration compatriots urged making peace by starting wars in Syria, Libya and the Ukraine, Hillary lead the charge. All of them have been disasters for their citizens and a stain on America&rsquo;s standing in the world.</p> <p><strong>When the Deep State began lining up the next enemy, Hillary joined the gumming brigade, warning about the China threat. </strong>My god, were the red capitalists of Beijing to actually bomb 4,000 Wal-Marts in America their system would collapse in six months and their heads would be hung from the rafters in the nearest empty Foxcon/Apple factory.</p> <p>Here&rsquo;s the thing. <strong>Hillary Clinton&rsquo;s sell-out to the Warfare State is not just about war and peace</strong> - even as it fosters the former and precludes the latter. It&rsquo;s also about the nation&rsquo;s busted fiscal accounts, its languishing main street economy and the runaway gambling den that has taken over Wall Street...</p> <p>After all this time, however, Hillary doesn&rsquo;t get any of this. <em><strong>She thinks war is peace; deficits don&rsquo;t matter; the baby boom is entitled to the social insurance they didn&rsquo;t earn; and that the Fed&rsquo;s serial bubble machine is leading the nation back to prosperity.</strong></em></p> <p>Actually, its leading to the greatest financial bubble in human history. After&nbsp;90 months of ZIRP and a decade of Wall Street coddling and subsidization by the Fed, the windfalls to the 1% have become unspeakable in their magnitude and illegitimacy.</p> <p>Soon 10,000 people will own a preponderant share of the wealth; 10 million people will live grandly off the droppings; 150 million will live off the state; and the rest of America will be left high and dry waiting for the house of cards to collapse.</p> <p><strong>Hillary rose to fame delivering an idealistic commencement address at Wellesley at&nbsp;the beginning of her career.</strong> But like the generation she represents, she has betrayed those grand ideals over a lifetime of compromise, expediency, self-promotion and complacent acquisition of power, wealth and fame.</p> <p>She doesn&rsquo;t deserve another stint at the podium - let alone the bully pulpit.</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="264" height="136" alt="" src="" /> </div> </div> </div> Apple China France Gambling Iraq Main Street National Debt Nationalism SPY Ukraine White House Tue, 26 Jul 2016 16:21:38 +0000 Tyler Durden 567270 at David Einhorn Is Back In The Doldrums With Q2 Loss As Amazon Short Stings: Full Letter <p>Last quarter David Einhorn admitted that "<a href="">it has been a while since we’ve had a profitable quarter to report</a>", when he happily reported that in Q1 Greenlight returned 3%. Alas, fortune has turned again, and in his latest report we read that after a serious of unfortunate events, his hedge fund declined 2.6% in the second quarter, bringing the YTD profit to just 0.4%.&nbsp; Here is the reason for the underperformance in his own words:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Most of the quarterly losses came from the short book. <strong>An undisclosed oil fracking short </strong>(not the Mother-Fracker) was our biggest loser, <strong>followed by Amazon</strong>, which reported a stronger quarter than we expected. </p> <p>&nbsp;</p> <p><strong>In the long book, Apple (AAPL) and Macy’s were material losers. </strong>The earnings estimates for&nbsp; AAPL continue to fall. We mitigated our loss by trading AAPL well – though the stock is down about 9% for the year, we have been nearly break-even on the position in 2016. We sold Macy’s for a loss after the company announced a significant reduction in full-year 2016 guidance. This announcement invalidated our thesis that 2016 earnings would benefit from easy comparisons later in the year. We exited the position at $32.08</p> </blockquote> <p>Einhorn also provides a lenghty explanation for his disagreement with Citron's short thesis on Chemours (which Greenlight is long), and then provides an interest peek into the Market Abuse Regulation for the European Union (“EU MAR”) which went into effect earlier this month. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Among its dozens of provisions, it sets forth uniform regulations throughout the EU regarding insider dealing and market manipulation, but it remains to be seen how local regulators will ultimately interpret and enforce many of its conflicting and ambiguous provisions. Having studied EU MAR and obtained expert advice, we have decided on a cautious approach. In short, <strong>we’ll be saying little or nothing about new positions in issuers that are subject to EU MAR for the time being</strong>. Accordingly, <strong>while we would ordinarily now discuss a new large stake in a European life sciences company</strong>, we will not do so at this time. Going forward we will of course monitor how regulators and courts interpret and enforce EU MAR, and will further revise our policies as appropriate.</p> </blockquote> <p>Aside from that, Einhorn details some other positions that he closed out of, selling the following:</p> <ul> <li><strong>American Capital Agency </strong>for a small gain after the company announced the acquisition of its external manager. Strangely, the market treated this bad news as good news, so we chose to exit.<br />Baxter International at a gain when the shares reached our view of fair value.</li> <li><strong>Ingram Micro</strong>, a small position that earned a good return, which is being acquired by Tianjin Tianhai.</li> <li><strong>Oil States International </strong>(OIS) without much recovery for what became a bad investment in Civeo, which was spun out from OIS. The stock fell sharply during the oil commodity rout and then subsequently bounced on an anticipated recovery. We sold rather than waiting to see if the recovery pans out.</li> </ul> <p>He also covered the following shorts:</p> <ul> <li><strong>Intuitive Surgical </strong>at a loss where we overestimated how quickly competition would materialize.</li> <li><strong>Under Amour </strong>where we took a second shot at shorting last fall. This time it worked better and we earned a nice profit.</li> <li><strong>United Rentals</strong>, which was a sizable winner over the last couple years, as the rental rates and demand for heavy equipment rentals fell and the company missed estimates.</li> </ul> <p>... however not Amazon which continues to levitate to record highs.</p> <p>Einhorn also had some macro commentary on Brexit, which he doesn't see as leading to meaningful long-term impacts:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>For the last couple centuries populations have celebrated the phrase “The British Are Leaving!” <strong>In our view, Brexit by itself will not be a significant economic event. </strong>Sure, there will be a handful of companies that suffer idiosyncratic issues, <strong>but the U.K. economy is simply not big enough for even a devalued British pound to have a large direct impact on global trade. </strong></p> <p>&nbsp;</p> <p>However, the mere pretense of an event is likely sufficient to entice the global monetary authorities into serving up a fresh course of Jelly Donuts. The Federal Reserve put itself on hold ahead of the vote, so it shouldn’t be a surprise if the “leave” vote takes tightening off the table for some time. Other central banks have made various promises to double down on their failing policies as they deem appropriate. Government bond prices have soared, as the market senses that a global monetization of large amounts or even all government debt may be in our future. </p> <p>&nbsp;</p> <p>The scent of more Jelly Donuts also sent gold prices up from $1,231 to $1,324 an ounce, making gold and gold stocks our largest winners during the quarter. CONSOL Energy was our other significant winner, fueled by a partial recovery in natural gas prices and continued strong well performance. The shares rose 43% and ended the quarter at $16.09</p> </blockquote> <p>And as customary, reveals his latest top holdings:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>At quarter-end, the largest disclosed long positions in the Partnerships were <strong>AerCap, Apple, CONSOL Energy, General Motors and gold. </strong>The Partnerships had an average exposure of 96% long and 69% short.</p> </blockquote> <p><em>Full letter below</em></p> <p><iframe src=";view_mode=scroll&amp;access_key=key-vdBWuSzvoagQ9PkWxRMV&amp;show_recommendations=true&amp;show_upsell=false" width="100%" height="600" frameborder="0" scrolling="no"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="530" height="298" alt="" src="" /> </div> </div> </div> Apple Bond British Pound Central Banks David Einhorn European Union Federal Reserve General Motors Greenlight Market Manipulation Monetization Natural Gas recovery Tue, 26 Jul 2016 15:58:29 +0000 Tyler Durden 567268 at Pokemon Go Is Spooking Middle East Governments <p><a href=""><em>Submitted by Jeremy Luedi via,</em></a></p> <p><em>Pokemon Go is creating headaches for Middle Eastern governments, as <strong>concerns over security and subversion prompt calls for intervention.</strong></em></p> <p>Pokemon Go has quickly become a global phenomenon, the latest viral sensation boosted by social media and our ubiquitous smartphones. The app is all over the news, as are stories of foolish players getting in trouble, lost, or accidents. While elsewhere these events have been shrugged off as frivolous or ultimately harmless, Pokemon Go is no laughing matter in the Middle East.</p> <p><strong>A host of governments in the Middle East are treating Pokemon Go as a potentially serious destabilizing force. </strong>Said regimes have cited religious, cultural, and national security reasons to support their calls for action against Pokemon Go.</p> <p><strong>From fatwa to farce, Pokemon Go has been on the receiving end of a range of government responses in the Middle East.</strong> For instance, Egypt has renewed a 15 year old fatwa against the Pokemon franchise which was issued by the then Grand Mufti in 2001. Similarly, <a href="">Saudi Arabia</a> has renewed a similar fatwa, characterizing Pokemon as un-Islamic.</p> <p>Specifically, religious authorities are concerned about the app&rsquo;s references to mutation and evolution, ideas which run counter to Islamic tenets concerning creation and God. Moreover, the game has been labelled as an addiction (a point not helped by similar statements from players), and likened to gambling &ndash; a sin in the Islamic tradition. The various symbols in the game are also allegedly linked to Christianity, Shintoism, Zionism and Freemasonry, thus drawing accusations of promoting apostasy and polytheism.</p> <p>While these claims will amuse foreigners, they are not specific to the Middle East, as many fundamentalist Christians in the West view Pokemon in a similar manner. What is disconcerting is the fact these pronouncements carry greater socio-political weight in the Middle East, especially among the theocratic Gulf state regimes. The narrow, and at times non-existent divide between religion and government in the region gives added impetus to any government efforts to counter Pokemon Go.</p> <p><strong>What is important to realize, is that these religious pronouncements conveniently align with government concerns over subversion and security, brought about by the app. </strong>In the wake of the Twitter revolt in Iran, and the <a href="">social media</a> driven Arab Spring, governments in the region are naturally extremely wary of any new popular <a href="">digital trend</a>, especially one they do not understand, nor can, as of yet, contain.</p> <h4>Pokemon Go, all fun and games, until someone gets hurt</h4> <p><a href=""><img alt="" src="" style="width: 500px; height: 579px;" /></a></p> <p><strong>Interestingly, Pokemon Go has become a vehicle for regional critics and anti-government forces to promote themselves and mock the powers that be.</strong> For instance, Qatari businessman Adel Bin Ali commented on recent events in Turkey &ldquo;Turkish coup? What coup? Turkey&rsquo;s generals stormed Erdogan&rsquo;s palace looking for Pokemon Go.&rdquo; Similarly, Iraqi comedian Ahmed al-Basheer poked fun via Pokemon, <a href="">stating</a> &ldquo;I introduce y&rsquo;all to Abu Pikachu al-Baghdadi and Jigglypuff in a headscarf.&rdquo; Basheer also mocked members of the Iraqi government by referencing the cute Pokemon characters.</p> <p>The Basheer Show is seen as Iraq&rsquo;s Daily Show, and is broadcast from Amman, Jordan due to security concerns, yet still reaches an audience of some 19 million in various countries &ndash; despite efforts by some governments to block it. The fact that Basheer is capitalizing on the viral nature of Pokemon Go to mock and critique the Iraqi government and others, is a serious wake-up call to Middle Eastern regimes, and proof in their eyes of the subversive nature of the app.</p> <p><strong>Even a former U.S Marine, now fighting against ISIS in Iraq, has posted images of himself playing the game on the battlefield, <a href="">challenging Daesh</a> to a Pokemon battle.</strong></p> <p>Another group capitalizing on the popularity of Pokemon Go are anti-Assad Syrian activists seeking to boost awareness and media attention in the conflict. Specifically, the Revolutionary Forces of Syria (RFS) Media Centre has released a series of photos showing Syrian children holding signs sporting pleas for help and popular Pokemon characters. The group is trying to counter public desensitization and fatigue, critiquing the time spent on the app vs. the time spent helping those affected by the civil war.</p> <p><strong>This effort coincides with the pictures of Syrian graphic designer Saif Tahhan, who has used Pokemon Go to highlights the needs of those in war-torn Syria.</strong> His fictional Syria Go app, sees users searching for basic necessities amongst the rubble. Syrian artist Moustafa Jano has also incorporated Pokemon into images of Syrian refugees to highlight the issue. Furthermore, Swedish novelist Jonas Gardell has utilized the <a href="">connection</a> between Pokemon Go and Syria, writing: &ldquo;Grandpa, what did you do that summer of 2016 when the world was on fire? Oh dear grandchildren, we were looking for Pokemon characters [on our] phones.&rdquo;</p> <div class="wp-caption aligncenter" id="attachment_22378" style="width: 510px;"><a href=""><img alt="" src="" style="width: 500px; height: 359px;" /></a><br /> <p class="wp-caption-text"><em>One of Saif Tahhan&rsquo;s Syria Go images</em></p> </div> <p><strong>The fact that anti-Assad activists both within and outside of Syria are using Pokemon Go to promote their cause, is a very strong signal to Middle Eastern governments confirming (in their minds) their suspicions about the danger posed by the app.</strong></p> <h4><u>Gotta catch &lsquo;em all&hellip;subversives that is</u></h4> <p>Governments in the Middle East are facing the problem of thousands of eager players wandering around with an app that relies on GPS tracking and cameras. Public buildings and prominent locations are part of the game, and as such governments in the region are worried about <a href="">security risks</a> to military and government buildings. In Lebanon, for instance, the government has to contend with hordes of people walking around Beirut. Police have already had to shoo away and briefly arrest players for filming mosques, security checkpoints, and military facilities.</p> <p><strong>As 16 year old Muhammed Zeitam, explains, &ldquo;you cannot just lift up your phone to the ministry. They get suspicious.&rdquo; </strong>Kuwait has issued similar warnings, instructing players to stay away from mosques, military buildings and the Emir&rsquo;s palace, whereas Saudi Arabia has warned about the dangers of using GPS tracking technology.</p> <div class="wp-caption aligncenter" id="attachment_22379" style="width: 610px;"><a href=""><img alt="" src="" style="width: 500px; height: 193px;" /></a><br /> <p class="wp-caption-text"><em>One of RFS&rsquo; Pokemon images (left) and work by Moustafa Jano (right)</em></p> </div> <p>Members of the Egyptian government have also stressed the security concerns posed by Pokemon Go, with Egypt&rsquo;s deputy head of communications considering banning the game and urging the regime to install WiFi jammers. Hamdi Bakheet, a member of the Egyptian defence and national security committee has gone further,<em><strong> <a href="">decrying</a> Pokemon Go as &ldquo;the latest tool used by spy agencies in the intel war, a cunning, despicable app that tries to infiltrate our communities in the most innocent way under the pretext of entertainment. But all they really want is to spy on people and the state.&rdquo;</strong></em></p> <p><strong>Ultimately, for Middle Eastern governments concerned about civil unrest, citizen movements, ISIS infiltration, and foreign spying, Pokemon Go is deeply disconcerting. </strong>Firstly, any non-government sanctioned means of connecting and organizing people worries these states. Secondly, by citing security concerns, governments will attempt to legitimize their efforts to squash the app, ironically using the very popularity which they fear as an amplifier for their own messages.</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="621" height="446" alt="" src="" /> </div> </div> </div> Gambling Iran Iraq Kuwait Middle East national security Saudi Arabia SPY Turkey Twitter Twitter Tue, 26 Jul 2016 15:43:00 +0000 Tyler Durden 567264 at One Analyst's Surprising Indicator Why Recession Is Coming In Early 2017 <p>Stifel analyst Paul Westra downgraded the restaurant industry in a note released today, slashing estimates and ratings on 11 stocks in the sector,<strong> while warning that a slowdown in the restaurant industry is a harbinger for an overall economic recession. </strong></p> <p>The report warns that the restaurant industry is facing a perfect storm of slowing demand, rising minimum wage mandates across the country and minimal opportunity for commodity cost declines. This fits with the thesis laid out by KeyBanc analysts last week, suggested last week when <a href="">upgrading Papa John's Pizza on the expectations </a>that the recent surge in political unrest and terrorism fears would prompt more Americans to stay at home and order food instead of eating out.</p> <p>As Westra says, "Today, we adopt a bearish outlook for restaurants as we confidently believe that, at a minimum, the simultaneous -150 basis points to -200bps deceleration of restaurant industry comps across all categories during the second quarter within our most recent Stifel Sales Survey reflects the start of a U.S. Restaurant Recession"</p> <p>However, it won't be just a "restaurant recession" - according to the analyst, the weakness would promptly spillover to the broader economy: "restaurants have historically led the market lower during the three to six-month periods prior to the start of the prior three U.S. recessions." </p> <p>To wit, Stifel highlights prior recessionary periods in the US have been preceded by 200-300bps declines in restaurant industry comps during the 3-9 month periods leading up to the recession.&nbsp; To that end, the report points out that 2Q16 comps averaged 70bps down from 250bps in 3Q15, reflecting a 180bps decline over the period, <strong>which Stifel warns reflects the start of the restaurant recession and likely is a harbinger for a US recession in early 2017</strong>.</p> <p>The charts below illustrate that the 2001 and 2007 recessions were preceded by a substantial deceleration of restaurant comps over the 24 months leading up to the recession.&nbsp;<strong> In tracking the current cycle, the deceleration in comps since January 2015 appears to be even more pronounced than the 2001 and 2007 slowdowns.</strong></p> <p><a href=""><img src="" alt="Industry Comps" width="600" height="395" /></a></p> <p><a href=""><img src="" alt="2013 -2016 YTD Industry Comp Trends" width="600" height="360" /></a></p> <p>&nbsp;</p> <p>Stifel contends that Wall Street is often slow to recognize recessionary signals from the restaurant space (or any other ones, we might add) as models tend to underestimate the relative pricing power (price increase less input cost inflation) collapse that occurs during downturns in the industry.&nbsp; <strong>As a result, the low marginal cost of each incremental meal sold relative to the high fixed costs associated with rent and employee overhead causes the worst performing concepts to chase short-term cash flow through price cuts which simply serves to deepen and prolong the contraction</strong>.&nbsp; </p> <p>What makes this cycle potentially worse is that demand weakness in previous cycles was somewhat offset by commodity price declines.&nbsp; In this cycle, however, commodity prices have already collapsed leaving minimal opportunity for further cost deflation from here.&nbsp; </p> <p><a href=""><img src="" alt="RPP" width="600" height="486" /></a></p> <p>Moreover, the labor cost side of the restaurant equation is only getting worse as well.&nbsp; Stifel, points out that <strong>60% of the U.S. population lives in states where the 2017 minimum wage is expected to increase 2.8% YoY led by a 15.4% increase in New York, 10% in Massachusetts and 6.8% in California.</strong></p> <p><a href=""><img src="" alt="Min Wage" width="600" height="215" /></a></p> <p>* * * </p> <p>Is Westra right? We will get the answer shortly, when the bulk of public restaurant companies report earnings in the coming days and weeks as they report earnings. Panera Bread Co. and BJ's Restaurants are set to report results after the close today, while other prominent chains like The Cheesecake Factory, Texas Roadhouse, and El Pollo Loco report over the next two weeks. </p> <p>&nbsp;So far the "eating out" picture has been gloomy: Starbucks and Chipotle both missed last week, with Del Frisco's reporting a 0.7% drop in same store sales. Earlier today, McDonald dropped after also reporting US sales growth that was half what analysts expected. </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="300" height="168" alt="" src="" /> </div> </div> </div> fixed ratings Recession Same Store Sales Tue, 26 Jul 2016 15:23:45 +0000 Tyler Durden 567252 at Miami Police Station Evacuated, Bomb Squad Detonates Suspicious Package <p>Update:<br /> <blockquote class="twitter-tweet" data-lang="en"> <p lang="en" dir="ltr"><a href="">#BREAKING</a>: Bomb squad has detonated suspicious package at Miami Police Department <a href=""></a></p> <p>&mdash; Joel Franco (@OfficialJoelF) <a href="">July 26, 2016</a></p></blockquote> <script async src="//" charset="utf-8"></script></p> <p><strong>Miami PD Bomd Squad has been called </strong>to Miami's downtown police department as <a href="">The Sun Sentinel reports </a>the headquarters - which employs 1600 officers and civilians - has been <strong>evacuated after the discovery of a suspicious package</strong>.</p> <p>Department officials said Tuesday on Twitter that the package was spotted outside the building around 10 a.m. The agency later tweeted out a photo of a bomb squad truck near the building and urged people to stay away from the area.</p> <p><a href=""><img src="" width="600" height="362" /></a></p> <p>No further details were immediately available.</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="617" height="372" alt="" src="" /> </div> </div> </div> Twitter Twitter Tue, 26 Jul 2016 15:20:38 +0000 Tyler Durden 567262 at "What The F**k Was That?" <p>Update: The machines lifted S&amp;P Futs perfectly to VWAP...</p> <p><a href=""><img height="312" src="" width="600" /></a></p> <p>&nbsp;</p> <p>While USDJPY notched down and Oil had been slipping, stocks suddenly lurched lower, gapping to yesterday&#39;s lows on heavy volume. As one veteran trader exclaimed &quot;what the f**k was that?&quot; as no obvious catalyst sprung up, unless of course this morning&#39;s series of economic &quot;beats&quot; was sufficiently good to be bad for stocks and raise the dreaded rate hike specter.</p> <p>Stocks suddenly plunged...</p> <p><a href=""><img height="457" src="" width="600" /></a></p> <p>&nbsp;</p> <p>And VIX spiked...</p> <p><a href=""><img height="447" src="" width="600" /></a></p> <p>&nbsp;</p> <p>As it seems someone suddenly kicked the power plug out of the wall at The NYSE...Very unusual that the largest eMini trades during this slide so far -- are below 1000 contracts.</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Chart of most active futures during that little swoon an hour ago. <a href="">#Pretty</a> <a href=";src=ctag">$ES_F</a> <a href=";src=ctag">$SPY</a> <a href=";src=ctag">$ESX_F</a> <a href=""></a></p> <p>&mdash; Eric Scott Hunsader (@nanexllc) <a href="">July 26, 2016</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>&nbsp;</p> <p>Catching down to crude...</p> <p><a href=""><img height="315" src="" width="600" /></a></p> <p>&nbsp;</p> <p>Sending stocks to 2-week lows... back to Japan &quot;helicopter money&quot; levels...</p> <p><a href=""><img height="398" src="" width="600" /></a></p> <p>Stairs up, elevator down...</p> <p>Some trader humor...</p> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Phew! H/T DCL <a href=""></a></p> <p>&mdash; Sal Arnuk (@ThemisSal) <a href="">July 26, 2016</a></p></blockquote> <script async src="//" charset="utf-8"></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1263" height="963" alt="" src="" /> </div> </div> </div> Crude Japan SPY Twitter Twitter Tue, 26 Jul 2016 14:58:42 +0000 Tyler Durden 567259 at Hollande Vows "All Out War" Against ISIS After Priest Killing <p>Shortly after the latest terror attack on French soil by two ISIS "soldiers", President Francois Hollande, who was roundly disparaged 12 days ago for the country's lack of preparedness to the Nice truck terror attack which killed 84, vowed to wage war against the Islamic State "<strong>by every means</strong>".</p> <p>"We are confronted with a group, Daesh, which has declared war on us," Hollande said, using an alternative name for Isis. <strong>"We have to wage war, by every means, (but through) upholding the law, which is because we are a democracy."</strong> </p> <blockquote class="twitter-video"><p dir="ltr" lang="en"><a href="">#SaintEtienneDuRouvray</a> a "cowardly assassination" by terrorists pledged to IS - <a href="">@fhollande</a> <a href=""></a> <a href=""></a></p> <p>— BBC Breaking News (@BBCBreaking) <a href="">July 26, 2016</a></p></blockquote> <script src="//"></script><p>Hollande was speaking in a lightning visit to the northern French town of Saint-Etienne-du-Rouvray, just hours after the attack took place. Shortly after he spoke terror group Isis claimed responsibility saying that its "soldiers" had carried out the attack. </p> <p>"The perpetrators of the Normandy church attack are soldiers of the Islamic State who carried out the attack in response to calls to target countries of the Crusader coalition," the Amaq news agency said, citing a "security source". </p> <p>The two assailants entered a local church, slitting the throat of an 84-year-old priest and leaving another hostage with life-threatening injuries, before being killed by police as they left the building, police said. </p> <p>Hollande said the assailants "claimed to be from Daesh" and branded the assault as a "vile terrorist attack". "The Catholic community has been hit, but it is all of the French public which is concerned," Hollande said. </p> <p>He called for national unity in the face of terrorism, urging the French people to "create a solid bloc that no-one can split".</p> <p>France remains on high alert after Tunisian Mohamed Lahouaiej Bouhlel ploughed a truck into a crowd of people celebrating Bastille Day in Nice, killing 84 people and injuring over 300. </p> <p>The July 14 massacre was the third major terror attack in France in little more than 18 months. </p> <p>As we <a href="">reported previously</a>, France has already announced it would send an aircraft carrier in proximity to Syria to help fight ISIS. It remains to be seen if after today's attack it will also expand its involvement by sending ground troops in Syria and/or Iraq.</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="517" height="330" alt="" src="" /> </div> </div> </div> France Iraq Tue, 26 Jul 2016 14:41:16 +0000 Tyler Durden 567258 at "Hope" Fades As Consumer Confidence Ignores Stock Market Exuberance <p>Janet, you have a problem...</p> <p>If soaring home prices and record high stocks won't spike consumer confidence, what will?</p> <p><a href=""><img src="" width="600" height="317" /></a></p> <p>&nbsp;</p> <p>While the 'Present Situation' index rose modestly to 118.3 (from 116.6), the 'Expectations' index dropped to 83.3 from 84.6 (inching the overall Conference Board Consumer Confidence index lower to 97.3).</p> <p><em><strong>Jobs plentiful dropped, income growth expectations dropped, plans to buy a car dropped, and inflation expectations dropped.</strong></em></p> <p>New England saw the biggest spike in confidence (from 82.0 to 95.8!!) but <strong>East South Central collapsed from 97.8 to 73.0.</strong></p> <p>Perhaps most worrying is the plunge in Under-35-year-old confidence from 132.3 to 122.8 and <strong>middle-income earners ($50k to 125k) all saw a drop in confidence.</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="961" height="507" alt="" src="" /> </div> </div> </div> Conference Board Consumer Confidence Tue, 26 Jul 2016 14:23:35 +0000 Tyler Durden 567256 at New Home Sales Rebound To Highest Since 2008 As Median Home Price Rises Back Over $300,000 <p>Following last month's <a href="">surprising drop in new home sales</a>, which tumbled the most in 8 months alongside sharp downward revisions to the historical data, coupled with a plunge in the median price many expressed concern that the housing recovery was finally saturated, at least when it comes to new housing even as demand for existing homes remained robust. However, moments ago the latest data from the Census Bureau may have shelved such concerns, when it reported that in June new home sales surged 25.4% from a year ago and up 3.5% from the upward revised May print of 572K to 592K, above the 560K expected, and the highest number reported since 2008, even if still well below half of the peak hit before the recession struck.</p> <p><a href=""><img src="" width="500" height="252" /></a></p> <p>That said, on an unadjusted basis, the actual number of homes sold in June was 54K, the same as last month, and below the 56K seen in April. </p> <p>The regional breakdown showed steady activity across most regions, with the Northeast, Midwest and South all unchanged at 3K, 8K and 29K respectively, while the West saw a 1K rise to 14K new homes. </p> <p>Since the number of homes for sale rose from 237K to 245K, the months supply increased from 4.4K to 4.5K.</p> <p>Finally, the median new home sale price rose once again, jumping back above $300K, or from $288.8K to $306.7K to be specific, 14K shy of the all time highs record in April of this year.</p> <p><img src="" width="500" height="343" /></p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="812" height="557" alt="" src="" /> </div> </div> </div> Census Bureau New Home Sales Recession recovery Tue, 26 Jul 2016 14:16:22 +0000 Tyler Durden 567253 at Tuesday Humor: Richmond Fed Survey Beats Expectations By 7 Standard Deviations <p>Aginst expectations of a -5 print, July's<strong> Richmond Fed printed +10 (up from a revised lower -10 in June)</strong>. This is the <strong>2nd biggest MoM spike since 1998</strong> (the biggest being March's insane spike). This beat is a 7 standard deviation beat over expectations among the 9 economists tracking it with none of them forecasting a gain at all. Across the board components improved with a surge in employees, workweek and the <strong>biggest jump in new orders since 1998!</strong></p> <p>The Survey has become dramatically more volatile in 2016...</p> <p><a href=""><img src="" width="600" height="318" /></a></p> <p>&nbsp;</p> <p>With somehow the biggest surge in new orders in 18 years...</p> <p><a href=""><img src="" width="600" height="307" /></a></p> <p>&nbsp;</p> <p>Which perhaps explains this farce...</p> <p><a href=""><img src="" width="600" height="222" /></a></p> <p>&nbsp;</p> <p>Are you laughing yet?</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="294" alt="" src="" /> </div> </div> </div> None Richmond Fed Tue, 26 Jul 2016 14:10:28 +0000 Tyler Durden 567251 at