http://www.zerohedge.com/fullrss2.xml/article/article/index.php/homes/item/21-does-the-mainstream-media-assist-wall-street-in-hypocritical-hypothesis-for-fear-of-the-next-paradigm-shift en Russia Said To Recall Ambassador At Center of Trump Controversy: Report http://www.zerohedge.com/news/2017-06-25/russia-said-recall-ambassador-center-trump-controversy-report <p>According to <a href="https://www.buzzfeed.com/johnhudson/moscow-is-finally-recalling-russian-ambassador-sergey?utm_term=.ayvq87mo8X#.hdyov8A2vj">BuzzFeed, </a>which cites three anonymous sources, Russia is reportedly recalling Ambassador Sergey Kislyak, the man who dared to do his job and talk to US politicians and visible public figures, and who <a href="http://thehill.com/policy/international/russia/339401-russia-is-recalling-ambassador-at-center-of-trump-campaign">according to The Hill </a>had "emerged as a focal point in the FBI probe into Russia’s election meddling."&nbsp; While the Kremlin has not confirmed the report, BuzzFeed adds that Kislyak is scheduled to leave Washington next month, following a July 11 going-away party at the St. Regis Hotel, two blocks away from the White House. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/kislyak.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/25/kislyak_0.jpg" width="600" height="338" /></a><br /><em>Trump speaking with Sergey Lavrov and Russian ambassador Sergey Kislyak during a <br />White House meeting.</em></p> <p>Kislyak, 66, had been <a href="https://www.usatoday.com/story/news/politics/2017/06/25/russian-ambassador-kislyak-recalled/427056001/">reported to be heading to New York to lead Russia's delegation at the United Nations</a>. If confirmed, his return to Russia will mark the end of his 10-year tenure as Russia's leading diplomat to the United States and makes him another casualty of the growing controversy over the Russian activity.</p> <p>As readers are well aware, Kislyak has been a key figure in the growing investigation by a special counsel and multiple congressional committees into Russia's interference in the 2016 presidential election that put President Trump in the White House. Two key Trump administration officials, Attorney General Jeff Sessions and adviser Jared Kushner, had meetings with Kislyak last year that they failed to disclose to congressional and federal officials. Sessions recused himself in March from any Justice Department investigation into the Russian interference, in part because of his unreported contacts with Kislyak.</p> <p>Ironically, all Kislyak was doing was, well, his job which is to meet with people like Sessions, Kushner and yes, even Trump. </p> <p>In May, the Associated Press reported that Kushner and Kislyak tried to set up a secret back-channel communications line with Russia that would have used Russian equipment. </p> <p>On May 10, Trump met with Kislyak and Russian Foreign Minister Sergey Lavrov in the Oval Office. During that meeting, <a href="https://www.usatoday.com/story/news/politics/2017/06/25/russian-ambassador-kislyak-recalled/427056001/">Ray Locker reminds </a>us that Trump reportedly shared classified intelligence information with the Russians and bragged about firing FBI Director James Comey, whom he called a "nut job."</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="534" height="301" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/kislyak.jpg?1498429683" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-25/russia-said-recall-ambassador-center-trump-controversy-report#comments Business Department of Justice Donald Trump FBI Federal Bureau of Investigation Federal Bureau of Investigation James Comey Jared Kushner Jeff Sessions Kislyak Politics Presidency of Donald Trump Russian interference in the 2016 United States elections Russia–United States relations Sergey Kislyak St. Regis Trump Administration United Nations United States White House White House Sun, 25 Jun 2017 22:31:06 +0000 Tyler Durden 598637 at http://www.zerohedge.com Dan Loeb Is Now Nestle's 6th Largest Shareholder; Goes Activist On World's Biggest Food Company http://www.zerohedge.com/news/2017-06-25/dan-loeb-now-nestles-6th-largest-shareholder-goes-activist-worlds-biggest-food-compa <p>Dan Loeb has returned to his earthshaking activist roots, and in a letter <a href="https://t.co/vQOLSCjkL5">released moments ago, </a>Third Point announced it is now targeting the world’s largest food company, with its biggest bet on a public company in its history, amounting to $3.5 billion.</p> <p>In the letter, Third Point announced that it currently owns roughly 40 million shares of Nestle, and that its stake, which is held in a special purpose vehicle raised for this opportunity including options, <strong>currently amounts to over $3.5 billion. </strong>Putting this number in the context of Nestle's market cap of $264 billion, Loeb may have an uphill battle though that never stopped him before.</p> <p>Loeb's stake of 40 million shares makes him the 6th largest holder of Nestle, above Credit Suisse Asset Management with 38 million shares and below Massachusetts Financial Services Company with 56.8 million. The Top 4 holders are BlackRock, CapRe, Norges Bank, and Vanguard.</p> <p>Third Point writes that "despite having arguably the best positioned portfolio in the consumer packaged goods industry, <strong>Nestlé shares have significantly underperformed most of their US and European consumer staples peers on a three year, five year, and ten year total shareholder return basis</strong>. One year returns have been driven largely by the market’s anticipation that with a newly appointed CEO, Nestlé will improve."</p> <p>While the problems are clear, why did Third Point go activist? To maximize value of course, as It explains:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Third Point invested in Nestlé because we recognized a familiar set of conditions that make it ripe for improvement and change: a conglomerate with unrealized potential for margin improvement and innovation in its core businesses, an unoptimized balance sheet, a number of non-core assets, and a recent history of meaningful under-performance versus peers. It is rare to find a business of Nestlé’s quality with so many avenues for improvement.</p> </blockquote> <p>As to how it could achieve this, Third Point lays out 4 specifics recommendations:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Third Point intends to play a constructive role to encourage management to pursue change with a greater sense of urgency. We have offered our views in productive conversations with management, which we expect will continue. We believe Nestlé is positioned to create enormous value for shareholders over the next several years if the company focuses on: <strong>1) Improving Productivity; 2) Returning Capital to Shareholders; 3) Re-shaping the Portfolio; and, 4) Monetizing its L’Oréal Stake. We discuss each of these in more detail below.</strong></p> </blockquote> <p>Loeb's conclusion:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>As demonstrated by our significant capital commitment, we are enthusiastic about Nestlé’s prospects. The situation reminds us of similar conditions that existed when we first invested in Baxter in 2015. Some market observers scratched their heads, as they thought the company looked “expensive” and thus underestimated the uplift that is possible when a new leader dedicates himself to better capital allocation, portfolio optimization, and margin improvement with strong shareholder support. </p> <p>&nbsp;</p> <p>We recognize that even with new leadership and clear options for value creation, change at a company like Nestlé can be complex. <strong>It is for this reason that Third Point intends to be an engaged, long-term shareholder and offer our assistance to the management team and Board as they pursue improved performance for all stakeholders. We are confident that by following the path we have outlined, Nestlé will be able to revive its iconic slogan, with a twist: Nestlé makes the very best returns for its shareholders.</strong></p> </blockquote> <p>For the full breakdown of Loeb's recommendations, see the full letter below. </p> <p>As <a href="https://www.bloomberg.com/news/articles/2017-06-25/nestle-said-to-be-targeted-by-activist-dan-loeb-s-third-point">Bloomberg notes</a>, the Third Point move comes as Nestle’s new Chief Executive Officer Mark Schneider aims to boost the company’s health strategy as well as focus on the businesses that are growing fastest, such as coffee and pet food. Food companies are under pressure to reduce costs after Kraft Heinz Co.’s unsuccessful bid for Unilever earlier this year showed that even the largest players could become targets.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Chocolate makers especially are grappling with weak U.S. consumption as Americans increasingly turn their backs on sugar. Nestle said this month it may sell its U.S. sweets unit, which includes brands such as Butterfinger and BabyRuth.</p> </blockquote> <p>Third Point has targeted European companies before. Vitamin maker Royal DSM NV also attracted the activist, and went on to sell its majority stake in a basic plastics and resins unit to CVC Capital Partners after facing calls to break up.</p> <p><em>Full Third Point letter below (<a href="http://www.thirdpointpublic.com/wp-content/uploads/2017/06/Third-Point-Nestle-Letter.pdf">pdf link</a>)</em></p> <p><iframe src="https://www.scribd.com/embeds/352220358/content?start_page=1&amp;view_mode=scroll&amp;access_key=key-9PZsKLKKh4MPok3Wymkb&amp;show_recommendations=true" width="100%" height="600" frameborder="0" scrolling="no"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="553" height="369" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/dan%20loeb_7.jpg?1498427909" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-25/dan-loeb-now-nestles-6th-largest-shareholder-goes-activist-worlds-biggest-food-compa#comments Blackrock Business Business Credit Suisse Daniel S. Loeb Finance Food and drink Kraft Medical food Nestlé Norges Bank Norges Bank pdf Third Point Third Point Management Vevey Sun, 25 Jun 2017 22:03:50 +0000 Tyler Durden 598636 at http://www.zerohedge.com Italian Taxpayers To Foot €17 Billion Bill As Rome Bails Out Another Two Insolvent Banks http://www.zerohedge.com/news/2017-06-25/italy-bails-out-two-failed-banks-17-billion-cost-taxpayers <p>Two weeks after the first, and biggest, European bank bail-in took place under the relatively new European bank resolution mechanism, the EBRD, when Spain's Banco Popular wiped out the holders of its most risky securities, including equity and AT bonds, and then selling what was left of the bank to Santander for €1 - a process that took place without a glitch -&nbsp; Italy may have just killed any hope of a European banking union, when the bailout of two small banks made a "mockery" of Europe's new regulation. </p> <p>Late on Sunday, Italy passed a decree that will effectively sell the good part of the two banks to Intesa, Italy’s second-largest and best-capitalized bank. Intesa said last week that it would be willing to buy the best assets for a token price of €1 as long as the government assumed responsibility for liquidating the banks’ large portfolio of sour loans. As a result, Italy said it would commit as much as €17 billion in taxpayer funds to clean up the two failed "Veneto" banks in one of Italy's wealthiest regions and support the takeover of their good assets by Intesa Sanpaolo SpA for a token amount. After an emergency cabinet meeting on Sunday, Finance Minister Pier Carlo Padoan said the Italian government will provide Milan-based Intesa with about €5.2 billion euros to allow it to take on Banca Popolare di Vicenza SpA and Veneto Banca SpA assets without hurting capital ratios, The European Commission, in a separate statement, said it approved the plan for the two banks and that it is in-line with state-aid rules. </p> <p>Unlike the Banco Popular bail-in by Santander, however, Intesa would only take on the good assets. PM Gentiloni said the lenders will be split into good and bad banks and that the firms, with taxpayers on the hook for the bad banks. The process was rushed to allow the failed banks to reopen on Monday and avoid a depositor panic and bank run. The intervention is necessary because depositors and savers were at risk, Gentiloni said. The northern region where they operate “is one of the most important for our economy, above all for small- and medium-size businesses.” </p> <p>In addition to the €5.2bn handed to Intesa, an additional €12bn will be available to cover potential further losses at the bad banks, Padoan said, while the Italian Treasury estimates the fair value of the losses at about €400 million. The final number will be far greater. </p> <p>Just like in the case of Banco Popular, the government tried for months to find a way to keep the banks afloat, including an appeal to wealthy businessmen in <a href="https://www.bloomberg.com/news/articles/2017-06-25/italy-mobilizes-up-to-19-billion-to-keep-veneto-banks-afloat">the region to contribute to a rescue according to Bloomberg. </a>Those efforts ended on Friday when the European Central Bank said the two banks are failing or were likely to fail and turned the matter over to the Single Resolution Board in Brussels for disposal. The SRB, in turn, passed the issue back to Italian authorities to allow the banks to be wound down under local law. In the subsequent 48 hours, culminating with today's announcement by the prime minister, which also required a change to Italy's bankruptcy law, Italy rushed to assemble the measures to carry out the plan because a local regulatory framework was required to allow the banks to open on Monday.</p> <p>Ultimately, the plan unveiled by the government is virtually the same as that suggested earlier in the week by Intesa, <strong>which "offered" to take on the assets of the two Veneto banks on the condition that it wouldn’t harm its own capital and dividends, in some ways mirroring an FDIC-backed bailout of a US bank, in which a safe lender assumes all the deposits and loans, which the insurer plugs the capital shortfall. </strong>Only in this case, the NPLs are spun off into a separate entity: Intesa's proposal excluded soured debt, higher-risk performing loans and subordinated bonds, along with shareholdings and other “legal relationships.” A purchase would only move forward if it didn’t lower Intesa’s common equity Tier 1 ratio, the bank said.</p> <p>But where the rest of Europe will be infurated, is that unlike the recent bail-in of Popular in which billions in unsecured liabilities were wiped out, in the case of the Veneto banks the proposed <strong>bail out</strong> ensures <strong>that senior creditors and depositors of Popolare di Vicenza and Veneto Banca would be protected in the wind-down under national insolvency law, and customers would see no interruption in service. </strong>Retail junior bondholders involved in the burden sharing - who can be reimbursed up to 80 percent according to rules - will be totally refunded because Intesa said it can fill the gap.</p> <p>And, as the WSJ adds, "<strong>the decision over the weekend to spare two failed Italian lenders from the full force of those new rules raises questions about the effectiveness of the banking union.</strong>"</p> <p>* * * </p> <p>Some <a href="https://www.wsj.com/articles/italy-is-prepared-to-spend-billions-in-shutdown-of-two-banks-1498418669">background</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The decision to create a banking union was the decisive moment in the eurozone's response to the global financial crisis. The establishment of common banking rules and oversight institutions were intended to help restore trust in a system badly shaken by concerns that weak national supervisors in thrall to local political pressures were colluding to hide from investors the full scale of bad debts. </p> <p>&nbsp;</p> <p>It also formed the centerpiece of a grand political bargain: By committing to sever the link between weak banks and over-indebted sovereigns, governments prepared the way for European Central Bank president Mario Draghi's 2012 promise to do "whatever it takes" to save the eurozone, including buying government bonds. </p> <p>&nbsp;</p> <p>The centerpiece of the new regime was the Bank Resolution and Recovery Directive -- rules to ensure that no taxpayer money is used to bail out banks and that losses fall on private-sector creditors -- and the creation of the Single Resolution Board to oversee the process. </p> </blockquote> <p>There was relief last month when this new regime was tested for the first time by the failure of the Spanish lender Banco Popular, which was sold to Santander for one euro after its shareholders and junior bondholders had been wiped out, with no adverse effect on the market.&nbsp; <strong>But Veneto Banca and Banco Populare di Vincenza will be spared the same treatment. Using a loophole in the BRRD, the Single Resolution Board has ruled that the two banks are not systemically important and therefore can be liquidated under Italian insolvency rules, which permit the use of government cash without the need for senior bondholders to take losses.</strong> </p> <p>As noted above, the plan is that the good assets of the banks will be transferred to Intesa Sanpaulo for a euro, but the bad assets and the cost of redundancies will be left with the government, which faces losses of up to €10 billion.</p> <p>* * *</p> <p>As <a href="https://www.wsj.com/articles/italy-is-prepared-to-spend-billions-in-shutdown-of-two-banks-1498418669?mg=prod/accounts-wsj">the WSJ's Deborah Ball observes</a>, the case of the Veneto banks is yet another example of Italy wriggling out of strict EU rules built after the financial crisis to prevent taxpayers from footing the bill in the event of the collapse of such institutions as banks. When the EU authority in charge of winding down the bloc’s failing banks—the Single Resolution Board—decided it wouldn’t take the case, it handed all power over to Italian authorities. This was followed by a Friday announcement by the SRB that it wouldn’t take action because neither of the banks would have “a significant adverse impact on financial stability" which is ironic becauase the whole point of the bailout - and not bial in - is to avoid a bankrun at the two banks which could then spread to the rest of the Italy's banking system. </p> <p>So the two banks will be closed down under national insolvency procedures, <strong>and the painful process of EU bail-in—under which junior and senior bondholders absorb the losses—is averted</strong>. In Italy, a <a href="http://www.zerohedge.com/news/2016-11-27/eight-italian-banks-may-fail-if-renzi-loses-referendum">majority of bonds are in the hands of mom and pop investors</a>. </p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/11/06/bail%20in%20chart_0.jpg" width="500" height="287" /></p> <p>Ironically, the EU Commission which pushed hard for the BRRD insists <strong>this is not a loophole and that the possibility of using national as opposed to eurozone-level insolvency regimes was clearly envisaged under the Bank Resolution and Recovery Directive. </strong>It points out that a number of failed banks have been liquidated using national insolvency regimes since 2015.</p> <p>* * * </p> <p>Even so, <strong>the WSJ notes that this decision has taken most observers by surprise. </strong>The two Italian banks, though smaller than Banco Popular, were large enough to be supervised by the European Central Bank. It therefore was widely assumed that their resolution would also be handled at the European level. Instead, it now appears that the SRB has discretion as to whether to apply the BRRD rules. Meanwhile the eurozone finds itself in the paradoxical situation where systemically unimportant banks are eligible for state aid, while systemically important banks must be subject to full bail-in.</p> <p>And, as the WSJ correctly adds, it is hard to avoid the conclusion that the SRB's decision to spare senior bondholders in the two lenders is primarily political.</p> <p>Adding insult to injury, and even more questions about whether the BRRD is even relevant any more, back in March Italian authorities tried in March to use another exception in EU rules to prop up the two Veneto banks. Under so-called precautionary recapitalization, Italy could have injected state money into the ailing lenders, but the commission didn’t approve the plans.&nbsp; </p> <p>More from the WSJ:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The Italian authorities have been fighting a rear-guard action to save the two banks from insolvency for two years, not least because they are major employers in the region and because many of the bondholders are retail customers of the banks who may not have known of the risks they were taking when they bought what were marketed as high interest savings products.&nbsp; </p> <p>&nbsp;</p> <p>Liquidating the banks under national rules at least removes the risk that 300, 000 retail investors might be hit by substantial losses less than a year before a general election is due. </p> <p>&nbsp;</p> <p>No one wants to reignite a new political crisis in the eurozone just as the economy, including that of Italy, appears to have finally turned a corner.</p> </blockquote> <p>Maybe, but Berlin, Europea's paymaster who had pushed hard for a uniform bank resolution mechanism and now finds Italian banks abusing one after another loophole to get bailed out instead of in, is not happy. </p> <p>Speaking to Germany's Die Welt, Isabel Schnabel, a member of Germany’s Council of Economic Experts said that the wind-down of Italy’s Veneto Banca and Banca Popolare de Vicenza under national insolvency law is “<strong>a serious blow to the European settlement regime." </strong>and added that <strong>"the cases show that European settlement regime offers too many loopholes</strong>" as in the end bank senior creditors will be completely spared from losses while Italian taxpayers will foot the bill. According to Scnabel, the&nbsp; Single Resolution Board’s authority should be expanded to include smaller banks in order to avoid situations where “creditors of banks are being spared from losses according to the convenience of the host countries.”</p> <p>For now, however it is too late, and Rome has once again outsmarted Berlin.</p> <p>* * *</p> <p>So with yet another gross evasion of Europe's bank resolution mechanism, where does that lead the banking union?</p> <p>As <a href="https://www.wsj.com/articles/deal-on-italian-banks-raises-questions-about-eurozone-rules-1498407926">WSJ writes</a>, "the decision to put the liquidation into the hands of the Italian authorities is not being questioned by Germany. From Berlin's perspective, it is enough that it has headed off a long-standing attempt by Rome to try to keep the banks alive by injecting government capital using another controversial BRRD loophole known as precautionary recapitalization."</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The decision to spare senior bondholders represents a pragmatic compromise to a saga that has cast a shadow on the Italian and eurozone banking system for too long -- and which German officials believe should have been addressed years ago.&nbsp; Nonetheless, Berlin wants reassurance that this deal doesn't set a precedent and that the state aid rules will be rigorously applied to minimize the use of taxpayers' money, according to German officials. </p> <p>&nbsp;</p> <p>In recent weeks, there has been much speculation about a fresh political push to strengthen the eurozone, including the creation of new mechanisms to pool banking risks via a common backstop to the eurozone's Single Resolution Fund and a common deposit-insurance scheme. </p> <p>&nbsp;</p> <p><strong>But the Italian episode highlights that before any steps can be taken to complete the banking union, new measures may be needed to strengthen the rules already in place.</strong></p> </blockquote> <p>A much more harsh assessment was offered earlier over the weekend by Bloomberg commentator Ferdinando Giugliano <a href="https://www.bloomberg.com/amp/view/articles/2017-06-23/europe-s-banking-union-is-dying-in-italy">who wrote that as a result of today's bailout, "</a><strong><a href="https://www.bloomberg.com/amp/view/articles/2017-06-23/europe-s-banking-union-is-dying-in-italy">Europe's Banking Union Is Dying in Italy</a>"</strong><br />and that <strong>"Italy's plan to rescue two small banks makes a mockery of Europe's new regulations.</strong>"&nbsp; </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>This plan is a slap in the face of Italian taxpayers, who according to some estimates could end up paying&nbsp; around 10 billion euros ($11.1) for it. </strong>The government could have taken a less expensive route, involving the "bail in" of senior bondholders. It chose not to: Many of these instruments are in the hands of retail investors, who bought them without being fully aware of the risks involved. </p> <p>&nbsp;</p> <p><strong>The government wants to avoid a political backlash and the risk of contagion spreading across the system. However, 10 billion euros is a whale of a premium to pay as an insurance against a contagion. And Rome may still face a backlash -- from taxpayers who will feel defrauded. </strong></p> <p>&nbsp;</p> <p>Most importantly, <strong>this plan is a dagger in the heart of the euro zone banking union</strong>. This was one of Europe's main responses to the sovereign debt crisis, designed to limit the contribution of taxpayers to bank rescues and to ensure all euro zone lenders faced a coherent set of rules.... This means the European Commission must take a hard look at it and decide whether it really fits within existing laws. Intesa Sanpaolo is cherry-picking the assets it wants and leaving the bill to the government: It's hard to see how this doesn't involve state aid, which the EU forbids.</p> </blockquote> <p>Ultimately, however, as the WSJ notes the decision to bail out the two banks and their stakeholders was entirely political (involving fears over a popular backlash of impaired senior bondholders), which means that Italy's government will continue bailing out those exposed to bank risk as long as Italy's taxpayers - and voters - keep silent; after all the risks from the alternative: depositors runs, contagion, bank crisis, are just too high and could remind Europe that 7 years after the first Greek bailout, absolutely nothing has been fixed in Europe, where the artificial sense of calm is only at the behest of a European central bank which now owns a record €4.2 trillion in assets and rising every week. </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="360" height="199" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/veneto%20banks.jpg?1498426034" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-25/italy-bails-out-two-failed-banks-17-billion-cost-taxpayers#comments Atlante Bailout Banca Intesa Banca Popolare di Vicenza Banca Teatina Bank Run Banking in Italy Banks Business Creditors Economy of Italy EU Commission European Central Bank European Central Bank European Commission European Union Eurozone Fail FDIC fixed Germany Germany’s Council of Economic Experts Intesa Sanpaolo Intesa Sanpaolo Group Italian government Italy Italy's government recovery Single Resolution Board in Brussels Single Resolution Fund Sovereign Debt Sovereigns UBI Banca Sun, 25 Jun 2017 21:35:34 +0000 Tyler Durden 598634 at http://www.zerohedge.com Epic Pictures From Arizona's Heatwave: "Everything Is Literally Melting" http://www.zerohedge.com/news/2017-06-25/epic-pictures-arizonas-heatwave-everything-literally-melting <p>Ask any Arizonan whether their summers are more tolerable because <strong>"it's a dry heat" </strong>and you're likely to be asked to <strong>turn your oven to 150 degrees, stick your head inside for 20 minutes and report back as to whether or not the humidity within the oven ever crossed you mind.</strong>&nbsp; Probably not. </p> <p>And while Arizonans have learned to cope with the "dry heat," this summer has been particularly brutal for people living in the Southwest as temperatures have already soared to over 120 degrees in certain areas.&nbsp; <strong>What's worse, it's only June.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25 - AZ5.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25%20-%20AZ5_0.JPG" style="width: 600px; height: 461px;" /></a></p> <p>And while the heatwave may not be that fun for the people living through it, it does making for some amazing pictures of stuff melting.</p> <p>Perhaps that <strong>plastic mailbox post wasn't such a great idea in retrospect.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25 - AZ1.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25%20-%20AZ1_0.JPG" style="width: 600px; height: 450px;" /></a></p> <p>&nbsp;</p> <p>On the bright side, you can get all your baking done outside in mother nature's free oven.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">"arizona isn't that hot"</p> <p>BET <a href="https://t.co/BjX2Me0Ezm">pic.twitter.com/BjX2Me0Ezm</a></p> <p>— antonihoe (@confuzzledteen3) <a href="https://twitter.com/confuzzledteen3/status/878049519161688064">June 23, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>&nbsp;</p> <p><strong>Plastic fences...also not a great idea</strong>.&nbsp; Come on Arizona...you're better than this.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25 - AZ2.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25%20-%20AZ2_0.JPG" style="width: 600px; height: 366px;" /></a></p> <p>&nbsp;</p> <p>Meanwhile, this Tempe resident (undoubtedly an ASU student judging by all the cheap alcoholic beverages) was just trying to do his part to fight climate change by recycling his beer bottles...<strong>it seems that ManBearPig won this round.&nbsp; </strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25 - AZ3.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25%20-%20AZ3_0.JPG" style="width: 600px; height: 605px;" /></a></p> <p>&nbsp;</p> <p>Breakfast is served...</p> <blockquote class="twitter-video"><p dir="ltr" lang="en">You already know whats going on in Arizona <a href="https://t.co/Pztyd03Vx3">pic.twitter.com/Pztyd03Vx3</a></p> <p>— ? ??c??d? ? (@Finessegawd3000) <a href="https://twitter.com/Finessegawd3000/status/877306917541994496">June 20, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>&nbsp;</p> <p>Meanwhile, even the road signs are melting down...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25 - AZ4.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25%20-%20AZ4_0.JPG" style="width: 600px; height: 393px;" /></a></p> <p>&nbsp;</p> <p>...which is going to make it even harder for this guy to get around town...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25 - AZ6.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25%20-%20AZ6_0.JPG" style="width: 600px; height: 415px;" /></a></p> <p>&nbsp;</p> <p>Al Gore is going to have a field day with these pics.</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="652" height="98" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017.06.25%20-%20AZ%20Tease.JPG?1498405454" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-25/epic-pictures-arizonas-heatwave-everything-literally-melting#comments Arizona Arizonan Chemistry Environment Manufacturing Matter Polyethylene terephthalate Twitter Twitter Sun, 25 Jun 2017 21:20:00 +0000 Tyler Durden 598616 at http://www.zerohedge.com Does Mueller's Team's Democratic Bias Confirm Gingrich's "Time To Rethink" Warning? http://www.zerohedge.com/news/2017-06-25/does-muellers-teams-democratic-bias-confirm-gingrichs-time-rethink-warning <p>Newt Gingrich is once again driving the narrative surrounding the multiple investigations into President Donald Trump and his campaign. After Gingrich asserted in a tweet Friday that it&#39;s &quot;time to rethink&quot; the assumption that Special Counsel Robert Mueller&rsquo;s team of prosecutors will behave impartially, <a href="https://www.axios.com/members-of-muellers-investigation-team-donated-to-republicans-democrat-2447091192.html">Axios has followed up with a report</a> noting that <strong>nearly every member of Mueller&rsquo;s team has contributed to Democratic candidates.</strong> The Axios report echoes <a href="http://www.cnn.com/2017/06/12/politics/robert-mueller-donations-democrats-fec/index.html">a similar story by CNN,</a> which previously reported on donations by three members of Mueller&rsquo;s team.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;<u><strong>The donations:</strong></u></p> <p>&nbsp;</p> <p><strong>James Quarles:</strong> <em>Donated almost $33,000 to Democrats, including Hillary Clinton and Barack Obama. He has also donated about $2,750 to Republicans &mdash; the only lawyer on Mueller&#39;s team to have done so.</em></p> <p>&nbsp;</p> <p><strong>Jeannie Rhee: </strong><em>Donated more than $16,000 since 2008 to Democrats, including the maximum donation possible to Clinton in both 2015 and 2016. Rhee has also donated to Obama.</em></p> <p><strong>Andrew Weissmann:</strong> <em>Donated more than $4,000 to Obama in 2008 and $2,000 to the DNC in 2006.</em></p> <p>&nbsp;</p> <p><strong>Elizabeth Prelogar:</strong> <em>Donated $250 each to Clinton in 2016 and Obama in 2012.</em></p> <p>&nbsp;</p> <p>There are no FEC filings for Aaron Zebley. It was not immediately clear whether Lisa Page had donated. The Michael Dreeben listed in the FEC database is not the same Dreeben Mueller hired, per CNN. Bob Mueller has not made donations.&rdquo;</p> </blockquote> <p>The assumption of impartiality has been made by both Republicans and Democrats. During testimony before the Senate Intelligence Committee earlier this month, Deputy Attorney General Rod Rosenstein said the donations didn&rsquo;t necessarily preclude Mueller&rsquo;s team from being objective&hellip;<strong>but considering deluge of leaks out of Mueller&rsquo;s office that were clearly meant to embarrass Trump, Rosenstein might want to rethink those claims.</strong></p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Republicans are delusional if they think the special counsel is going to be fair. Look who he is hiring.check fec reports. Time to rethink.</p> <p>&mdash; Newt Gingrich (@newtgingrich) <a href="https://twitter.com/newtgingrich/status/874228318865952768">June 12, 2017</a></p></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script><p>&nbsp;</p> <p>Mueller hasn&rsquo;t donated to candidates of either party, records show. Mueller&#39;s team is investigating both the allegations of collusion between Russian entities and the Trump campaign, as well as whether Trump&rsquo;s treatment of former FBI Director James Comey amounted to obstruction of justice.</p> <p>Gingrich&rsquo;s comments in recent weeks have been eerily prescient. <a href="http://www.zerohedge.com/news/2017-06-17/gingrich">In a June 17 interview with Sean Hannity,</a> Gingrich noted that some Senate Democrats were beginning to question whether Attorney General Loretta Lynch&rsquo;s conduct during the campaign merited an investigation &ndash; and took a swipe at Republicans for letting Lynch off the hook. <em><strong>Less than a week later, the Senate Judiciary Committee announced it had launched a bipartisan-endorsed probe into Lynch. </strong></em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/06/10/Gingrich.JPG"><em><strong><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/06/10/Gingrich_0.JPG" style="width: 500px; height: 339px;" /></strong></em></a></p> <p>Gingrich also told Hannity that the Mueller investigation will likely result in &ldquo;somebody going to jail.&rdquo; Though that somebody probably won&rsquo;t be President Donald Trump.</p> <p>Trump also weighed in during a Fox News interview on Friday, when he told Ainsley Earhardt that he is bothered by Special Counsel Robert Mueller&#39;s close relationship with fired FBI Director James Comey. When asked whether Mueller should recuse himself, Trump replied <strong>&quot;well he&#39;s very, very good friends with Comey which is very bothersome... We&#39;re going to have to see.&quot;</strong></p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/EfOOexF5c9A" width="560"></iframe></p> <p>As radio host Mark Levin noted that the investigation is beginning to look like a premeditated <a href="http://www.zerohedge.com/news/2017-06-23/trump-mueller-and-comeys-bff-status-very-bothersome">&ldquo;pretext for impeachment&rdquo;</a> given the close relationship between Mueller and key witness Comey.</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/8EHgwsiogb4" width="560"></iframe></p> <p>As <a href="http://www.zerohedge.com/news/2017-06-09/retired-fbi-special-agent-blows-whistle-real-robert-mueller">LibertyReport&rsquo;s Mike Krieger</a> pointed out earlier this week, retired FBI special agent Coleen Rowley punched holes in the consensus narrative that portrays Mueller and Comey as honest, diligent and impartial public servants. A closer look at their conduct during the Bush administration reveals that the two officials participated inn post-9/11 coverups and secret abuses of the Constitution.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Mainstream commentators display amnesia when they describe former FBI Directors Robert Mueller and James Comey as stellar and credible law enforcement figures. <em><strong>Perhaps if they included J. Edgar Hoover, such fulsome praise could be put into proper perspective.</strong></em></p> <p>&nbsp;</p> <p>Although these Hoover successors, now occupying center stage in the investigation of President Trump, have been hailed for their impeccable character by much of Official Washington, <em><strong>the truth is, as top law enforcement officials of the George W. Bush Administration (Mueller as FBI Director and James Comey as Deputy Attorney General), both presided over post-9/11 cover-ups and secret abuses of the Constitution, enabled Bush-Cheney fabrications used to launch wrongful wars, and exhibited plain vanilla incompetence.&rdquo;</strong></em></p> </blockquote> <p>How quickly Senate Democrats, many of whom lambasted the Bush Administration for deceiving the country with questionable intelligence to justify an invasion of Iraq, forget&hellip;<br />&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="971" height="659" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/Gingrich.JPG?1498410243" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-25/does-muellers-teams-democratic-bias-confirm-gingrichs-time-rethink-warning#comments American people of German descent Barack Obama Bush Administration Democrats Director of the Federal Bureau of Investigation Donald Trump Donald Trump FBI Federal Bureau of Investigation Federal Bureau of Investigation Fox News George W. Bush administration Iraq James Comey Judiciary Committee Newt Gingrich Politics Robert Mueller Rod Rosenstein Russian interference in the 2016 United States elections Senate Intelligence Committee Special prosecutor Testimony United States United States intelligence agencies Sun, 25 Jun 2017 21:00:00 +0000 Tyler Durden 598621 at http://www.zerohedge.com "Big Swinging Dick" Defined http://www.zerohedge.com/news/2017-06-25/big-swinging-dick-defined <p><a href="https://www.linkedin.com/pulse/how-calculate-trade-size-erico-matias-tavares"><em>Authored by Erico Matias Tavares via Sinclair &amp; Co.,</em></a></p> <div class="prose"> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div> <p><em>&quot;<span style="text-decoration: underline;">Big Swinging Dick</span>: (Very) informal and somewhat derogatory; a trader who believes his methodology is perfect and will always result in sizable profits. However, it originally was a term of self-designation for major bond-traders. The term was popularized by the book Liar&#39;s Poker, which describes the author&#39;s experience as a bond trader on Wall Street in the 1980s.&quot; Source: </em><a href="http://financial-dictionary.thefreedictionary.com/Big+Swinging+Dick" rel="nofollow noopener" target="_blank"><em>financial dictionary</em></a></p> </blockquote> <p><strong>While much has been written about trade size, meaning how much trading capital should be risked on each trade, this remains a nebulous imprecise topic.</strong></p> <p>That&rsquo;s unfortunate because it can make all the difference between staying in the game or losing all trading capital &ndash; <strong>known in the business as &ldquo;blowing up&rdquo;.</strong> Yes, even (especially) if you are a big swinger.</p> <p>The concept of a &quot;<a href="https://www.linkedin.com/pulse/trading-living-interview-adam-grimes-erico-matias-tavares" target="_blank">trading edge</a>&quot; is central here. Broadly speaking, this is how much a trader is expected to make over a reasonable number of trades (meaning, with some statistical significance), taking into consideration the risk of loss and how much will be made or lost with each trade on average.</p> <p><strong>Basically, if you don&rsquo;t know what your edge is you should not be trading, or gambling for that matter.</strong> Buying and holding for some time perhaps, but not regularly going in and out of the market without a good plan.</p> <p>Let&rsquo;s assume that you are in a situation where you have a negative edge, by definition meaning you are likely to lose money over a large enough number of trades. The conventional example is a casino, where as we know the house always wins in the end because of that reason.<strong><em> So as you walk through the entrance, how large should your bet size be?</em></strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170625_BSD.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170625_BSD.jpg" style="width: 599px; height: 322px;" /></a></p> <p><strong>Surprisingly to some, the answer is actually 100% of your capital, meaning all of it, in one go &ndash; more so if the edge is especially unfavorable to you.</strong></p> <p>Casinos want to keep their patrons gambling for as long as possible, because they know the longer they keep on playing the greater the chances they will give back all their winnings and then some. Therefore, if the goal is to maximize expected profits go for all or nothing, then walk away (unless you are there to have a good time, in which case bet as little as possible each time).</p> <p><strong>The other situation where 100% is appropriate is at the other side of the spectrum, when a trader just can&rsquo;t lose. </strong>The more capital traded each time the higher the profits will be since there are no losses. This of course is unrealistic in any speculative endeavor. It&rsquo;s mentioned here for illustrative purposes only.</p> <p><u><strong>The much trickier question lies in between those two scenarios, </strong></u>when there is a positive edge but no certainty of profit. What to do in this situation?</p> <p>Let&#39;s assume there is a 99% chance of doubling your money versus 1% of losing it all, which are fantastic odds. Since we are near certainty, should we bet everything once again?</p> <p>A big swinger surely would. However, unlikely as it may be we can still suffer a loss, which would instantly put us out of the game. The economic loss is actually much greater than the trading capital in this case, because had we managed to hold on eventually we could stand to make a lot of money with those fantastic odds. But as fate would have it, we blew up. Big swinger no more.</p> <p><strong>So no matter how good the odds with uncertainty there is nothing preventing a string of losses from occurring (that&rsquo;s how life works by the way).</strong></p> <p><u><strong>The key point here is endurance,</strong></u> meaning having enough trading capital &ndash; and mental stamina &ndash; on reserve so that if one of those mean streaks hits you can survive and eventually get back to the higher probabilities of winning again.</p> <p>As such, defining how much should be risked on each trade requires a quantifiable (even if not exact) framework that takes all these factors into consideration. Fortunately, this can be done without too many mathematical gymnastics. Here&rsquo;s one way to do it.</p> <p>Let&rsquo;s assume we trade a fixed amount of our capital, called &ldquo;R&rdquo;. That&#39;s how much we are risking each time. As a result, trade profits and losses can now be expressed as a function of R, such as a loss of -2R and a gain of 1R. This way the framework can be standardized and applied to any futures contract, stock, FOREX or bond.</p> <p>Next we assign some probability of occurrence to each resulting R level (usually based on historical analysis or backtesting). Now we can quantify the edge, which is roughly speaking the sumproduct of the two.</p> <p><strong>The graph below shows a hypothetical trading model that delivers a 0.2R on each average trade. That&rsquo;s a very decent trading system. Not only are the odds of not losing money higher than losing it, wins are skewed heavily to the upside.</strong></p> <div class="slate-resizable-image-embed slate-image-embed__resize-full-width"><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170625_BSD1.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170625_BSD1_0.png" style="width: 600px; height: 224px;" /></a></div> <p>Any trader would love to use such a system any time of the year. However, even if on paper the results look great, it is worth remembering that these are based on statistical averages. This can make all the difference in the world, potentially generating some pretty big swings in your accumulated trading capital over time.</p> <p>To illustrate how, let&rsquo;s also assume that we trade this system once every week for ten years, so 52 x 10 trades in total. We define cumulative loss as the maximum loss in terms of R from a trading capital high to a trading capital low over the course of those ten years. This is actually a very important number since a lot of things can happen during that time frame.</p> <p>As a side note, we are putting on the trades sequentially in a portfolio of one security only. This avoids the complication of figuring out correlation coefficients between securities, where any correlation less than perfect would yield some diversification benefit, in principle reducing the cumulative loss. So we are using the most conservative scenario here.</p> <p>Finally, Microsoft Excel is used to generate 520 random trades over 1000 times to derive the average cumulative loss.<strong> This is like 1000 traders using the same exact system completely independently, and that high number carries some statistical robustness. The resulting histogram is shown below:</strong></p> <div class="slate-resizable-image-embed slate-image-embed__resize-full-width"><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170625_BSD2.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170625_BSD2_0.png" style="width: 600px; height: 291px;" /></a></div> <p>We can<u><strong> immediately observe how luck plays such a prominent role in trading</strong></u> (or any activity that involves risk for that matter), even when the edge of the system is quite positive: traders using exactly the same system can experience cumulative losses ranging from 5R all the way to 43R. Of course these are extremes (or tails) with limited occurrences but it does highlight the point.</p> <p>There is some concentration of outcomes around 12R, the cumulative loss with the most occurrences. But the chance of actually losing more than, say, 19R at some point is over one in five so the tail risk is clearly not insignificant. And it&rsquo;s also a function of trading over 10 years using this particular system. If it had been, say, just two years (104 sequential trades) that figure would have been 2%, virtually one tenth of that.</p> <p><strong>In other words, the more you trade the higher the odds you will have a big losing streak at some point, unlikely as that may be. As professional traders often remind us, the worst drawdown is always ahead of us. We can see why here.</strong></p> <p>That&rsquo;s a hugely underappreciated point that is often lacking in more meaningful discussions about trade size. And it makes sense. The more you walk under the rain the higher the likelihood you will get wet - even if you have a great umbrella.</p> <p>If you are planning to trade sporadically and opportunistically, that&rsquo;s one thing; but if you are considering regularly going in and out of the market over many years that&#39;s quite another. Again, it bears repeating that the chances of something bad happening increase with the number of trades.</p> <p>The size of the edge also makes a huge difference to the outcome. Let&rsquo;s assume that the edge in the model above is now reduced from 0.2R to just 0.05R (by taking out five percentage points from the odds of getting 2R and allocating them to -1R). The chance of losing more than 19R over ten years is now a staggering 73%.</p> <p><strong>So the worse the edge the greater the chances of having a string of losses. As it should be of course.</strong></p> <p>Why are such tail numbers relevant? Because if there isn&rsquo;t enough capital set aside you will blow up your trading account. Pure and simple.</p> <p>The higher that tail risk the smaller the trade size should be so you have enough cash stashed away for that rainy day. And this should have implications on how trades are structured.</p> <p>Moreover, market conditions can and do change, possibly even invalidating the trading system and the edge altogether. In times of great volatility for instance, where swings can frequently occur in both directions, it pays to play even safer than suggested by these figures.</p> <p><strong>Going back to the original framework, setting aside just 19R of our capital aside and betting the rest on each trade means there&rsquo;s a 20% chance of blowing up over those ten years. </strong>That&rsquo;s too much for our risk appetite, which means we typically err on the side of leaving more cash on the sidelines.</p> <p>How much more depends on each trader&rsquo;s tolerance. All things considered, our general preference is to use a trade size that keeps at least 50R of our capital set aside. Translating that into a percentage means that risking anything above 2% of our capital on the average trade starts raising some questions about our survivability over ten years. And that is assuming we have a trading system that delivers a sustainable positive edge, which very hard to develop in practice.</p> <p>If we are so concerned with the negative tail why not risk even less, like 1% or even just 0.5% each time? That&rsquo;s possible, but if the system does work we might be leaving money on the table. And that can add up considerably over time. In the end it all boils down to individual tolerance and confidence in the robustness of the system. There are no magical right numbers but it&rsquo;s important to be approximately right.</p> <p>This framework can also be applied in gauging the performance of fund managers. For instance, if the returns on capital employed are really good over a couple of years, can we be sure that they are setting aside enough money if they hit a bad streak? Perniciously, managers are incentivized to always use as much cash as possible, since more capital set aside lowers returns. But there are no free lunches. This comes with a longevity risk that more people ought to pay attention to.</p> <p><strong>Summing up, using a simple framework we have shown how the payoff dynamics and number of trades, usually unfolding over longer periods of time, should be part of the calculation of trade size. Their importance can be easily overlooked when blindly assuming some static assumptions over time.</strong></p> <p>Beyond that, we can only hope and pray that Lady Luck is on our side. Be that as it may, developing at least a basic understanding of mathematical and probabilistic concepts inherent in speculative activities is a must for traders. Trading without any logic or meaningful guidelines can be hazardous to anyone&#39;s health.</p> <p><u><em><strong>Otherwise better forget about trading and put everything on red the next time you go to Las Vegas. And perhaps that way you might become a big swinger instantaneously.</strong></em></u></p> </div> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="698" height="375" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170625_BSD.jpg?1498411387" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-25/big-swinging-dick-defined#comments Actuarial science Algorithmic trading Bond Cumulative Losses Economy Finance Financial markets Financial risk fixed Foreign exchange market Futures contract Gambling Las Vegas Market Conditions Money Share trading Stock market Value at risk Volatility Sun, 25 Jun 2017 20:30:00 +0000 Tyler Durden 598624 at http://www.zerohedge.com Defining Hypocrisy: Schumer Defends Pelosi By Telling Dems "You Don't Blame Other People For Losing" http://www.zerohedge.com/news/2017-06-25/schumer-defends-pelosi-you-dont-blame-other-people-losingsomeone-should-tell-hillary <p>After months of blaming everything under the sun for their November presidential shocker, from Putin to racism to misogyny to you name it, Chuck Schumer, the lead Democrat in the Senate, has a message for John Ossoff and all the Dems now calling for Nancy Pelosi's resignation over their latest embarrassing defeat in Georgia's 6th district: <strong>"But you lose an election, you don’t blame other people, you blame yourself."</strong></p> <p>Really? Because we're almost certain Democrats and every mainstream media outlet has done nothing but launch an all out crusade against Russia for the past 6 months rather than blame the fact that they ran a corrupt process (poor Bernie) and a failed candidate.&nbsp; Again, if someone can please tell us why the Russians were only effective in flipping votes to Trump in MI, WI, OH and PA but not in CO, NM or NV we would very much love to hear your thoughts...<strong><br /></strong></p> <p>Here is what Schumer had to say earlier on ABC's "This Week" with the always fair and balanced George Stephanopoulos.<strong><br /></strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"Democrats need a strong, bold, sharp-edged and commonsense economic agenda. Policy, platform, message that appeal to the middle class, that resonate with the middle class, and show that — and unite Democrats."</p> <p>&nbsp;</p> <p>"This economic message platform is going to resonate.&nbsp; It’s what we were missing, and it’s not going to be baby steps — it’s going to bold."</p> <p>&nbsp;</p> <p><strong>"But you lose an election, you don’t blame other people, you blame yourself."</strong></p> </blockquote> <blockquote class="twitter-video"><p dir="ltr" lang="en">Schumer says Democrats were missing economic message in 2016: "When you lose an election, you don't blame other people. You blame yourself." <a href="https://t.co/pExnfYsXrv">pic.twitter.com/pExnfYsXrv</a></p> <p>— This Week (@ThisWeekABC) <a href="https://twitter.com/ThisWeekABC/status/878971240937005058">June 25, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>&nbsp;</p> <p>But, if Schumer is suddenly having a change of heart on the whole blame game thing...we would fully support it.&nbsp; That said, he should probably reach out to Hillary to relay the new strategy because apparently she<strong> "Has 39 Problems, But Hillary Ain't One."</strong></p> <p><iframe src="https://www.youtube.com/embed/C0DCBUE3HiU" width="600" height="337" frameborder="0"></iframe></p> <p>&nbsp;</p> <p><strong>In conclusion:</strong></p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/25/2017.06.25%20-%20Chuck%202_0.JPG" alt="Pot" width="600" height="401" /></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="611" height="348" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017.06.25%20-%20Chuck%20Schumer.JPG?1498406089" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-25/schumer-defends-pelosi-you-dont-blame-other-people-losingsomeone-should-tell-hillary#comments Blame Chuck Schumer Dismissal of United States Attorneys controversy George Stephanopoulos Hillary Clinton Horse racing Nancy Pelosi Politics Senate Social Issues Twitter Twitter United States Sun, 25 Jun 2017 20:00:00 +0000 Tyler Durden 598618 at http://www.zerohedge.com Megyn Kelly Fails To Fact Check Sandy Hook Father's Contradictory Claim In Alex Jones Hit Piece http://www.zerohedge.com/news/2017-06-25/megyn-kelly-fails-fact-check-sandy-hook-fathers-contradictory-claim-alex-jones-hit-p <p><img src="https://ibankcoin.com/zeropointnow/files/2017/06/kel3.jpg" width="500" height="279" style="display: block; margin-left: auto; margin-right: auto;" /></p> <p style="box-sizing: border-box; margin-top: 0.25em; margin-bottom: 0.75em; font-variant-numeric: inherit; font-stretch: inherit; font-size: 13px; line-height: 1.3; font-family: lucida_granderegular, Verdana, sans-serif;">&nbsp;</p> <p style="box-sizing: border-box; margin-top: 0.25em; margin-bottom: 0.75em; font-variant-numeric: inherit; font-stretch: inherit; font-size: 13px; line-height: 1.3; font-family: lucida_granderegular, Verdana, sans-serif;"><span style="box-sizing: border-box; border-color: currentcolor; font-variant-numeric: inherit; font-stretch: inherit; line-height: inherit;">Content originally published at&nbsp;</span><a href="http://ibankcoin.com/" style="box-sizing: border-box; border-color: currentcolor; font-variant-numeric: inherit; font-stretch: inherit; line-height: 1.2; word-wrap: break-word; color: #1e439a;">iBankCoin.com</a></p> <div><span style="font-size: 13.008px;">Last Sunday's exposé of&nbsp;Alex Jones&nbsp;on NBC's&nbsp;</span><em style="font-size: 13.008px;">Sunday Night With Megyn Kelly&nbsp;</em><span style="font-size: 13.008px;">was considered by many to be&nbsp;a&nbsp;tasteless and&nbsp;heavily edited&nbsp;attempt&nbsp;to smear the Infowars host and vocal supporter of Donald Trump. Despite a week of heavy promotion, the segment backfired -&nbsp;sending&nbsp;Kelly's ratings further&nbsp;into the toilet&nbsp;a week after&nbsp;her </span><a href="http://www.latimes.com/entertainment/tv/la-et-st-sundays-with-megyn-kelly-review-20170604-story.html" target="_blank" style="font-size: 13.008px;" rel="noopener noreferrer">embarrassing interview</a><span style="font-size: 13.008px;"> with Russian President Vladimir Putin&nbsp;-&nbsp;an encounter which&nbsp;director Oliver Stone said she was '</span><a href="http://pagesix.com/2017/06/07/oliver-stone-beautiful-megyn-kelly-was-not-prepared-for-putin-interview/" target="_blank" style="font-size: 13.008px;" rel="noopener noreferrer">not prepared for.</a><span style="font-size: 13.008px;">'</span></div> <p>This lack of preparation was obvious in the Jones interview - as Kelly and NBC aired footage of&nbsp;the grieving father of a Sandy Hook massacre victim which contains a <strong>major contradiction</strong> to the official story.</p> <p><strong>Neil Heslin</strong></p> <p>Prominently featured&nbsp;in the exposé is&nbsp;<a href="https://ibankcoin.com/zeropointnow/files/2017/06/Neil-Heslin-at-17-minutes-in.jpg" target="_blank" rel="noopener noreferrer">Neil Heslin</a> - a father of one of the victims. During his interview with Megyn&nbsp;Kelly,&nbsp;Heslin&nbsp;described what happened the day of the shooting when 20 year old Adam Lanza murdered 20 children and&nbsp;six adults at Sandy Hook Elementary school before committing suicide.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>I dropped him off at 9:04. That's when we dropped him off at school with his book bag. Hours later I was picking' him up in a body bag.</p> <p>&nbsp;</p> <p>I lost my son. I buried my son. <strong>I held my son with a bullet hole through his head.</strong></p> </blockquote> <p>&nbsp;</p> <div class="wpview wpview-wrap"><iframe src="https://www.youtube.com/embed/RfZLbsAwHq0?feature=oembed" width="618" height="464" frameborder="0"></iframe><span class="mce-shim">&nbsp;</span><span class="wpview-end">&nbsp;</span></div> <p><strong>Except this does not comport with the official story</strong></p> <p>Jim Fetzer,&nbsp;Professor Emeritus&nbsp;at the University of Minnesota who <a href="http://www.rense.com/general96/NobodyDiedAtSandyHook_final.pdf" target="_blank" rel="noopener noreferrer">wrote a book</a> claiming Sandy Hook was staged, <a href="http://jamesfetzer.blogspot.com/2017/06/sandy-hook-neil-heslin-contradicts.html?m=1">notes</a> that based on the facts of the case, Heslin's statement that he 'held his son with a bullet hole through his head' <strong>could not have happened</strong>.&nbsp;According to Coroner Wayne Carver, M.D., the parents of the victims weren't allowed to see their children's bodies - and were instead shown pictures to identify the deceased. Anderson Cooper even interviewed&nbsp;the parents of one of the victims about not being able to see their child.</p> <p>&nbsp;</p> <div class="wpview wpview-wrap"><iframe src="https://www.youtube.com/embed/Qp0U6r8Xfz0?feature=oembed" width="618" height="348" frameborder="0"></iframe><span class="mce-shim">&nbsp;</span></div> <p>While&nbsp;it's entirely possible that&nbsp;Mr. Heslin had access to his son after the shooting,&nbsp;given the highly contentious nature of the Sandy Hook massacre in which&nbsp;<em>every aspect</em> of the case&nbsp;has been&nbsp;pored over and dissected&nbsp;- <strong>it was incumbent upon Megyn Kelly and NBC to familiarize themselves with all sides of the argument so they could have&nbsp;identified and explained Heslin's statement. </strong></p> <p>By airing such an obvious contradiction to the official narrative, Megyn Kelly and NBC have&nbsp;lent credibility to&nbsp;Fetzer and other conspiracy researchers who often&nbsp;point to inconsistent reports from the MSM to support their theories.</p> <p><strong>She lied...</strong></p> <p>While Megyn Kelly can be heard weeks before the interview on a&nbsp;<strong><a href="http://ibankcoin.com/zeropointnow/2017/06/16/alex-jones-gets-jump-on-megyn-kelly-leaks-recordings-to-set-the-record-straight/#sthash.WihL9wKl.dpbs" target="_blank" rel="noopener noreferrer">leaked recording</a></strong>&nbsp;promising Jones that&nbsp;the&nbsp;segment&nbsp;wouldn't be a 'hit job,' a&nbsp;promo released by NBC revealed <strong>she lied -&nbsp;</strong>as&nbsp;it was obvious Kelly was going to focus on statements made on Infowars about the 2012&nbsp;massacre at <strong>Sandy Hook Elementary School</strong> in Newtown, MA committed by Adam Lanza.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>She's a lawyer. It was a total cross-examination... <strong>And when I said that I believe children died at Sandy Hook, as I've said for years, she kept coming back with answers saying "you believe nobody died! You believe Anderson Cooper was involved!"</strong> and I said "NO! My listeners questioned it, I had debates with both sides, and <strong>I played devil's advocate</strong>." -<em>Alex Jones</em></p> </blockquote> <p>As a result of NBC's decision to air the piece, several corporate sponsors pulled advertisements, Megyn&nbsp;Kelly was disinvited&nbsp;to an anti 2nd Amendment event, and <strong><a href="http://ibankcoin.com/zeropointnow/2017/06/13/alex-jones-implores-nbc-not-to-air-interview-with-liar-megyn-kelly-jp-morgan-pulls-ads/#sthash.ZwwSMHGe.dpbs" target="_blank" rel="noopener noreferrer">Jones implored&nbsp;NBC</a> </strong>not to air the segment on Father's Day - citing the inappropriate timing.</p> <p><strong>Sandy Hook Questions</strong></p> <p>The <a href="http://www.ct.gov/csao/lib/csao/Sandy_Hook_Final_Report.pdf" target="_blank" rel="noopener noreferrer">final report</a> on the Sandy Hook shooting&nbsp;concludes that Adam Lanza, 20,&nbsp;was a socially awkward lone gunman with unmedicated Obsessive Compulsive Disorder&nbsp;whose mother gave him negligent access to&nbsp;firearms&nbsp;- however&nbsp;several&nbsp;inconsistencies&nbsp;in the official report&nbsp;have&nbsp;led&nbsp;many to speculate&nbsp;that the incident was a hoax or a 'false flag' staged to justify gun control measures.</p> <p>Among the questions people have:</p> <ul> <li>Why were there reports of men&nbsp;dressed in camouflage who fled into the woods - one of whom police allegedly detained?</li> <li>Why does Sandy Hook father Robbie Parker appear to '<a href="https://youtu.be/MwudDfz1yAk?t=428" target="_blank" rel="noopener noreferrer">get into character</a>'</li> <li>Why&nbsp;does the Sandy Hook Elementary website have <a href="https://ibankcoin.com/zeropointnow/files/2017/06/zerotraffic.png">no internet archive</a> for four years? Was the school even open?</li> <li>Why does it appear that several <a href="https://ibankcoin.com/zeropointnow/files/2017/06/before.png" target="_blank" rel="noopener noreferrer">charities were set up</a> before the December 14th&nbsp;shooting?</li> <li>Why weren't the Victims' parents allowed to see their children's bodies?</li> </ul> <p>While <strong>several Sandy Hook questions have been debunked</strong> - such as the missing&nbsp;<a href="http://www.crisisactorsguild.com/2016/05/12/why-the-most-compelling-evidence-in-nobody-died-at-sandy-hook-is-a-total-bust/" target="_blank" rel="noopener noreferrer">internet archive</a>,&nbsp;the massacre&nbsp;remains a hotly contested topic across the internet.</p> <p><strong>Alex Jones' <a href="https://youtu.be/MwudDfz1yAk" target="_blank" rel="noopener noreferrer">official position</a></strong> is that he believes children died in the shooting - in fact,&nbsp;during a <a href="https://fellowshipoftheminds.com/2014/05/09/citizens-confront-newtown-board-of-education-about-sandy-hook-hoax/" target="_blank" rel="noopener noreferrer">2014 account</a> of a hearing before the Newtown Board of Education, an Infowars journalist "<strong>did not dispute that Adam Lanza had perpetrated the shooting</strong>."</p> <p><img src="https://ibankcoin.com/zeropointnow/files/2017/06/manfrom.png" width="782" height="167" style="display: block; margin-left: auto; margin-right: auto;" class="aligncenter wp-image-9366 size-full" /></p> <p>Yet despite Jones' official position,&nbsp;he and&nbsp;Infowars have played&nbsp;devil's advocate&nbsp;along the way&nbsp;-&nbsp;presenting&nbsp;facts and narratives which&nbsp;disagree with the official story.</p> <p>And while Jones has presented a number of angles to the Sandy Hook massacre, Megyn Kelly and NBC chose to distort&nbsp;the facts through their lens of propaganda&nbsp;to fit their case against the Infowars host, while airing a&nbsp;gaping hole in the official story in their quest to destroy Alex Jones.</p> <p><strong>This needs to be addressed</strong></p> <p>By&nbsp;failing to identify&nbsp;the obvious contradiction between Neil Heslin's account and&nbsp;the official story, Kelly and her network have&nbsp;fanned the very flames of doubt and conspiracy&nbsp;they sought to silence, creating more questions than answers.</p> <p>For the sake of all the Sandy Hook&nbsp;parents who weren't allowed to see their deceased children, and to&nbsp;settle this new piece of fodder for conspiracy theorists which&nbsp;<em>they</em> aired,&nbsp;Megyn Kelly and NBC have a responsibility to address this giant contradiction to the official story.</p> <p>&nbsp;</p> <p style="text-align: center;"><span class="wpview-end" style="box-sizing: border-box; border-color: currentcolor; font-variant-numeric: inherit; font-stretch: inherit; font-size: 13px; line-height: inherit; font-family: lucida_granderegular, Verdana, sans-serif; text-align: center;"><span style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit;">Follow on Twitter&nbsp;</span><strong style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit;"><span style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit; color: #1e439a; text-decoration-line: underline;"><a href="https://twitter.com/ZeroPointNow" target="_blank" style="box-sizing: border-box; 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font-variant-numeric: inherit; font-stretch: inherit; font-size: 13px; line-height: inherit; font-family: lucida_granderegular, Verdana, sans-serif; text-align: center;">&nbsp;Subscribe to our&nbsp;</span><strong style="box-sizing: border-box; border-color: currentcolor; font-variant-numeric: inherit; font-stretch: inherit; font-size: 13px; line-height: inherit; font-family: lucida_granderegular, Verdana, sans-serif; text-align: center;"><a href="https://www.youtube.com/subscription_center?add_user=ibankcoin" target="_blank" style="box-sizing: border-box; border-color: currentcolor; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: 1.2; font-family: inherit; word-wrap: break-word; color: #1e439a;">YouTube channel</a></strong></p> http://www.zerohedge.com/news/2017-06-25/megyn-kelly-fails-fact-check-sandy-hook-fathers-contradictory-claim-alex-jones-hit-p#comments Activism Alex Jones American people of German descent Conservatism in the United States Donald Trump James H. Fetzer Lanza Megyn Kelly NBC NBC News Newtown Board of Education Newtown Public Schools Newtown, Connecticut ratings Sandy Hook Elementary School Sandy Hook Elementary School shooting Twitter Twitter United States University of Minnesota Vladimir Putin Sun, 25 Jun 2017 19:35:57 +0000 ZeroPointNow 598631 at http://www.zerohedge.com Get Ready For "QT1": A First Look At The Fed's Hidden Policy http://www.zerohedge.com/news/2017-06-25/get-ready-qt1-first-look-feds-hidden-policy <p><a href="https://dailyreckoning.com/quantitative-tightening-fed-hidden-policy/"><em>Authored by James Rickards via The Daily Reckoning,</em></a></p> <p>The Federal Reserve is now setting out on a new path for quantitative tightening (QT) after nine years of unconventional quantitative (QE) easing policy. <strong>It is the evil twin of QE </strong>which was used to ease monetary conditions when interest rates were already zero.</p> <p><span style="font-weight: 400;"><strong>First, it is important to examine QE and QT in a broader context of the Fed&rsquo;s overall policy toolkit.</strong> Understanding the </span><a href="https://dailyreckoning.com/inside-the-fed-tool-kit/" target="_blank"><span style="font-weight: 400;">many tools the Fed has</span></a><span style="font-weight: 400;">, which of them they&rsquo;re using and what the impacts are will allow you to distinguish between what the Fed thinks versus what actually happens.</span></p> <p><span style="font-weight: 400;">We have a heavily manipulated system. For years, if not decades, monetary policy has been <strong>flipping back and forth between how the economy actually works and what the Fed believes works.</strong></span></p> <p><span style="font-weight: 400;">QE was a policy of printing money by buying securities from primary dealers and to ease monetary conditions when interest rates were at zero. QT takes a different approach.</span></p> <p><strong><a href="https://dailyreckoning.com/get-ready-quantitative-tightening/" target="_blank"><span style="font-weight: 400;">In QT, the Fed will &ldquo;sell&rdquo; securities</span></a></strong><span style="font-weight: 400;"><strong> to the primary dealers, take the money, and make it disappear. </strong>This is an attempt to ultimately reduce the money supply and implement a policy of tightening money.</span></p> <p><span style="font-weight: 400;">There&rsquo;s a bit of a twist to that <em>selling</em>. Today the Fed&rsquo;s balance sheet stands at $4.5 trillion. It started at $800 billion in 2008 and has increased over five times that since the crisis. Now they&rsquo;re going to try to get the balance sheet back to normal levels.</span></p> <p><strong>Simultaneously, the Fed wants to get interest rates to back to normal. </strong><a href="https://dailyreckoning.com/quantitative-tightening/" target="_blank"><span style="font-weight: 400;">The Taylor rule</span></a><span style="font-weight: 400;">, which is one of the most accepted normative rules, indicates that interest rates should be 2.5%. As of June 14th, the Fed raised rates by going up 1%, with a new target range of 1 to 1.25%.</span></p> <p><strong>The Fed hiked rates not because it believes the economy is getting stronger, but because it is desperately trying to catch up &mdash; before the next crisis.</strong></p> <p><span style="font-weight: 400;"><u><strong>They are now trying to normalize the balance sheet.</strong></u> Under the Taylor Rule a normal balance sheet at the current expansion rate could be expected to be at $2.5 trillion. That means you have to take $2 trillion of money and make it disappear.</span></p> <p>They can do that by selling securities, but the Fed believes that the market&rsquo;s too fragile. Instead they&rsquo;re going to leave securities on the balance sheet and allow them to mature. Think of this as the Fed putting QE in reverse.</p> <p><strong><span style="font-weight: 400;">The Fed has been rolling over the balance sheet to keep it at $4.5 trillion.</span></strong></p> <p>You&rsquo;ll be hearing more about quantitative tightening in the weeks and months ahead for 2017.</p> <p><strong>What quantitative tightening means is that they&rsquo;re going to stop rolling it over.</strong></p> <p><span style="font-weight: 400;">That means as securities mature and the Treasury sends out money they&rsquo;re not going to buy, replenish or buy more. <strong>This should cause the balance sheet to shrink and the money supply to be reduced.</strong> The Fed is not going to do it all at once.</span></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170623_EOD1_1.jpg"><span style="font-weight: 400;"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170623_EOD1_1_0.jpg" style="width: 600px; height: 253px;" /></span></a></p> <p><span style="font-weight: 400;">The </span><a href="https://dailyreckoning.com/markets-priced-perfection/" target="_blank"><span style="font-weight: 400;">real news the market will continue watching</span></a><span style="font-weight: 400;"> at the Fed and its Federal Open Market Committee (FOMC) will be quantitative tightening (QT). While the Fed might not use the exact QT language, they will intend to reduce rollovers of long-term asset purchases.</span></p> <p><strong>The same way they tapered QE, they&rsquo;re going to taper QT. This time however, they&rsquo;re going to taper upward. </strong>Meaning they&rsquo;re going to go from $10 billion a month not being rolled over to $20 billion, $30 billion, etc.</p> <h2><u><strong>Quantitative Tightening and Wall Street</strong></u></h2> <p><span style="font-weight: 400;">Eventually, the amount of securities they don&rsquo;t roll over will go up until the balance sheet controlled by the Fed comes down to the targeted figure. The projection is that it could take 10 years to achieve. The problem is we might not make it that </span><a href="https://dailyreckoning.com/recession-closer-realize/" target="_blank"><span style="font-weight: 400;">far before the entire system collapses</span></a><span style="font-weight: 400;">.</span></p> <p><strong>We&rsquo;re in a new reality.</strong></p> <p><span style="font-weight: 400;">By raising rates and leaving open the possibility of further increases, all of the monetary actions being taken are tightening the economy. The Fed&rsquo;s QT policy that aims to tighten monetary conditions, reduce the money supply and increase interest rates <strong>will cause the economy to hit a&nbsp;wall.</strong></span></p> <p>The decision by the Fed to not purchase new bonds will be just as detrimental to tightening of the economy as raising interest rates.</p> <p><span style="font-weight: 400;"><strong>The economy is slowing.</strong> Even without any action, retail sales, real incomes, auto sales and even labor force participation are all&nbsp;declining. Every important economic indicator shows that the US economy is slowing right now. When you add in rate hikes and QT, we may very well be in a recession by later this year.</span></p> <p><strong><em>The Fed is tightening into weakness. </em></strong></p> <p><span style="font-weight: 400;">Because they&rsquo;re getting ready for a potential recession where they&rsquo;ll have to cut yet again. Then it&rsquo;s back to QE. You could call that QE4 or QE1 part 2.</span></p> <p><u><strong>The point is that the Fed has essentially trapped itself into a state of perpetual manipulation.</strong></u></p> <p>This is what Wall Street doesn&rsquo;t understand. It&rsquo;s still operating from outdated assumptions on how the business cycle works.</p> <p><strong>Those on Wall Street continue to have models that build according to the old reality, not the new one.</strong></p> <p><span style="font-weight: 400;">The reality is that the market is fundamentally set up for a fall. The fact is that the </span><a href="https://dailyreckoning.com/feds-road-ahead/" target="_blank"><span style="font-weight: 400;">Fed has no idea what it is doing</span></a><span style="font-weight: 400;">. I would expect a severe stock market correction coming sooner than later.</span></p> <p>While the Fed may act to try and bail out the stock market and Wall Street again, they&rsquo;re not going to be bailing out you and me.</p> <p><strong><em>Now is the time to increase your allocations to cash, gold, silver and U.S. Treasuries.</em></strong></p> <p><strong><em>Preparing now will offer the best insurance position in the wake of the coming crash.</em></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="775" height="401" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170625_rick.jpg?1498410810" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-25/get-ready-qt1-first-look-feds-hidden-policy#comments Auto Sales Business Economy ETC Excess reserves Federal Open Market Committee Federal Reserve Federal Reserve System Interest rate Macroeconomics Monetary Policy Monetary policy Money Money creation Money Supply Money supply Quantitative easing Reality Recession Recession US Federal Reserve Sun, 25 Jun 2017 19:30:00 +0000 Tyler Durden 598622 at http://www.zerohedge.com Is This Uber's "Theranos Moment"? http://www.zerohedge.com/news/2017-06-25/ubers-theranos-moment <p><a href="https://markstcyr.com/2017/06/24/ubers-theranos-moment/"><em>Authored by Mark St.Cyr,</em></a></p> <p>There comes that moment where the veiled threats against logic such as the go-to <strong>excuse of &ldquo;it&rsquo;s different this time&rdquo; are exposed against the harsh light of reality</strong> for all to see with such clarity, &ldquo;it&rsquo;s different this time&rdquo; is precisely the apt statement to show why it was all fallacy to begin with.</p> <p><strong>Uber&trade; has just had that moment, and the resulting fallout as I&rsquo;ve iterated before: Will. Be. Legend.</strong></p> <p>To think, let alone, believe that the current implosion (and yes, I mean implosion) will be isolated within Uber is as much of a fantasy as was believing: &ldquo;it&rsquo;s different this time.&rdquo; Why? Because: It is precisely that.</p> <p><strong>I believe (and have written) the remaining unicorns along with entire &ldquo;tech&rdquo; or &ldquo;Valley&rdquo; model for valuation are now facing what I called,&nbsp;<a href="http://www.zerohedge.com/news/2017-04-17/unicorns-watch-horror-uber-careens-towards-extinction-event-down-round">&ldquo;an extinction event.&rdquo;</a>&nbsp;</strong>Or said differently: The moment Uber is made to state publicly its current valuation going forward? It&rsquo;ll be the&nbsp;equivalent<span style="letter-spacing: .05em;">&nbsp;for both &ldquo;The Valley&rdquo; and &ldquo;unicorn&rdquo; metric modeling &ndash; as was for the dinosaurs. e.g., Stick a fork in it, it&rsquo;s done.</span></p> <p><strong>Now to be fair Theranos&trade; was/is caught up in what has been deemed as fraud for their product offering, Uber is not.</strong> However, why I use the &ldquo;moment&rdquo; appraisal is this: Once it was shown that the whole &ldquo;so worth it&rdquo; valuation metric was no longer above reproach? The jumping-of-ship for those closest happened so fast even rats took notice.</p> <p><img height="254" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170625_theranos_0.jpg" width="600" /></p> <p><strong>Ms. Holmes publicly declared any, and all, accusations as false before finally having to recant in the form of pulling, or re-verifying prior testing results. </strong>But as she was doing that publicly, quietly many either working for, or involved in management were reported to be heading towards any and all exits.&nbsp;<a href="https://www.forbes.com/sites/matthewherper/2016/06/01/from-4-5-billion-to-nothing-forbes-revises-estimated-net-worth-of-theranos-founder-elizabeth-holmes/#2e3304a63633">Then, precisely one year ago this week</a> (yes, it&rsquo;s the anniversary) Forbes&trade; revised, and declared Ms. Holmes net worth had gone from $4.5 BILLION &ndash; To Nothing. And just like that it was over almost as fast as it had began.</p> <p>So exactly where is the equivocation argument? Good question, and it is this:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><em><strong>The revising of valuations and more came when suddenly everyone no-longer could justify the valuations based on &ldquo;it&rsquo;s different this time&rdquo; arguments.</strong></em></u></p> </blockquote> <p>That argument works fine when the Fed&rsquo;s QE program is in full effect and works like some magical cloak to hide the naked fallacy&nbsp;that a company with less than $100 Million in revenues is worth some $9 BILLION because the VC&rsquo;s invested say it is. (I can&rsquo;t help myself from laughing as I typed that, it&rsquo;s so far beyond ludicrous.)</p> <p><strong>But once the term &ldquo;law suits&rdquo; and more get thrown across a unicorns saddle?&nbsp;Let&rsquo;s just say &ndash; viewpoints, and valuation metrics begin to change, and change quickly.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Uber is currently valued via all reports at around $68 BILLION dollars. </strong>And with that valuation it is currently the #1 unicorn, and most valued startup, and private tech company, in the world. <strong>And it&rsquo;s core product? It&rsquo;s an app to hail a cab.</strong></p> </blockquote> <p><u><strong>Re-read the above line a few times, and let it sink in.</strong></u> Because as I implied earlier &ndash; this is where the equivocation moment comes. e.g., When all-hype suddenly meets law suits? All, and I mean just that &ndash; all &ndash; perspective changes. Especially for those of the unicorn variety.</p> <p>Theranos, for all that it was going through at that time, one could argue (<a href="http://www.zerohedge.com/news/2016-07-02/silicon-valley-snake-oil">and some did making snake-oil salesmen look trustworthy</a>) that there was at least some possible future if the law suits turned out to be defendable, or were misplaced. After all, it was about patented machines, diagnosis, and more. Nevertheless &ndash; it was over with near immediacy once it was blatantly obvious people once loyal and intimately involved, along with companies using the service publicly began jumping ship.</p> <p>Suddenly every &ldquo;news&rdquo; outlet that once couldn&rsquo;t get a flattering story out quick enough tripped all over themselves to re-write the now how, and why, for the imminent collapse of the once storied unicorn.</p> <p><strong>This time &ndash; is no different, <a href="http://www.cnbc.com/2016/06/08/ubers-66-billion-valuation-may-ride-on-shaky-foundation.html">for the stories have already begun</a>. Again, once the unquestionable becomes questioned? I believe you already know the answer. But if you need reminding &nbsp;&ndash; again &ndash; just look to Theranos.</strong></p> <p>Now, much like Ms. Holmes, the founder and CEO had to quit, or resign, to appease those calling for change. And, much like the previous example &ndash; <a href="https://www.usatoday.com/story/tech/news/2017/06/21/uber-benchmark-bill-gurley-matt-cohler/103091246/">those closest, and who should be the greatest ally for change and stay as to help weather out the storm are also jumping</a>. Sound familiar?</p> <p>The optics of such a &ldquo;jump&rdquo; while in the midst of such a sh*t-storm at Uber, from my perspective, shows only one thing: You know the jig is up, it&rsquo;s all about managing the fall, and there&rsquo;s no need to do that in plain view.</p> <p>If I&rsquo;m wrong, then why would such a staunch defender of the company and its CEO resign when the negative optics of such a move are clearly visible? Unless? See above.</p> <p><strong>And just like Theranos &ndash; <a href="https://techcrunch.com/2017/06/22/as-ubers-value-slips-on-the-secondary-market-lyfts-is-rising/">Uber&rsquo;s valuation has already began slipping</a>.</strong></p> <p>The real difference here? <strong><em>Remember: Theranos was said to be worth $9 Billion when their fall from grace began. And that was all based upon the idea that they were involved in life changing medical technology. Uber? They are said to be worth $68 BILLION &ndash; and they&rsquo;re an app to hail a cab. Think about that, again.</em></strong></p> <p><strong>And lest one forget &ndash; <a href="http://www.zerohedge.com/news/2017-04-14/cash-burning-machine-uber-opens-its-books-shows-staggering-losses">Uber burns through, not makes: $BILLIONS</a>. </strong>And its &ldquo;world domination&rdquo; thesis has already been cleaved when it gave up on China. And that realization alone has yet to be priced in, or out, one might say. Add to that just some of the above and &ldquo;cleave&rdquo; might be an understatement for future valuation adjustments going forward.</p> <p>Just ask Ms. Holmes.</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="1121" height="475" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170625_theranos.jpg?1498409163" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-25/ubers-theranos-moment#comments A Business China Economy Neologisms Reality Theranos Transport Uber Unicorn US Federal Reserve Valuation Sun, 25 Jun 2017 18:30:00 +0000 Tyler Durden 598619 at http://www.zerohedge.com