http://www.zerohedge.com/fullrss2.xml/%20http%3A/news.goldcore.com en Loonie Tumbles After Canadian Retail Sales Suffer Biggest August Slump Ever http://www.zerohedge.com/news/2017-10-20/loonie-tumbles-after-canadian-retail-sales-plunge-august <p><strong><em>Blame the storms... oh wait!</em></strong></p> <p>Despite rate-hikes, exuberant discussions from BoC speakers about the economy, and &#39;hope&#39; - a lot of &#39;hope&#39;, Canadian retail sales plunged in August...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171020_loonie1.png"><img height="313" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171020_loonie1_0.png" width="600" /></a></p> <p>&nbsp;</p> <p><strong>This is the biggest drop in retail sales since Dec 2015 and is the biggest August drop on record.</strong></p> <p>And the reaction in the Loonie is clear...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171020_loonie.png"><img height="309" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171020_loonie_0.png" width="600" /></a></p> <p>As hope for more rate hikes fades.</p> <p>Though we are sure this is merely transitory.</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="1641" height="844" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171020_loonie.png?1508503254" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-20/loonie-tumbles-after-canadian-retail-sales-plunge-august#comments Business Geography of British Columbia Hope, British Columbia Lower Mainland Retail Fri, 20 Oct 2017 12:43:05 +0000 Tyler Durden 605685 at http://www.zerohedge.com Owners Of Luxury Greenwich Homes Are Pulling From The Market As Sales Plunge http://www.zerohedge.com/news/2017-10-19/owners-luxury-greenwich-homes-are-pulling-them-market-sales-plunge <p>Once upon a time, a nonexistent income tax (Connecticut became the last state in the US to adopt an income tax in the early 1990s) and low property taxes - not to mention the gold coast tableau of beautiful beaches and lush greenery - made Greenwich, CT - just over the state line from Westchester - a haven for hedge fund bazillionaires and other wealthy finance types.</p> <p>But since the financial crisis, sales of megamansions and other high-end homes in the city have tapered off as taxes have inexorably risen and trends have shifted to favor urban environments. As <a href="http://www.zerohedge.com/news/2017-05-31/sales-ultra-luxury-homes-greenwich-continue-plummet">we reported back in June, </a><strong>there were only five sales of homes for $10 million or more in 2015 and 2016, less than half the historical average. </strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/10/18/2017.10.19goldcoast.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/10/18/2017.10.19goldcoast_0.JPG" style="width: 500px; height: 251px;" /></a></p> <p>At the time, there were 38 properties listed for $10 million in and around Greenwich, meaning it would take at least seven years to sell them all.</p> <p>And of course, the state&rsquo;s looming fiscal crisis - and the prospect of still more tax hikes on top of the two that lame-duck Democratic Gov. Dannel Malloy has pushed through in recent years - isn&rsquo;t doing the real estate market any favors.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/10/18/2017.10.19greenwich_0.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/10/18/2017.10.19greenwich_0.JPG" style="width: 500px; height: 457px;" /></a></p> <p>Amid the market washout, owners of many of the luxury homes mentioned above are finally throwing in the towel, as <a href="https://www.bloomberg.com/news/articles/2017-10-19/greenwich-mansion-owners-pull-listings-to-wait-for-a-better-day">Bloomberg </a>reports. Listings of luxury homes in the Connecticut town plunged more than 31% from a year earlier.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Luxury-home listings in the Connecticut town plunged 31 percent from a year earlier, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. That&rsquo;s largely because sellers who failed to get their hoped-for price quit trying to find buyers and took their properties off the market to wait for a better day.</p> <p>&nbsp;</p> <p><strong>&ldquo;Inventory is declining but sales aren&rsquo;t rising,&rdquo; </strong>Jonathan Miller, president of Miller Samuel, said in an interview.<strong> &ldquo;It&rsquo;s mostly listings being pulled off the market.&quot; </strong></p> </blockquote> <p>To be sure, part of the drop off in sales of mansions and other large, out-of-the-way homes is due to a shift in preferences. Buyers today are favoring smaller homes closer to the center of town - where they can easily catch a the New Haven line train for the 50 minute ride into Grand Central Terminal.</p> <p>As one broker put it: &ldquo;Small is the new big.&quot;</p> <p>...kind of like how 30 is the new 20.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Tastes are changing in Greenwich, home to many Wall Street executives who take the 50-minute train ride to Manhattan. Lavish mansions on several acres have languished, while smaller homes closer to downtown get scooped up. In the third quarter, <strong>sales of luxury homes</strong> - the top 10 percent of deals by price - <strong>fell 13 percent from a year earlier to 21, the firms said. Condo purchases, meanwhile, jumped 35 percent to 58 transactions, the most for a quarter in data going back to 1999. </strong></p> <p>&nbsp;</p> <p>&ldquo;Small is the new big,&rdquo; said Scott Durkin, chief operating officer of Douglas Elliman. &ldquo;Millennial buyers, they want to be in town, they want to be close to services, they don&rsquo;t need 5,000 to 10,000 square feet -- they&rsquo;re OK with 1,600 to 2,200.</p> <p>&nbsp;</p> <p><strong>&ldquo;We really don&rsquo;t have enough of those listings to sell,&rdquo;</strong> he said. <strong>&ldquo;We need more.&quot; </strong></p> <p>&nbsp;</p> <p>The closer that homes are to Greenwich&rsquo;s commercial district or waterfront, the faster they&rsquo;re selling. <strong>At the current pace of deals, it would take 7.8 months to sell all the listed properties south of Post Road, an area that includes the train station and tony shops of Greenwich Avenue, Miller Samuel and Douglas Elliman said. In the Back Country section </strong>- north of the Merritt Parkway, featuring oversized estates set back from winding, two-lane roads - <strong>it would take more than three years to clear the listed inventory. </strong></p> </blockquote> <p>The owners of one property located on Greenwich&rsquo;s iconic Old Mill Road agreed to three price cuts in the two years the 11,000 square foot property has been on the market. <strong>The property, on 5.3 acres that include a 2,329-square-foot guest house, was first listed in May 2015 for $17.35 million, and eventually lowered to $11.45 million. But was eventually pulled off the market in September, before brokers tried a different tactic: relisting it under a different address - 781 Lake Ave. - <em>at the low, low price of $10.95 million. </em></strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/10/18/2017.11.19greenwichtwo.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/10/18/2017.11.19greenwichtwo_0.JPG" style="width: 500px; height: 258px;" /></a></p> <p>Heavy discounts helped encourage a pickup in sales earlier this year. And with more sellers pulling homes off the market, brokers are hoping the drop in listings revives a &ldquo;sense of urgency&rdquo; that&rsquo;s been missing from the market for years.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>High-end sales had picked up earlier this year, largely because of price cuts, helping to clear some of the backlog. Sellers were still discounting this quarter, offering an average of 6.7 percent off the last listed price. The reductions drew in buyers for some costlier homes, pushing the median sale price in the luxury category up 34 percent to $6.5 million, Miller Samuel and Douglas Elliman said. That&rsquo;s the upside to having so many fatigued sellers giving up, according to Durkin. It clears the distractions and boosts confidence for those who want to commit to a high-end purchase in town.</p> <p>&nbsp;</p> <p><strong>&ldquo;When there&rsquo;s too much to choose from it takes off the intensity of the buying process,&rdquo; </strong>Durkin said. <strong>&ldquo;It doesn&rsquo;t give you any sense of urgency and it doesn&rsquo;t get you off the fence.&quot; </strong></p> <p>&nbsp;</p> <p>Brokerage Houlihan Lawrence, in its own Greenwich report, said that luxury sales did best at the top, with homes priced at $5 million and above. There were 18 such deals in the quarter, compared with 11 a year earlier. Two were for more than $10 million.</p> </blockquote> <p>Given the state&rsquo;s fiscal dysfunction, we&rsquo;d be surprised if sales saw a meaningful acceleration any time soon.</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="773" height="388" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.10.19goldcoast.JPG?1508444635" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-19/owners-luxury-greenwich-homes-are-pulling-them-market-sales-plunge#comments Business Douglas Elliman Elliman Miller Samuel Inc. Real estate Real estate Residential real estate Fri, 20 Oct 2017 12:32:31 +0000 Tyler Durden 605658 at http://www.zerohedge.com Peter Schiff Warns Of "Calm Before The Storm" http://www.zerohedge.com/news/2017-10-20/peter-schiff-warns-calm-storm <p><a href="http://www.europac.com/commentaries/calm_storm"><em>Authored by Peter Schiff via Euro Pacific Capital,</em></a></p> <p>In light of the 30-year anniversary of the Black Monday Crash in 1987 (when the Dow lost more than 20% in &quot;one day&quot;,&nbsp;<strong>we should be reminded that investor anxiety usually increases when markets get to extremes.</strong> If stock prices fall steeply, people fret about money lost, and if they move too high too fast, they worry about sudden reversals. As greed is supposed to be counterbalanced by fear, this relationship should not be surprising. But sometimes the formula breaks down and stocks become very expensive even while investors become increasingly complacent. History has shown that such periods of untethered optimism have often presaged major market corrections. Current data suggests that we are in such a period, and in the words of our current President, we may be &quot;in the calm before the storm.&quot;</p> <p>Many market analysts consider the Cyclically Adjusted Price to Earnings (CAPE) ratio to be the best measure of stock valuation. Also known as the &ldquo;Shiller Ratio&rdquo; (after Yale professor Robert Shiller), the number is derived by dividing the current price of a stock by its average inflation-adjusted earnings over the last 10 years. Since 1990, the CAPE ratio of the S&amp;P 500 has averaged 25.6. The ratio got particularly bubbly, 44.2, during the 1999 crescendo of the &ldquo;earnings don&rsquo;t matter&rdquo; dotcom era of the late 1990&rsquo;s. But after the tech crash of 2000, the ratio was cut in half, drifting down to 21.3 by March of 2003. For the next five years, the CAPE hung around historic averages before collapsing to 13.3 in the market crash of 2008-2009. Since then, the ratio has moved steadily upward, returning to the upper 20s by 2015. But in July of this year, the CAPE breached 30 for the first time since March 2002. It has been there ever since (which is high when compared to most developed markets around the world). (data from Irrational Exuberance, Princeton University Press 2000, 2005, 2015, updated Robert J. Shiller)</p> <p><strong>But unlike earlier periods of stock market gains, the extraordinary run-up in CAPE over the past eight years has not been built on top of strong economic growth. </strong>The gains of 1996-1999 came when quarterly GDP growth averaged 4.6%, and the gains of 2003-2007 came when quarterly GDP averaged 2.96%. In contrast Between 2010 and 2017, GDP growth had averaged only 2.1% (data from Bureau of Economic Analysis). It is clear to some that the Fed has substituted itself for growth as the primary driver for stocks.</p> <p>Investors typically measure market anxiety by looking at the VIX index, also known as &ldquo;the fear index&rdquo;. This data point, calculated by the Chicago Board Options Exchange, looks at the amount of put vs. call contracts to determine sentiment about how much the markets may fluctuate over the coming 30 days. A number greater than 30 indicates high anxiety while a number less than 20 suggests that investors see little reason to lose sleep.</p> <p><strong>Since 1990, the VIX has averaged 19.5 and has generally tended to move up and down with CAPE valuations. Spikes to the upside also tended to occur during periods of economic uncertainty like recessions.</strong> (The economic crisis of 2008 sent the VIX into orbit, hitting an all-time high of 59.9 in October 2008.) However, the Federal Reserve&rsquo;s Quantitative Easing bond-buying program, which came online in March of 2009, may have short-circuited this fundamental relationship.</p> <p><strong>Before the crisis, there was still a strong belief that stock investing entailed real risk. </strong>The period of stock stagnation of the 1970s and 1980s was still well remembered, as were the crashes of 1987, 2000, and 2008. But the existence of the Greenspan/Bernanke/Yellen &ldquo;Put&rdquo; (the idea that the Fed would back stop market losses), came to ease many of the anxieties on Wall Street. Over the past few years, the Fed has consistently demonstrated that it is willing to use its new tool kit in extraordinary ways.</p> <p>While many economists had expected the Fed to roll back its QE purchases as soon as the immediate economic crisis had passed, the program steamed at full speed through 2015, long past the point where the economy had apparently recovered. <strong>Time and again, the Fed cited fragile financial conditions as the reason it persisted, even while unemployment dropped and the stock market soared.</strong></p> <p>The Fed further showcased its maternal instinct in early 2016 when a surprise 8% drop in stocks in the first two weeks of January (the worst ever start of a calendar year on Wall Street) led it to abandon its carefully laid groundwork for multiple rate hikes in 2016. As investors seem to have interpreted this as the Fed leaving the safety net firmly in place, the VIX has dropped steadily from that time.&nbsp;<span style="text-decoration: underline;">In September of this year, the VIX fell below 10</span>.</p> <p><strong>Untethered optimism can be seen most clearly by looking at the relationship between the VIX and the CAPE ratio.</strong> Over the past 27 years, this figure has averaged 1.43. But just this month, the ratio approached 3 for the first time on record, increasing 100% in just a year and a half. This means that the gap between how expensive stocks have become and how little this increase concerns investors has never been wider. <strong>But history has shown that bad things can happen after periods in which fear takes a back seat.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171020_schiff1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171020_schiff1_0.jpg" style="width: 600px; height: 319px;" /></a></p> <p><em>Past performance is not indicative of future results.&nbsp;Created by Euro Pacific Capital from data culled from econ.yale.edu &amp; Bloomberg.</em></p> <p><u><strong>On September 1 of 2000</strong></u>, the S&amp;P 500 hit 1520, very close to its (up to then) all-time peak. <strong>The 167% increase in prices over the prior five years should have raised alarm bells. It didn&#39;t.</strong> At that point, the VIX/CAPE ratio hit 1.97&hellip;a high number. In the two years after September 2000, the S&amp;P 500 retreated 46%. Ouch.</p> <p><strong>Unfortunately, the lesson wasn&rsquo;t well learned.</strong> The next time the VIX/CAPE hit a high watermark was in <u><strong>January 2007 </strong></u>when it reached 2.39. At that point, the S&amp;P 500 had hit 1438 a 71% increase from February of 2003. As they had seven years earlier, the investing public was not overly concerned. In just over two years after the VIX/CAPE had peaked&nbsp;the S&amp;P 500 declined 43%. Double Ouch.</p> <p><strong>For much of the next decade investors seemed to have been twice bitten and once shy. </strong>The VIX/CAPE stayed below 2 for most of that time. But after the election of 2016, the caution waned and the ratio breached 2. In the past few months, the metric has risen to record territory, hitting 2.57 in June, and 2.93 in October. These levels suggest that a record low percentage of investors are concerned by valuations that are as high as they have ever been outside of the four-year &ldquo;dotcom&rdquo; period.</p> <p>Investors may be trying to convince themselves that the outcome will be different this time around. <strong>But the only thing that is likely to be different is the Fed&#39;s ability to limit the damage. </strong>In 2000-2002, the Fed was able to cut interest rates 500 basis points (from 6% to 1%) in order to counter the effects of the imploding tech stock bubble. Seven years later, it cut rates 500 basis points (from 5% to 0) in response to the deflating housing bubble. Stocks still fell anyway, but they probably would have fallen further if the Fed hadn&#39;t been able to deliver these massive stimuli. In hindsight, investors would have been wise to move some funds out of U.S. stocks when the CAPE/VIX ratio moved into record territory.&nbsp;While stocks fell following those peaks, gold rose nicely.</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171020_schiff2_0.jpg" style="width: 600px; height: 346px;" /></p> <p><em>Past performance is not indicative of future results.&nbsp;Created by Euro Pacific Capital from data culled from&nbsp;Bloomberg.</em></p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171020_schiff3_0.jpg" style="width: 600px; height: 346px;" /></p> <p><em>Past performance is not indicative of future results.&nbsp;Created by Euro Pacific Capital from data culled from Bloomberg.</em></p> <p><strong>But interest rates are now at just 1.25%. If the stock market were again to drop in such a manner, the Fed has far less fire power to bring to bear. </strong>It could cut rates to zero and then re-launch another round of QE bond buying to flood the financial sector with liquidity. But that may not be nearly as effective as it was in 2008. Given that the big problem at that point was bad mortgage debt, the QE program&rsquo;s purchase of mortgage bonds was a fairly effective solution (although we believe a misguided one). But propping up overvalued stocks, many of which have nothing to do with the financial sector, is a far more difficult challenge. The Fed may have to buy stocks on the open market, a tactic that has been used by the Bank of Japan.</p> <p><em><strong>It should be clear to anyone that since the 1990s the Fed has inflated three stock market bubbles. As each of the prior two popped, the Fed inflated larger ones to mitigate the damage. The tendency to cushion the downside and to then provide enough extra liquidity to send stock prices back to new highs seems to have emboldened investors to downplay the risks and focus on the potential gains. This has been particularly true given that the Fed&rsquo;s low interest rate policies have caused traditionally conservative bond investors to seek higher returns in stocks. Without the Fed&rsquo;s safety net, many of these investors perhaps would not be willing to walk this high wire.</strong></em></p> <p>But investors may be over-estimating the Fed&#39;s ability to blow up another bubble if the current one pops. <strong><em>Since this one is so large, the amount of stimulus required to inflate a larger one may produce the monetary equivalent of an overdose. </em></strong>It may be impossible to revive the markets without killing the dollar in the process. The currency crisis the Fed might unleash might prove more destructive to the economy than the repeat financial crisis it&#39;s hoping to avoid.</p> <p><u><strong>We believe the writing is clearly on the wall and all investors need do is read it. </strong></u>It&rsquo;s not written in Sanskrit or Hieroglyphics, but about as plainly as the gods of finance can make it. <em><u><strong>Should the current mother-of-all bubbles pop, for investors and the Fed it won&rsquo;t be third time&rsquo;s the charm, but three strikes and you&rsquo;re out.</strong></u></em></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="1200" height="637" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171020_schiff1.jpg?1508501253" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-20/peter-schiff-warns-calm-storm#comments Bank of Japan Bank of Japan Behavioral finance Bond Bureau of Economic Analysis Business Capitalism Cyclically adjusted price-to-earnings ratio Dow 30 Economy Federal Reserve Finance Financial markets Financial ratios Housing Bubble Investment Irrational Exuberance Japan Market Crash Money Peter Schiff Princeton University Quantitative Easing Robert J. Shiller Robert Shiller S&P 500 Stock market crash Unemployment US Federal Reserve VIX VIX Yale Fri, 20 Oct 2017 12:13:23 +0000 Tyler Durden 605683 at http://www.zerohedge.com Frontrunning: October 20 http://www.zerohedge.com/news/2017-10-20/frontrunning-october-20 <ul> <li>Trump’s Tax Plan Takes a Big Step Forward, But What Comes Next Won’t Be Easy (<a href="https://www.bloomberg.com/news/articles/2017-10-20/trump-wins-path-to-tax-bill-in-senate-budget-but-it-s-not-easy">BBG</a>)</li> <li>Low pay, no bonus: U.S. retailers struggle with hiring (<a href="http://www.reuters.com/article/us-usa-retail-hiring/low-pay-no-bonus-u-s-retailers-struggle-with-hiring-idUSKBN1CP18B">Reuters</a>)</li> <li>Donald Trump Jr. Becomes a Rainmaker on the Republican Speaking Circuit (<a href="https://www.bloomberg.com/news/articles/2017-10-20/donald-trump-jr-rises-on-gop-speech-circuit-with-red-meat-talks">BBG</a>)</li> <li>In Kuroda's face - researchers find ways to predict central bank changes (<a href="http://www.reuters.com/article/us-japan-boj-face/in-kurodas-face-researchers-find-ways-to-predict-central-bank-changes-idUSKBN1CP0GS">Reuters</a>)</li> <li>One Month After Maria, a Crisis Still Rages in Rural Puerto Rico (<a href="https://www.bloomberg.com/news/articles/2017-10-20/one-month-after-maria-a-crisis-still-rages-in-rural-puerto-rico">BBG</a>)</li> <li>GOP Gears Up for Tax-Overhaul Push (<a href="https://www.wsj.com/articles/gop-gears-up-for-tax-overhaul-push-1508491802">WSJ</a>)</li> <li>A Fed for a Growth Economy (<a href="https://www.wsj.com/articles/a-fed-for-a-growth-economy-1508455555">WSJ</a>)</li> <li>Three Wise Men: Xi Seeks to Join Mao and Deng in China’s ‘Holy Scripture’ (<a href="https://www.wsj.com/articles/three-wise-men-xi-seeks-to-join-mao-and-deng-in-chinas-holy-scripture-1508491813">WSJ</a>)</li> <li>EU leaders demand UK raises Brexit divorce payment&nbsp; (<a href="https://www.ft.com/content/bbe43a6a-b585-11e7-a398-73d59db9e399?emailId=59e9e77f41301a0004f287a0&amp;segmentId=3d08be62-315f-7330-5bbd-af33dc531acb">FT</a>)</li> <li>No trade talks but May wins gesture, warm words at EU summit (<a href="http://www.reuters.com/article/us-britain-eu/no-trade-talks-but-may-wins-gesture-warm-words-at-eu-summit-idUSKBN1CO36F?il=0">Reuters</a>)</li> <li>La Croix CEO Bubbles Over in Anger About Short-Sellers (<a href="https://www.bloomberg.com/news/articles/2017-10-20/la-croix-ceo-frustration-bubbles-over-in-short-seller-blame-game">BBG</a>)</li> <li>Nursing shortage strains U.S. hospitals (<a href="http://www.reuters.com/article/us-usa-healthcare-nursing/short-on-staff-nursing-crisis-strains-u-s-hospitals-idUSKBN1CP0BD">Reuters</a>)</li> <li>New GE Chief Slashes Forecasts, Plans to Exit $20 Billion in Businesses (<a href="https://www.wsj.com/articles/ge-earnings-fall-as-new-leadership-picks-up-restructuring-work-1508497764">WSJ</a>)</li> <li>Uruguay’s President, Who Won a Fight With Big Tobacco, Is Now Targeting Alcohol (<a href="https://www.bloomberg.com/news/articles/2017-10-20/president-who-won-fight-with-big-tobacco-has-new-target-booze">BBG</a>)</li> <li>Austrian coalition talks set to begin, far right likely partner (Reuters)</li> <li>Wall Street’s Robots Still Have a Lot to Learn About Being a Human Trader (<a href="https://www.bloomberg.com/news/articles/2017-10-20/automation-starts-to-sweep-wall-street-with-tons-of-glitches">Bloomberg</a>)</li> <li>Tillerson Balances Trump’s Objectives With His Own (<a href="https://www.wsj.com/articles/tillerson-warns-china-on-trade-territorial-claims-1508441697">WSJ</a>)</li> <li>Lawyers Begin Sketching Strategy to Challenge Possible Nafta Withdrawal (<a href="https://www.wsj.com/articles/lawyers-begin-sketching-legal-strategy-to-challenge-possible-nafta-withdrawal-1508491805">WSJ</a>)</li> <li>Celgene abandons Crohn's drug trials, shares drop (<a href="http://www.reuters.com/article/us-celgene-study-crohn-s/celgene-abandons-crohns-drug-trials-shares-drop-idUSKBN1CO31D">Reuters</a>)</li> </ul> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">WSJ</span></em></p> <p>- U.S. Senate Republicans adopted a budget for the next fiscal year, clearing a critical hurdle in the GOP push to overhaul the tax code. on.wsj.com/2gpoOQM</p> <p>- U.S. Secretary of State Rex Tillerson described how he seeks to manage an often-fraught relationship with President Donald Trump, saying he tries to deliver short-term victories to an impatient commander-in-chief while focusing on a longer horizon himself. on.wsj.com/2gn2XcB</p> <p>- The Federal Bureau of Investigation has joined the investigation into how a group of militants thought to be Islamists killed four American soldiers in Niger two weeks ago, a move that comes as U.S. officials face criticism over their struggle to answer questions about the incident. on.wsj.com/2goQ3uI</p> <p>- Wal-Mart Stores Inc. is near a deal to add Lord &amp; Taylor to its website, part of a broader effort by the retail giant to build an online shopping destination that can compete with Amazon.com Inc. on.wsj.com/2gpp6ak</p> <p>- A federal judge sentenced Thomas C. Davis, the former chairman of Dean Foods Co, to two years in prison for engaging in a long-running insider trading scheme with legendary Las Vegas gambler William "Billy" Walters. on.wsj.com/2gp0Chv</p> <p>- Personal-shopping service Stitch Fix has filed for an initial public offering, revealing that the six-year-old startup's annual sales have zoomed to nearly $1 billion at a time when traditional clothing retailers are struggling. on.wsj.com/2gnXlie</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>Goldman Sachs Chief Executive Lloyd Blankfein is planning to spend a lot more time in Frankfurt, he said on Thursday, as the Wall Street bank pushes ahead with plans to make the German city a major base after Britain leaves the European Union.</p> <p>British lawmaker Nicky Morgan, chair of parliament’s Treasury Committee, voiced concern about a lack of gender and ethnic diversity at the top levels of the Bank of England, which currently has only two women serving across its three major policy committees.</p> <p>Lyft Inc has raised $1 billion in fresh financing, the ride-services company said on Thursday, in a round led by one of Alphabet Inc’s investment funds, further complicating the convoluted world of ride-hailing alliances and dealing a blow to rival Uber Technologies Inc.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>- Lyft has begun to explore going public in 2018 and is trying to strengthen its position by raising more capital, including $1 billion in new financing led by CapitalG, an investment arm of Google's parent company Alphabet Inc . nyti.ms/2gpvI8E</p> <p>- Sean Penn and Netflix Inc are fighting over a documentary series "The Day I Met El Chapo: The Kate del Castillo Story" that will become available early Friday, with a lawyer for Penn saying in a letter to the streaming service that it is "hereby on notice that blood will be on their hands if this film causes bodily harm." nyti.ms/2gn0ChC</p> <p>- U.S. President Trump has picked Joseph Simons to lead the Federal Trade Commission, the White House said Thursday. nyti.ms/2gp954d</p> <p>- Senator John McCain and two Democratic senators moved on Thursday to force Facebook Inc, Google and other internet companies to disclose who is purchasing online political advertising, after revelations that Russian-linked operatives bought deceptive ads in the run-up to the 2016 election with no disclosure required. nyti.ms/2gnaZlE</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>Two of the biggest stars of the Canadian entertainment industry Gilbert Rozon and Eric Salvail have resigned from running their empires amid accusations they sexually harassed or assaulted people under their professional sway. tgam.ca/2goS8GR</p> <p>Former Ontario premier Dalton McGuinty's chief of staff got instructions on how to double delete e-mails in the summer of 2012, a period when the government was under mounting pressure to release documents related to the controversial cancellation of two gas-fired power plants, court documents show. bit.ly/2gnW22E</p> <p>NATIONAL POST</p> <p>A number of buyers have emerged to snap up assets from Cenovus Energy Inc as it divested oil and gas properties to pay down debt after announcing a C$1.3 billion ($1.04 billion) deal to sell its Palliser oil and gas properties. bit.ly/2gozW03</p> <p>Ontario man William Whyte, owner and CEO of an armoured vehicle company Armet Armored Vehicles in Virginia, has been convicted for his role in a scheme to provide the U.S. with shoddy equipment for use in Iraq. bit.ly/2goaYxX</p> http://www.zerohedge.com/news/2017-10-20/frontrunning-october-20#comments Bank of England Bank of England BBG Bitly Business Business CapitalG Cenovus Energy Donald Trump Economy of the United States European Union European Union Federal Bureau of Investigation Federal Trade Commission Financial data vendors goldman sachs Goldman Sachs Google Insider Trading Iraq John McCain Las Vegas Lloyd Blankfein Lyft Politics Puerto Rico Republican Party Reuters Rex Tillerson Rex Tillerson S&P/TSX 60 Index The Wall Street Journal Transport Treasury committee United States Senate US Federal Reserve White House White House Fri, 20 Oct 2017 12:01:23 +0000 Tyler Durden 605684 at http://www.zerohedge.com Gold Up 74% Since Last Market Peak 10 Years Ago http://www.zerohedge.com/news/2017-10-20/gold-74-last-market-peak-10-years-ago <p><span style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif;"><span style="font-size: 16px;"><strong><a href="http://www.goldcore.com/us/gold-blog/gold-74-since-last-market-peak-10-years-ago/">Gold Up 74% Since Last Market Peak 10 Years Ago</a></strong></span></span></p> <p><span style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif;"><span style="font-size: 16px;"><strong>&nbsp;</strong></span></span><strong style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">- 10 year anniversary of&nbsp;pre-Global Financial Crisis market peak in S&amp;P 500 on October 9th</strong><br /><strong style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">- Gold up 74% since the last market peak a decade ago; 11% pa in USD, 9.4% pa in EUR and 12.4% pa in GBP</strong><br /><strong style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">- Precious metal has climbed $736/oz on Oct 9th 2007 to $1278.75 ten-years later</strong><br /><strong style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">- S&amp;P 500's 102% climb is thanks to asset-pumping policies by central banks, rather than value</strong><br /><strong style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">- Gold's performance&nbsp;is slowly forcing mainstream to re-consider gold</strong><br /><strong style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">- "Notion of gold as a hedge against serious risk aversion is true... " - Bloomberg analyst</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Editor Mark O'Byrne</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><img src="https://goldprice.org/charts/history/gold-price-performance_x.png?1746409744" width="945" height="622" style="height: auto; max-width: 100%;" class="alignnone size-large" /></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">&nbsp;</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Ten years ago last week the U.S. stock market hit a peak before crashing during the financial crisis. That now seems a like a distant memory but with stocks making new record highs every day recently, it is prudent to step back and evaluate the long term performance of assets and indeed the outlook in the coming years.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Today the S&amp;P 500 continues to make headlines as it repeatedly reaches new highs, most notably in September as it pushed past 2500&nbsp;despite North Korean/Trump war drums.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Quietly in the background gold has been putting in its own stellar performance.&nbsp;Although few would have known, given the lack of interest most market participants have paid to it in recent years.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/Snip20171015_15.png"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/Snip20171015_15-1024x683.png" alt="Decade run for gold" width="1024" height="683" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-large wp-image-11974" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Since the last peak of the S&amp;P500 the precious metal, and ultimate hedge against inflation, has climbed over 74%.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">After massive gains during the financial crisis, it fell quite sharply in all currencies in 2013 prior to consolidating at lower levels in 2014 and 2015 and then eking out gains again in 2016 and so far in 2017.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This puts gold in the&nbsp;<strong>top five of best performing assets</strong>&nbsp;in the last ten years.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/total-return-10-years-DB_1.jpg"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/total-return-10-years-DB_1.jpg" alt="total return 10 years" width="819" height="457" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-11975" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">In the year-to-date gold has almost been in line with the S&amp;P's ongoing rally. Both remain in the top 10 performing markets, with an increase of 13.41% and 14.14%, respectively.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/Snip20171015_16.png"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/Snip20171015_16-1024x864.png" alt="YTD asset performance" width="1024" height="864" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-large wp-image-11976" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Much of the chatter regarding the S&amp;P's recent performance is surrounded by whispers of concern. Some commentators wonder if equity&nbsp;markets are now entering the ebullient phase that we often see towards the end of bull markets and ahead of&nbsp;market peaks.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This is likely to be the case, but what does this mean for gold which has also had an excellent decade? Many mainstream analysts have been forced to reconsider their take on gold. An asset which, in their opinion, should not have performed so strongly against a backdrop of low inflation and strong, coordinated global growth.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>How did&nbsp;the S&amp;P500 recover to such highs?</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/Snip20171015_17.png"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/Snip20171015_17-1024x433.png" alt="First Trust History of U.S. Bear &amp; Bull Markets Since 1926" width="1024" height="433" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-large wp-image-11977" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">According to the above chart produced by First Trust, this current bull run in the S&amp;P500 is not particularly remarkable. The average bull market has lasted 9 years with an average cumulative total return of 472%.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">At the moment markets are still riding a wave of optimism, much of which seems based on&nbsp;the somewhat unexpected&nbsp;Trump Bump. Investors are either optimistic or relieved in terms of what he may do or hasn't done already.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">But the market hasn't only been climbing thanks to Trump's victory, it was already climbing for over seven years prior to his inauguration.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This bull-run is ultimately thanks to the&nbsp;ultra-loose monetary policies from major central banks.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">The Federal Reserve used&nbsp;“QE bond purchases” to purchase assets in order to increase bond prices and reduce interest rates. The primary aim was to prevent a further crash in the housing market and indeed stock markets, it worked. However the Fed has made markets addicted to QE and they have been unable to stop the massive cash injections.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Quantitative easing has massively distorted asset prices. Just take a look at benchmark Spanish and Italian 10-year government bonds&nbsp;where yields have fallen from 6-7 per cent in July 2012, to below 2%.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">It is unbelievable that investors are celebrating this state of affairs by pumping more money into the equity markets. Global growth is still slow, there is low U.S. productivity growth and rising inequality.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Inflation is beginning to tick higher both in the UK and the U.S. and many key property markets, such as London and New York city, are slowing down</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">One might say that we are seeing a stock market in a state of euphoria.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Will it last?</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">In a word: no.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Historically bull markets go out with a nice bang rather than a drawn-out whimper. They also like to go 'bang' right after they have shone at their brightest. Given the S&amp;P500 has already outperformed analysts' expectations for the end of 2017, one might ask if we are now seeing some serious glow.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">What will trigger the last swan song of this market? There is little a bull market fears above a recession.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">As explained above, the rally is thanks to QE. As the year goes on more central banks are expected to &nbsp;tighten monetary policy. But,&nbsp;there is a concern that investors are ignoring/misreading signals from central bankers or (worse) central bankers are failing to estimate the dangers of withdrawing stimulus and the recession it will likely trigger.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Citigroup recently expressed concern about how markets may react to quantitative tightening, in a research note, stating&nbsp;<em>“even small balance sheet adjustments may create outsized responses in markets – especially when several central banks are adjusting policy simultaneously”.</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This is of particular concern when one considers the high&nbsp;valuations in both global bond and equity markets (note, the S&amp;P500 isn't the only one having a good run). As Citigroup also notes,&nbsp;withdrawing stimulus&nbsp;<em>“would be less disruptive if market valuations were fair rather than expensive”.</em></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">A September survey of Bank of America hedge fund managers saw the largest net increase in those who had bought hedges against a market downturn, in over a year. So fearful are they of a severe sell-off, respondents showed&nbsp;their biggest underweight position in US stocks since November 2007.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Meanwhile cash holdings were above the average of the past decade.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Gold has done very well despite the massive bull market in stocks. This is largely due to concerns regarding loose monetary policy by those aware of gold's hedging and safe haven properties. If this is about to be reined in, what should we expect for the future performance of gold?</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Gold "really is a good hedge"</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">One of the joys of gold's stellar decade-long performance is the manner in which it has forced the mainstream to confront their prejudices.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">It is not unusual for mainstream analysts to dismiss gold's role as a hedge against multiple risks including inflation, recession and devaluation. But&nbsp;there is a change in the wind, helping gold's cause.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Last week&nbsp;<a href="https://www.bloomberg.com/news/articles/2017-10-10/is-gold-really-a-good-hedge" target="_blank">Bloomberg's Macro Man (Cameron Crise)</a>&nbsp;decided to really look into the stats and ask whether or not gold really is a good hedge.</p> <blockquote style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><p><em>I used the CBOE Volatility Index (VIX) as a proxy for market risk aversion and ran a series of multifactor regressions to determine whether equity volatility is statistically significant as an explanatory variable for gold.</em></p> <p><em>The answer, somewhat to my surprise, appears to be yes.</em></p> <p><em>...the VIX appears to be a significant statistical driver of changes in the gold price over a meaningful period of time. Based on this evidence, it looks as if claims of gold as a risk-aversion hedge might be true.</em></p> </blockquote> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Why does this matter given what we have just been discussing? Currently Wall Street's fear gauge, the VIX, &nbsp;stands just above its lowest level in two decades. But evidence (such as the BAML) survey shows that some fear is seeping into the market.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This is good news for gold, especially when one considers historical episodes of increased risk aversion.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Crise looked at the following:</p> <blockquote style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><p><em>I identified 10 notable episodes of risk aversion over the past three decades, defining the duration of each as the peak-to-valley move in the S&amp;P 500 index. I then calculated the performance of U.S. stocks, Treasuries, and gold during these episodes.</em></p> <p><em>Again, on this metric, gold looks pretty good as a risk-aversion hedge. By definition, equity market performance was poor, with an average loss of almost 20 percent per episode. Treasuries proved a useful offset, returning an average 3.4 percent and performing positively on seven occasions. Gold, meanwhile, was a star performer, rising almost 7 percent per episode, with gains in 8 of the 10 periods.</em></p> </blockquote> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/1600x-1.jpg"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/1600x-1-1024x654.jpg" alt="Risk aversion gold history" width="1024" height="654" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-large wp-image-11981" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Gold's vital role in a&nbsp;portfolio</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This is good news for those of us looking to hold gold in our portfolios. We have brought many examples to you (both academic and anecdotal) of gold's safe haven role in investing. Crise's work is yet another to add to the growing list of support for the precious metal's vital role in portfolio insurance.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Crise constructed two sample portfolios to test gold's resilience and returns in a portfolio:</p> <blockquote style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><p><em>...a simple 60/40 asset mix calculated using the S&amp;P 500 total return index and the Bloomberg Barclays US Treasury Total Return Index, and a 55/35/10 mix that reduced the stock and bond weightings by 5 percent apiece and replaced them with gold. (I used the spot gold price to calculate gold returns.)</em></p> <p><em>It turns out that a portfolio including gold outperforms the 60/40 portfolio by about 55 basis points per year, albeit at the cost of higher volatility. (The risk-adjusted return was virtually identical for both portfolios.) Over a 30-year time frame, though, that half a percent per year accumulates into quite a tidy sum.</em></p> </blockquote> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/1600x-1-2.jpg"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/1600x-1-2-1024x508.jpg" alt="gold portfolio performance" width="1024" height="508" style="height: auto; max-width: 100%; display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-large wp-image-11982" /></a></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Conclusion&nbsp;</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">For the past few years market bulls have been overjoyed to experience monetary stimulus and&nbsp;surging valuations. Now they cannot afford to ignore a reduction in stimulus against a backdrop of over-the-top valuations.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Investors also cannot afford to ignore what is about to happen. Wealth management schemes and pension plans have a huge amount of cash wrapped up in equity markets. Savers would be wise to consider the forthcoming risks and consider re balancing and allocating funds to gold in order to protect their wealth and portfolio.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">The S&amp;P500, along with other markets, may well continue to run for some time. History shows that equity bull markets have run for longer. Yet, on a host of metrics it looks very overvalued indeed and vulnerable to a sharp correction or indeed a crash.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">At the moment much rests on the unlikely scenario of central banks not going through with their threats to raise rates and for global growth to continue&nbsp;its current synchronised rise.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Gold has performed incredibly well next to an asset class which it perhaps wouldn't have been expected to do so well against.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This does not mean that the two are complementary in their behaviour. Instead investors must consider the factors that drove the S&amp;P 500 to such highs and&nbsp;how well gold will perform&nbsp;when they are no longer there.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">This scenario sounds like it is already making&nbsp;more prudent, smart money investors nervous, a situation that&nbsp;bodes well for gold in the coming months and years.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>News and&nbsp;Commentary</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.reuters.com/article/global-precious/precious-gold-prices-hold-firm-as-dollar-sags-idUSL4N1MV03W">Gold prices hold firm as dollar sags (Reuters.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://www.bloomberg.com/news/articles/2017-10-19/asia-stocks-to-end-the-week-lower-kiwi-holds-loss-markets-wrap">Dollar Gains, Treasuries Fall on U.S. Tax Hopes (Bloomberg.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.marketwatch.com/story/asia-pacific-stocks-start-lower-edge-back-into-positive-territory-2017-10-19">Asia-Pacific stocks start lower, edge back into positive territory (MarketWatch.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.politico.com/story/2017/10/19/jerome-powell-trump-candidate-federal-reserve-chair-243957">Trump leaning toward Powell for Fed chair, officials say (Politico.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.reuters.com/article/russia-cenbank-reserves-gold/russia-c-bank-gold-purchases-on-moscow-exchange-wont-change-reserves-outlook-idUSR4N1MS016">Gold purchases on Moscow Exchange won’t change reserves’ outlook - Russia (Reuters.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><a href="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/20171018_PEBITDA_0.jpg" target="_blank"><img src="http://www.goldcore.com/ie/wp-content/uploads/sites/19/2017/10/20171018_PEBITDA_0.jpg" style="height: auto; max-width: 100%;" /><br /></a>Source: ZeroHedge</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://moneyweek.com/florida-property-bubble-great-depression/">How one of the first big property bubbles led to the Great Depression (MoneyWeek.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="https://uk.news.yahoo.com/warning-ecological-armageddon-number-flying-insects-drops-75-135342925.html">Warning of 'ecological Armageddon' after dramatic 75% plunge in insect numbers (Yahoo News)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.zerohedge.com/news/2017-10-18/sp-500-now-overvalued-18-20-metrics">S&amp;P 500 Is Now Overvalued On 18 Of 20 Metrics (ZeroHedge.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.zerohedge.com/news/2017-10-18/just-two-charts">2 Charts Show S&amp;P A Bubble and Risk of Crash (ZeroHedge.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://stansberrychurchouse.com/real-estate/chinas-greater-bay-area-gets-big-green-light/">China’s Greater Bay Area gets a big green light (StansBerryChurcHouse.com)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Gold Prices (LBMA AM)</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">20 Oct: USD 1,280.25, GBP 974.27 &amp; EUR 1,084.76 per ounce<br />19 Oct: USD 1,283.40, GBP 975.64 &amp; EUR 1,087.42 per ounce<br />18 Oct: USD 1,280.65, GBP 972.53 &amp; EUR 1,090.47 per ounce<br />17 Oct: USD 1,289.70, GBP 973.47 &amp; EUR 1,097.02 per ounce<br />16 Oct: USD 1,305.15, GBP 981.08 &amp; EUR 1,107.03 per ounce<br />13 Oct: USD 1,293.90, GBP 972.88 &amp; EUR 1,093.73 per ounce<br />12 Oct: USD 1,294.45, GBP 977.96 &amp; EUR 1,092.26 per ounce</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Silver Prices (LBMA)</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">20 Oct: USD 17.08, GBP 12.96 &amp; EUR 14.46 per ounce<br />19 Oct: USD 17.03, GBP 12.93 &amp; EUR 14.40 per ounce<br />18 Oct: USD 16.95, GBP 12.86 &amp; EUR 14.42 per ounce<br />17 Oct: USD 17.11, GBP 12.96 &amp; EUR 14.55 per ounce<br />16 Oct: USD 17.41, GBP 13.09 &amp; EUR 14.75 per ounce<br />13 Oct: USD 17.20, GBP 12.94 &amp; EUR 14.55 per ounce<br />12 Oct: USD 17.20, GBP 13.06 &amp; EUR 14.50 per ounce</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><br />Recent Market Updates</strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://www.goldcore.com/us/gold-blog/gold-bullion-protects-conflict-war/">-&nbsp;How Gold Bullion Protects From Conflict And War</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/silver-bullion-prices-set-soar/">-&nbsp;Silver Bullion Prices Set to Soar</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/brexit-uk-vulnerable-gold-bar-exports-distort-uk-trade-figures/">-&nbsp;Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/puerto-rico-without-electricity-wifi-atms-shows-importance-cash-gold-silver/">-&nbsp;Puerto Rico Without Electricity, Wifi, ATMs Shows Importance of Cash, Gold and Silver</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/u-s-mint-gold-coin-sales-vix-point-increased-market-volatility-higher-gold/">-&nbsp;U.S. Mint Gold Coin Sales and VIX Point To Increased Market Volatility and Higher Gold</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/global-outlook-mad-mad-mad-mad-world-news-charts/">-&nbsp;Global Outlook – Mad, Mad, Mad, MAD World: News in Charts</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/young-guns-gold-podcast-october-2017/">-&nbsp;Young Guns of Gold Podcast – ‘The Everything Bubble’</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/london-house-prices-falling-time-buckle/">-&nbsp;London House Prices Are Falling – Time to Buckle Up</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/perth-mint-gold-coins-sales-double-september/">-&nbsp;Perth Mint Gold Coins Sales Double In September</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/survey-shows-uk-us-pensions-crisis-imminent/">-&nbsp;Survey shows UK and US Pensions Crisis is Imminent</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/gold-investment-germany-surges-now-worlds-largest-gold-buyers/">-&nbsp;Gold Investment In Germany Surges – Now World’s Largest Gold Buyers</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/yahoo-hacking-highlights-cyber-risk-increasing-importance-physical-gold/">-&nbsp;Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold</a></strong><br /><strong><a href="http://www.goldcore.com/us/gold-blog/safe-haven-silver-outperform-gold-q4-2018/">-&nbsp;Safe Haven Silver To Outperform Gold In Q4 And In 2018</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Important&nbsp;<span class="m_-928942620346942956il">Guides</span></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">For your perusal, below are our&nbsp;<span class="m_-928942620346942956m_5033479916755799273m_2111833215933341997il">most</span>&nbsp;<span class="m_-928942620346942956m_5033479916755799273m_2111833215933341997il">popular</span>&nbsp;<span class="m_-928942620346942956m_5033479916755799273m_2111833215933341997il">guides</span>&nbsp;in 2017:</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://t.hsms10.com/e1t/c/*W1sFhNs6QLBySW4Rr0Hl90CHT-0/*N5MhbFRBkTqXW95dlRy194d-P0/5/f18dQhb0S5ft8X-f1rW8cCGTT51FcdHN5s9DSvWrM1ZW3MpzC43frry_W8r4Kht63lH28W1lQSSc8y_DL1W8z_p0c67hcl-W1qMTKP5xLd3bN8zTG51RBdNtW3L39B54P7Fz2W8rCHmp3PnStQVS9p0b63dhWbW8mp0Tc5x5KNkW7-XB_567h1CPW8r5PXz49z-4PN2MV0Xm5w8jDW1mw3yc59SFsZN4H-tjrQC5z2VPC2cV7gvpc4W4XYhBl2y9PQJW4sxqtN7h5hQFW28TbSB2Cg_LLW96LzRy5DkRJDW5BRXXj2y4Lc7N3Kd2SV_-Nf6W3brNsz66rKFTW2xH0xz1lcG1VVQBGcH5DQdGhN22JjmzdPgQwW9464-Y5GFs9DW4Rj6Nh6BzJrnN45Ly2MkwRN4W8qYMH51FnsVDW2X9_p02MVHnbN2GZdYq215_BW1J7MZd3mgJK7W4F32xR1JjtM5W4Bn5JG3ZzLH2W5jL56q7dkHC7W3VtW1b1MWhN-W1MKd944yqBfl111" target="_blank">Essential&nbsp;<span class="m_6690301754972839650m_5033479916755799273m_2111833215933341997il"><span class="m_6690301754972839650il">Guide</span></span>&nbsp;To Storing Gold In Switzerland</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://t.hsms10.com/e1t/c/*W1sFhNs6QLBySW4Rr0Hl90CHT-0/*W5Hh19S2J1j6jW1gxPj45yTRLt0/5/f18dQhb0S5fw8X-fbXW8cCGTT51FcdHN5s9DSvWrM1YW3MpzC43frry_W8r4Kht63lH28W1lQSSc8y_DL1W8z_p0c67hcl-W1qMTKP5xLd3bN8zTG51RBdNtW3L39B54P7Fz2W8rCHjG25x99KVwyMQc6PVJWyW625bx16Gj8TSW6bVy-525hjVhW83KHrF7J39qHN2m8DqKmmF0wW1jsTjn5VDnrHVbq5fx4TKc2lW6Rjg6t5Pk17jW2xZzRk8LpcPpW36k5sF4FnHNZW1mvfQB2BpzSjN1mT8mr2g4dYW5VZ-P_37vq3BW2--Tfh1w3GzfW5CkFpW6ZccdyW5vvKY_3N2S6fW3KRSNH8yxr7CW7YJp821cQlwRW63x06S1bBvW3W408wWR11rnNbV4Vjkz6NjfdLW55Fr2P5nn1d6W301cwV4GX00sW5hfR428jJDdkW4Cy2w54wj2JxVMFy4w4hyJQMV6N2-D1mPRd4N6YRN0Y4ZDMLD2LMBk7BT1f5Fq5PC03" target="_blank">Essential&nbsp;<span class="m_6690301754972839650m_5033479916755799273m_2111833215933341997il"><span class="m_6690301754972839650il">Guide</span></span>&nbsp;To Storing Gold In Singapore</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong><a href="http://t.hsms10.com/e1t/c/*W1sFhNs6QLBySW4Rr0Hl90CHT-0/*W7dc5x_8dXcz0W57pb-W8yRfPY0/5/f18dQhb0Sjv98X-fhGW8cCGTT51FcdHN5s9DSvWrBCVW3MpzC43frry_W8r4Kht63lH28W1lQSSc8y_DL1W8z0sTg7mCbb0W57V1HT7tVHF9W8Z32tg35s628W859LV685kgn-W5mG2963qCNtmW8hTG4j5Zh496W2d551v3pNnKLVLrb9R83_Pn-W7JCxGl81bhDKW7N_KqM11GBXTW41TlcR3TwTqzW19BjML1ks0KjW7RPZVs5-2sjBW7ZzDyK7GLjPjW2KH_vB6SdpRZW1hx1p11Gg3W9W6rwy5K1YZKs5W2gFslL6NqPjwW1tbMwf7n90PHW67SS1j224DVBW6SdFBY1S1FW8W1Th1-Q1X2dwGW1swLvy81myPRW1B9M4Q6SdHPtW7C3gqS89xKZ9W1Ms6WG19gjwJN42ktpLPs031VgkKmy5qqk_FW41Q13s3srYmmW2-yGlm4v9PYhVmLW2J4r5l5jW7fnqv3187HWVW794lJw3T7yBDW1Zq0mT90vVQHW7SNfQy7BfhjRN3QzSrFQN_TjVcGblm3cFvNY0" target="_blank">Essential&nbsp;<span class="m_6690301754972839650m_5033479916755799273m_2111833215933341997il"><span class="m_6690301754972839650il">Guide</span></span>&nbsp;to Tax Free Gold Sovereigns (UK)</a></strong></p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Please share our research with family, friends and colleagues who you think would benefit from being informed by it.</p> http://www.zerohedge.com/news/2017-10-20/gold-74-last-market-peak-10-years-ago#comments Asia-Pacific Bank of America Bank of America Barclays Bond Bond Business CBOE CBOE Volatility Central Banks Citigroup Equity Markets Federal Reserve Finance Germany Gold as an investment Great Depression headlines Hedge Housing Market Investment Market risk Mathematical finance Monetary Policy Money New York City Precious metals Puerto Rico Quantitative Easing Recession Reuters S&P S&P 500 Security Smart Money Sovereigns Switzerland Technical analysis U.S. Treasury US Federal Reserve VIX Volatility Fri, 20 Oct 2017 11:49:19 +0000 GoldCore 605682 at http://www.zerohedge.com Democrat Wilson Slams John Kelly's "Empty Barrel" Comment: "This Has Become Totally Personal" http://www.zerohedge.com/news/2017-10-20/rep-wilson-responds-john-kellys-empty-barrel-comment-has-become-totally-personal <p>Yesterday, White House Chief of Staff John Kelly gave an emotional plea from the briefing room podium, saying he was &quot;stunned&quot; and &quot;brokenhearted&quot; at Democratic Representative Frederica Wilson&rsquo;s criticism of what was supposed to be a private call between Trump and a killed military servicemember&rsquo;s family.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>I was stunned when I came to work yesterday morning and brokenhearted at what I saw a member of Congress doing.&nbsp; A member of Congress who listened in on a phone call from the President of the United States to a young wife.&nbsp; And, in his way, he tried to express that opinion that he was a brave man, a fallen hero.&nbsp; He knew what he was getting himself into because he enlisted.&nbsp; And he was where he wanted to be, exactly where he wanted to be with exactly the people he wanted to be with when his life was taken.&nbsp; That was the message.&nbsp; That was the message that was transmitted. <strong>It stuns me that a member of Congress would have listened in on that conversation.&nbsp; Absolutely stuns me.</strong></p> </blockquote> <p>The retired US Marine Corp General then launched into a fierce criticism of Rep. Wilson, labeling her &ldquo;an empty barrel&rdquo; for allegedly taking credit for raising funding for a new FBI field office during a 2015 ceremony dedicating the new building &ndash; located in Miramar, Florida &ndash; to two FBI agents who were killed during a gunfight with drug traffickers.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>There were family members there,&quot; Kelly, who attended the ceremony in his capacity as Marine Corps general and head of US Southern Command, said Thursday. &quot;Some of the children that were there were only 3 or 4 years old when their dads were killed on that street in Miami-Dade. Three of the men that survived the fight were there and gave a rendition of how brave those men were and how they gave their lives.</p> <p>&nbsp;</p> <p>And a congresswoman stood up, and in a long tradition of empty barrels making the most noise, stood up there in all of that and talked about how she was instrumental in getting the funding for that building, and how she took care of her constituents because she got the money, and she just called up President (Barack) Obama, and on that phone call, he gave the money, the $20 million, to build the building, and she sat down. <strong>We were stunned...</strong></p> </blockquote> <p>Wilson, who recounted Trump&rsquo;s purportedly insensitive remarks &ndash; allegedly made during a conversation with the widow of Sgt. La David Johnson that Wilson was inexplicably present for &ndash; during interviews with the Washington Post and CNN, has fired back, accusing Kelly of giving an inaccurate account of a building dedication in an interview with the <a href="http://www.miamiherald.com/news/politics-government/national-politics/article179869321.html">Miami Herald</a>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/10/04/2017.10.20wilson.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/10/04/2017.10.20wilson_0.JPG" style="width: 500px; height: 278px;" /></a></p> <p>She added that the back and forth with the White House over the growing gold-star family controversy (several other families have come forward to complain about Trump&rsquo;s condolence calls, with one father saying Trump promised to send him $25,000, but never followed through) has become &ldquo;totally personal.&quot;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Thursday night, Wilson said Kelly got the story flat-out wrong. In fact, she said Washington approved the money before she was even in Congress. The legislation she sponsored named the building after Grogan and Dove, a law enacted just days before the ceremony.</p> <p>&nbsp;</p> <p><strong>&ldquo;He shouldn&#39;t be able to just say that, that is terrible,&rdquo; </strong>Wilson said of Kelly&rsquo;s remarks in the White House briefing room, the latest volley in the controversy over Trump&rsquo;s condolence call to a military widow from Miami Gardens, an area Wilson represents. <em><strong>&ldquo;This has become totally personal.&rdquo;</strong></em></p> </blockquote> <p>She rejected Kelly&rsquo;s characterization of her remarks, claiming she has staff &ndash; speech writers and such &ndash; who write her speeches for her. She also claimed the funding for the building had been secured long before she got to Congress.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;That is crazy that I got [the money] and Mr. Obama just gave it to me,&rdquo;</strong> Wilson said. <strong>&ldquo;That building was funded long before I got to Congress. I didn&rsquo;t say that. I have staff, people who write the speeches. You can&rsquo;t say that.&rdquo;</strong></p> </blockquote> <p>Johnson was killed during an Oct. 4 ambush in Niger in West Africa. Wilson said Trump was disrespectful to his widow, Myeshia, by saying her husband had known what he was getting into by joining the Army, and by calling him &ldquo;your guy&rdquo; instead of using his name. The Pentagon has opened an investigation into the ambush where Johnson was killed as troubling questions about the sequence of events have emerged. The attack, apparently carried out by militants affiliated with Islamic State, was the deadliest since Trump took office, yet the U.S. military&rsquo;s Africa Command still does not have a clear &ldquo;story board&rdquo; of facts that commanders usually gather swiftly after deadly incidents.</p> <p>Meanwhile, on Thursday night, Trump blasted Wilson in a tweet Thursday night, calling her &ldquo;wacky&rdquo; and accusing the Florida Democrat of lying about the content of his phone call with the family of a fallen soldier.</p> <p>&ldquo;The Fake News is going crazy with wacky Congresswoman Wilson(D), who was SECRETLY on a very personal call, and gave a total lie on content!&rdquo; Trump tweeted.</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">The Fake News is going crazy with wacky Congresswoman Wilson(D), who was SECRETLY on a very personal call, and gave a total lie on content!</p> <p>&mdash; Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/921207772233990144?ref_src=twsrc%5Etfw">October 20, 2017</a></p></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script><p>For now, the national conversation has lingered on the exact language Trump used during phone calls with Gold Star families and absent a phone recording leaking, it is unclear how this topic will be resolved. Kelly, himself a Gold Star father, urged the press and public to keep the pain of Gold Star &lsquo;sacred&rsquo;. Unfortunately for military families everywhere, it looks like that ship has sailed.&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="638" height="355" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.10.20wilson.JPG?1508496563" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-20/rep-wilson-responds-john-kellys-empty-barrel-comment-has-become-totally-personal#comments Africa Command army Barack Obama Brokenhearted Business Congress Donald Trump FBI Federal Bureau of Investigation Florida Pentagon Politics R. Kelly U.S. Southern Command United States United States Marine Corps US military Vocal music West Africa White House White House Fri, 20 Oct 2017 11:45:35 +0000 Tyler Durden 605679 at http://www.zerohedge.com Coverup Questions Emerge Over Vegas Security Guard's 'Ellen' Appearance http://www.zerohedge.com/news/2017-10-19/coverup-questions-emerge-over-vegas-security-guards-ellen-appearance <p>Following<a href="http://www.zerohedge.com/news/2017-10-18/missing-vegas-massacre-security-guard-resurfaces"> his sudden re-appearance on The Ellen Show after vanishing for 6 days,</a> numerous questions remain unanswered about Mandalay Bay shooting hero Jesus Campos&#39; timeline and perhaps more concerning stil is that <a href="http://www.dailymail.co.uk/news/article-4996918/Hotel-insisted-Jesus-Campos-appear-Ellen-fearing-lawsuites.html">The Daily Mail reports </a>that <strong>he was pressured into giving his only interview to Ellen DeGeneres because the giant company that owns the Las Vegas casino feared he would spill the beans about the shooting timeline if he was grilled by real journalists</strong>.</p> <p><img height="518" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171019_ellen1_0.jpg" width="600" /></p> <p><a href="http://www.zerohedge.com/news/2017-10-14/vegas-massacre-timeline-shifts-again-very-dynamic-event">As we detailed previously,</a> <strong>Campos had originally agreed to do five interviews, all on Thursday last week, but suddenly went missing,</strong> his union boss, who was helping set up the deal, <a href="http://www.dailymail.co.uk/news/article-4996918/Hotel-insisted-Jesus-Campos-appear-Ellen-fearing-lawsuites.html">told DailyMail.com in an exclusive interview.</a> David Hickey, president of the Michigan-based International Union, Security Police and Fire Professionals of America, <strong>would not confirm that MGM was behind the decision,</strong> but said the company certainly influenced Campos.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>&lsquo;I was in a meeting with MGM&rsquo;s upper management and they were definitely concerned about how tough someone like Hannity would be on him and they voiced their opinions,&rsquo; </strong></em>Hickey said.</p> <p>&nbsp;</p> <p>He said all sides had agreed parameters for the interviews. <em><strong>&lsquo;Everyone knew he wasn&rsquo;t to talk about security protocols, staffing or training or give out names of employees.&rsquo;</strong></em></p> <p>&nbsp;</p> <p>But he said the company &mdash; that, like most of Vegas&rsquo;s casino industry, obsessively controls what employees are allowed to say to the media &mdash; was pressuring Campos not to give too much away.</p> <p>&nbsp;</p> <p><em><strong>&lsquo;I thought they were being negative, telling him that someone was going to be tough and how they were worried about his health &mdash; it wasn&rsquo;t the thing he needed to hear four hours before the interviews were going to begin.&rsquo;</strong></em></p> </blockquote> <p>Hickey said he met with the MGM executives at a location in Las Vegas where Campos was staying. They met in the living room but he wanted a word with some of the management team in private so they went into the bedroom.</p> <p><strong>When they returned, Campos had gone, and Hickey said he hasn&rsquo;t seen or heard from him since.</strong> The next thing he knew the security official had bailed on the five interviews.</p> <p><em>Then he learned on Monday that instead of appearing on a news show he would go on Ellen.</em></p> <p><em><span style="text-decoration: underline;"><strong>&lsquo;It certainly wasn&rsquo;t my choice that he should appear on that circus,&rsquo;</strong></span></em> Hickey<a href="http://www.dailymail.co.uk/news/article-4996918/Hotel-insisted-Jesus-Campos-appear-Ellen-fearing-lawsuites.html"> told DailyMail.com.</a></p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171018_csmpos.jpg"><img height="323" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171018_csmpos_0.jpg" width="600" /></a></p> <p><strong>Ellen did not press him on the official timeline of the shooting, which has changed three times since the massacre.</strong></p> <p><strong><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/17/20171019_ellen2.jpg" style="width: 599px; height: 330px;" /></strong></p> <p><u><strong>And that appears to have been MGM&#39;s plan.</strong></u></p> <p>When he went through his recollection of the night,<strong> she did not press him to clarify some of the lingering questions about the official timeline - such as whether he or hotel officials delayed calling police for six minutes after he was shot.</strong></p> <p>If that version is proven to be true, it could open MGM to massive costs from lawsuits.</p> <p>DeGeneres told him:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&#39;I know you&#39;ve had so many people asking for you to tell the story and talk about it and I understand your reluctance. <strong>You&#39;re talking about it now and you&#39;re not going to talk about it again.</strong></p> <p>&nbsp;</p> <p>&lsquo;I don&#39;t blame you. Why relive it over and over?&#39;</p> </blockquote> <p>Sources told<a href="http://www.dailymail.co.uk/news/article-4996918/Hotel-insisted-Jesus-Campos-appear-Ellen-fearing-lawsuites.html"> DailyMail.com</a>, <strong>MGM is worried that families of the 58 people murdered as well as many of the 546 injured&nbsp; in the Mandalay Bay massacre will launch lawsuits</strong> potentially worth billions of dollars against the company, and <strong>they thought Campos might not keep his story straight under the pressure of the TV lights and tough questioning</strong>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>That is why Campos, 25, appeared on a daytime chat show hosted by a fast-talking, dancing comedienne, <strong><em>rather than take questions from TV hardhitters such as Fox News&rsquo; Sean Hannity, NBC News or ABC News</em></strong>.</p> <p>&nbsp;</p> <p><em><strong>&lsquo;MGM was behind the decision to call off all the interviews and did a deal with Ellen, knowing she would not play hardball on the timeline as long as she had the exclusive,&rsquo; </strong></em><a href="http://www.dailymail.co.uk/news/article-4996918/Hotel-insisted-Jesus-Campos-appear-Ellen-fearing-lawsuites.html">a TV insider told DailyMail.com</a>.</p> </blockquote> <p>The stench of coverup continues...</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="634" height="349" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171019_ellen2.jpg?1508457856" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-19/coverup-questions-emerge-over-vegas-security-guards-ellen-appearance#comments ABC News American people of German descent California CAPTCHA Ellen Ellen DeGeneres Fox News Hannity International Union Las Vegas Metro-Goldwyn-Mayer NBC Sean Hannity Security Police security protocols Television The Ellen DeGeneres Show United States Fri, 20 Oct 2017 11:45:00 +0000 Tyler Durden 605667 at http://www.zerohedge.com General Electric Plunges 5% After Slashing Guidance http://www.zerohedge.com/news/2017-10-20/general-electric-plunges-5-after-slashing-earnings-guidance <p>While it may not have slashed its dividend, yet, General Electric shares plunged 5% in the pre-market after the company cut its 2017 profit forecast while its new CEO grapples with one of the deepest slumps in the iconic US manufacturer’s history. The company reported that adjusted earnings this year are expected to be only $1.05 to $1.10 per share, down over 30% from a previous range of $1.60 to $1.70 a share. This is also sharply lower than the sellside consensus of $1.54 a share.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/17/GS%20plunges.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/17/GS%20plunges_0.jpg" width="500" height="281" /></a></p> <p>For the current quarter, the industrial conglomerate and maker of jet engines and gas turbines reported adjusted Q3 EPS of 29 cents, nearly 50% below the 50 cent consensus estimate. </p> <p>As Bloomberg <a href="https://www.bloomberg.com/news/articles/2017-10-20/ge-cuts-2017-profit-forecast-as-new-ceo-battles-deepening-slump">reports</a>, the revision underscores the severity of the challenges facing Chief Executive Officer John Flannery, who took over Jeffrey Immelt’s longtime post in August. With hurdles from poor cash flows to slumping power-generation markets, GE is by far the biggest loser on the Dow Jones Industrial Average this year and has seen a quarter of its market value evaporate.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The cut is the latest step in what is shaping up to be a dramatic repositioning of GE under its new leadership. Flannery this month welcomed a representative of activist investor Trian Fund Management to GE’s board and announced several management changes<strong>. He is seeking deep cost cuts and has said he will consider all options, including portfolio changes.</strong></p> </blockquote> <p>In addition to GE no longer using a "shadow" private jet for its CEO, not to mention slashing its fleets of private cars and other corporate perks as the WSJ infamously reported yesterday, expect thousands more in layoffs from what was once America's most iconic company, which in turn will follow to more complaints by the Fed about America's growing "qualified labor shortage." And now we wait news on the fate of the company's dividend which <a href="http://www.zerohedge.com/news/2017-10-19/ge-options-are-pricing-massive-dividend-cuts">wall street expects to be "massively" cut</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="800" height="450" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/GS%20plunges.jpg?1508498652" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-20/general-electric-plunges-5-after-slashing-earnings-guidance#comments Business Business CAPTCHA Dividend Dow 30 Dow Jones Industrial Average Economy Economy of the United States General Electric General Electric General Electric Jeff Immelt Private Jet Slump The Wall Street Journal Trian US Airways US Federal Reserve Fri, 20 Oct 2017 11:29:23 +0000 Tyler Durden 605681 at http://www.zerohedge.com Stocks Hit New Record Highs, Dollar Jumps On Senate Vote; Japan Has Longest Winning Streak In History http://www.zerohedge.com/news/2017-10-20/stocks-hit-new-record-highs-dollar-jumps-senate-budget-blueprint-longest-winning-str <p>Global stocks hit new all time highs overnight, with US stock-index futures, Asian and European stocks all rising overnight after the <a href="http://www.zerohedge.com/news/2017-10-19/senate-passes-2018-budget-paving-way-15-trillion-tax-cuts-sending-yields-usdjpy-shap">Senate adopted a fiscal 2018 budget resolution</a>, paving the way for Trump's $1.5 trillion in tax cuts, while news that "dove" Jay Powell may be the next Fed chair added to the risk-on sentiment.</p> <p><strong>Among key macro trades, </strong>the USD rallied on optimism Trump tax cuts are a step closer, with USD/JPY close to 113.50 and USD/CHF back above 200DMA. USTs push through overnight lows dragging bunds and gilts lower; short Sterling strip initially bid higher after dovish Cunliffe comments before unwinding due to steepening in Eurodollars. European equity markets opened higher but ground back towards flat, as mining stocks and banks&nbsp; outperform. The euro slipped as investors awaited the next move in Spain’s Catalan crisis, and the yen fell ahead of Japan’s election. Gold dropped along with European bonds as safe havens lost favor. WTI crude fell as Iraq sought to restore flows from fields in a disputed region. Spanish banks Sabadell and Caixabank weigh on IBEX after Catalan separatists target them for deposit withdrawals; not reflected in Spanish bonds, however, which actually outperform. ZAR weakest in EMFX due to speculation Deputy PM could be fired; crude futures pressured by the strong USD.</p> <p>In the top overnight event, the Senate voted to adopt budget resolution through 51-49 vote, which paves the way for a tax overhaul and shields a future tax reform bill from a Democrat filibuster. To be sure, this is only the first step in a process that only now becomes fraught with disagreement among republicans. Sure enough, “the budget still has to pass the House, but near-term, it should be supportive for the dollar,” said Shinichiro Kadota, a senior foreign-exchange strategist at Barclays Securities Japan Ltd. in Tokyo. “Senate passage of the budget was a step required for budget reconciliation to advance tax reform.”<br /><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/17/budget%20process_0.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/17/budget%20process_0_0.jpg" width="500" height="381" /></a></p> <p>&nbsp;</p> <p>There were also reports that US President Trump is leaning towards Powell for Fed Chair. However, it was later reported that US President Trump advisers are said to be leaning towards Taylor or Powell as the next Fed Chair and added that the Fed chair role was down to the aforementioned 2 candidates, although according to online betting site Predicit the contest is now over.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/17/powell%20pd%20bbg.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/17/powell%20pd%20bbg_0.jpg" width="500" height="281" /></a></p> <p>Investors continue to eye political developments in Spain, the decision on a Federal Reserve chair that may sway the path of U.S. interest rates, and Brexit negotiations, suggesting caution as markets head into the weekend. But Thursday’s bout of volatility dissipated quickly as tax-cut optimism took hold. The CBOE Volatility Index, which surged as much as 17 percent on Thursday, actually ended the day in the red and fell further on Friday. Spain’s IBEX was unchanged after falling -0.2% even as the Stoxx 600 gained as officials in Madrid are finalizing plans for taking control of Catalonia.&nbsp; CaixaBank down 0.4%, Banco Sabadell were down 1.6%; separatist campaign group Catalan National Assembly called on supporters to pull cash from the two banks to protest at their decision to shift their legal domiciles out of the region.</p> <p>Material and tech stocks are supporting European equities this morning after a resolutely weaker day yesterday, and earnings are the main focus with Volvo shares hitting a record high after its earnings beat estimates. Swedish firms are among the best performers with Ericsson also gaining 4.8% after its earnings. Meanwhile the IBEX is lagging peers as investors exercise caution ahead of a potential triggering of Article 155 this weekend.</p> <p><strong>Japan’s Nikkei 225 Stock Average rose for a 14th day, matching the longest winning streak on record </strong>ahead of Sunday’s general election when the Abe administration’s popularity will be put to test. <strong>The last time the index saw a similar rally was back in 1961. The Nikkei 225 has gained on every trading day in October, rising 5.4 percent</strong>, while the Topix index extended its rally to a tenth session. Shares reversed an early decline as the yen weakened after the U.S. Senate adopted a fiscal 2018 budget resolution that boosted the odds for U.S. President Donald Trump’s tax cut plans. Stocks in Tokyo have been boosted on the outlook for strong corporate earnings, foreign buying and bets that Prime Minister Shinzo Abe’s coalition would retain power with a two-thirds majority in parliament. There’s “more stealth” in this Japan market rally, said Andrew Clarke, director of trading at Mirabaud Asia Ltd. in Hong Kong. Abe’s ruling coalition is projected to lose its two-thirds majority in the election, the latest Nikkei poll showed. The most likely scenario is the Liberal Democratic Party-Komeito bloc picking up 297 seats, shy of the 310 needed for a so-called super-majority. “If the Abe victory is not priced in or is even better than expected there are going to be a lot of people chasing their tails,” Mirabaud’s Clarke said.</p> <p>Elsewhere in Asia, the MSCI Asia Pacific Index was little changed at 166.91. New Zealand retirement-village operator Ryman Healthcare Ltd. fell 4.1 percent, amid concerns incoming Prime Minister Jacinda Ardern’s policies will lead to lower property prices. Kiwi stocks fluctuated and the local dollar fell. “While political dust is settling in New Zealand with the formation of a coalition government to be headed by Jacinda Ardern, the climate is heating up in Japan ahead of general elections on Sunday, said Rob Carnell, head of research and chief economist at ING Bank in Singapore. In Hong Kong, the Hang Seng Index gained 1.2 percent, rebounding from its biggest lost in two months Thursday. India is closed for a holiday after a ceremonial shortened trading session to mark Diwali on Thursday. Shares in New Zealand .NZ50 notched their 14th straight rising session and fifth winning week to close at a record after the nationalist New Zealand First Party agreed to form a new government with the centre-left Labour Party following weeks of political negotiations, ending the centre-right National Party's decade in power. But the New Zealand dollar wallowed at five month lows after a 1.7 percent fall on Thursday, its largest daily fall since June 2016, on concerns the new Labour coalition will take a tougher stance on immigration and foreign investment.</p> <p>In commodities, West Texas Intermediate crude dipped 1 percent to $50.76 a barrel.&nbsp; Gold fell 0.7 percent to $1,281.22 an ounce. Copper climbed 0.7 percent to $3.19 a pound.</p> <p>In rates, The yield on 10-year Treasuries increased four basis points to 2.36 percent, the highest in more than a week.&nbsp; Germany’s 10-year yield increased four basis points to 0.43 percent.&nbsp; Britain’s 10-year yield advanced three basis points to 1.276 percent.</p> <p>Economic data include existing home sales. P&amp;G, General Motors, Honeywell and Baker Hughes are among companies reporting earnings</p> <p><strong>Bulletin Headline Summary from RanSquawk</strong></p> <ul> <li>US equity futures notably higher after the senate voted to adopt budget resolution, paving way for tax overhaul</li> <li>President Trump is said to be leaning towards Powell for the next Fed Chair.</li> <li>Looking ahead, highlights include Canadian CPI, US Existing Home Sales.</li> </ul> <p><strong>Market Snapshot</strong></p> <ul> <li>S&amp;P 500 futures up 0.2% to record 2,564.75</li> <li>STOXX Europe 600 up 0.1% to 389.57</li> <li>MSCI Asia down 0.07% to 166.90</li> <li>MSCI Asia ex Japan up 0.4% to 550.70</li> <li>Nikkei up 0.04% to 21,457.64</li> <li>Topix up 0.03% to 1,730.64</li> <li>Hang Seng Index up 1.2% to 28,487.24</li> <li>Shanghai Composite up 0.3% to 3,378.65</li> <li>Sensex down 0.6% to 32,389.96</li> <li>Australia S&amp;P/ASX 200 up 0.2% to 5,906.99</li> <li>Kospi up 0.7% to 2,489.54</li> <li>German 10Y yield rose 4.1 bps to 0.436%</li> <li>Euro down 0.4% to $1.1804</li> <li>Italian 10Y yield fell 1.2 bps to 1.761%</li> <li>Spanish 10Y yield rose 1.9 bps to 1.654%</li> <li>Brent futures down 1% to $56.68/bbl</li> <li>Gold spot down 0.8% to $1,280.33</li> <li>U.S. Dollar Index up 0.3% to 93.53</li> </ul> <p><strong>Top Overnight News</strong></p> <ul> <li>U.S. Senate adopted a fiscal 2018 budget resolution Thursday which House GOP leaders agreed to accept. The show of unity is aimed at speeding consideration of President Trump’s plan to enact tax cuts</li> <li>Several people familiar with the process said President Donald Trump’s<br /> closest advisers are steering him toward choosing either Stanford<br /> economist John Taylor or Federal Reserve Board Governor Jerome Powell to<br /> be the next Fed chief</li> <li>The Catalan National Assembly called on independence supporters to pull cash from CaixaBank, Banco Sabadell and other major lenders to protest their shifting out of the region. The banks said business was normal</li> <li>German Chancellor Angela Merkel upended U.K. skeptics, offering Prime Minister Theresa May the political cover she has been asking to take further steps in Brexit talks. Merkel said there is zero indication that Brexit talks won’t succeed and that she truly wants an agreement</li> <li>U.S. Secretary of State Rex Tillerson signalled impatience with China on issues from North Korea to trade, and vowed to remain on the job as long as Donald Trump will have him</li> <li>Sprint, T-Mobile Deal Announcement Is Said to Likely Be Delayed</li> <li>Barclays Sued by Fund for $850 Million in Metal Market Abuse</li> <li>Daimler Profit Falls as Mercedes Stumbles on Diesel Costs</li> <li>Trading Firms Fear Mutiny on MiFID Rule Demanding Passport Data</li> <li>Madrid Doubles Down as Catalans Prepare to Declare New State</li> <li>Existing home sales for September will be announced Friday</li> </ul> <p>A<strong>sia equity markets traded with a modest tone amid a very light calendar and mixed US lead, </strong>although risk appetite was spurred in US equity futures after the senate voted to adopt the budget resolution which paves the way for a tax overhaul. ASX 200 (+0.2%) pared initial losses amid a recovery in the largest weighted financials sector, while Nikkei 225 (Unch.) failed to benefit from JPY weakness with underperformance seen in Toshiba amid financial-related probes and Nissan after reports it halted some domestic output and that unqualified inspections occurred for the past 2 decades. Elsewhere, Hang Seng (+1.0%) rebounded from its worst performance in 2 months, while Shanghai Comp. (+0.1%) was uninspired despite the PBoC’s largest weekly net injection since January. Finally, 10yr JGBs tracked the downside seen in T-notes as risk appetite was underpinned by the developments in Washington, although losses were stemmed amid the presence of the BoJ in the market for a respectable JPY 990bln in government debt of 1yr-10yr maturities. PBoC injected CNY 50bln via 7-day reverse repos and CNY 30bln via 14-day reverse repos for a weekly net injection of CNY 560bln vs. last week's net drain of CNY 240bln. </p> <p><em>Top Asian News</em></p> <ul> <li>Dymon Asia Hedge Fund to Raise $600 Million in Equity Expansion</li> <li>Noble Group Faces 11th Hour Oil-Unit Sale as Stock Is Halted</li> <li>Abe’s Coalition Seen Losing Two-Thirds Majority in Nikkei Poll</li> <li>Foreigners Return to Add Momentum as Nikkei Surges 14th Day</li> <li>Swiss $3 Billion Fund Bets Himalayan Nuts Will Crank Returns</li> </ul> <p><strong>European stocks are supported by material and tech stocks this morning after a resolutely weaker day yesterday, </strong>and earnings are the main focus with Volvo shares hitting a record high after its earnings beat estimates. Swedish firms are among the best performers with Ericsson also gaining 4.8% after its earnings. Meanwhile the IBEX is lagging peers as investors exercise caution ahead of a potential triggering of Article 155 this weekend. A bit more downside for debt futures in wake of the latest public sector deficit figures, despite some smaller than expected shortfalls. An 80% of GDP ex-banks/BoE headline is eye-catching and of course the Government’s financing position is just as contingent on the Brexit outcome in the longer run as the economy overall. Gilts remain on the backfoot within a 124.75-50 range, but in truth more in line with the general tone following a downturn in US Treasuries after Thursday’s European close. Indeed, Bunds are just a few ticks off a marginal new 161.54 Eurex session low, and 10 year US T-notes are just above their 124- 29+ nadir at 125-00. To recap, the catalysts for softer bonds – Washington passing the 2018 budget resolution and Fed chair favourites said to be Powell and Taylor. Spanish 10 year Bono yield back up around 1.65% ahead of the anticipated Article 155 activation against&nbsp; Catalonia over the weekend.</p> <p><em>Top European News</em></p> <ul> <li>CaixaBank, Sabadell Say Business Normal After Calls to Pull Cash</li> <li>Pearson Is Said in Advanced Talks to Sell Unit to Chinese Group</li> <li>U.K. Budget Gap Narrows More Than Forecast on Solid Tax Growth</li> <li>Austria’s Schelling Says ECB Should Slow Down Asset Purchases</li> <li>Glencore Stake Swap Cements Ties With Russia’s Aluminum King</li> <li>Telecom Italia Said to Be Open to Spinoff of Landline Grid</li> <li>Betsson Drops Most in Year After a ‘Weak’ Third Quarter</li> <li>Ericsson Gains on Improving Sentiment Amid High Short Interest</li> </ul> <p><strong>In currencies, </strong>the dollar index saw a recovery ahead of the 93.00 level, finding a bid following the US Senate’s decision to pass the budget blueprint, which is key to President Trump’s tax effort. EUR/USD failed to test October’s high, with the daily candle ‘head and shoulders’ formation, now evident, bears will look for a break through 1.1671 to indicate a change in direction in the pair, with eyes on the ECB next week. EUR/USD sees around 3bln worth of expires today between 1.1800 – 1.1850. USD/JPY has followed the vast majority of USD crosses in finding some greenback buying, however, has run into some resistance, with touted offers between 113.30/50. In cable, subdued data, and economical concerning commentary from BoE members Ramsden, Teneryo and Cunliffe this week has seen the percentage of a November hike from the BoE fall from 80% to around 70%. Cable has seen a bearish week, coming back to trade in the post Brexit range, a long term support trendline continues to act as a support, with bears likely to look for a break through 1.3. Brexit talk continues, with May, Davis and Merkel all weighing in yesterday; with Davis telling officials to step up planning for a potential no-deal in Brexit discussions. The Loonie will be in focus today, with inflation and retail sales due at 13.30. Excluding Canada’s latest&nbsp; employment report, where the focus was on part-time employment moving to full-time employment, data has been a concern for the BoC following their unexpected hike, as likelihood of another move in 2017 lessens. USD/CAD trades in consolidation of late, stuck in this October 1.2450 – 1.2600 range, with many awaiting for the aforementioned data to possibly give the pair some monthly direction.</p> <p><strong>In commodities</strong>, WTI and Brent crude futures hovering at the lows amid the upside seen in the greenback, with WTI pushing through yesterday lows. Similarly selling pressure has been observed in the precious metal complex due to the strength in the aforementioned USD. Gold fell 0.7 percent to $1,281.22 an ounce. Copper climbed 0.7 percent to $3.19 a pound.</p> <p><strong>Looking at the day ahead, </strong>today will be a big day for Brexit talks with EU leaders set to meet and discuss at the European Council meeting in Brussels in the morning. Away from that, the day ends with the Fed’s Yellen speaking in the evening. Datawise we get US existing home sales data for September. General Electric and Proctor &amp; Gamble results will be due.</p> <p><strong>US Event Calendar</strong></p> <ul> <li>10am: Existing Home Sales, est. 5.3m, prior 5.35m; MoM est. -0.93%, prior -1.7%</li> <li>2pm: Fed’s Mester Speaks on Global Regulatory Structure</li> <li>7:30pm: Yellen Gives Lecture on Monetary Policy Since Financial Crisis</li> </ul> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>Stateside the S&amp;P 500 looked at the early weakness and decided that it wasn’t<br /> going to let it ruin its recent run and turned round a 0.5% intra-day loss at<br /> the lows into a small (+0.03%) gain into the close, in part as Politico reported<br /> that Fed Governor Powell is the “leading candidate” for the Fed Chair after<br /> President Trump has now concluded interviews with the five potential candidates.<br /> The report has also caused a small rally in US treasuries to close 2.9bp lower<br /> yesterday. Later on, Bloomberg reported that VP Pence and Treasury Secretary<br /> Mnuchin are advocating Taylor or Powell to President Trump.</p> <p>Overnight, the most important news is that the senate has voted 51-49 to<br /> adopt the FY18 budget resolution which clears one obstacle and enables<br /> the Republicans to move onto the next stage of delivering tax reforms. This<br /> morning, UST10y have reversed yesterday’s move at are trading at 2.355% as we<br /> type, after being below 2.30% at the lows yesterday as risk markets were having<br /> a mini wobble. It does feel Treasuries have been all over the place this past week<br /> with CPI, the Fed Chair headlines, the risk off from yesterday and then the senate<br /> vote giving ammunition to both sides. </p> <p>Yesterday’s early losses originally stemmed from Asia as after going to print<br /> yesterday, the Hang Seng fell from near flat deep into the afternoon session<br /> to then close -1.92% (worst since mid-August). This was on the back of sharp<br /> property sector falls as 3 month bank rates rose by the most this year. It couldn't<br /> have helped the subsequent risk-off environment to hear the Chinese Central<br /> Bank governor Zhou warning of a possible 'Minsky moment' for the economy<br /> where “if we’re too optimistic when things go smoothly, tensions build up, which<br /> could lead to a sharp correction”. He didn’t specify which asset class he was<br /> referring to, but broadly noted that corporate borrowing in China is “very high”,<br /> partly due to inadequate direct financing and inefficient capital allocation by<br /> companies. This morning in Asia, markets are trading modestly higher though,<br /> with the Hang Seng rebounding +0.98%, while Kospi (+0.54%), ASX 200 (+0.17%)<br /> and Nikkei (-0.07%) are slightly up as we type.</p> <p>Elsewhere the world's biggest company - namely Apple - fell (-2.37%) yesterday<br /> as reports from the Chinese Economic Daily news suggested that orders for the<br /> iPhone 8 had been disappointing. Obviously next month's launch of the iPhone<br /> X was always going to overshadow the '8' so we'll see if that makes up for any<br /> disappointments. Given it makes up c4% of the S&amp;P 500 and c12% of the Nasdaq<br /> then even us macro guys have to be aware of it. Suppliers of Apple also had a<br /> weak day in sympathy. Weaker earnings in Europe (e.g. Unilever, Nestle, Thales<br /> and Roche) also didn't help sentiment and neither did the signs that the Spanish<br /> situation remains tense (more below). </p> <p>Turning to Spain, where Catalan President Puidgemont has refused to<br /> denounce the claim to independence, noting that “if the Spanish government<br /> persists in blocking dialogue…the Catalan Parliament may proceed…to approve<br /> a formal declaration of independence”. In response, Spain’s government has<br /> issued a statement invoking Article 155 of the Constitution which starts the<br /> process of potentially taking direct control of Catalonia. The Spanish cabinet<br /> will meet this Saturday to approve specific measures before seeking approval<br /> from the Senate, which could take weeks. Later on, sources told Bloomberg<br /> that senior lawmakers from the main pro-independence parties will meet next<br /> Monday in Catalan Parliament to discuss next steps. Spanish markets modestly<br /> underperformed yesterday, with the IBEX -0.74% and 10y yields up 1.7bp while<br /> core European bond yields fell slightly (Bunds -0.1bp; OATs -1.3bp; Gilts -3.6bp). </p> <p>Onto Brexit talks which remains at a stalemate over at the EU Summit, with<br /> one of the main sticking point being UK’s potential financial obligation to the<br /> EU. The Dutch PM noted that PM “May has to come up with more clarity on<br /> what is meant by other commitments in her Florence speech”. That said, rhetoric<br /> continues to offer a glimpse of hope as Germany Merkel’s noted that “at this<br /> point, it’s not sufficient to begin the second phase, but it’s encouraging enough<br /> to continue working (on preparatory work) in order to reach the beginning of<br /> the second phase (ie: talks on trade) in December” and that there is “zero<br /> indication” that Brexit talks won’t succeed. Back in the UK, First Secretary of<br /> State Green noted that it’s “hugely desirable” and likely that a Brexit deal will be<br /> reached, while Foreign Secretary Johnson said “that we’ll get….a great deal…<br /> but with any negotiation, you’ve got to be prepared to walk away”. </p> <p>Staying with politics, this Sunday, we will see the Japanese election where polls<br /> suggests PM Abe should win a two thirds majority in parliament and secure his<br /> third term. According to a survey by Sankei newspaper on Tuesday, it forecasts<br /> PM Abe’s coalition side could win 300-335 seats out of a total of 465 seats (Abe’s<br /> LDP takes c300, coalition partner takes c35), which is slightly higher than earlier<br /> polls. A win by PM Abe could lead to a continuation of accommodative monetary<br /> policy along with potential changes towards higher sales tax and the approval of<br /> gambling resorts. </p> <p>Now quickly recapping other markets performance from yesterday. The<br /> Nasdaq fell 0.29% while Dow was broadly flat. Within the S&amp;P, modest gains from<br /> the utilities and health care sectors were broadly offset by losses from consumer<br /> staples and tech stocks, while United Continental dropped the most in eight<br /> years (-12.08%) after a disappointing profit forecast. European bourses broadly<br /> weakened, with peripherals such as Italy (-0.99%) and Spain (-0.74%) slightly<br /> underperforming the core indices (Stoxx 600 -0.63%, FTSE -0.26%). The VIX touched an intra-day high of 11.78 (highest since early September) but closed at<br /> 10.05 (-0.02pts) for the day. </p> <p>Onto currencies, the US dollar index dipped 0.1% while the Euro gained 0.55%<br /> and Sterling weakened 0.35%, partly impacted by the lower than expected retail<br /> sales readings. In commodities, WTI oil fell 1.44% while Russia and OPEC are<br /> reportedly speaking to other members behind the scenes to ensure an extension<br /> of oil supply cuts at next month’s OPEC meeting. Precious metals rebounded<br /> slightly after three consecutive days of losses (Gold +0.71%; Silver +1.50%)<br /> while other base metals were mixed but little changed (Copper -0.60%; Zinc<br /> +0.08%; Aluminium +0.87%). </p> <p>Away from markets and onto central banker commentaries. The ECB’s Nowotny<br /> noted that the ECB must decide in October on how QE will continue and that<br /> “there are good arguments for a slow reduction of purchases”, while also<br /> noting that “we don’t have to wait until inflation reaches 1.9%, we can normalise<br /> policy earlier”. Elsewhere, BOE’s policy maker Cunliffe sounded a bit dovish<br /> where he is “very clear” that a slow and gradual rate hike is warranted, but “when<br /> that process starts is a more open question”, with his decision “based in large<br /> part on whether I see domestic inflation pressure and what I see happening to<br /> pay in the economy”. </p> <p>Finally, arguably the most consequential surprise across markets this year has<br /> been the slowdown in inflation. The slowdown began in March even as growth<br /> strengthened and the labour market tightened. Large cross asset impacts have<br /> understandably led to an acute market focus on inflation, its drivers and debate<br /> as to its prospects, but it has also led to a large number of myths about inflation.<br /> DB’s multi asset strategists discuss 6 of them in their note and suggests that if<br /> inflation was judged by historical standards to be completely normal, then a Fed<br /> behaving in line with its past behaviour would have policy rates at 350bp instead<br /> of being at 113bp. </p> <p> Before we take a look at today’s calendar, we wrap up with other data releases<br /> from yesterday. The US macro data was a bit mixed. The October Philly Fed<br /> business outlook index was materially above expectations at 27.9 (vs. 22<br /> expected) and now slightly above the June reading, while the weekly initial<br /> jobless claims reached a 44 year record low at 222k (vs. 240k expected).<br /> Elsewhere, the continuing claims was broadly in line at 1,888k (vs. 1,890k<br /> expected), while the Conference board leading index was down 0.2% mom<br /> (vs. 0.1% expected). In the UK, the core September retail sales fell more than<br /> expected, at -0.7% mom (vs. -0.2%) and 1.6% yoy (vs. 2.2% expected)</p> <p>Over in China, as we noted yesterday, its 3Q GDP reading was in line at 6.8% yoy,<br /> but both the September retail sales (10.3% yoy vs. 10.2% expected) and IP (6.6%<br /> yoy vs. 6.5% expected) slightly beat expectations. Our China economists have<br /> revised up their 4Q GDP growth forecast to 6.6% (+0.1ppt) and 2017 full year<br /> forecast to 6.8% (+0.1ppt), as growth momentum has been stronger than they<br /> expected, particularly in the service sector. This is likely supported by the wealth<br /> effect from the property market boom in the tier 3 cities. In their view, growth<br /> will likely slow in 2018 but the pace depends on the growth target to be set<br /> by the new group of leaders in the Central Economic Working Conference in<br /> December . On balance, our China team expect a flexible growth target for 2018 and for growth to slow to 6.3%. However, the risk to this forecast is to the upside,<br /> if the leaders decide to keep the target at 6.5%. </p> <p>Looking at the day ahead, today will be a big day for Brexit talks with EU leaders<br /> set to meet and discuss at the European Council meeting in Brussels in the<br /> morning. Away from that, the day ends with the Fed’s Mester speaking in the<br /> evening. Datawise UK public sector net borrowing data for September and US<br /> existing home sales data for September are the only releases of note. General<br /> Electric and Proctor &amp; Gamble results will be due.</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="660" height="371" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/happy%20trader%202_12.jpg?1508497156" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-20/stocks-hit-new-record-highs-dollar-jumps-senate-budget-blueprint-longest-winning-str#comments Abe administration Aftermath of the United Kingdom European Union membership referendum Apple ASX 200 Banco Sabadell Bank of Japan Barclays BOE BoE Bond Brexit Business CAD Catalan parliament CBOE CBOE Volatility China Conference Board Continuing Claims Copper CPI Crude Democratic Party Donald Trump Equity Markets European Central Bank European Council European Union European Union federal government Federal Reserve Federal Reserve Board Futures contract Futures markets Gambling General Electric General Motors Germany Gilts Hang Seng 40 headlines Honeywell Hong Kong IBEX 35 India Iraq Italy Japan Jim Reid Labour Party Monetary Policy MSCI Asia Pacific NASDAQ NASDAQ 100 National Party New Zealand New Zealand First Party Newspaper Nikkei Nikkei 225 North Korea OPEC Organization of Petroleum-Exporting Countries People's Bank of China Philly Fed Politics Precious Metals recovery Republican Party Rex Tillerson S&P S&P 500 S&P/ASX 200 Senate Shinz? Abe Short Interest Spain’s government Spanish government Stanford Stoxx 600 Topix United Kingdom European Union membership referendum United States United States Senate US Dollar Index US Federal Reserve Volatility Volvo West Texas World Yen Fri, 20 Oct 2017 11:06:30 +0000 Tyler Durden 605680 at http://www.zerohedge.com Did Money Talk: Europe’s "Real Boss" Now Expects Progress On Brexit By December http://www.zerohedge.com/news/2017-10-20/did-money-talk-europe%E2%80%99s-real-boss-now-expects-progress-brexit-december <p>?The &ldquo;British press&rdquo; is wrong (although it wasn&rsquo;t just the British press): Brexit negotiations are going well and the divorce settlement should be finalised by December. Really?</p> <p>This is what the EU&rsquo;s &quot;real&quot; boss had to say on the state of Brexit negotiations following the first day of the EU summit. <strong>&ldquo;My position wasn&rsquo;t changed by Theresa&rsquo;s May&rsquo;s presentation, because I&rsquo;ve kept in continuous contact with her by phone. What I heard today was a confirmation of the fact that, in contrast to what you hear in the British press, the process is moving forward step-by-step&hellip;</strong><strong>At this point, it&rsquo;s not yet sufficient to begin the second phase, but it&rsquo;s encouraging enough to continue working in order to reach the beginning of the second phase in December.&rdquo;</strong></p> <p>According to <a href="https://uk.reuters.com/article/uk-britain-eu/merkel-sends-positive-signal-to-may-on-brexit-talks-idUKKBN1CO35X">Reuters</a>, Merkel dismissed suggestions that the talks should be broken off as &ldquo;absurd&rdquo;, commenting &ldquo;I have absolutely no doubts that if we are all focused ... that we can get a good result. From my side there are no indications at all that we won&rsquo;t succeed,&rsquo; she said.&rdquo;</p> <p>From <a href="https://www.bloomberg.com/news/articles/2017-10-19/may-appeals-to-eu-for-a-brexit-deal-she-can-sell-at-home">Bloomberg</a>, &ldquo;<strong>Now both sides need to move</strong>,&rsquo; Merkel told reporters after hearing May speak at dinner, in a shift of rhetoric for the EU side, which has previously insisted that it&rsquo;s up to the U.K. alone to make the next move.EU leaders are aware of the fragility of May&rsquo;s position -- she&rsquo;s trying to hold onto her job after a failed election and keep a squabbling Cabinet together. That&rsquo;s why they offered her <a href="https://www.bloomberg.com/politics/articles/2017-10-19/eu-leaders-offer-may-encouraging-brexit-words-and-ask-for-more" target="_blank" title="EU Leaders Offer May Encouraging Brexit Words; Ask for More (1)">words</a> of encouragement on Thursday, according to an EU official speaking on condition of anonymity. The conclusions of the summit also point to possible progress before year-end, while demanding more concrete steps from the U.K.&rdquo;</p> <p>Three days ago, Germany and France were reportedly taking a tougher line on talks and members of Theresa May&rsquo;s team were briefing journalists that negotiations could collapse after the summit if no ground was given by the EU (see &ldquo;<a href="http://www.zerohedge.com/news/2017-10-17/theresa-mays-government-fears-imminent-collapse-brexit-negotiations">Theresa May&#39;s Government Fears Imminent Collapse Of Brexit Negotiations</a>&rdquo;). However, UK Brexit Minister, David Davis, is slightly less confident and is still planning for a potential breakdown according to the lead story in today&rsquo;s Times.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/17/am4.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/17/am4_0.jpg" style="width: 500px; height: 553px;" /></a></p> <p>As we&rsquo;ve said, <strong>&ldquo;it boils down to money&rdquo;</strong> and the EU is reluctant to move forward until both sides can agree on a number. This is where we suspect that some progress was made. If so, the more upbeat tone from Merkel makes sense and, according to an un-named UK official, this is what happened. <strong>&ldquo;</strong><strong>The U.K. prime minister signalled she&rsquo;s willing to offer more on the divorce bill, according to a U.K. official</strong>. May urged leaders at a European summit to help her find a deal she could sell to sceptics at home, and her counterparts responded with words of encouragement -- though no concrete concessions.&rdquo;</p> <p>In terms of numbers, May&rsquo;s initial offer made in Florence on 22 September 2017 was about 20 billion euros along with further unspecified commitments that might amount to another 20 billion euros. The EU is thought to be demanding in the region of 60 billion euros. &nbsp;</p> <p>Before the dinner began, some thought had gone into the choreography, as TV footage was dominated by May&#39;s friendly chatting with both Merkel and Macron. The photo below shows what might have been the critical moment in the talks.</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/17/am3_0.jpg" style="width: 500px; height: 282px;" /></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="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/am1.jpg?1508494077" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-20/did-money-talk-europe%E2%80%99s-real-boss-now-expects-progress-brexit-december#comments Angela Merkel Brexit Brexit negotiations European Union European Union France Germany Government Negotiation Politics Reuters Theresa May Fri, 20 Oct 2017 10:08:33 +0000 Tyler Durden 605678 at http://www.zerohedge.com