http://www.zerohedge.com/fullrss2.xml/feeds/comments/Kerry en June Rate Hike Odds Collapse To Record Lows - Market Prices In No Hikes Through Feb 2017 http://www.zerohedge.com/news/2016-05-06/june-rate-hike-odds-collapse-record-lows-market-prices-no-hikes-through-feb-2017 <p>The market took one look at today's dismal jobs data and marked down the data-dependent Fed's rate-hike schedule to record lows. June odds are now at 4% - the lowest on record...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/06/20160507_WIRP.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/06/20160507_WIRP_0.png" width="600" height="174" /></a></p> <p> And even out to Feb 2017 there is a less than 50-50 chance of The Fed acting...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/06/20160507_WIRP1.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/06/20160507_WIRP1.png" width="251" height="164" /></a></p> http://www.zerohedge.com/news/2016-05-06/june-rate-hike-odds-collapse-record-lows-market-prices-no-hikes-through-feb-2017#comments Fri, 06 May 2016 12:56:14 +0000 Tyler Durden 530653 at http://www.zerohedge.com 562,000 Workers Drop Out Of The Labor Force As Participation Rate Resumes Drop http://www.zerohedge.com/news/2016-05-06/562000-workers-drop-out-labor-force-participation-rate-resumes-drop <p>In addition to the poor headline Establishment survey print which rose only 160,000 in April, coupled with a deplorable Household survey employment number which plunged by 316,000 for the month and below levels seen in February, an even more concerning development was the resumption in the deteriorating trend in the US labor force participation rate, which in recent months had been on a steady increase as far fewer workers were dropping out of the workforce (contrary to convention wisdom, this was not driven by new entrants into the labor force).</p> <p>All that changed today, when the number of Americans not in the labor force soared by a whopping 562,000 in April, pushing the grand total of people not in the labor force back over 94 million and fast approaching the all time high of 94.6 million. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/lfp%20.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/lfp%20_0.jpg" width="600" height="561" /></a></p> <p>As a result, the participation rate, which recently had climbed to 63% or the highest since early 2014, has once again resumed its downward slope with the April print down to just 62.8% as the poor labor and demographic conditions once again emerge as a key driver within the US workforce.</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="1050" height="503" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/lfp%20teaser.jpg?1462539132" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-06/562000-workers-drop-out-labor-force-participation-rate-resumes-drop#comments Fri, 06 May 2016 12:52:08 +0000 Tyler Durden 530652 at http://www.zerohedge.com Payrolls Miss Huge: April Jobs Rose Only 160K, Below 200K Expected; Unemployment Rate At 5% http://www.zerohedge.com/news/2016-05-06/payrolls-miss-huge-april-jobs-rose-only-160k-below-200k-expected-unemployment-rate-5 <p>It appears that the Fed is now officially "one and done" because the only indicator that until recently "confirmed" a "strong recovery", non-farm payrolls, just had a major stumble.&nbsp;</p> <p> In yet another Goldman jinx which just two days ago boosted its payrolls forecast from 225K to 240K, moments ago the BLS reported that ADP's ominous print was right when it said that April payrolls rose only 160K, far below the 200K expected, and higher than just 1 of 92 economist expectations. This was the lowest print since last September's 145K. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/payrolls%20april.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/payrolls%20april_0.jpg" width="600" height="386" /></a></p> <p>Private payrolls rose 171K on expectations of a 195K print, with last month's 230K revised steeply lower to 184K.</p> <p>The unemployment rate also missed expectations of a drop to 4.9% and stayed flat at 5.0%.</p> <p>The March 215K job growth was revised lower to 208K, while the February was also revised lower from 242K to 233K for a net -19K drop.</p> <p>Worse, the household survey suggested that a whopping 316K jobs were lost in April, as the total number of employed dropped from 151,320 to 151,004.</p> <p>The silver lining was that unlike last month, wage growth was more stable on both an average hourly and weekly basis, with average hourly earnings rising 0.3%, as expected, and up from a downward revised 0.2% in March. Curiously, last month's big drop in average weekly earnings was revised higher to 2.1%, while in April weekly earnings rose 2.6%, the highest since last October.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/wage%20growth.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/wage%20growth_0.jpg" width="600" height="717" /></a></p> <p>* * * </p> <p>According to the BLS, total nonfarm payroll employment increased by 160,000 in April. Over the prior&nbsp; 12 months, employment growth had averaged 232,000 per month. In April, employment gains occurred in professional and business services, health care,&nbsp; and financial activities, while mining continued to lose jobs. (See table B-1.) </p> <p><em>The breakdown:</em></p> <p>Professional and business services added 65,000 jobs in April. The industry added an average of 51,000 jobs per month over the prior 12 months. In April,&nbsp; job gains occurred in management and technical consulting services (+21,000)&nbsp; and in computer systems design and related services (+7,000).</p> <p>In April, health care employment rose by 44,000, with most of the increase&nbsp; occurring in hospitals (+23,000) and ambulatory health care services (+19,000). Over the year, health care employment has increased by 502,000.</p> <p>Employment in financial activities rose by 20,000 in April, with credit intermediation and related activities (+8,000) contributing to the gain. Financial activities has added 160,000 jobs over the past 12 months.</p> <p>Mining employment continued to decline in April (-7,000). Since reaching a peak in September 2014, employment in mining has decreased by 191,000, with more than three-quarters of the loss in support activities for mining.</p> <p>Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, leisure and hospitality, and government, showed little or no change over the month.</p> <p>The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.5 hours in April. The manufacturing workweek and overtime remained unchanged at 40.7 hours and 3.3 hours, respectively. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was up by 0.1 hour to 33.7 hours. </p> <p>In April, average hourly earnings for all employees on private nonfarm payrolls increased by 8 cents to $25.53, following an increase of 6 cents in March. Over the year, average hourly earnings have risen by 2.5 percent. In April, average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $21.45. </p> <p>The change in total nonfarm payroll employment for February was revised from +245,000 to +233,000, and the change for March was revised from +215,000 to +208,000. With these revisions, <strong>employment gains in February and March combined were 19,000 less than previously reported. Over the past 3 months, job gains have averaged 200,000 per month</strong>.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="893" height="575" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/payrolls%20april.jpg?1462538127" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-06/payrolls-miss-huge-april-jobs-rose-only-160k-below-200k-expected-unemployment-rate-5#comments BLS recovery Unemployment Fri, 06 May 2016 12:36:54 +0000 Tyler Durden 530650 at http://www.zerohedge.com Traders Dump'n'Pump VIX, Buy Gold After Dismal Jobs Data - S&P Gives Up Gains Year-To-Date http://www.zerohedge.com/news/2016-05-06/traders-dumpnpump-vix-buy-gold-after-dismal-jobs-data <p>The machines went wild when the dismal jobs data struck. The<strong> instant reaction was a complete crush of VIX</strong> (despite stocks tumbling, Gold surging, and bond yields plunging), but that<strong> rapidly turned around </strong>and now VIX is heading higher again... Gold is now up 22% Year-to-date as S&amp;P futures indicate cash will open in the red for 2016.</p> <p>VIX crushed out of teh gate but the weakness dragged it back higher as traders rush for safe haven gold and bonds...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/06/20160507_VIX1.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/06/20160507_VIX1_0.png" width="600" height="418" /></a></p> <p>&nbsp;</p> <p>broadly speakinmg it is "risk-off" for now but VIX is being manhandled to remain positive into the open...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/06/20160507_VIX2.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/06/20160507_VIX2_0.png" width="600" height="558" /></a></p> <p>&nbsp;</p> <p>And that indicates S&amp;P 500 will open in the red for 2016...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/06/20160507_VIX3.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/05/06/20160507_VIX3_0.png" width="600" height="295" /></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="2168" height="1067" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160507_VIX3.png?1462538751" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-06/traders-dumpnpump-vix-buy-gold-after-dismal-jobs-data#comments Bond Fri, 06 May 2016 12:36:18 +0000 Tyler Durden 530649 at http://www.zerohedge.com What Wall Street Expects From Today's Payrolls Report And How To Trade It http://www.zerohedge.com/news/2016-05-06/what-wall-street-expects-todays-payrolls-report-and-how-trade-it <p>In what may be one of the least relevant payroll reports in a long time as the Fed <em>already knows</em> the labor market is doing better quantiatively (qualitatively it has been all about low-paying jobs gaining at the expense of higher paying manufacturing and info-tech positions) and as has further demonstrated it is no longer <em>jobs data dependent</em>, here is what Wall Street consensus expects: <strong>total payrolls +200,000, down from 215K in March; a 4.9% unemployment rate; average hourly earnings rising 0.3% (last 0.3%) M/M and 2.4% Y/Y (last 2.3%); on labor force participation of 63</strong>%. </p> <p>As RanSquawk adds, expectations are for a reading of 200K, squarely in-line with the Fed's benchmark figure, representing continued strength in the labour market. Given the middle of the road expectations, some may take note of yesterday's ADP report, which came in well below expectations (156K vs. Exp. 195K (Prev. 200K, Rev.194K) despite it being widely considered an unreliable indicator. Other recent labour market indicators show that the US labour market is still in fine health, however, the most recent Job Openings and Labour Turnout Survey (JOLTS) came in just below expectations (5445 vs. Exp. 5490, Prev. 5541, Rev. 5604) but printed a strong 5K+ reading none the less. Finally, last month's NFP report printed higher than expected unemployment (5.0% vs. Exp. 4.9%), although some noted that this was partly due to an uptick in the labour force participation rate. If the headline comes in reasonably close to the expected, this metric could garner particular focus given the weakness last time round.</p> <p>The previous FOMC meeting saw the Fed keep rates on hold, with Esther George the lone dissenter and shed little light on the gradient of the rate hike path. They did however express a rather dovish tone on inflation expectations, and since then (April 27th) the USD has weakened significantly, printing fresh year lows in this week's session. Fed rhetoric since the meeting has largely been a reiteration of the statement provided with the rate decision, although there has been a renewed emphasis on the data dependency of the Fed.</p> <p>Forecasts by bank:</p> <ul> <li>BNP Paribas: 175K</li> <li>Deutsche Bank: 175K</li> <li>US Estimates Citi: 190K</li> <li>HSBC: 191K </li> <li>BoFA: 200K</li> <li>Wells Fargo: 213K</li> <li>Lloyds: 215K </li> <li>BBVA: 227K </li> <li>SocGen: 228K</li> <li>Goldman: 240K</li> <li>JPMorgan: 250K</li> </ul> <p>The full expectations histogram:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/20160507_NFP.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/20160507_NFP_0.png" width="600" height="224" /></a></p> <p>&nbsp;</p> <p>Here is a quick summary of market sentiment heading into payrolls courtesy of DB and Joe LaVorgna who has one of the most bearish forecasts at 175K (vs 200K consensus), and well below one of the most bullish calls, that from Goldman which sees 240K.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Welcome to random number generator day, </strong>also more commonly known as US nonfarm payrolls. The current consensus forecast is for a 200k print this afternoon although it’s interesting to see that the range of forecasts are from as low as 160k to as high as 315k. Our US economists are sitting at the lower end of that range and are forecasting for a below-market 175k gain. This is based on their view that upon closer inspection of the sectors responsible for job growth last quarter, <strong>the details reveal that retail trade has accounted for a disproportionate share of these gains </strong>(in the fact the pace of which is the fastest since 1994). They expect the pace of hiring in this sector to moderate somewhat closer to its 12-month average this month. As well as this, temp hiring, which has historically been a leading indicator of payroll growth, has declined over the same period and so these trends together contribute to their below-consensus forecast.</p> </blockquote> <p>If DB is the bearish case, Goldman is the bull. Here it is summarized:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>We expect a 240k gain in nonfarm payroll employment in April. We increased our forecast from an initial estimate of 225k published last Friday as a result of the improvement in the employment component of the ISM non-manufacturing survey released this week</strong>. Our revised estimate is above consensus expectations for a 200k increase. Most labor market indicators were roughly in line with their recent trends in April, but improvements in reported job availability and the ISM non-manufacturing survey suggest a bit more strength. Payroll employment rose 215k in March and has risen at an average pace of 209k over the last three months and 234k over the last year. </p> <p>&nbsp;</p> <p><strong>Arguing for a stronger report:</strong></p> <ul> <li><strong>Service sector surveys. </strong>The employment components of the service sector surveys were mixed in April, but we attach the greatest weight to the ISM non-manufacturing survey, whose employment component rebounded from recent lows (+2.7pt to 53.0). </li> <li><strong>Job availability. </strong>The Conference Board’s labor differential—the difference between the share of consumers saying jobs are plentiful vs. hard to get—improved a touch to +1.4 in April from +0.2 in March. The index remains below the highs reached in prior expansions. </li> </ul> <p><strong>Arguing for a weaker report:</strong></p> <ul> <li><strong>ADP. </strong>ADP reported a 156k gain in private payroll employment in April, about 50k below the recent average. </li> <li><strong>Weather. </strong>Winter weather swings can have large effects on payrolls, especially in the construction and leisure and hospitality sectors.&nbsp; </li> </ul> <p><strong>Neutral factors:</strong></p> <ul> <li><strong>Manufacturing surveys. </strong>The employment components of the manufacturing surveys were mixed to softer in April</li> <li><strong>Jobless Claims. </strong>The four-week moving average of initial jobless claims leading into the payroll reference week was basically unchanged. </li> <li><strong>Online job ads. </strong>The Conference Board’s Help Wanted Online (HWOL) report showed increases in both new and total online ads in April. </li> <li><strong>Job cuts. </strong>According to the Challenger, Gray &amp; Christmas report, job cuts were roughly flat on a seasonally-adjusted basis. Job cuts in the energy sector remained elevated in April. </li> </ul> </blockquote> <p>As Bloomberg's Richard Breslow adds, "partially because of Wednesday’s non-manufacturing ISM and more probably because DXY had a good week, economist forecasts have been ratcheted up. <strong>The whisper number, however, seems to be all over the place, suggesting traders are unconvinced about what the market will do under various outcomes. </strong>Overnight options volatility shows little anxiety or commitment."</p> <p>* * * </p> <p><strong>For traders' benefit here is a "rule of thumb primer on how to trade today's report from BofA:</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>P<strong>ost-payroll market reactions:</strong> bullish for HY &amp; stocks if "Goldilocks" release (175-225K); most bullish for gold &amp; Treasuries if weak payroll (&lt;125-150K); most bullish for $, Tech, Europe, Japan if strong payroll (&gt;250K)</p> </blockquote> <p>Some more thoughts from RanSquawk:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Given the backdrop of USD weakness, any surprise reading to the upside could lead to some significant USD strengthening, especially when one considers the interest rate differentials between the US, Europe and Japan. Conversely, given strong labour conditions are now a fundamental pillar in all present Fed and market models for the future tightening of monetary policy, any surprise to the downside could cause the USD to re-test the weeks (and Year) lows. Should the headline print relatively inline, focus may fall upon the other metrics in the report. Given the concentration of fed rhetoric on inflation forecasts, particular attention may be on average hourly earnings given its implications on wage inflation.</p> </blockquote> <p><em>Finally, here is Richard Breslow's full take on why "NFP wil tell an anecdote not a story"</em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Looking ahead to today’s nonfarm payroll report, you have to ask yourself two questions. How am I going to trade the numbers? And what does this mean for the FOMC in June and beyond? The answers are likely to be, quite rightly, different.</p> <p>&nbsp;</p> <p>NFP days tend toward the volatile, so outlier numbers really do matter for trading. But the Fed already knows the labor market is doing better. It’s not what’s keeping them on hold.</p> <p>&nbsp;</p> <p>The wage piece is the only component with lasting potential to change the narrative. Narrative means market versus central bank rate hike expectations, not speeches. And not whether June is a “live meeting” or not.</p> <p>&nbsp;</p> <p>Partially because of Wednesday’s non-manufacturing ISM and more probably because DXY had a good week, economist forecasts have been ratcheted up. The whisper number, however, seems to be all over the place, suggesting traders are unconvinced about what the market will do under various outcomes. Overnight options volatility shows little anxiety or commitment.</p> <p>&nbsp;</p> <p>Even with estimate creep, bond yields have been bid and futures remain priced at 10% rate hike chance for June. It was telling (and amusing) yesterday, that while Fed speakers were inspiring headlines like, “Fed’s Williams says 2 or 3 rate hikes this year seems reasonable,” yields kept ticking lower.</p> <p>&nbsp;</p> <p>In the last 24 hours alone, three more central banks joined the growing list of those worried about global growth and falling inflation. Australia and Czech Republic both warned of downward price pressures. Mexico said that since March the international outlook has deteriorated and warned of renewed risk of heightened financial market volatility. And don’t forget, developments in Turkey are potentially very bad news for Europe counting on a deal over refugees. </p> <p>&nbsp;</p> <p>Trade today like there’s no tomorrow, because come Monday we’ll again be data-dependent, June live and wondering what’s the next shoe to drop.</p> </blockquote> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="796" height="297" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/20160507_NFP.png?1462537038" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-06/what-wall-street-expects-todays-payrolls-report-and-how-trade-it#comments Australia Bond Central Banks Czech Goldilocks headlines Initial Jobless Claims Japan Market Sentiment Mexico Monetary Policy Non-manufacturing ISM None RANSquawk SocGen Turkey Unemployment Volatility Fri, 06 May 2016 12:16:39 +0000 Tyler Durden 530648 at http://www.zerohedge.com Everyone Is Selling: Largest Outflow From Stock Funds Since September 2015 http://www.zerohedge.com/news/2016-05-06/everyone-selling-largest-outflow-stock-funds-september-2015 <p>In what is the latest confirmation that nobody believes the "rally", the latest fund flow data from EPFR showed that US mutual fund and ETF flows turned sharply negative for stocks and high yield this past week (ending on May 4th). The outflow from stocks was $16.9BN following a $1.29bn inflow in the prior week. <strong>This was the biggest outflow from stocks since the Sep'15 capitulation on back of China devaluation.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/flows%20equities%20.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/flows%20equities%20.jpg" width="596" height="455" /></a></p> <p>In credit land it was likewise a rush into safety, with what BofA dubs a "massive preference for quality over junk in credit continues: largest IG bond inflows in 13 months contrasts with largest HY bond outflows in 3 months":</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>High yield flows turned to a $2.34bn outflow, driven mostly by just one ETF. High yield reported a $0.23bn inflow the week before. Inflows to high grade remained strong, however, falling marginally week over week to $2.76bn from $3.09bn. The decline was due to both an acceleration of outflows from short-term funds to $0.23bn from $0.14bn and a decline in flows outside of short-term funds to $2.99bn from $3.23bn. Both high grade funds ($1.75bn) and ETFs ($1.01bn) continue to report strong inflows (Figure 2). </p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/flows%20bofa%201.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/flows%20bofa%201_0.jpg" width="600" height="220" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/flows%20debt.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/flows%20debt_0.jpg" width="600" height="257" /></a></p> <p>&nbsp;</p> <p>Some other notable flow observations from Michael Hartnett:</p> <p><strong>Unwind of "long-$ plays" continues...</strong>longest streak of outflows from European equity funds in 8 years (Chart 2), longest Japanese equity outflow streak since Feb’12</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/europe%20flows.jpg" width="484" height="588" /></p> <p><strong>Biggest outflows in Technology funds in 12 weeks </strong>($0.9bn) as relative performance of tech slumps to 8-month low</p> <p><strong>Massive preference for quality over junk in credit continues: </strong>largest IG bond inflows in 13 months contrasts with largest HY bond outflows in 3 months Oil rally stoking rotation into EM debt &amp; TIPS funds</p> <p><strong>Precious metals: </strong>$1.7bn inflows (largest in 9 weeks) (inflows in 16 of past 17 weeks)</p> <p>And the punchline: <strong>YTD flows show risk-off asset allocation...$83bn out of equity funds and rotation into both fixed income ($56bn) &amp; precious metals funds</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/flowscume.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/flowscume_0.jpg" width="600" height="348" /></a></p> <p>Those wondering just who is pushing the market higher if everyone is selling, aside from the traditional fallback answer of "corporate stock buybacks", sadly we don't have more to add.</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="515" height="394" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/flows%20equities%20.jpg?1462535881" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-06/everyone-selling-largest-outflow-stock-funds-september-2015#comments Bond China fixed High Yield Precious Metals Fri, 06 May 2016 11:57:47 +0000 Tyler Durden 530647 at http://www.zerohedge.com Frontrunning: May 6 http://www.zerohedge.com/news/2016-05-06/frontrunning-may-6 <ul> <li>Trump, under pressure to unite Republicans, sharpens attack on Clinton (<a href="http://www.reuters.com/article/us-usa-election-idUSKCN0XX0T7">Reuters</a>)</li> <li>Trump's Campaign Upends the Science of Presidential Transition (<a href="http://www.bloomberg.com/politics/articles/2016-05-06/trump-s-campaign-upends-the-science-of-presidential-transition">BBG</a>)</li> <li>Trump says Britain would be better off outside EU (<a href="http://www.reuters.com/article/us-usa-election-trump-brexit-idUSKCN0XW2FG?il=0">Reuters</a>)</li> <li>Goldman Said to Extend Fixed-Income Job Cuts to 10% of Staff (<a href="http://www.bloomberg.com/news/articles/2016-05-05/goldman-said-to-extend-fixed-income-cuts-to-10-of-staff-in-2016">BBG</a>)</li> <li>Apple's Tim Cook to visit China for government meetings (<a href="http://www.reuters.com/article/us-apple-china-exclusive-idUSKCN0XX0NY">Reuters</a>)</li> <li>China regulator studying impact of overseas-listed firms relisting in China (<a href="http://www.reuters.com/article/us-china-csrc-ipo-idUSKCN0XX0R8?il=0">Reuters</a>)</li> <li>China Ponzi Warning to Asset Managers Cites Pooling of Cash (<a href="http://washpost.bloomberg.com/Story?docId=1376-O6QGJJ6TTDTC01-1BQQPHNNA4UJVG1KIBTPP9ID5Q">BBG</a>)</li> <li>CLSA Sees China Bad-Loan Epidemic With $1 Trillion of Losses (<a href="http://www.bloomberg.com/news/articles/2016-05-06/clsa-sees-china-bad-loan-epidemic-with-losses-over-1-trillion">BBG</a>)</li> <li>Push for $15 Raises Pay—And Tensions (<a href="http://www.wsj.com/articles/push-for-15-raises-payand-tensions-1462491407">WSJ</a>)</li> <li>GM, Lyft to Test Self-Driving Electric Taxis (<a href="http://on.wsj.com/1UDAfTy">WSJ</a>)</li> <li>Herbalife Soars After Saying It’s Close to FTC Resolution (<a href="http://www.bloomberg.com/news/articles/2016-05-05/herbalife-expects-to-pay-about-200-million-to-resolve-ftc-probe">BBG</a>)</li> <li>Moderate Syrian Rebels Torn Between Giving Up, Joining Islamic Extremists (<a href="http://www.wsj.com/articles/for-syria-rebels-an-agonizing-choice-1462479800">WSJ</a>)</li> <li>'Paralyzing Volatility' Means Trouble for Wall Street Giants (<a href="http://www.bloomberg.com/news/articles/2016-05-06/why-paralyzing-volatility-means-trouble-for-wall-street-giants">BBG</a>)</li> <li>The Downside of Hedging Currency Risk for Stock Investors (<a href="http://www.wsj.com/articles/the-downside-of-hedging-currency-risk-for-stock-investors-1462527003">WSJ</a>)</li> <li>Square Falls on Concerns Over Financing of Loan Program (<a href="http://www.bloomberg.com/news/articles/2016-05-05/square-sales-beat-estimates-on-expanding-services-for-business">BBG</a>)</li> <li>Credit Suisse Banker Case Said to Widen With Three New Suspects (<a href="http://www.bloomberg.com/news/articles/2016-05-06/credit-suisse-banker-case-said-to-widen-with-three-new-suspects-invhkmvm">BBG</a>)</li> <li>Greek Unions Call 48-Hour Strike to Oppose Austerity Bill (<a href="http://www.wsj.com/articles/greek-unions-call-48-hour-strike-to-oppose-austerity-bill-1462527989">WSJ</a>)</li> <li>No Sign of Brexit Revolution as U.K. Voters Opt for No Change (<a href="http://www.bloomberg.com/news/articles/2016-05-06/no-sign-of-brexit-revolution-as-u-k-voters-opt-for-no-change">BBG</a>)</li> </ul> <p>&nbsp;</p> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">WSJ</span></em></p> <p>- U.S. House of Representatives Speaker Paul Ryan said Donald Trump had "work to do" to unify the Republican Party and demonstrate his commitment to conservative principle. (<a href="http://on.wsj.com/1UDAiyM" title="http://on.wsj.com/1UDAiyM">http://on.wsj.com/1UDAiyM</a>)</p> <p>- General Motors Co and Lyft will begin testing a fleet of self-driving Chevrolet Bolt electric taxis on public roads within a year, as the companies seek to fight off Silicon Valley giants amid a reshaping auto industry. (<a href="http://on.wsj.com/1UDAfTy" title="http://on.wsj.com/1UDAfTy">http://on.wsj.com/1UDAfTy</a>)</p> <p>- Sanofi sent a letter to Medivation saying it would try to remove and replace members of the U.S. biotech firm's board if it didn't engage in takeover talks. (<a href="http://on.wsj.com/1UDAbmT" title="http://on.wsj.com/1UDAbmT">http://on.wsj.com/1UDAbmT</a>)</p> <p>- Apple Inc and SAP SE said they would cooperate to help developers create iPad and iPhone apps tapping the German software giant's database services and analytics. (<a href="http://on.wsj.com/1UDAcHx" title="http://on.wsj.com/1UDAcHx">http://on.wsj.com/1UDAcHx</a>) </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>* British retail tycoon Philip Green on Thursday hit out at UK lawmakers for leading what he called a "trial by media" in relation to last week's fall into administration of department store BHS.</p> <p>* France's Sanofi has threatened to oust the board of Medivation if the U.S. cancer drugmaker continues to resist its $9.3 billion takeover offer. The company also indicated prospect of a higher bid if its target agreed to enter talks.</p> <p>* Burberry is evaluating the appointment of a senior manager to support its chief executive, Christopher Bailey, amid concerns from investors after the company's share price saw a sharp fall.</p> <p>* Italy's third-largest lender by assets, Banca Monte dei Paschi di Siena said its first-quarter profits fell by more than a third, highlighting concerns about its pile of bad loans and collapsing share price.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>- After years of debate about the health risks of electronic cigarettes, the U.S. Food and Drug Administration on Thursday issued sweeping new rules that prohibits sale of electronic cigarettes to anyone under 18. (<a href="http://nyti.ms/1Yc0u2p" title="http://nyti.ms/1Yc0u2p">http://nyti.ms/1Yc0u2p</a>)</p> <p>- NRG Energy, moving to complete its reorganization after the ouster of its chief executive last year, is paring back involvement in two of its alternative energy ventures as it seeks to cut costs and streamline operations, the company announced on Thursday. (<a href="http://nyti.ms/24wg3JM" title="http://nyti.ms/24wg3JM">http://nyti.ms/24wg3JM</a>)</p> <p>- The leaders of the two most powerful labor unions in the U.S. - the Service Employees International Union and the American Federation of State, County and Municipal Employees - are completing a plan that calls for unusually close cooperation in political campaigning, organizing and bargaining in states and cities across the country. (<a href="http://nyti.ms/1XbwDZS" title="http://nyti.ms/1XbwDZS">http://nyti.ms/1XbwDZS</a>)</p> <p>- A suit challenging media mogul Sumner Redstone's mental competence, filed by a former companion, who was removed from his house and his will, goes to trial on Friday. (<a href="http://nyti.ms/1O1uL3E" title="http://nyti.ms/1O1uL3E">http://nyti.ms/1O1uL3E</a>)</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>** Ontario school boards wanting to buy properties from other boards will be forced to pay as much as private developers do in some areas under new provincial rules that are causing divisions in the education sector. (<a href="http://bit.ly/23uhm5" title="http://bit.ly/23uhm5">http://bit.ly/23uhm5</a>)</p> <p>** The Supreme Court of Canada has closed the door on an application by Nortel Networks Corp's U.S. bondholders to try to make a claim for extra interest payments on their $4 billion of outstanding notes. (<a href="http://bit.ly/23ui57e" title="http://bit.ly/23ui57e">http://bit.ly/23ui57e</a>)</p> <p>** Conservative MPs who voted to support the Trudeau government's physician-assisted-dying bill as it makes its way to committee for further study say they did so on the word of their constituents - with some even pushing for more people to be eligible than the Liberal legislation currently allows. (<a href="http://bit.ly/1UEcT09" title="http://bit.ly/1UEcT09">http://bit.ly/1UEcT09</a>)</p> <p>NATIONAL POST</p> <p>** The head of Canada Revenue Agency says the federal body is in the midst of a "blitz" on the Isle of Man tax scheme that heightened public and regulatory concerns over offshore accounts. (<a href="http://bit.ly/23ulnaF" title="http://bit.ly/23ulnaF">http://bit.ly/23ulnaF</a>)</p> <p>** The liquidity crisis at First Quantum Minerals Ltd is largely over, company executives said on Thursday, though there is still a lot of work required to improve the balance sheet. (<a href="http://bit.ly/23ulDGB" title="http://bit.ly/23ulDGB">http://bit.ly/23ulDGB</a>)</p> <p>** The shut down of energy facilities accelerated on Thursday, taking off line about 1 million barrels - close to 40 percent - of Alberta's daily oilsands production, as a wildfire that started near Fort McMurray spread south to new producing areas. (<a href="http://bit.ly/23ulFyl" title="http://bit.ly/23ulFyl">http://bit.ly/23ulFyl</a>)</p> <p>&nbsp;</p> <p><strong>Analyst Actions:</strong></p> <ul> <li>Advance Auto Parts (AAP) raised to buy vs neutral at Goldman</li> <li>Ariad Pharma (ARIA) raised to outperform at Cowen</li> <li>CorEnergy Infrastructure (CORR) cut to sector perform at RBC</li> <li>Endo (ENDP) cut to underperform at Mizuho</li> <li>Federal Realty Trust (FRT) cut to underperform at RBC Capital</li> <li>General Motors (GM) raised to equal-weight at Morgan Stanley</li> <li>Intercontinental Exchange (ICE US) resinstated buy at Goldman</li> <li>Macerich (MAC) raised to outperform at RBC Capital</li> <li>Medicines Co. (MDCO) rated new outperform at Cowen</li> <li>Michaels (MIK) cut to neutral at Goldman Sachs</li> <li>Ormat Technologies (ORA) cut to neutral at JPMorgan</li> <li>Ubiquiti Networks (UBNT) raised to market perform at BMO</li> <li>United Rentals (URI) cut to sell vs neutral at Goldman</li> <li>Weatherford (WFT) cut to market perform at Wells Fargo</li> </ul> http://www.zerohedge.com/news/2016-05-06/frontrunning-may-6#comments Apple China Credit Suisse Donald Trump General Motors Nortel Reuters Wells Fargo Fri, 06 May 2016 11:37:19 +0000 Tyler Durden 530646 at http://www.zerohedge.com Large Truck Orders Continue To Plunge, Down 39% In April http://www.zerohedge.com/news/2016-05-06/large-truck-orders-continue-plunge-down-39-april <p><em>Submitted by Mish Shedlock of <a href="https://mishtalk.com/2016/05/05/class-8-truck-orders-plunge-39-large-truck-sales-vs-recessions/">Mish Talk</a></em></p> <p><strong>Class 8 Truck Orders Plunge 39%; Large Truck Sales vs. Recessions</strong></p> <p>Class 8, &ldquo;<a href="https://en.wikipedia.org/wiki/Truck_classification" target="_blank">heavy duty</a>&rdquo; truck orders are down 39% from a year ago.</p> <p><a href="https://mishgea.files.wordpress.com/2016/05/class-8.png"><img alt="Class 8" class="alignnone size-large wp-image-37533" height="286" src="https://mishgea.files.wordpress.com/2016/05/class-8.png?w=803&amp;h=438" width="529" /></a></p> <p>First, let&rsquo;s take a look at the reports, then we will take a look at what this may mean for the economy.</p> <p><strong>Class 8 Truck Orders Plunge 39%</strong></p> <p>The Wall Street Journal reports <a href="http://www.wsj.com/articles/truck-orders-fall-in-april-1462383538" target="_blank">Truck Orders Fall in April</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Last month, trucking fleets ordered just 13,500 Class 8 trucks, the big rigs used on long-haul routes, down 16% from March and 39% from a year earlier. It was the fewest net orders in any April since 2009, FTR said.</p> <p>&nbsp;</p> <p>DAT Solutions, an Oregon-based transportation data firm, reported that loads available for dry vans, the most common type of tractor-trailers used for shipping consumer goods, fell 28% in April while capacity on the market was up 1.7% on a year-over-year basis.</p> <p>&nbsp;</p> <p>Eaton Corp. , the sales leader in heavy-duty truck transmissions, predicted that organic sales from its vehicles unit will fall 10%-12%, after earlier predicting that sales would drop 7% to 9%. The company lowered its outlook for the business after concluding there are at least 20,000 heavy-duty trucks built last year that are still sitting on dealer lots.</p> <p>&nbsp;</p> <p>Engine maker Cummins Inc. said on Tuesday it doesn&rsquo;t expect any improvement in the truck market later in the year. It now expects heavy-duty truck production in North America to be at 210,000 vehicles this year, down 5% from its earlier view and down 28% from 2015&rsquo;s actual volume. Cummins&rsquo; first-quarter sales of diesel engines to the heavy-duty truck market dropped 17% from a year earlier to $631 million.</p> </blockquote> <p><strong>Worst Yet to Come</strong></p> <p>CCJ reports <a href="http://www.ccjdigital.com/sagging-truck-orders-will-probably-get-worse-before-it-gets-better/" target="_blank">Sagging truck orders &lsquo;will probably get worse before it gets better&rsquo;</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Last month was the worst April for Class 8 truck orders since 2009 according to preliminary data released by FTR Wednesday.</p> <p>&nbsp;</p> <p>North American Class 8 truck net orders fell for the fourth consecutive month in April to 13,500 units, down 16 percent month-over-month and 39 percent year-over-year.</p> <p>&nbsp;</p> <p>Don Ake, FTR&rsquo;s vice president of commercial vehicles, says &ldquo;surprisingly low&rdquo; orders across the board were weak as the Class 8 market tries to find the bottom of this cycle.</p> <p>&nbsp;</p> <p>Kenny Vieth, president and senior analyst for ACT Research, says the blame for low orders was widespread.</p> <p>&nbsp;</p> <p>&rdquo; &hellip; an ongoing overcapacity narrative, a resulting weak freight rate environment, softness in late-model used truck values, and excessive new vehicle stocks,&rdquo; he adds.</p> </blockquote> <p><strong>Large Truck Sales vs. Recessions </strong></p> <p>Variant Perception reports <a href="https://blog.variantperception.com/2016/05/05/peak-in-heavy-truck-sales-point-to-cyclical-pain/?utm_source=VP+Updates&amp;utm_campaign=419e218b7a-RSS_EMAIL_BLOG_DAILY&amp;utm_medium=email&amp;utm_term=0_e19841ce98-419e218b7a-407656189" target="_blank">Peak in Heavy Truck Sales Point to Cyclical Pain</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Heavy truck sales are oddly a good leading indicator for the economy. It is odd because a lot of industrial production is coincident with the business cycle. However, if you go back over forty years, you can see that recessions have always been preceded by a decline in heavy truck sales. This is particularly true if the increase in truck sales is very large. Today, truck sales are not far from where they were at previous cyclical peaks in 1999 and 2007.</p> </blockquote> <p><strong>Heavy Truck Sales</strong></p> <p><a href="https://mishgea.files.wordpress.com/2016/05/heavy-truck-sales.png"><img alt="Heavy Truck Sales" class="alignnone size-full wp-image-37534" height="530" src="https://mishgea.files.wordpress.com/2016/05/heavy-truck-sales.png?w=529" width="486" /></a></p> <p>Orders are down, sales will follow, sharply!</p> <p>Topping off the the automotive sector please don&rsquo;t miss <a target="_blank">About Those Record Auto Sales: Let&rsquo;s Communicate!</a></p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="643" height="348" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/class-8.png?1462533014" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-06/large-truck-orders-continue-plunge-down-39-april#comments Auto Sales Wall Street Journal Fri, 06 May 2016 11:10:32 +0000 Tyler Durden 530643 at http://www.zerohedge.com Futures Sink Ahead Of Payrolls, Capping Worst Week For Stocks Since February http://www.zerohedge.com/news/2016-05-06/futures-sink-ahead-payrolls-capping-worst-week-stocks-february <p>Ahead of the most important macroeconomic event of the week, US nonfarm payrolls (Exp. +200,000, down from 215,000 and following a very poor ADP report two days ago), the markets have that sinking feeling again. </p> <p>Futures seem unable to shake off what has been a steady grind lower in the past week, while the Nasdaq has been down for nine of the past ten sessions, after yet another session of jawboning by central bankers who this time flipped on the hawkish side, hinting that the market is not prepared for a June rate hike. Additionally, sentiment is showing little sign of improvement due to concerns over global-growth prospects as markets seek to close the worst week since the turmoil at the start of the year. </p> <p>Perhaps its the suddenly ascendent dollars, which has rallied the most since November in the past week, which has not only pushed global markets lower but has resulted in the S&amp;P futures sliding to session lows, down 0.3% as of this moment. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/USD%20bbg.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/04/20/USD%20bbg_0.png" width="600" height="338" /></a></p> <p>The MSCI World Index extended its biggest weekly decline since February as corporate earnings failed to reassure investors. </p> <p>"We’ve turned a little bit cautious,” John Woods, chief investment officer for Asia-Pacific at Credit Suisse Private Banking, told Bloomberg TV. "One of the reasons why we’ve gone underweight equities recently is because valuations look stretched at the top of the range but also because the two interest-rate hikes we expect are not being fully priced in by the market."</p> <p>Emerging markets headed for the worst week in four months with Turkey, Poland and South Africa providing focal points for selling. U.S. crude oil sank, set for its first weekly drop in more than a month and industrial metals were poised for their biggest weekly loss since 2013 as the aforementined Chinese bubble appears to have finally popped. Bonds and the dollar have been the main beneficiaries, with a gauge of the U.S. currency headed for its best week this year, while German bunds advanced. </p> <p>"<strong>The top worry in the market is still slower growth perspective than feared, and central banks,”</strong> said Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany. “We are on thin ice already and we don’t need more disappointments as the Fed is eyeing the job market very closely.”</p> <p>As expected, pleas for more central bank handouts were quick: "We expect BOJ to do a U-turn in the coming months by opting for more easing and this is likely to result in renewed yen depreciation," said Salman Ahmed, the London-based chief global strategist at Lombard Odier Investment Managers, which oversees about $165 billion. "However, we are sometime away from this dynamic to take hold."</p> <p><strong>Perhaps the biggest reason for the drift lower is that late yesterday, four regional Federal Reserve presidents said they were open to considering an interest-rate increase in June. </strong>After financial markets were roiled in the first six weeks of the year, the central bank had adopted a more dovish stance. Of course, all that will take for these same 4 presidents to change their tune is for stocks to drop lower enough and back to square one we go. Recall how fast the Fed flipflops "<a href="http://www.zerohedge.com/news/2016-04-14/these-two-headlines-fed-credibility-just-hit-all-time-lows">With These Two Headlines, Fed "Credibility" Just Hit A New All Time Low."</a></p> <p>As a result, concerns about the Fed and payrolls, have sunk Asian and European markets, with the Stoxx Europe 600 Index falling 0.6 percent as of 11:05 a.m. in London, extending its weekly drop to 3.1 percent. Miners and energy producers posted the worst performance among industry groups, tracking declines in oil prices and base metals. ArcelorMittal slid 4.9 percent, adding to the gloom as it posted a 33 percent drop in quarterly earnings. Tullow Oil Plc tumbled 6 percent and Royal Dutch Shell Plc lost 1.6 percent. Futures on the S&amp;P 500 lost 0.3 percent, after the index ended Thursday little changed, as investors awaited the jobs report to shed light on growth in the world’s largest economy and the trajectory of borrowing costs. Traders are pricing in only a 10 percent chance of a Fed interest-rate increase in June, with February 2017 the first month with at least even odds of a raise.</p> <p><strong>Global Market Snapshot</strong></p> <ul> <li>S&amp;P 500 futures down 0.3% at 2039</li> <li>Stoxx 600 down 0.6% to 330</li> <li>FTSE 100 down 0.4% to 6091</li> <li>DAX down 0.3% to 9818</li> <li>German 10Yr yield down less than 1bp to 0.16%</li> <li>Italian 10Yr yield up 2bps to 1.51%</li> <li>Spanish 10Yr yield up 2bps to 1.6%</li> <li>S&amp;P GSCI Index up 0.2% to 348.3</li> <li>MSCI Asia Pacific down 0.5% to 127</li> <li>Nikkei 225 down 0.3% to 16107</li> <li>Hang Seng down 1.5% to 20142</li> <li>Shanghai Composite down 2.8% to 2913</li> <li>S&amp;P/ASX 200 up 0.2% to 5292</li> <li>US 10-yr yield down than 1bp to 1.74%</li> <li>Dollar Index down 0.18% to 93.61</li> <li>WTI Crude futures down 0.1% to $44.26</li> <li>Brent Futures down 0.2% to $44.93</li> <li>Gold spot up 0.3% to $1,281</li> <li>Silver spot up 0.1% to $17.37</li> </ul> <p><strong>Top Global News</strong></p> <ul> <li>Goldman Said to Extend Fixed-Income Job Cuts to 10% of Staff: Firm is also said to dismiss staff in equities division</li> <li>Evonik Said Near $3.5 Billion Acquisition of Air Products Units: Agreement excludes Air Products’ electronics division</li> <li>Herbalife Soars After Saying It’s Close to FTC Resolution: Co. expects to pay about $200m in potential settlement</li> <li>Credit Suisse Banker Case Said to Widen With Three New Suspects: Another three former employees as suspects in a case looking into unauthorized trades on the accounts of rich eastern Europeans</li> <li>Dish Network Is Said to Be Target of Negative Kerrisdale Report: Report to say Dish’s airwave holdings are overvalued, according to people familiar with the situation</li> <li>ArcelorMittal Sees Better Steel Market as Prices Rebound: Co. sees broad recovery in global steel market</li> <li>Facebook Must Face Privacy Claims Over Photo-Tagging Feature: Social network accused of violating Illinois biometrics law</li> <li>U.S. Trade Panel to Start Probe on 8 Smartphone Vendors’ Devices</li> <li>Teva Said Finalizing Asset Sales to Clear Allergan Deal: Reuters</li> <li>Ron Burkle, SBE Said to Near Deal to Buy Morgans Hotel: NYP</li> <li>JCPenney Said to Take Cost-Cutting Measures: New York Post</li> </ul> <p><strong>Looking at regional markets, Asian stocks traded mostly lower following a subdued lead from Wall St. with participants tentative ahead of NFP</strong>. 8 out of 10 sectors fall with energy, finance underperforming and consumer stocks outperforming. The Nikkei 225 (-0.7%) caught up with losses on return from its 3-day absence with a firm JPY weighing on exporter names. ASX 200 (-0.2%) was pressured from the open by energy weakness but then recovered off worst levels following the RBA SOMP which suggested the RBA were still open to future rate cuts given the weaker inflation forecasts. Chinese markets (Shanghai Comp -1.9%) conformed to the negative tone amid lingering growth concerns and after the PBoC conducted a consecutive weekly net drain, with CNY 220b1n of funds exiting the interbank market. Finally, 10yr JGBs tracked T-notes higher as the cautious tone in the region underpinned demand for safe-haven assets.</p> <p><em>Top Asia News</em></p> <ul> <li>China Ponzi Warning to Asset Managers Cites Pooling of Cash: Asset Management Association reiterates ban on money pooling</li> <li>CLSA Sees China Bad-Loan Epidemic With $1 Trillion of Losses: Soured credit may be at least 9x official number</li> <li>Indian State Power Giant Revives Threat to Cut Delhi Supplies: NTPC may halt supplies from May 10 over non- payment of dues</li> <li>RBA Sees Inflation Below Goal in 2016; Yields, Aussie Plunge: RBA cuts 2016 underlying inflation forecast to 1-2% from 2-3%</li> <li>Uber’s China Rival Said Close to Raising $2b in New Funding: Didi Kuaidi is close to raising funds in round that will give it valuation of ~$25b</li> <li>Macquarie’s Record Profit Run May Be Ending as Challenges Mount: Group FY net A$2.063b vs est. A$2.037b</li> </ul> <p><strong>European equities are trading modestly in the red ahead of the key risk event in the form of the latest payrolls report. </strong>17 out of 19 Stoxx 600 sectors fall with basic resources, oil &amp; gas underperforming and automobiles, real estate outperforming. 55% of Stoxx 600 members decline, 42% gain. Notable outperformers in Europe have been Italian banks after earnings from Banca Monte dei Paschi (BMPS IM), which saw Co. beat on expectations and announce bad loan provisions had fallen to their lowest level in 4 yrs, however failed to lift the FTSE MIB out of the red. While Bunds have seen somewhat of a subdued start to the morning with little in way of newsflow as all eyes remain firmly fixed on the US jobs data.</p> <p><em>Top European News</em></p> <ul> <li>Monte Paschi Profit Surpasses Estimates on Lower Provisions: Bad-loan provisions drop to lowest in four years</li> <li>Telenor Said to Hire JPMorgan to Explore Sale of VimpelCom Stake: VimpelCom said to work with Morgan Stanley on valuation</li> <li>InterContinental Shares Fall on Mideast Sales Hit, Early Easter: Oil markets hit Middle East travel</li> </ul> <p><strong>In FX, as is always the case on NFP day we will be looking out for any major moves in the USD, currently EUR/USD and GBP/USD are gaining ground on the USD. </strong>The Bloomberg Dollar Spot Index was little changed on Friday, on course for a weekly gain of 1.3 percent.&nbsp; <strong>The Aussie dropped as much as 1.4 percent to a two-month low and was poised for its biggest weekly loss since January. </strong>Australia’s central bank said underlying inflation is expected to be 1 percent to 2 percent 2016, down from the 2 percent to 3 percent it forecast in February. The authority cut its benchmark interest rate to a record low on Tuesday. </p> <p>The yen rose 0.3 percent to 106.91 per dollar, trimming its weekly loss to 0.4 percent. The currency jumped 5 percent last week, prompting policy makers to warn of possible intervention, as the Bank of Japan unexpectedly refrained from adding to record stimulus at a policy review. Prime Minister Shinzo Abe said Thursday he was ready to respond to excessive currency moves if needed.</p> <p><strong>In commodities, oil fell as rising U.S. stockpiles and OPEC production cushioned the impact of declines in North American output. </strong>West Texas Intermediate crude dropped 0.5 percent to $44.08 a barrel, extending its weekly loss to 4 percent. Brent fell 0.7 percent to $44.70.U.S. crude inventories rose to the highest since 1929 while production slid the most in eight months last week, government data showed Wednesday. Canada’s supplies are sufficient to cover production losses from fires in the country’s oil-sands region, Genscape said. OPEC output climbed in April amid gains from Iran and Iraq. </p> <p>Industrial metals in London were heading for their biggest weekly drop since 2013 on a resurgent dollar and rising concerns about the strength of demand in China, where authorities have taken steps to cool a speculative frenzy. Copper is down 5.1 percent this week to $4,791.50, poised for the biggest decline since November. <strong>Steel reinforcement-bar futures dropped by a record 9.5 percent this week on the Shanghai Futures Exchange.</strong> Iron ore and coking coal plunged by a similar amount on the Dalian Commodity Exchange after Chinese authorities clamped down on speculators. The USD weakness has also benefitted spot gold, with the yellow metal higher by around USD 5/oz, although still some way off the USD 1300/oz level, which it saw earlier in the week. </p> <p>The main event is reserved for this afternoon however with the release of the April employment report for the US. As highlighted earlier the main focus will be on the payrolls figure as well as average hourly earnings and the unemployment rate. Elsewhere, later on this evening we’ll also receive the March consumer credit data. There’s little in the way of Central Bank speak today, while on the earnings front we’ll receive quarterly reports from just 6 S&amp;P 500 companies and 4 Stoxx 600 companies.</p> <p><strong>Bulletin Headline Summary From RanSquawk and Bloomberg</strong></p> <ul> <li>Light newsflow has seen equities in modest negative territory ahead of the main risk event of the day in the form of the US nonfarm payroll report</li> <li>The USD has seen downside against major counterparts this morning, with the likes of GBP, EUR and JPY all seeing strength as a result</li> <li>Highlights today include the aforementioned US NFP report, Canadian jobs figures and potential comments from ECB's Visco</li> <li>Treasuries little changed in overnight trading as global equities and oil drop, precious metals rally ahead of today’s nonfarm payroll report. </li> <li>If Britain is a country of the brink of a revolutionary vote to defy its leaders and leave the European Union, there was little evidence of it in elections held Thursday</li> <li>Next week the Bank of England governor will present economic projections to guide investors on an outlook that has rarely been more clouded in doubt. He also has to balance how far to stray into the fraught political battle concerning Brexit</li> <li>A new accounting rule that will force banks to set aside provisions for bad loans long before they sour could cannibalize profits and eat into capital at U.S. lenders</li> <li>Chinese banks’ bad loans are at least nine times bigger than official numbers indicate, an “epidemic” that points to potential losses of more than $1 trillion, according to an assessment by brokerage CLSA Ltd</li> <li>China’s $237 billion social security fund posted a rare public advertisement for job openings in economic analysis, equity research and global fixed-income investment, fueling speculation that the state-run institution is preparing to boost holdings of riskier assets</li> <li>The world’s largest debt market is sound and traders’ ability to transact remains robust, U.S. Treasury Department officials said in premiering a liquidity gauge Friday in a blog to be posted on the government’s website</li> <li>BlackRock Inc.’s iShares iBoxx High Yield Corporate Bond ETF, the largest exchange-traded fund that buys junk bonds, has seen 27.8 million shares redeemed, or about $2.6 billion, in the last four days</li> <li>Goldman Sachs Group Inc. is cutting more jobs in its securities units, extending reductions in fixed-income operations this year to roughly 10 percent of workers there, according to people with knowledge of the situation</li> <li>Sovereign 10Y yields mixed, Greece rallies 17bp; European and Asian equity markets drop; U.S. equity- index futures lower. WTI crude oil falls, precious metals rally</li> </ul> <p><strong>US Event Calendar</strong></p> <ul> <li>8:30am: Change in Non-farm Payrolls, April, est. 200k (prior 215k) <ul> <li>Two-Month Payroll Net Revision, April, no ests. (prior -1k)</li> <li>Change in Private Payrolls, April, est. 195k (prior 195k)</li> <li>Change in Mfg Payrolls, April, est. -5k (prior -29k)</li> <li>Unemployment Rate, April, est. 4.9% (prior 5%)</li> <li>Average Hourly Earnings m/m, April, est. 0.3% (prior 0.3%)</li> <li>Average Hourly Earnings y/y, April, est. 2.4% (prior 2.3%)</li> <li>Average Weekly Hours All Employees, April, est. 34.5 (prior 34.4)</li> <li>Change in Household Employment, April, est. 170k (prior 246k)</li> <li>Labor Force Participation Rate, April, est. 63% (prior 63%)</li> <li>Underemployment Rate, April, no est. (prior 9.8%)</li> </ul> </li> <li>1pm: Baker Hughes rig count</li> <li>3:00pm: Consumer Credit, March, est. $16b (prior $17.217b)</li> </ul> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>And so welcome to random number generator day, also more commonly known as US nonfarm payrolls. The current consensus forecast is for a 200k print this afternoon although it’s interesting to see that the range of forecasts are from as low as 160k to as high as 315k. Our US economists are sitting at the lower end of that range and are forecasting for a below-market 175k gain. This is based on their view that upon closer inspection of the sectors responsible for job growth last quarter, the details reveal that retail trade has accounted for a disproportionate share of these gains (in the fact the pace of which is the fastest since 1994). They expect the pace of hiring in this sector to moderate somewhat closer to its 12-month average this month. As well as this, temp hiring, which has historically been a leading indicator of payroll growth, has declined over the same period and so these trends together contribute to their below-consensus forecast.</p> <p>As usual we’ll also receive the other important details of the April employment report including average hourly earnings (market expecting +0.3% mom and +2.4% yoy), labour force participation rate (expected to be 63.0%) and the unemployment rate (expected to nudge down one-tenth to 4.9%). All of this data is due out this afternoon at 1.30pm BST so all eyes on then.</p> <p>Markets have been trading cautiously all week leading into payrolls and a big part of that is the renewed fear and uneasiness about global growth. As a result we’ve also seen the Fed futures markets continue to price a lower probability of a hike at the June meeting despite the chorus of vocal support from Fed officials signalling that the meeting is ‘live’ – although in reality that is just in-keeping with the FOMC script so it shouldn’t come as too much of a surprise. Currently the probability of a 25bp hike next month is a lowly 10% and the lowest it’s been in months. In fact pricing for just one hike by the December meeting has now fallen below 50% and there’s little evidence to suggest that the gap currently between the Fed and the market is narrowing.</p> <p>So the S&amp;P 500 goes into today’s print on the back of three consecutive daily declines (in which it has shed -1.5%) and five in the last six days (in which it’s down -2.1%). It had looked as though we might be in for a better day yesterday with the index up as much as half a percent early doors, before gains were wiped out with the move down for Oil off the highs. The index closed a smidgen lower (-0.02%) but it is credit which seems to have been at the forefront of the risk-off moves of late. Last night the CDX IG index closed another 1.5bps wider. It means the index has weakened for the last 6 sessions and in that time is 11bps wider. It was interesting to see yesterday that the biggest HY ETF in the US (the iShares HYG Index) has had redemptions of around $2.3bn over the last four days and that the short interest in the fund is now up over 80% since mid-April. It’s worth noting that over a 4-day period the redemptions now are greater than during the selloff earlier this year and provides further evidence that this close to 3-month rally is quickly losing momentum.</p> <p>In terms of that Oil move yesterday, WTI peaked back above $46/bbl mid-way through the day yesterday (and about +5% on the day) as the market reacted to the impact of the Canada wildfires and subsequent production curtailment in the Canada Oil Sands region, as well as the news of political infighting out of Libya and the potential knock on effect to output levels there. That said, $46 marked the high point for the day as prices quickly reversed with WTI trading all the way back down towards $44/bbl, which is where it’s hovering just north of this morning. That move coincided with another strong day for the US Dollar. The Dollar index rallied to a +0.65% gain yesterday, marking three consecutive daily gains.<br />Glancing at our screens this morning, markets look like they’re sent to end the week on a bit of a whimper in Asia. The focus has been on Japan where bourses have reopened following the public holiday. After initially opening positive the Nikkei is now down -0.89% with the Yen also posting a modest gain this morning. Some of that may also reflect data released in Japan overnight. The Nikkei services PMI for April was recorded as declining 0.7pts and into contractionary territory at 49.3. Combined with the manufacturing data, that has resulted in the composite dropping a full point to 48.9 and to the lowest since April 2014.</p> <p>Elsewhere this morning we’re also seeing further losses for the Hang Seng (-1.30%), Shanghai Comp (-1.85%) and the ASX (-0.31%). The Aussie Dollar (-1.00%) has been the big focus for FX markets after the RBA revised down their inflation forecasts for this year.</p> <p>Over the last 24 hours we’ve also had a host of Fedspeak to contend with. Yesterday we heard from St Louis Fed President Bullard who said that ‘my attitude about June is that it’s a live meeting in which we will have plenty of new data compared to March’. Dallas Fed President Kaplan backed this view up yesterday too, while overnight we’ve heard from these two officials again, along with Williams and Lockhart as part of a panel discussion. Lockhart highlighted that he doesn’t support a shift from the Fed’s 2% inflation target, while Williams questioned if the inflation goal is the right strategy for the future. Williams also said that in the face of another ‘negative shock’ then the Fed has a list of things that it can do including QE4, while negative rates are ‘at the bottom of the list’. Bullard also agreed with negative rates as being ‘very unlikely’.</p> <p>Away from the Fedspeak, the data took a bit of a pause for breath yesterday. Ahead of today’s payrolls we received the latest reading for initial jobless claims which revealed an uptick in the number of claims last week to 274k (vs. 260k expected), a rise of 17k. While that was the highest reading in five weeks, the four-week average still remains at a lowly 258k. Meanwhile, closer to home in the UK the services PMI for April (52.3 vs. 53.5 expected; 53.7 previously) backed up what was a soft set of PMI indicators for the country last month. Combined with the first sub-50 manufacturing print for the UK in over three years, the composite declined 1.7pts last month to 51.9 and the lowest going back to 2013. With the Brexit referendum looming, the data points to some growth concerns for the start of Q2 and it’ll be interesting to hear what the BoE makes of the data.</p> <p>Just wrapping up the price action yesterday, with a number of European holidays yesterday volumes were a bit thinner in the region although the Stoxx 600 (+0.32%) did manage to eke out a small gain for the first time in a week. Meanwhile core sovereign bond markets were stronger once again. 10y Bund yields eventually closed 4bps lower at 0.161% while Treasury yields were lower again too. The benchmark 10y year was 3bps lower at 1.746% and is now close to 20bps down from the highs in yield last month.</p> <p>Looking at today’s calendar, it’s a particularly quiet close to the week datawise in Europe with just the latest industrial production for Spain due out. The main event is reserved for this afternoon however with the release of the April employment report for the US. As highlighted earlier the main focus will be on the payrolls figure as well as average hourly earnings and the unemployment rate. Elsewhere, later on this evening we’ll also receive the March consumer credit data. There’s little in the way of Central Bank speak today, while on the earnings front we’ll receive quarterly reports from just 6 S&amp;P 500 companies and 4 Stoxx 600 companies.</p> <p>Before we wrap up, there’s more important data out over the weekend from China too. On Saturday we’ll get the April foreign reserves data while on Sunday the all-important trade numbers are due out. So worth keeping an eye on those ahead of the open in Asia again on Monday.</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="675" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/USD%20bbg.png?1462531904" /> </div> </div> </div> http://www.zerohedge.com/news/2016-05-06/futures-sink-ahead-payrolls-capping-worst-week-stocks-february#comments Aussie Bank of England Bank of Japan BOE Bond Borrowing Costs Central Banks China Consumer Credit Copper Credit Suisse Crude Crude Oil Dallas Fed Equity Markets European Union Federal Reserve fixed Germany Greece headlines High Yield Illinois Initial Jobless Claims Iran Iraq Japan Jim Reid Middle East Morgan Stanley NASDAQ New York Post Nikkei OPEC Poland Precious Metals Price Action RANSquawk Real estate Reality recovery Short Interest St Louis Fed St. Louis Fed Treasury Department Turkey Unemployment Yen Fri, 06 May 2016 10:51:47 +0000 Tyler Durden 530642 at http://www.zerohedge.com The First Casualty Is Truth http://www.zerohedge.com/news/2016-05-05/first-casualty-truth <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <h1 style="margin-top: 0px; margin-bottom: 0.25em; padding: 0px; font-size: 24px; font-weight: normal; line-height: 1.15; font-family: Roboto, sans-serif; max-width: 90%;"><a href="https://www.sprottmoney.com/blog/the-first-casualty-is-truth-jeff-thomas.html"><span style="text-decoration: underline;"><em><strong>The First Casualty is Truth<br /></strong></em></span></a><a href="https://www.sprottmoney.com/blog/the-first-casualty-is-truth-jeff-thomas.html"><span style="text-decoration: underline;"><em><strong>&nbsp;</strong><strong>Written by Jeff Thomas (CLICK FOR ORIGINAL)</strong></em></span></a></h1> <p>&nbsp;</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><em><strong><a href="https://www.sprottmoney.com/blog/the-first-casualty-is-truth-jeff-thomas.html"><img src="http://www.zerohedge.com/sites/default/files/images/user196978/imageroot/2016/05/05/Iceberg_4_1997_08_07_710.jpg" width="710" height="492" /></a><br /></strong></em></span></p> <p>&nbsp;</p> <p>&nbsp;</p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">In the fifth century BC, Greek dramatist Aeschylus said, “In war, truth is the first casualty.” Quite so. Whenever national leaders decide to go on the warpath for the sake of their own ambition or self-aggrandizement, it’s the citizenry that will pay the bloody price for their aspirations. Since war is rarely desired by the citizenry, it has to be sold to them. Some form of deception, exaggeration or outright lies must be put forward to con the populace into getting on board with the idea.<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">War, after all, represents a monumental failure of national leaders to serve the rightful national objectives of a citizenry – peace and prosperity. Of course, in the case of an <em>empire</em> going to war, this represents a monumental failure on steroids – the outcome may well be world war in such a case.<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Readers of this publication will no doubt be well-versed in the knowledge that, when an empire is nearing the end of its period of domination, war is almost always used by leaders as a last-ditch attempt to maintain order. (During wartime, a populace tends to focus more on the war than the failure of its leaders. In addition, they’re likely to tolerate the removal of freedoms by their leaders to be “patriotic”.)<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">This being the case, we might surmise that an empire in decline would be likely to display similar symptoms to a country at war. One of those symptoms might well be the loss of truth, not just as relates to warfare, but as relates to the society as a whole. A nation in decline might even <em>welcome</em> the disappearance of truth, as it would allow the people to continue to feel good about themselves at a time when a truthful outlook would be too unpleasant to be tolerable. Further, the closer to collapse the country may be (economically, politically and socially), the more extreme the self-created loss of truth would be likely to be.<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Let’s have a look at a few cultural examples and see if that premise seems viable.<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><strong><span lang="EN-CARRIBEAN">Silver Versus Chocolate</span></strong></p> <p class="MsoNormal"><strong><span lang="EN-CARRIBEAN"><br /></span></strong></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">As I described in January on “Running Out of Candy,” Californian Mark Dice stood on a street corner offering passers-by either a free ten-ounce bar of silver or a free bar of Hershey’s chocolate. Without fail, each one chose the chocolate. Even though Mister Dice was standing in front of a coin shop where the silver bar could be redeemed, they rejected the silver which they knew <em>had</em> to have greater value.</span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Only twenty years ago, people would have been far less likely to deny truth in favour of a falsehood that was more palatable – the instant gratification of candy. In effect, this is the abandonment of basic truth in favour of <em>whatever perception is more pleasant</em>.</span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><strong><span lang="EN-CARRIBEAN">Kim Jong-Un on Dancing with the Stars<br /> </span></strong></p> <p class="MsoNormal"><strong><span lang="EN-CARRIBEAN"><br /></span></strong></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Talk show host Jimmy Kimmel recently asked people on the street if they had seen Korean leader Kim Jong-Un on the popular television show, Dancing with the Stars. Clearly they had not, as the idea was absurd, yet many answered yes, then went on to <em>describe</em> their appraisal of his performance as though they’d seen it. (Some went into depth, expounding on the artistry and social value of the non-existent performance.) The interviewer went on to remind the interviewees that Kim Jong-Un is in fact a dictator and asked whether they thought it was in good taste for him to have pointed a machine gun at the audience. In spite of the now blatant absurdity, interviewees continued to pretend they had actually witnessed the performance, offering their opinions on how well he had performed. They responded in accordance with <em>what appeared to be expected of them</em>, rather than choose the less-pleasant option of saying, “I’m sorry, but I didn’t see it.”<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Now, the video was clearly offered by Jimmy Kimmel to show his audience “how dumb people can be,” but it demonstrates something more. It shows us that a significant segment of the population is quite prepared to simply abandon reality by, first, pretending to have witnessed something they have not and, second, offering firm and even complex opinions on something that did not occur.<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><strong><span lang="EN-CARRIBEAN">Political Candidacy<br /> </span></strong></p> <p class="MsoNormal"><strong><span lang="EN-CARRIBEAN"><br /></span></strong></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Certainly, political hopefuls have always had a reputation for being less than truthful and any responsible voter would be advised to look at every candidate with a jaundiced eye. But what if voters choose to lie to <em>themselves</em>in order to validate candidates?<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Back when the US became the unquestioned empire in the world (just after World War II), Americans took a great deal of pride in truth and honour. A candidate might be suspected of personal immoral behaviour and/or corruption and still be elected, but if it were blatant, he would not.<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Today the liberal media <em>regularly</em> refer to the record of presidential candidate Donald Trump, highlighting the companies that have gone bust and people who have financially ruined as a result of his dealings. They also highlight his ever-changing political viewpoints, his arrogance and distain for virtually everyone but himself. Yet supporters of Mister Trump virtually block out the repeated reports, focusing only on their enjoyment of his bombast toward the establishment.<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">And the conservative media have been equally persistent in calling attention to candidate Hillary Clinton’s long history of shady business dealings, her failure with regard to the Benghazi incident, her selling of influence whilst acting officially as Secretary of State, her acceptance of large campaign donations from Wall Street and, most prominently, her (very possibly illegal) abuse of top secret government documents.<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Yet half of all democrats at present are content to simply treat all that evidence as though it has <em>no significance</em>.</span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">To put this in perspective, as recently, as 1974, the American public were so outraged over their president having complied with a coverup of an information burglary that he was forced to resign his office. Today, however, we observe not a sitting president, but <em>candidates</em> for president, each of whom, regardless of their glaring unsuitability, is able to attract a <em>major</em> portion of the public’s support and continue to campaign.</span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Here, we need not focus on the shortcomings of the candidates, no matter how unfit for office they may be, but on the voters, who choose to <em>disregard</em> the obvious truth.</span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">Again, abandonment of basic truth in favour of whatever perception is more pleasant.<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">All of the above, I believe are symptoms of a greater problem. As a Briton, I’m very aware that, during the decline of the British Empire,many of my fellow Brits pretended that it wasn’t happening, saying, “There will always be a Britain,” and “The sun never sets on the British Empire.” And, tellingly, they continued to behave as though Britain were still top doggie in the neighbourhood. (We still had vestiges of this, right up until the 1980’s, decades after it was clearly all over.)<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">When a ship is going down, the very <em>worst </em>reaction is to pretend that everything’s fine; that it will all turn out okay. Yet, just as occurred in Britain, we see today in the American people a desire to pretend that, although all is not well, there’s a rainbow just over the next rise; that if the people (and their presidential candidates) will only make their hopes and promises big enough, the greatness will return, along with good times for all.<br /> </span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN"><br /></span></p> <p class="MsoNormal"><span lang="EN-CARRIBEAN">I wish that that were the case, but I’m inclined to believe that self-deception does not improve the situation; it exacerbates it. Better to face reality, then create a <em>plan</em> to address that reality.</span> </p> <p>&nbsp;</p> <p>&nbsp;</p> <p><span style="margin: 0px; padding: 0px;" lang="EN-CARRIBEAN">&nbsp;</span></p> <h1 style="padding: 0px; margin-top: 0px; margin-bottom: 0.25em; line-height: 1.15; font-size: 24px; font-weight: normal; font-family: Roboto, sans-serif; max-width: 90%;"><em style="margin: 0px; padding: 0px;"><span style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 20.3333px; line-height: 17.3333px;">Please email with any questions about this article or precious metals</span></em><em style="line-height: 1.15; margin: 0px; padding: 0px;"><span style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 20.3333px; line-height: 17.3333px;">&nbsp;</span><strong style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 20.3333px; line-height: 17.3333px;"><span style="text-decoration: underline;"><a href="mailto:bgreen@sprottmoney.com?subject=From%20Zero%20Hedge: The First Casualty is Truth Article">HERE</a></span></strong></em></h1> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <h1 style="margin-top: 0px; margin-bottom: 0.25em; padding: 0px; font-size: 24px; font-weight: normal; line-height: 1.15; font-family: Roboto, sans-serif; max-width: 90%;"><a href="https://www.sprottmoney.com/blog/the-first-casualty-is-truth-jeff-thomas.html"><span style="text-decoration: underline;"><em><strong>The First Casualty is Truth<br /></strong></em></span></a><a href="https://www.sprottmoney.com/blog/the-first-casualty-is-truth-jeff-thomas.html"><span style="text-decoration: underline;"><em><strong>&nbsp;</strong><strong>Written by Jeff Thomas (CLICK FOR ORIGINAL)</strong></em></span></a></h1> http://www.zerohedge.com/news/2016-05-05/first-casualty-truth#comments Corruption Donald Trump Fail KIM Precious Metals Reality Fri, 06 May 2016 10:03:30 +0000 Sprott Money 530609 at http://www.zerohedge.com