en "Run For Cover If You’re Short" Gartman Pleads One Day After Saying "2,025 Is A Given" <p>For today's dose of pre-market entertainment, we go once again to Dennis Gartman, who clearly perturbed by the violent turnaround in global stocks yesterday <a href="">appeared on CNBC </a>where the "closely followed market-watcher" said the early week's market gains could continue for the next couple of weeks.</p> <p>"Historically when that happens, we carry through. So I think you're likely to trade better — maybe not today, particularly — <strong>but I bet by Friday we're higher and I bet by next week we're higher again,</strong>" Gartman told CNBC in London.</p> <p>"<strong>Anybody who's short - and there are a lot of smart people who are in fact heavily short - they have to run for cover, and I think it could get ugly.</strong>"</p> <p>Gartman comically added that he reversed his short and turned long on the Euro STOXX 50 following Tuesday's rally, confirming his infamous "retirement fund" is nothing but a momentum chasing pile of virtual cash. </p> <p>"When the Euro STOXX 50 reversed to the upside, after having opened lower and then gotten higher on the day, I said to myself, 'this is turning better, something's taking place,'" Gartman told CNBC.</p> <p>"Perhaps it was the agreement that was reached between the EU (European Union) fiscal authorities and Greece… that seemed to me to be the turning point and once you got higher on the day, it's as if the shorts, I being included, had to rush to get long and I actually ended the day long here, which is unusual for me to turn my position that quickly," he said.</p> <p> <iframe src=";byGuid=3000520445&amp;size=530_298" width="530" height="298"></iframe></p> <p>&nbsp;</p> <p>As a reminder, this is what the "closely followed market-watcher" said exactly 24 hours ago, <a href="">which as we comically mused</a>, precipitated the surge in stocks:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In our retirement account here at TGL we have simplified our position taking in the equity market: we have only a position in derivatives on the short side, and although it is not a material position it is one-sided. We’ve cast our long positions aside. We’ve simplified; we’ve gotten smaller; but <strong>we are bearishly inclined, and we are intent upon adding to those bearishly inclined positions the very moment in the futures markets that 17,400 is given in the Dow futures; the moment that 2025 is “given” in the S&amp;P futures; the moment that 4290 is “given” in the NASDAQ futures and the moment that 1085 is “given” in the Russell</strong>. These will all happen almost simultaneously. Our antennae are up; so too should everyone’s be.</p> </blockquote> <p>So many givens... so little time. And some more amusement from his latest note:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>We begin then by noting firstly that we were obviously uncommonly wrong in being even modestly net short of equities coming into yesterday’s trading session. </strong>That became abundantly and swiftly clear to us about one hour after we had sent yesterday’s TGL to our clients around the world as the EUR STOXX 50 and the DAX indices both had opened lower; turned higher on the day and were taking out the previous day’s highs in what seemed to be only a matter of a very few moments.<strong>.. Indeed, we cannot recall having seen a more violent or emphatic “reversal” in European shares ever. </strong></p> <p>&nbsp;</p> <p>We have learned over the years to pay attention to “reversal” such as this one circled here this morning, and any weakness that might develop later today or even later this week is to be bought<strong>. This is a big change of opinion on our part, but history mandates that we change accordingly</strong>. </p> <p>&nbsp;</p> <p>As is always… ALWAYS…the case, we pay heed to reversals, whether in the equity markets, the commodity markets, the forex markets and/or the debt markets. When market’s “reverse” we pay heed and more often than not we take action. <strong>We’ve learned over the years that when such things occur it is better to “shoot first and ask questions later.” </strong></p> <p>&nbsp;</p> <p><strong>We did exactly that as we moved quickly to get from net short in our retirement funds to net long and by mid-day here in North American we&nbsp; had gotten that way. </strong>We covered in half of our short position in derivatives and we began buying both high tech and low tech companies’ shares as we were able, ending the day net long of equities…and rather aggressively so. <strong>We cannot recall having turned this radically and this swiftly in the equity market in many, many years, but the “reversal” in Europe forced our hand. </strong>We truly had no choice. </p> <p>&nbsp;</p> <p>What caused the rush higher? If we must point to one fundamental reason for the rush upward it was that the European Union fiscal authorities, led by Mr. Dijsselbloem, the current President of the EU, along with Mr. Schäuble, the usually taciturn Finance Minister of Germany, and Mr. Gramegna, Luxembourg’s Finance Minister, had agreed with the IMF and with Greece that the latter had succeeded in its fiscal reforms and that the Fund and the Troika would help Greece meet her debt problems. They had agreed that the left-of-centre Greek government led by Mr. Tsipras had actually met its commitments on a promised austere budget and that it was meet and right for the Fund and the Troika to release €10.3 billion in financial aid. Mr. Dijsselbloem actually referred to the agreement reached between the various parties as a “Breakthrough,” and indeed it was. From that point on, stock prices were bid up; shorts ran for cover and the skies had cleared. </p> <p>&nbsp;</p> <p><strong>In our account here, we quite literally were grasping for almost anything we could to reverse our position.</strong> Covering… or actually greatly reducing… our short position in the derivatives market was the first course of action. Then we chose to buy high-tech, high beta equities to “catch up” as quickly as we could, and by the day’s end were back buying prosaic, old-guard, dividend payers… but we did indeed end the day net long. <strong>Now we shall see if the “reversals” hold; we shall see if stock prices continue higher; we have bet that they shall.</strong></p> </blockquote> <p>Surely, Gartman's remains the best comedy newsletter money can buy. As for the market, and Gartman's bet that "by Friday we're higher and I bet by next week we're higher again", trade accordingly. </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="181" height="183" alt="" src="" /> </div> </div> </div> Dennis Gartman Equity Markets European Union Germany Greece Momentum Chasing NASDAQ Wed, 25 May 2016 13:14:43 +0000 Tyler Durden 561799 at Feds Probing Potential Insider Trading By Senator Bob Corker <p>Back in December the topic of insider trading by prominent members of Congress hit new highs when as we reported at the time a "<a href="">Prominent Tennessee Senator Fails To Disclose Millions In Hedge Fund, Real Estate Investments</a>." The politician in question, Tennessee republican Senator Bob Corker, who according to Roll Call was recently the 23rd <a href="">richest member of Congress</a>...</p> <p><a href=""><img src="" width="505" height="287" /></a></p> <p>... and the company under focus: a Tennessee-based REIT, CBL &amp; Associates. </p> <p>As a reminder, last November, the Campaign for Accountability (CFA), a D.C. watchdog, called for an SEC and ethics investigation of Corker in connection with his family's trading in shares of CBL &amp; Associates (a REIT based in Tennessee). According to CFA, between 2008 and 2015, Sen. Corker, his wife and daughters made an <strong>astonishing 70 trades of stock in the real estate investment giant CBL &amp; Associates Properties – more than triple the number of transactions he made of any other stock. </strong>Some of the trades <strong>closely preceded company announcements that led to changes in the stock’s price and seemingly resulted in the senator making millions of dollars.</strong></p> <p>CfA Executive Director Anne Weismann stated, “<strong>Sen. Corker’s trades followed a consistent pattern — he bought low and sold high. It beggars belief to suggest these trades – netting the senator and his family millions – were mere coincidences</strong>.”</p> <p>As the Wall Street Journal has reported, Sen. Corker failed to report numerous trades of CBL stock. Federal law requires members of Congress to report stock trades and file reports disclosing their assets. Many of Sen. Corker’s profitable trades were made in advance of his broker, UBS, issuing reports impacting CBL’s trading price.</p> <p><a href=""><img src="" width="500" height="281" /></a></p> <p>Sen. Corker then amended his filings to reveal a 2009 purchase of between $1 and $5 million of CBL stock, sold just five months later in 2010 at a 42% profit. Similarly, Sen. Corker made purchases worth between $3 and $15 million in 2010 and, just after his last trade, UBS said it was upgrading its outlook. The stock went up 18%. Shortly thereafter, Sen. Corker began selling; a week later, UBS downgraded the stock and the share price soon declined about 10%.</p> <p>As the CBA also wrote, "as a member of the Senate Banking Committee, Sen. Corker has advanced legislation that would financially benefit UBS and CBL." This is what Vanity Fair added to this curious story:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>As the complaint—filed with the SEC and the Senate Select Committee on Ethics—details, Corker and CBL go way back. Corker began his career at a company whose primary business was subcontracting for CBL and which is now substantially owned by CBL. CBL executives were Corker’s “first and most generous donors,” as the complaint put it, when Corker filed to run for Congress in 2006.</p> <p>&nbsp;</p> <p>Both directly and indirectly, CBL have given generously to Corker. According to the complaint, CBL’s executives, directors and their spouses rank among the senator’s top campaign donors, contributing $88,706 to his campaign committee and PAC since his 2006 run. Since Corker’s arrival in the Senate, CBL executives have contributed more than $50,000 each to NAREIT and ICSC—which, in turn, were part of a nine-PAC consortium that held a fundraiser for Corker in Washington in 2011. NAREIT and ICSC also donated $15,000 directly to his campaign committee since his arrival in the Senate.</p> </blockquote> <p>* * * </p> <p>All these questionable revelations proved too much for the Feds to ignore, and as the <a href="">WSJ reports overnight</a>, <strong>CBL is now under investigation by federal law-enforcement officials for alleged accounting fraud.</strong></p> <p>As the paper adds,&nbsp;the FBI and the SEC <strong>are focusing their examination of CBL &amp; Associates Properties Inc. on whether officials at the Chattanooga, Tenn., company falsified information on financial statements to banks when applying for financing arrangements, the people said. </strong>Law-enforcement officials have talked to former CBL employees who allege the company inflated its rental income and its properties’ occupancy rates when reporting those figures to banks, the people said. </p> <p>More importantly, the focus of the investigation is not just whether CBL cooked its books, but the REIT's cozy relationship with Corker and his dozens of oddly profitable trades involving CBL stock:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The FBI and SEC officials have also separately asked questions about the relationship between the company and Mr. Corker, who is close with senior executives at the firm and has made millions of dollars in profits trading the company’s stock in recent years</strong>. Authorities don’t believe that Mr. Corker was involved in the company’s potential accounting issues, but they are interested in learning more about the senator’s trading in CBL’s stock, the people said.</p> </blockquote> <p>So far, the WSJ reports, "they have found no evidence to suggest that Mr. Corker has committed wrongdoing" and to be sure Corker's camp denies any wrongdoing. Micah Johnson, a spokeswoman for Mr. Corker, decried the “baseless charges against Senator Corker.”</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Stephen Lebovitz, president and chief executive of CBL, said in a statement that the company “has not been contacted by the FBI, the SEC or any other regulatory agency regarding any accounting or financial issues.” He said the company has “stringent policies regarding our accounting and financial practices in keeping with applicable laws, rules, and regulations to which we strictly adhere.”</p> </blockquote> <p>The investigation is being run by the FBI’s Washington field office and SEC staff at its Washington headquarters, which tend to handle higher-profile investigations, as opposed to the agencies’ local offices. </p> <p>What makes the probe especially grotesque is that Corker is not only a chairman of the Senate Foreign Relations Committee but also a senior member of the Senate Banking Committee which is directly involved in crafting legislation aimed at regulating entities such as the CBL REIT. He has close personal, business and political ties with several members of the family that founded CBL and runs it. That includes founder Charles Lebovitz and his sons, Stephen Lebovitz and Executive Vice President Michael Lebovitz.</p> <p>The relationship between Corker and the REIT's owners runs deep. After graduating from college in 1974, Mr. Corker worked for a small company that helped construct buildings for CBL. Corker has a home in the same upscale Chattanooga suburb as three of the Lebovitz family members. “He’s a friend,” Stephen Lebovitz said of Mr. Corker in an interview in November with The Wall Street Journal. “Chattanooga’s not that big a city.”&nbsp; </p> <p>Michael Lebovitz served as a vice chairman of Mr. Corker’s initial Senate campaign and records show that CBL executives are major donors to his campaigns.</p> <p>Perhaps aware that his trades would eventually be probed, in a 2011 article on Corker’s CBL investments, Corker preemptively said that by tracking the company’s stock for many years, he noticed that its shares traded within a range. “I’ve bought it heavily when it is at the low end of that range and then I hold it until there is upward movement, when I sell,” he said in a statement at the time.</p> <p>Surprisingly, the vast majority of these "rangebound" trades were very profitable. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In one of these purchases, Mr. Corker bought between $1 million and $5 million in CBL shares on Nov. 29, 2011, according to updated financial-disclosure statements that he filed after questions from the Journal. The stock rose nearly 7% the next day and continued to climb. He sold the stock in May 2012 for between $5 million and $25 million after the stock had risen 42%, representing a gain of between $420,000 and $2.1 million, according to a Journal analysis of the trade.</p> </blockquote> <p>And, just in case Corker's "trading explanation" does not work, Corker's spokesman decided to attack the messenger, casting doubt on the motives of the group that brought attention to his trades.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Ms. Johnson, the Corker spokeswoman, said she believes the questions into Mr. Corker have been prompted by the Campaign for Accountability, a nonpartisan organization that has filed several complaints with the Senate Ethics Committee about Mr. Corker’s financial activity. <strong>She said the group is a “politically motivated special-interest group that refuses to disclose its donors. We know that any effort to examine [Mr. Corker’s] actions will result in this smear campaign being discredited.”</strong> </p> <p>&nbsp;</p> <p>“I wish we had that much authority,” said Anne Weismann, executive director of the organization. “<strong>We don’t have the ability to tell the FBI or SEC what to do.”</strong></p> </blockquote> <p>Well thank god for that, because if in addition to legal insider trading by members of Congress, these same Congressmen, such as Corker, could also wish away any probe into their trades, then the corruption at the very top would be clear for all to see. As it stands, the FBI and the SEC will actually have to go through Corker's trades one by one. At the end of the day, we must note, even though Corker "does not have the ability to tell the FBI or SEC what to do", we are confident there will be no punishment and at best Corkers will be given the "Mickelson" treatment, in which he has to forfeit a part of his illegal profits with absolutely no consequences whatsoever. </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="876" height="493" alt="" src="" /> </div> </div> </div> Bob Corker CBL Corruption FBI Insider Trading NAREIT Real estate Wall Street Journal Wed, 25 May 2016 12:55:15 +0000 Tyler Durden 561798 at Emerging Markets Turmoil Signal Pain Ahead For US Stocks <p><strong>Follow EM or not?</strong> That is the big question that BofAML asks as once again Emerging Market stocks are <strong>decoupling </strong>(lower) from an exuberant US equity market.</p> <p><em>After a big rally in risk assets today the S&amp;P 500 is up and credit tighter (CDX IG)/ higher (CDX HY) relative to the levels on May 16th &ndash; the day before speeches by Fed officials and later the FOMC minutes re-priced the probably of a June rate hike materially higher. After today&rsquo;s strong new home sales report and a decline in Brexit risks (GBP up 1.0%), the implied probability of a June rate hike increased further to 34%, the dollar rallied (DXY dollar index is up 0.4%), 5s30s Treasury curve flattened by 1.5bps and financials outperformed (up 1.55% vs. 1.37% increase for the S&amp;P 500).</em></p> <p>However, we are <strong>seeing the same decoupling between US and EM stocks that that turned out a leading indicator for the decline in US risk assets in August last year and again in December/January this year...</strong></p> <p><a href=""><img height="314" src="" width="600" /></a></p> <p>&nbsp;</p> <p><a href="">As we noted last night, </a>we suspect this is <strong>China-driven volatility</strong> rippling through from EM equities and FX inevitably spreading to US equity markets through various carry trades.</p> <p><a href=""><img height="312" src="" width="600" /></a></p> <p>So the question is - <em><strong>will the Yuan turmoil ripple through markets enough to spook The Fed once more and dissolve what little credibility they have left or will Janet and her henchmen stand up to the foreign forces, hike rates to spit their own face, and deal with the aftermath </strong></em>through some more Citadel-driven VIXtermination? With VIX futures near record shorts and S&amp;P futures at their longest in almost 2 years - there&#39;s not much easy leveraged money to squeeze there - like there was in August.</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="959" height="502" alt="" src="" /> </div> </div> </div> Equity Markets New Home Sales Volatility Yuan Wed, 25 May 2016 12:33:47 +0000 Tyler Durden 561794 at Just Stop It! <p><a href=""><em>Submitted by David Stockman via Contra Corner blog,</em></a></p> <p>The&nbsp;posse of fools in the Eccles Building is so petrified of a stock market hissy fit that it&nbsp;has <strong>more or less created a Wall&nbsp;Street&nbsp;doomsday machine</strong>.</p> <p>After trolling on the zero bound for 89&nbsp;straight months now,<strong>&nbsp;the FOMC&nbsp;falsely believes that it has levitated the U.S. economy to the cusp of full-employment via massive liquidity and wealth effects pumping.</strong></p> <p>As a consequence,<strong> it refuses to let the market have breathing room for even a modest correction</strong>, insisting that just a&nbsp;few more months of this monetary lunacy will&nbsp;permit a return to some semblance of normalcy.</p> <p>But it never gets there. <strong>The truth is, this&nbsp;so-called recovery cycle is now visibly&nbsp;dying of old age and being crushed by the headwinds of global deflation. </strong>Rather than acknowledge that the jig is up, our feckless monetary politburo just&nbsp;equivocates, procrastinates&nbsp;and prevaricates about the monumental policy&nbsp;failure it has superintended.</p> <p><strong>So&nbsp;the casino punters just won&rsquo;t go home. </strong>They hang around against all odds, failing to liquidate and thereby enabling the robo machines to engage in endless and pointless cycling between chart points. As shown in the&nbsp;graph below,&nbsp;this has been going on for nearly 600 days now.</p> <p>But of late&nbsp;the churning&nbsp;has been&nbsp;occurring in an&nbsp;increasingly narrow channel.&nbsp;Accordingly, the&nbsp;spring is being coiled ever more tightly.</p> <p><strong>When this 83-month long simulacrum of a economic recovery finally rolls over into recession someday soon, therefore, the&nbsp;implosion will be thunderous. The robo-machines will chase the punters out the casino exits in an epic stampede of selling.</strong><br /><a class="image-anchor" href="^SPX/chart/#/?zoom=custom&amp;endDate=&amp;quotes=true&amp;calcs=id:level,include:true,,&amp;format=real&amp;maxPoints=850&amp;securitylistSecurityId=&amp;units=&amp;securities=id:^SPX,include:true,,&amp;correlations=&amp;splitType=single&amp;startDate=11/17/2014" target="_blank"><img alt="^SPX Chart" src="" style="height: 354px; width: 601px;" /></a></p> <p style="font-size: 10px;"><a href="" target="_blank">^SPX</a> data by <a href="" target="_blank">YCharts</a></p> <p><strong>Indeed, given the headwinds emanating from all corners of the global economy and financial system it is hard to believe that any sentient carbon units actually participated in today&rsquo;s 19th nervous short squeeze in as many weeks. Among other things,&nbsp;first&nbsp;quarter results have been fully&nbsp;posted and it turns out that the S&amp;P 500 companies earned <em>$87 </em>per share during the last 12 months (LTM).</strong></p> <p>That&rsquo;s down from the<em><strong> $99 </strong></em>per share&nbsp;LTM figure posted in Q1 last year and the peak of <em><strong>$106</strong> </em>per share recorded in the year ended in September 2014.</p> <p>In short, reported GAAP earnings&mdash;&ndash;the honest&nbsp;kind companies report to the SEC&nbsp;on penalty of jail&mdash;&mdash; are now down <strong>18%</strong> from their&nbsp;recent&nbsp;bubble cycle&nbsp;peak.&nbsp;But since&nbsp;the S&amp;P 500&nbsp;has remained within <em><strong>3%</strong></em> of&nbsp;its May 2015 all-time high (2130), it &nbsp;means that the PE ratio has been rapidly inflating&nbsp;right into the teeth of falling profits and a rapidly cooling domestic and global economy.</p> <p>In fact,&nbsp;the market closed today&nbsp;at<em><strong>&nbsp;23.9X</strong></em>, which is a truly ludicrous valuation level. We are in the&nbsp;<em><strong>waning days</strong> </em>of the third bubble cycle of the 21st century, yet&nbsp;the casino&nbsp;is pricing current earnings as if recessions have been outlawed and that the long-term growth trend of earnings is in double digits..</p> <p>So here&rsquo;s a spoiler alert. &nbsp;When S&amp;P 500 earnings peaked prior to the financial crisis in the June 2007 LTM period, they clocked in at<em><strong> $85</strong> </em>per share.</p> <p>The arithmetic of the matter,&nbsp;therefore, is that corporate&nbsp;earnings have grown at a miniscule&nbsp;<em><strong>0.2%&nbsp;annual rate</strong>&nbsp;</em>during the last nine years. Take the inflation out of that and adjust for&nbsp;nearly $3 trillion of stock buybacks and shrinkage of&nbsp;the share count in the interim, and you have less than&nbsp;no growth at all.</p> <p>The worse thing is that we have been here before - at this same&nbsp;juncture exactly&nbsp;eight years ago in May 2008. The just completed earnings season had generated S&amp;P profits of about $61 per share. That was down more than <em><strong>25%</strong></em> from the prior year peak of $85, but the casino punters ignored the warning signs. The&nbsp;S&amp;P 500 index remained within <strong>3%</strong> of its November 2007 high (1570) for a few more months.</p> <p><strong>Then the sky fell. Nine months later the market was down by 57% and&nbsp;the U.S.&nbsp;economy was in the worst recession since the 1930s.</strong></p> <p>More crucially,&nbsp;the sell-side assurance that the severe&nbsp;earnings decline then underway&nbsp;was just the &ldquo;pause that refreshes&rdquo; and that profits would rebound to $100 per share in no time, proved to be dead wrong.</p> <p>By the following spring, LTM profits for the S&amp;P 500&nbsp;companies&nbsp;posted at just $7 per share!</p> <p>Now, we have no idea how far earnings will fall this time, but we do note that on the eve of the cyclical contraction in May 2008, the S&amp;P 500 was trading at the same drastically inflated multiple as today&mdash;&mdash;- 24X LTM earnings.</p> <p>We also note that recessions are precipitated not by lagging indicators such as the dubious BLS monthly jobs surveys, but by the accumulation of&nbsp;excess&nbsp;inventories in the face of&nbsp;weakening sales. Here is what happened last time the punters insisted on staying in the&nbsp;nosebleed section of the&nbsp;casino when earnings were already falling rapidly.</p> <p><img src="" style="width: 601px; height: 399px;" /></p> <p>&nbsp;</p> <p><strong>Nor is this time any different. As of March, total business sales in the U.S. economy&mdash;manufacturing, wholesale and retail&mdash;&mdash;were down 5.5% from their July 2014 peak, while the inventory ratio has soared back up into the recession zone.</strong></p> <p><img src="" style="width: 601px; height: 399px;" /></p> <p><u><strong>That&rsquo;s right. The scarlet &ldquo;X&rdquo; is back.</strong></u></p> <p>It&nbsp;means not merely&nbsp;that recession is just around the corner. <strong>That eventuality is guaranteed</strong> by the fact that this tepid recovery is already very long in the tooth by historical standards&nbsp;and by the reality that&nbsp;global trade, industrial production and PMI&rsquo;s are slipping into recession mode virtually everywhere.</p> <p>What is&nbsp;also proves is&nbsp;that the Fed and other central banks have absolutely destroyed the last semblance of honest price discovery. How is any other conclusion possible?</p> <p><em>That is, with headwinds&nbsp;ranging&nbsp;from the tottering Red Ponzi of China,&nbsp;to the collapse in Brazil, the depression in the Baaken and Texas shale patch, the plunge in Japan&rsquo;s trade accounts, the swirling liquidity crisis in the petro-states, the slump in German exports, the double digit decline of US freight volumes, the flat-lining of temp agency&nbsp;employment levels and much more, why would any rational investor pay <strong>23.9X</strong> for the S&amp;P 500 at this juncture&mdash;&ndash;and especially&nbsp;after nine years of no earnings growth?</em></p> <p>Alas, they wouldn&rsquo;t.</p> <p><strong>Wall Street has indeed become a doomsday machine and the Fed has zero chance of stopping its eventual implosion.</strong></p> <p>So in the interim<strong> the posse of monetary cranks in the Eccles Building&nbsp;ought to just stop their dangerous charade;</strong> it&rsquo;s only feeding the robo-machines and putting everyone else deeper into harms&rsquo; way.</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="242" height="156" alt="" src="" /> </div> </div> </div> BLS Brazil Central Banks China GAAP Global Economy Japan Reality Recession recovery Wed, 25 May 2016 12:13:51 +0000 Tyler Durden 561793 at Egypt’s Economy, More Trouble Ahead <p><strong style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 13.3333px; line-height: 17.3333px;">Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.</strong></p> <p><strong style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 13.3333px; line-height: 17.3333px;"><br /></strong></p> <p>Early last Thursday, EgyptAir 804 disappeared over the Mediterranean, becoming the second civilian airliner in less than seven months to go down while flying either to or from Egypt. Both this incident and Metrojet 9268’s disaster of last October were terrorist acts. Tourism to Egypt, a major earner of foreign exchange, has already been flat for years and will suffer even further from these airline disasters.</p> <p>The World Travel &amp; Tourism Council (WTTC) provides figures on the total contribution of travel and tourism in Egyptian Pounds. If we convert this to U.S. dollars (USD) at the black market (read: free market) exchange rate, the results are not pretty.&nbsp;</p> <p>&nbsp;</p> <p><img src="" width="1351" height="1100" /></p> <p>&nbsp;</p> <p>Egypt’s tourism problem is only one of many facing President Sisi. For starters, dwindling foreign reserves, a half-baked currency, and elevated inflation will likely prove to be President Sisi’s Achilles’ heel. The Central Bank of Egypt (CBE) is currently reporting an annual inflation rate of 10.3 percent, but that is far from the truth. Utilizing changes in black market exchange rate data and applying the Purchasing Power Parity theory, I calculate the inflation rate to be over four times higher than what the CBE reports, hovering between 40 and 50 percent for the past several months. Egypt is lying to the world about the strength of the Pound and the severity of its inflation problems (see the charts below). And lies are nothing more than a form of propaganda.</p> <p><img src="" width="1423" height="1033" /></p> <p>&nbsp;</p> <p>&nbsp;<img src="" width="3000" height="2178" /></p> <p>&nbsp;</p> <p>Perhaps that’s why the press corps travelling with Secretary of State John Kerry to Egypt was not permitted beyond Cairo’s airport, as David Sanger of the <a href=""><em>New York Times</em> reported</a> last Wednesday. Who wants a probing press to ask embarrassing questions about the economy when you’re lying?</p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="5689" height="4131" alt="" src="" /> </div> </div> </div> New York Times Purchasing Power Twitter Twitter Wed, 25 May 2016 12:00:00 +0000 Steve H. Hanke 561730 at Violent Protesters Storm Trump Rally In New Mexico; Throw Rocks, Bottles At Riot Police <p>A calm protest quickly turned violently chaotic at a Donald Trump rally yesterday in Albuquerque, New Mexico. Protesters started to gather around 4pm in what until then was a low key protest: they chanted anti-Trump slogans, held anti-Trump signs and waved Mexican flags before the demonstration descended into chaos with some protesters standing on top of police cars, at which point all hell broke loose.<br />&nbsp;</p> <p><a href=""><img height="404" src="" width="600" /></a></p> <p>&nbsp;</p> <p>Protesters began to throw water bottles and yell profanity and aggressive taunts; the scene then quickly escalated to what one police officer called &quot;<strong>the gauntlet of hate.&quot;</strong></p> <p>&nbsp;</p> <blockquote class="twitter-video" data-lang="en"><p dir="ltr" lang="en">Here&#39;s video of anti-Trump protesters walking on and jumping on police cars in Albuquerque <a href=""></a></p> <p>&mdash; Oliver Darcy (@oliverdarcy) <a href="">May 25, 2016</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>&nbsp;</p> <p>&quot;You&#39;re a wetback&quot; someone from the crowd yelled at a Trump supporter, while things like &quot;go back to Mexico&quot;, and &quot;socialism never, capitalism forever&quot; could be heard being yelled back in response.</p> <p>Parents escorted scared kids past the chaos, and eventually police even set up a mounted horse unit to deter the crowds. However this was not enough, as protesters eventually began to riot. Rocks and bottles were thrown at police, and the protesters were eventually able to break through barriers, allowing them to rush the entrance of the convention center, at which point the riot police responded with tear gas.</p> <p>According to CNN, his supporters chanted &quot;build that wall&quot; during his rally on Tuesday in Albuquerque where a little less than half of the population is Hispanic or Latino.</p> <p>&quot;Watching thugs (and) punks in Albuquerque - en route to California. They don&#39;t even know what they are protesting,&quot; Trump aide Dan Scavino said on Twitter.</p> <p>As vendors fled, protesters grabbed merchandise and set things on fire the Albuquerque Journal <a href="">reports</a>.</p> <p>The chaos got so out of control, local police eventually had to call in reinforcements from around the state in order to deal with the protesters, whose numbers swelled to over 600 according to estimates.</p> <p>By 11:30pm, police in riot gear were continuing to patrol the streets, but the scene had returned to normal at that point.</p> <p><a href=""><img height="229" src="" width="600" /></a></p> <p><a href=""><img height="535" src="" width="600" /></a></p> <p><a href=""><img height="395" src="" width="600" /></a></p> <p><a href=""><img height="436" src="" width="600" /></a></p> <p><a href=""><img height="433" src="" width="600" /></a></p> <p><a href=""><img height="364" src="" width="600" /></a></p> <p><a href=""><img height="303" src="" width="600" /></a></p> <p dir="ltr" lang="en"><a href=""><img height="437" src="" width="600" /></a></p> <p dir="ltr" lang="en"><a href=""><img height="400" src="" width="600" /></a></p> <p dir="ltr" lang="en">&nbsp;</p> <script src="//"></script><p><iframe frameborder="0" height="315" src="" width="600"></iframe></p> <p>&nbsp;</p> <p><iframe frameborder="0" height="315" src="" width="600"></iframe></p> <p>&nbsp;</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Video from <a href="">@dcbigjohn</a> shows police using horses to break up protesters outside Trump rally in Albuquerque tonight <a href=""></a></p> <p>&mdash; BuzzFeed News (@BuzzFeedNews) <a href="">May 25, 2016</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet"><p dir="ltr" lang="en">Several <a href="">#APD</a> officers are being treated for injuries as a result of being hit by rocks. At least one subj arrested from the riot.</p> <p>&mdash; Albuquerque Police (@ABQPOLICE) <a href="">May 25, 2016</a></p></blockquote> <script src="//"></script><blockquote class="twitter-video" data-lang="en"> <p lang="en" dir="ltr">Here&#39;s video of anti-Trump protesters walking on and jumping on police cars in Albuquerque <a href=""></a></p> <p>&mdash; Oliver Darcy (@oliverdarcy) <a href="">May 25, 2016</a></p></blockquote> <script async src="//" charset="utf-8"></script><blockquote class="twitter-video" data-lang="en"> <p lang="en" dir="ltr">Protesters keep throwing rocks at police, officers respond with smoke canisters, push forward. <a href=""></a></p> <p>&mdash; Jacob Rascon (@Jacobnbc) <a href="">May 25, 2016</a></p></blockquote> <script async src="//" charset="utf-8"></script> Donald Trump Mexico Twitter Twitter Wed, 25 May 2016 11:52:43 +0000 Tyler Durden 561792 at Tiffany Shares Slide After Biggest Sales Drop In 6 Quarters, EPS Miss, Guidance Cut <p>Iconic jeweler Tiffany reported Q1 earnings which continued the recent slide in top and bottom line on the back of a clearly weaker domestic and global consumer, and which not only missed the top and bottom line, printing at $891.3MM (exp. 914.9MM) and $0.64 (exp. $0.68), respectively, but also reported a steep drop in same store sales which tumbled 9% in Q1, double the 4.6% expected drop, and also slashed guidance, expecting full year 2017 EPS to be down in the mid-single digits, compared to its previous guidance which expected earnings to stay flat or fall by up to mid-single digit in percentage terms.</p> <p>Sales at the jeweler's stores open for more than a year fell 10 percent in the Americas region in the first quarter ended April 30. Analysts on average had expected a 9.1 percent decline, according to research firm Consensus Metrix. Tiffany's net income fell 16.6 percent to $87.5 million, or 69 cents per share.</p> <p>The 7.4% drop in total revenue was the steepest sales drop in six quarters. Once again the company blamed a stronger dollar for discouraging tourists from buying its high-end jewelry, even though the dollar was notably weaker Y/Y in the first quarter, as the company does not even bother to pull up a stock chart. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The Company's reported net sales <strong>reflect either a translation-related benefit from strengthening foreign currencies or a detriment from a strengthening U.S. dollar</strong>. Internally, management monitors and measures its sales performance on a non-GAAP basis that eliminates the positive or negative effects that result from translating sales made outside the U.S. into U.S. dollars </p> </blockquote> <p>GAAP Sales decline in the upper single digits in every single market except Japan, where Tiffany saw a 8% boost. </p> <p>While many, especially the Fed which is said to hike as soon as next month, tout an imminent consumer recovery, Tiffany did not see it. Here is its full outlook:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Management is now forecasting full year earnings per diluted share in 2016 to decline by a mid-single-digit percentage from 2015’s adjusted earnings per diluted share </strong>(which excluded loan impairment and certain staffing and occupancy charges - see “Non-GAAP Measures”). Management also expects diluted EPS in the second quarter to decline by a similar rate as occurred in the first quarter. The forecast is based on the following full year assumptions, which are approximate and may or may not prove valid: (i) worldwide net sales declining by a low-single-digit percentage from the prior year; (ii) worldwide gross retail square footage increasing 2%, net through 11 openings, 6 relocations and 10 closings; (iii) operating margin below the prior year’s 19.7% (excluding the prior year’s charges – see “Non-GAAP Measures”) due to an expected increase in gross margin more than offset by SG&amp;A expense growth; (iv) interest and other expenses, net unchanged from 2015; (v) an effective income tax rate slightly lower than the prior year; (vi) a modest year-over-year strengthening of the U.S. dollar; (vii) net inventories unchanged from the prior year; (viii) capital expenditures of $260 million; and (ix) free cash flow (net cash provided by operating activities less capital expenditures) of at least $400 million.</p> </blockquote> <p>According to Reuters, Tiffany's reluctance to offer promotions has been turning away thrifty shoppers, while a stronger dollar has made purchases more expensive for tourists. </p> <p><strong>"We faced numerous challenges, including continued pressure from foreign tourist spending in Europe, the U.S. and Asia, particularly in Hong Kong," </strong>Chief Executive Frederic Cumenal said.</p> <p>Shares of the company, whose "Blue Book" collection was flaunted by actress Cate Blanchett on the Oscar red carpet this year, fell 4.5% to $61 in premarket trading on Wednesday.</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="1600" height="1202" alt="" src="" /> </div> </div> </div> Capital Expenditures GAAP Hong Kong Japan recovery Reuters Same Store Sales Wed, 25 May 2016 11:38:33 +0000 Tyler Durden 561789 at Switzerland Prepares To Vote On "Free Lunch" For Everyone <p><a href=""><em>Submitted by Claudio Gras via,</em></a></p> <h3><u><strong>Will the Swiss Guarantee CHF 75,000 for Every Family?</strong></u></h3> <p><strong>In early June the Swiss will be called upon to make a historic decision.</strong> Switzerland is the first country worldwide to put the idea of an <strong><em>Unconditional Basic Income (of $2,500 per month for every man, woman, and child for doing absolutely nothing) </em></strong>to a vote and the outcome of this referendum will set a strong precedent and establish a landmark in the evolution of this debate.</p> <p style="text-align: center;">&nbsp;</p> <p style="text-align: center;"><img alt="die-schweizer-initiative-fuer" class="aligncenter wp-image-44984" src="" style="width: 600px; height: 400px;" /></p> <p style="text-align: center;">The Swiss Basic Income Initiative in a demonstration in front of parliament. As we have previously reported (see &ldquo;<a href="">Swiss Parliament Shoots Down Socialist Utopia</a>&rdquo; for details), Switzerland&rsquo;s parliament has already rejected the idea, with even the socialists voting against it (proving that they are still in possession of most of their marbles and quite likely in possession of an abacus as well).</p> <p><span id="more-44981">&nbsp;</span></p> <p><strong>The Swiss public will have to approve or reject a change in the constitution </strong>that would allow for the introduction of an Unconditional Basic Income (UBI), or a preset, monthly minimum income to be paid out by the government to every adult and child in the country if their income falls below a specific threshold. Even though details of this proposal have been few and far between, the most commonly cited amount of this guaranteed income would be 2,500 Swiss Francs for adults and 625 francs for children. <strong>The architects of the proposal stress that this government-guaranteed payment, unlike the current benefit programs, will be entirely &ldquo;no questions asked&rdquo;, i.e., it will not be means-tested and will apply to every person legally living in Switzerland.</strong></p> <p>Currently, these are all the details that the Swiss have at their disposal to make their decision. No plan has so far been put forward to specify how such a proposal would be financed, whether an increase in income tax or VAT will have to be enforced, which specific existing welfare programs it would replace or how the glaringly obvious exploitation possibilities of such a plan would be avoided, without any kind of means test &ndash; or without &ldquo;asking any questions&rdquo;, according to one of the campaign&rsquo;s catchphrases.</p> <p><strong>The main argument of the supporters of this initiative is that it would support the people that will, or already do, lose their jobs to automation and technological progress; a defensive move against &ldquo;the rise of the robots&rdquo; as they put it. </strong>They also claim that such a measure will give people the opportunity to grow, to learn and to pursue skills or professional goals that are now rendered prohibitive by their current meaningless and mundane jobs, that they are forced into in order to simply pay their bills. &ldquo;What would you do if your income were taken care of?&rdquo; asked the pro-UBI campaign in Geneva, with a poster that officially made it into the Guinness Book of Records as the world&rsquo;s largest.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Biggest poster ever" class="aligncenter wp-image-44983" src="" style="width: 600px; height: 400px;" /></p> <p style="text-align: center;">Meet the world&rsquo;s largest poster ever. As to the answer to the question, a number of people would&nbsp; likely immediately proceed to party. The poster unfortunately fails to ask &ldquo;who is going to pay for it?&rdquo; &ndash; or better said,<em> who will be robbed at gunpoint to pay for it</em>.</p> <p style="text-align: center;">&nbsp;</p> <p>&nbsp;</p> <h3><u><strong>The Free Lunch &ndash; A Fantasy as Old as Methuselah</strong></u></h3> <p><strong>The promise of a free lunch is by no means a new thing in politics.</strong> Getting &ldquo;something for nothing&rdquo; is an age-old shiny trinket that has been dangled before the eyes of the public since time immemorial. In fact, it has appeared so excruciatingly often in our political history, for centuries on end, that one would think that it wouldn&rsquo;t work anymore; not in 2016, surely. And yet it does. <strong><em>UBI is the proof that there are still people who choose to believe that &ldquo;no strings attached&rdquo; freebies and gifts are promises one can rely on and build an economy on, especially when they are coming from their government and rulers.</em></strong></p> <p>However, there are always some strings attached to such gifts and if history has taught us anything on this matter, it is the distinction between a gift and a bribe. Unsavory political ideologies and catastrophic cultural philosophies often tend to make their debut in front of the public hidden inside a Trojan gift horse. <strong>Unrealistic yet enchanting promises have always been a reliable political tool and it has never been a big strategic challenge to corrupt the people by granting the majority something that was stolen from minorities.</strong></p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Robots" class="aligncenter wp-image-44987" height="480" src="" width="640" /></p> <p style="text-align: center;">Another recent demonstration by UBI supporters in Switzerland &ndash; this one suggests that &ldquo;robots&rdquo; will actually pay for it all. This is based on a combination of the popular Luddite error that&nbsp; &ldquo;machines will make us all jobless&rdquo; (an idea proven consistently wrong since the early 19<sup>th</sup> century when the original Luddites went around to break machines, but who cares about evidence when changing the world is at stake!) and the fantasy that the world of Star Trek has already arrived, and machines will simply produce everything we need and want &ldquo;for free&rdquo; at the push of a button, in a kind of economic<em> perpetuum mobile</em>. Thus, we can now get serious about erecting the long dreamed of socialist Utopia &ndash; and this time, we&rsquo;re going to get it right, you just wait and see!</p> <p>&nbsp;</p> <p>We can easily spot the parallel in the promotion of Basic Income: Even though the architects of UBI in Switzerland, quite wisely, omit any reference to the realistic and structural aspects of their scheme, <u><strong>at the end of day, <em>someone</em> will have to pay for it. </strong></u><em>&ldquo;Tax the 1%!&rdquo;</em>, argue their international fellow travelers, which, rather predictably, makes UBI even more attractive to a large portion of the public. This whole discussion about UBI reminds us of the following quote by Thomas Jefferson:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;A government big enough to give you everything you want, is a government big enough to take away everything that you have.&rdquo;</em></p> </blockquote> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Jefferson" class="aligncenter wp-image-44985" height="500" src="" width="414" /></p> <p style="text-align: center;">Thomas Jefferson knew a thing or two about the true nature of government. By accepting a &ldquo;free lunch&rdquo; offered by the government, one is no longer free, but becomes dependent on the whims of the ruling elite &ndash; which is of course precisely what the ruling elite wants. In other words, what happens in reality is <em>the exact opposite</em> of what the UBI supporters imagine will happen. They assert that a basic income distributed by the State will &ldquo;free people&rdquo;, as they will no longer be forced to deal with the drudgery of having to earn a living. Thus, in a quite Orwellian twist, dependency is marketed as &ldquo;freedom&rdquo;.</p> <p style="text-align: center;">&nbsp;</p> <p>&nbsp;</p> <h3><u><strong>The Cultural Argument for Collectivism</strong></u></h3> <p><strong>Key figures of the pro-UBI camp take pride in claiming that the main motivation behind the campaign is not economic but cultural.</strong> They say this proposal aims to make people think about the nature of life and work, it is a way to liberate them from the jobs they don&rsquo;t like but need, a status which the scheme&rsquo;s advocates, quite unhistorically, equate to the indignity of slavery. On top of this,<strong> they claim, UBI will help society survive the imminent unemployment apocalypse: </strong>they believe that with the help of automation and artificial intelligence 50% of all the existing jobs will be taken over within the coming decade by computers and machines.</p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="Luddite" class="aligncenter wp-image-44986" height="500" src="" width="333" /></p> <p style="text-align: center;">The original Luddites were slightly less imaginative: instead of demanding a basic income, they simply went and smashed the machines they thought would take away their jobs. The underlying notion was simply anti-economic: it asserted that the very goal of economic activity, namely producing more with less, was somehow &ldquo;evil&rdquo;. Taken to its logical conclusion, this means one would have to reject civilization altogether and return to the &ldquo;noble savage&rdquo; life of cavemen and jungle dwellers bereft of tools (a life that would be nasty, brutish, very short and marked by a distinct lack of iPhones).</p> <p>&nbsp;</p> <p><strong>Such an argument might sound superficially rational,</strong> but it goes deeper than that: <u><em><strong>It presupposes that we as human beings see ourselves downgraded and equated to a machine, like just another cog that can be replaced at any time, in a system where man is literally defined as a human resource.</strong></em></u></p> <p>The truth is that it is indeed a cultural debate, far more than it is an economic one.<strong> The only conceivable aim of such a factually unhinged and unfounded proposal can be to gauge the mind-set of the Swiss people in this moment in time.</strong> The outcome of this referendum can provide a valuable insight into the Swiss mentality, and whether the Swiss&nbsp; actually prefer collectivism over individualism. Such a signal could serve as cue for a further escalation of government empowerment: After all, the collapsing centralized system is bound to show symptoms of desperation by &ldquo;doubling down&rdquo; and accelerating and maximizing its centralization efforts.<strong> Thus focusing on the symptoms and secondary effects is futile; a real difference can only be made by addressing the root cause, the system itself.</strong></p> <p>&nbsp;</p> <p style="text-align: center;"><img alt="socialism" class="aligncenter wp-image-44988" src="" style="width: 600px; height: 460px;" /></p> <p style="text-align: center;">Since the collapse of the Soviet system (of which many prominent Western economists asserted as late as the 1980s that it would eventually overtake capitalism and free markets &ndash; which goes to show how utterly blinded by ideology and statolatry the profession has become), most socialists have stopped making economic arguments in favor of socialism, realizing they are no longer credible. Instead they are now making moral and cultural arguments in favor of collectivism. Allegedly, although it will make us poorer, socialism is &ldquo;morally superior&rdquo; to the free market system. One might want to ponder the victims of the Chinese Cultural Revolution in this context &ndash; when the protection of individual rights is abandoned in favor of vague and pious notions of the &ldquo;collective good&rdquo;, things often tend to get real ugly very quickly.</p> <p>&nbsp;</p> <p><u><strong>Despite the economic <em>non-sequiturs</em> and the plain Utopianism that lie at the core of the idea of a Universal Basic Income, the concept seems to be gaining popularity worldwide. </strong></u>Canada is set to conduct an experiment with this idea later this year. The city of Utrecht in the Netherlands is launching a pilot program, Finland is planning a two-year trial and a British proposal is gathering interest, while the nonprofit group <em>Give Directly</em> will start providing a guaranteed income to 6,000 Kenyans this month in a decade-long scheduled program and track the results. The idea seems to be gaining traction due to the Western Left&rsquo;s efforts, however the polls in Switzerland are painting a dramatically different picture: the UBI initiative is projected to suffer a crushing defeat.</p> <p>&nbsp;</p> <h3><u><strong>A Bastion of Liberty</strong></u></h3> <p><strong>The Swiss have been voting counter-intuitively for years</strong>: When they held a referendum for or against six weeks of vacation, or when they were called upon to vote for an initiative advocating fewer working hours, or even when they made their choice on the issue of the minimum wage, they always delivered outcomes that seemed surprising to the rest of the West, especially the rest of Europe. Up to now, the Swiss have consistently rejected interference by the state when it came to such topics and have refused to grant more powers to their government. Even in recent years, when the trend in favor of aggressive state expansionism seems to be stronger than ever, Switzerland appears to still hold the line as the last bastion of liberty that remains standing.</p> <p><strong>So what is so different about the Swiss then?</strong> Switzerland is indeed very different, because it became a nation by its peoples&rsquo; own will, based on limited government, strong private property rights and a direct democracy founded on the principles of subsidiarity. This has always required open dialogue and being exposed to different ideas and values: <strong>Vigorous debate itself leads to an enlightened society. Thus, the essential difference lies in the nation&rsquo;s culture, mentality and philosophy.</strong></p> <p style="text-align: center;">&nbsp;</p> <p style="text-align: center;"><img alt="swiss-culture" class="aligncenter wp-image-44989" src="" style="width: 601px; height: 275px;" /></p> <p style="text-align: center;">High up in the Swiss Alps, where they are playing strange instruments. The Swiss have always stood up for the rights of the individual against the State. They successfully defended themselves against the Hapsburg dynasty and other would-be conquerors, and attempts to introduce collectivist decay from within have been consistently rejected as well.</p> <p>&nbsp;</p> <p><strong>The Swiss have grown up in an environment in which the people were always able to decide for themselves, but they also have a long tradition of doubt and of dissent.</strong> Every critical issue is discussed and decided by the people, the actions of government are subject to the judgment of and limited by the citizenry. All viewpoints are heard, even anti-establishment voices have their say, and critical thinking provides the basis for society&rsquo;s future. However, this is only possible when people rely on their own mind to think about the issues individually and independently.</p> <p><u><strong>Switzerland is therefore quite a hostile terrain for those who wish to promote &ldquo;free lunches&rdquo; and &ldquo;no strings attached&rdquo; gifts.</strong></u> A long history of independent thinking, of consequential analysis and of government limitation, makes it very easy for the Swiss to see past the populism-fueled empty promises and the associated publicity stunts. <em><u><strong>The upcoming rejection of the UBI proposal on June the 5th will and should serve as a reminder that the Swiss still remain the exception to the rule.</strong></u></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="549" height="321" alt="" src="" /> </div> </div> </div> Finland Netherlands Reality Switzerland Unemployment Wed, 25 May 2016 11:29:00 +0000 Tyler Durden 561760 at Frontrunning: May 25 <ul> <li>Oil nudges $50 a barrel as investors bet on shrinking overhang (<a href="">Reuters</a>)</li> <li>From hinterland to wonderland: China's 'teapot' refinery boomtowns (<a href="">Reuters</a>)</li> <li>Peter Thiel Has Been Secretly Funding Hulk Hogan's Lawsuits Against Gawker (<a href="">Forbes</a>)</li> <li>China Wants to Set Prices for the World's Commodities (<a href="">BBG</a>)</li> <li>Big Banks Ladle On the Risk (<a href="">WSJ</a>)</li> <li>China Said to Plan Asking U.S. on Timing of Fed Rate Hike (<a href="\">BBG</a>)</li> <li>ECB credit buying to start small, betting on issue boom (<a href="">Reuters</a>)</li> <li>HP Enterprise to Spin Off, Merge Services Business (<a href="">WSJ</a>)</li> <li>Swedish court upholds Assange arrest warrant (<a href="">Reuters</a>)</li> <li>Trump Unveils Stable of Republican Donors (<a href="">BBG</a>)</li> <li>Ryan Said to Tell Confidants He’s Ready to End Trump Standoff (<a href="">BBG</a>)</li> <li>Clinton blasts Trump for cheering housing bubble burst (<a href="">Reuters</a>)</li> <li>Goldman Sachs Sees Malaysian Deals Evaporate Amid 1MDB Concerns (<a href="">BBG</a>)</li> <li>Trump on the defense over Clinton's housing market digs (<a href="">CNN</a>)</li> <li>Nerves of Steel Pay Off as Metals Bonds Jump on Materials Rally (<a href="">BBG</a>)</li> <li>Deutsche Bank Trading Woes Exposed in Slide Down Currency League (<a href="">BBG</a>)</li> <li>Jailed Ukraine pilot heads home under prisoner swap with Russia (<a href="">Reuters</a>)</li> <li>Polish minister says looking for solutions to constitutional row (<a href="">Reuters</a>)</li> <li>Shell Cuts 2,200 More Jobs to Withstand Lower-For-Longer Oil (<a href="">BBG</a>)</li> <li>Microsoft May Cut 1,850 Jobs as Nadella Pares Phone Ambitions (<a href="">BBG</a>)</li> <li>Sanofi to unveil challenge to Medivation's board (<a href="">Reuters</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>- Hewlett Packard Enterprise Co plans to spin off most of its technology services operations and merge them with those of Computer Sciences Corp., in an $8.5-billion transaction that marks HP Enterprise's latest adjustment to a shifting landscape that is roiling the market for corporate technology. (<a href="" title=""></a>)</p> <p>- Eurozone finance ministers and the International Monetary Fund patched together a deal in the early hours of Wednesday that clears the way for fresh loans for Greece and sets out how the country could get debt relief in the future. (<a href="" title=""></a>)</p> <p>- A real estate firm that has been a favored investment of Tennessee Republican Senator Bob Corker is under investigation by federal law enforcement officials for alleged accounting fraud, according to people familiar with the matter. (<a href="" title=""></a>)</p> <p>- Attorney General Loretta Lynch said Tuesday she has decided to seek the death penalty for Dylann Roof, a white man charged with killing nine parishioners at a black church in Charleston, S.C., last year. (<a href="" title=""></a>) </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>* Greg Tufnell, ex-managing director of Mothercare is leading a bid to acquire BHS.</p> <p>* Monsanto Co, the world's largest seed company, turned down Bayer AG's $62 billion acquisition bid as "incomplete and financially inadequate" on Tuesday, but said it was open to engage further in negotiations.</p> <p>* Dozens of French police raided Google's Paris headquarters on Tuesday, escalating an investigation into the digital giant on suspicion of tax evasion.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>- Toyota Motor Corp and Volkswagen AG, two of the world's largest automakers, said they were stepping up to invest in technology start-ups that are working to change the way people travel by car. Toyota said it had formed a partnership with and invested an undisclosed amount in Uber, the biggest ride-hailing company. Gett, the app popular in Europe, said it was working with Volkswagen, and the automaker was investing $300 million in the start-up. (<a href="" title=""></a>)</p> <p>- Monsanto Co rejected Bayer AG's $62 billion takeover offer on Tuesday, calling the takeover approach by the German giant too low. (<a href="" title=""></a>)</p> <p>- Months after Hewlett-Packard split itself into two publicly traded companies, one of those new smaller businesses plans to become even smaller. Hewlett Packard Enterprise Co will sell its enterprise services business, whose offerings include call centers and network maintenance, to the Computer Sciences Corp in an all-stock deal, the companies announced on Tuesday. (<a href="" title=""></a>)</p> <p>- Media mogul Sumner Redstone confirmed on Tuesday the appointment of two new members to his irrevocable trust, which will control the future of his companies, as well as new directors to National Amusements, the private theater chain company through which he controls his $40 billion media empire. (<a href="" title=""></a>)</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>** The Canadian government is preparing to reject the permanent residence applications of three Chinese people who work for China's telecom giant Huawei, citing concerns of spying, terrorism or government subversion. The cases come after Huawei, which started operating in Canada in 2008, faced spying concerns in recent years. (<a href="" title=""></a>)</p> <p>** Broadcast regulator Canadian Radio-television and Telecommunications Commission wants to know how pick-and-pay television is working out so far, and is calling Canada's largest cable and satellite distributors to account for the way they've rolled out new choices to viewers. (<a href="" title=""></a>)</p> <p>NATIONAL POST</p> <p>** After some rocky years of revitalizing the business at Indigo Books and Music Inc, Heather Reisman is in growth mode again as she unveiled the company's latest store concept in west Toronto on Tuesday, the closest realization yet of her long-held vision to create a so-called "cultural department store." (<a href="" title=""></a>)</p> <p>** About four in 10 Canadian homeowners says they were "caught short" in the past year without enough money to meet their expenses, according to a survey out on Tuesday. Manulife Bank paints a dim picture of Canadians with rising debt who could be sitting on a potential land mine if interest rates start rising. (<a href="" title=""></a>) </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Britain</span></em></p> <p>The Times</p> <p>The pressure on Deutsche Bank's British chief executive grew yesterday after one of the top ratings agencies cut the German lender's credit standing and warned that his chances of delivering an ambitious turnaround plan were becoming more remote. (<a href="" title=""></a>)</p> <p>The Guardian</p> <p>Britain's leading tax and spending think tank, the Institute for Fiscal Studies, has warned that leaving the European Union would force ministers to extend austerity measures by up to two years to achieve a budget surplus. (<a href="" title=""></a>)</p> <p>French investigators have raided Google's Paris headquarters, saying the company is now under investigation for aggravated financial fraud and organised money laundering. (<a href="" title=""></a>)</p> <p>The Telegraph</p> <p>U.S. agricultural business Monsanto rejected a $62 billion takeover offer from German drugs and crops giant Bayer yesterday as it believes the current proposal is "incomplete and financially inadequate", but said it is willing to engage in further negotiations. (<a href="" title=""></a>)</p> <p>A Portuguese-backed consortium is in pole position to save BHS after Matalan founder John Hargreaves and Select Fashions Cafer Mahiroglu retreated from the bid battle. (<a href="" title=""></a>)</p> <p>Sky News</p> <p>Twitter has confirmed rumours it is going to stop counting attachments in its 140-character limit, giving users leeway to be more wordy. (<a href="" title=""></a>)</p> <p>Bank of England Governor Mark Carney came under fire at a grilling by MPs today when he was accused of rehashing "propaganda" on the economic consequences of Brexit. (<a href="" title=""></a>)</p> <p>The Independent</p> <p>Google could face a claim for billions of euros in back taxes after 100 police and tax investigators raided the company's offices in Paris as part of an investigation into alleged systematic fraud. (<a href="" title=""></a>)</p> <p>The chief executive of French energy giant EDF said the company "can't afford to keep the UK waiting" and hinted a decision regarding the Hinkley Point C nuclear project in Britain could be reached before the summer. (<a href="" title=""></a>)</p> <p>&nbsp;</p> <p>&nbsp;</p> Bank of England Bob Corker China Deutsche Bank European Union Eurozone goldman sachs Goldman Sachs Google Greece Housing Bubble Housing Market International Monetary Fund Monsanto National Amusements ratings Ratings Agencies Real estate Redstone Reuters Toyota Twitter Twitter Ukraine Volkswagen Wed, 25 May 2016 11:24:43 +0000 Tyler Durden 561788 at Gundlach Feels Like We Are Back In December, Says "Stocks Are Dead Money" After A Short Squeeze <p>In his latest <a href=";utm_medium=Social">contrarian comments to Reuters</a>, Jeff Gundlach focused on the recent flipflopping by the Fed and its various speakers who are now positioning the market for an imminent rate hike despite the US economy still treading water, and said that while many Fed officials are "dying to raise rates," but all that matters is Janet Yellen's opinion, a glimpse of which we will get as soon as this Friday when she speaks at Harvard. "All that matters is Yellen. She is still there."&nbsp;</p> <p><img src="" width="508" height="338" /></p> <p>Last week, New York Federal Reserve President William Dudley said the U.S. economy could be strong enough to warrant an interest rate increase in June or July, reinforcing the drum beat from within the Fed in recent days that rate increases are coming soon. A range of policymakers with normally varying views on monetary policy are now stating a rate increase is possible at the next policy meeting in June.</p> <p>Further, he noted something many have suggested, namely that sentiment from late 2015 has returned, when the market was optimistic that just because the Fed is hiking that some surprising surge in the US economy is on deck: both the Fed and the market were wrong: "I feel like we are back in December again, <strong>where everyone thinks that there is a super secret that some Fed officials have this knowledge that the economy is really good</strong>."</p> <p>There was no super secret and in fact, the Fed was proven very wrong when the market tumbled shortly after the hike. </p> <p>As a result, he said on Tuesday that the rally in U.S. stocks, which began on Monday, <strong>feels like a short squeeze and characterized U.S. stocks as "dead money.</strong>"</p> <p>His sentiment echos that of not only Goldman, which recently unveiled a surprising warning hinting a drop back to 1850 is in the cards, but also that of Bank of America which last night said that "<strong>we are seeing the same decoupling between US and EM stocks that that turned out a leading indicator in Aug and again in Jan.</strong>"</p> <p>Gundlach has been generally bearish on stocks in recent months as the market has gone largely nowhere. It remains to be seen if central banks will allow him to be right, and when.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="640" height="360" alt="" src="" /> </div> </div> </div> Bank of America Bank of America Central Banks Federal Reserve Gundlach Jeff Gundlach Monetary Policy Reuters William Dudley Wed, 25 May 2016 11:06:55 +0000 Tyler Durden 561787 at