http://www.zerohedge.com/fullrss2.xml/BoomBustBlog/BoomBustBlog/BoomBustBlog/BoomBustBlog/article/article/article/article/article/news/article/article/article/article/article/article/article/article/article/guest-post-migration-black-swans en Shell's New Permian Play Profitable At $20 A Barrel http://www.zerohedge.com/news/2017-03-27/shells-new-permian-play-profitable-20-barrel <p><a href="http://oilprice.com/Energy/Crude-Oil/Shells-New-Permian-Play-Profitable-At-20-A-Barrel.html"><em>Authored by Rakesh Upadhyay via OilPrice.com,</em></a></p> <p><em><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_shell.jpg"><img height="249" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_shell_0.jpg" width="600" /></a></em></p> <p><strong>OPEC&rsquo;s worries about the booming U.S. oil production have increased significantly with the big three oil companies&rsquo; interest in shale.</strong> Exxon Mobil Corp., Royal Dutch Shell Plc, and Chevron Corp., are planning $10 billion of investments in shale in 2017, a quantum jump compared to previous years. All the naysayers who doubted the longevity of the shale oil industry may have to modify their forecasts.</p> <p>OPEC lost when they pumped at will as lower oil prices destroyed their finances, and now they are losing their hard-earned market share as a result of cutting production. <strong>Shell&rsquo;s declaration that they can <em>&ldquo;make money in the Permian with oil at $40 a barrel, with new wells profitable at about $20 a barrel&rdquo;</em> is an indication that Shell is here to stay, whatever the price of oil.</strong></p> <p><strong>The arrival of the big three oil companies with their loaded balance sheets is good news for the longevity of the shale industry.</strong></p> <p>The oil crash, which started in 2014, pushed more than 100 shale oil companies into bankruptcy, causing default on at least $70 billion of debt, according to <a href="http://www.economist.com/news/business-and-finance/21719436-exploration-and-production-companies-are-poised-go-another-investment-spree-americas">The Economist</a>. Even the ones that survived haven&rsquo;t been very profitable, according to Bloomberg, which said that the top 60 listed E&amp;P firms have<em> &ldquo;burned up cash for 34 of the last 40 quarters&rdquo;.</em></p> <p>Therefore, during the downturn, the smaller players had to slow down their operations, but this will not be the case with the big three.</p> <p><strong><em>&ldquo;Big Oil is cash-flow positive, so they can take a longer-term view,&rsquo;&rsquo;</em> </strong>said Bryan Sheffield, the billionaire third-generation oilman who heads Parsley Energy Inc. <em>&ldquo;You&rsquo;re going to see them investing more in shale,&rdquo;</em> reports <a href="https://www.bloomberg.com/news/features/2017-03-21/big-oil-s-plan-to-buy-into-the-shale-boom">Bloomberg</a>.</p> <p>The majors are attempting to further improve the economics of operation. Shell said that its cost per well has been reduced to $5.5 million, a 60 percent drop from 2013. Instead of drilling a single well per pad, which was the norm, Shell is now drilling five wells per pad, 20 feet apart, which saves money previously spent on moving rigs from site to site.</p> <p>Shell is not the only one&mdash;Chevron expects its shale production to increase 30% every year for the next decade. Similarly, Exxon plans to allocate one-third of its drilling budget this year to shale, and it expects to quadruple its shale output by 2025<strong>.</strong> <span style="color: #800000;"><strong class="related">&nbsp;</strong></span></p> <p><em><strong>&ldquo;The arrival of Big Oil is very significant for shale,&rdquo; said Deborah Byers, U.S. energy leader at consultant Ernst &amp; Young in Houston. &ldquo;It marries a great geological resource with a very strong balance sheet.&rdquo;</strong></em></p> <p><a href="http://www.foxbusiness.com/markets/2017/03/21/billions-pour-into-permian-oilfield-amid-land-grab.html">$30 billion</a> has been spent on land acquisitions in the Permian basin since mid-2016, which is a favorite among oil companies.</p> <p>Considering the new projects and the resurgent shale boom, Goldman Sachs expects oil output to increase by 1 million barrels a day year-on-year. The outcome is an oversupply in the next couple of years.</p> <p><em><strong>&quot;2017-19 is likely to see the largest increase in mega projects&#39; production in history, as the record 2011-13 capex commitment yields fruit,&quot; the U.S. investment bank said in a research note on Tuesday, reports <a href="http://www.reuters.com/article/us-crude-goldman-idUSKBN16S26L">Reuters</a>.</strong></em></p> <p>The U.S. Energy Information Administration expects the U.S. oil production to top 10 million barrels by December 2018, a level only surpassed in October and November 1970.</p> <p><em><span style="text-decoration: underline;"><strong>OPEC is running out of options.</strong></span></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="661" height="274" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170327_shell.jpg?1490641003" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/shells-new-permian-play-profitable-20-barrel#comments Business Chevron Corporation default Energy Exxon ExxonMobil goldman sachs Goldman Sachs Market Share Oil shale OPEC OPEC Organization of Petroleum-Exporting Countries Petroleum Petroleum politics Price of oil Reuters Shale gas Shale gas in the United States Shale oil The Economist U.S. Energy Information Administration Mon, 27 Mar 2017 22:30:00 +0000 Tyler Durden 591850 at http://www.zerohedge.com Sanctioned Russian Bank Confirms It Met With Trump's Son-In-Law http://www.zerohedge.com/news/2017-03-27/sanctioned-russian-bank-confirms-it-met-trumps-son-law <p>In what is emerging as the latest headache for Donald Trump, a state-run Russian bank which has been under U.S. economic sanctions since 2014 disclosed on Monday that its executives had met Jared Kushner, Trump's son-in-law and key policy adviser, during the 2016 election campaign. As <a href="http://www.zerohedge.com/news/2017-03-27/trump-creates-new-office-son-law-kushner-overhaul-government">reported previously</a>, Kushner has been asked to discuss the contact, and a meeting during the same period with the Russian ambassador, with a Senate committee probing Russia’s alleged interference in the 2016 election.</p> <p>Executives of Russian state development bank Vnesheconombank (VEB) had talks with Kushner during a bank roadshow in 2016 when it was preparing a new strategy, the bank said as <a href="http://www.reuters.com/article/us-usa-trump-russia-idUSKBN16Y1H6">reported by Reuters</a>. "As part of the preparation of the new strategy, executives of Vnesheconombank met with representatives of leading financial institutes in Europe, Asia and America multiple times during 2016," VEB said in an emailed statement. </p> <p>It said roadshow meetings took place "with a number of representatives of the largest banks and business establishments of the United States, including Jared Kushner, the head of Kushner Companies." </p> <p>VEB declined to say where the meetings took place or the dates. U.S. officials said that after meeting with Russian Kislyak at Trump Tower last December, a meeting also attended by Flynn, <strong>Kushner met later in December with Sergei Gorkov, the CEO of Vnesheconombank</strong>. White House spokeswoman Hope Hicks confirmed the meetings.</p> <p>That said, simply meeting with representatives of a U.S.-sanctioned entity is not a violation of sanctions or against the law, although we doubt the media will focus on that nuance. </p> <p>A bigger circumstantial problem may be that Evgeny Buryakov, 41, a Russian citizen who worked at Vnesheconombank and whom U.S. authorities accused of posing as a banker while participating in a New York spy ring, pleaded guilty to a criminal conspiracy charge on Friday. Buryakov admitted in federal court in Manhattan to acting as an agent for the Russian government without notifying U.S. authorities. He was sentenced to 30 months in US prison.</p> <p>Additionally, Gorkov, the bank’s chairman, graduated in 1994 from the Academy of the Federal Security Service of Russia, the Russian school for intelligence officials, i.e., spies. He later worked for the now-defunct Russian oil giant Yukos and state-controlled Sberbank before taking the top job at VEB. As the WSJ reminds us, the plunge in oil prices and Western sanctions over the Ukraine crisis had&nbsp; pushed the bank into financial trouble, forcing the <a href="https://www.wsj.com/articles/russias-most-important-bank-needs-a-bailout-1460341131">Russian government to undertake a bailout</a>.</p> <p>The White House said Kushner was simply doing his job by holding this meeting, although Obama sanctioned the bank in 2014 after the Ukraine coup and subsequent hostilities with Russia, and contacts with Russia have landed other Trump associates in hot water.</p> <p>Earlier on Monday, White House spokesman Sean Spicer told reporters that Kushner is willing to testify to the Senate Intelligence Committee chaired by U.S. Senator Richard Burr, a North Carolina Republican. “Throughout the campaign and the transition, Jared served as the official primary point of contact with foreign governments and officials ... and so, given this role, he volunteered to speak with Chairman Burr's committee, but has not received any confirmation regarding a time for a meeting," Spicer told reporters at his daily briefing. The Republican and Democratic leaders of the Senate panel also said Kushner had agreed to be interviewed.</p> <p>Allegations by U.S. intelligence agencies that Russian actors were behind hacking of senior Democratic Party operatives and spreading disinformation linger over Trump's young presidency. Democrats charge the Russians wanted to tilt the election toward the Republican, a claim dismissed by Trump. Russia denies the allegations. </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="593" height="336" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/20170325_kushner.jpg?1490652240" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/sanctioned-russian-bank-confirms-it-met-trumps-son-law#comments Burr's committee Business Democratic Party Donald Trump Donald Trump Draft:Timeline of the presidency of Donald Trump Federal Security Service of Russia Jared Kushner Kushner Politics Politics of the United States Reuters Russian government Russian interference in the 2016 United States elections Senate Senate committee Senate Intelligence Committee Sergey Kislyak SPY Trump family U.S. intelligence Ukraine United States VEB Vnesheconombank White House White House Mon, 27 Mar 2017 22:05:48 +0000 Tyler Durden 591857 at http://www.zerohedge.com Modern Day Snake Oil - Is 2% Growth As Good As It Gets? http://www.zerohedge.com/news/2017-03-27/modern-day-snake-oil-2-growth-good-it-gets <p><a href="https://mishtalk.com/2017/03/27/two-percent-growth-as-good-as-it-gets/"><em>Authored by Mike Shedlock via MishTalk.com,</em></a></p> <p>There have been 11 recessions and 11 recoveries since 1949.</p> <p><strong>The current recovery is the slowest recovery since 1949 and closing in on the becoming longest.</strong></p> <p>Growth since the 2nd quarter of 2009 is a mere 2.1%. The Wall Street Journal asks <em><strong><a href="http://blogs.wsj.com/economics/2017/03/23/is-the-u-s-economys-slow-growth-as-good-as-it-gets/" target="_blank">Is Two Percent as Good as It Gets?</a></strong></em></p> <p><a href="https://mishgea.files.wordpress.com/2017/03/slow-lane.png"><img class="alignnone size-large wp-image-44947" height="367" src="https://mishgea.files.wordpress.com/2017/03/slow-lane.png?w=529&amp;h=324" width="600" /></a></p> <p><em><strong>&ldquo;The growth seen during the recovery might, for a while, be as good as it gets,&rdquo; </strong></em>the Federal Reserve Bank of San Francisco&rsquo;s John Fernald, Stanford University&rsquo;s Robert Hall, Harvard University&rsquo;s James Stock, and Princeton University&rsquo;s Mark Watson said in a study to be presented among Brookings Papers on Economic Activity.</p> <p><em>Inquiring minds may wish to download the Brookings&rsquo; report entitled&nbsp;<a href="https://www.brookings.edu/bpea-articles/the-disappointing-recovery-of-output-after-2009/" target="_blank">Disappointing Recovery of Output After 2009</a> but I found it a waste of time.</em></p> <p><u><strong>Okun&rsquo;s Law&nbsp;</strong></u></p> <p>The report was mostly mathematical gibberish based on <a href="https://en.wikipedia.org/wiki/Okun%27s_law" target="_blank">Okun&rsquo;s Law</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Okun&rsquo;s law (named after Arthur Melvin Okun, who proposed the relationship in 1962) is an empirically observed relationship between unemployment and losses in a country&rsquo;s production. The &ldquo;gap version&rdquo; states that for every 1% increase in the unemployment rate, a country&rsquo;s GDP will be roughly an additional 2% lower than its potential GDP. The &ldquo;difference version&rdquo; describes the relationship between quarterly changes in unemployment and quarterly changes in real GDP. <em>The stability and usefulness of the law has been disputed</em>.</p> </blockquote> <p>Clearly, <strong>Okun&rsquo;s Law is at least as useless as any widely believed economic law, which is to say totally useless.</strong></p> <p>The supporting paper consists of 90 pages of largely unintelligible garbage such as the following.</p> <p><a href="https://mishgea.files.wordpress.com/2017/03/okuns-law-gibberish.png"><img class="alignnone size-large wp-image-44949" src="https://mishgea.files.wordpress.com/2017/03/okuns-law-gibberish.png?w=529&amp;h=221" style="width: 601px; height: 251px;" /></a></p> <p><u><strong>Commendable Effort</strong></u></p> <p><strong>The <em>Wall Street Journal</em> managed to condense 90 pages of nonsense down to 2 pages of nonsense. </strong>That&rsquo;s a highly commendable effort, and the best one could reasonably expect.</p> <p>Here&rsquo;s the conclusion: &ldquo;<em>The causes aren&rsquo;t entirely clear</em>.&rdquo;</p> <p>I searched the 90-page report for the word<strong> &ldquo;<em>debt</em>&ldquo;.</strong> Care to guess the number of hits? I bet you can: <strong>zero.</strong></p> <p><u><strong>Modern Day Snake Oil</strong></u></p> <p>I was discussing economic indicators with Pater Tenebrarum at the <a href="http://www.acting-man.com/" target="_blank">Acting Man Blog</a> a couple of days ago. He pinged me with the correct takeaway.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Economic forecasting is not a science, and it is actually not the task of economic science to make forecasts (contrary to what is commonly asserted). Forecasting is akin to the task of the historian. Mises called speculators &ldquo;historians of the future&rdquo;.</p> <p>&nbsp;</p> <p>Economic laws only play a role insofar as they can be used as constraints for a forecast. The problem is that all these models simply look at the data of economic history, at statistical series that <em>always</em> turn tail &ldquo;unexpectedly&rdquo;, driven by human action.</p> <p>&nbsp;</p> <p><strong>All these mathematical models are complete humbug. It is modern-day snake oil.</strong></p> </blockquote> <p>Still, it&#39;s pretty clear that the market cares nothing for top-down or bottom-up forecasts of economic activity...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_GDP.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_GDP_0.jpg" style="width: 600px; height: 319px;" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="960" height="510" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170327_GDP.jpg?1490635659" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/modern-day-snake-oil-2-growth-good-it-gets#comments Arthur Melvin Okun Business Economic forecasting Economic model Economics Economy Federal Reserve Federal Reserve Bank Federal Reserve Bank of San Francisco Harvard University Macroeconomic model Princeton University recovery Stanford University Unemployment Unemployment Wall Street Journal Mon, 27 Mar 2017 21:40:36 +0000 Tyler Durden 591842 at http://www.zerohedge.com Elon Musk Launches Company To Hook Up People To Computers http://www.zerohedge.com/news/2017-03-27/elon-musk-launches-company-hook-people-computers <p>In case revolutionizing the transportation and energy industries while colonizing Mars wasn't enough of a challenge for Elon Musk (or perhaps taxpayer subsidies for Musk's ventures in those fields have dried up) in his latest venture the billionaire entrepreneur now "wants to merge computers with human brains to help people keep up with machines." Specifically, <a href="https://www.wsj.com/articles/elon-musk-launches-neuralink-to-connect-brains-with-computers-1490642652">the WSJ has uncovered </a>that Musk has launched another company called Neuralink, which is pursuing what Musk calls “neural lace” technology, which is shorthand for a brain-computer interface and consists of&nbsp;implanting tiny brain electrodes that will one day be able upload and download thoughts.</p> <p>Think the 2014 Johnny Depp movie <em><a href="http://www.imdb.com/title/tt2209764/">Transcendence</a>.</em></p> <p>Musk has taken an active role setting up the California-based company and may play a significant leadership role, according to people briefed on Neuralink’s plans, a bold step for a father of five who already runs two technologically complex businesses. While Musk did not comment on the story, Max Hodak, who said he is a “member of the founding team,” confirmed not only the company’s existence but also Musk’s involvement. "He described the company as “embryonic” and said plans are still in flux but declined to provide additional details. Mr. Hodak previously founded Transcriptic, a startup that provides robotic lab services accessible over the internet."</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/musk%20neural_0.jpg" width="500" height="296" /></p> <p>Investors in Musk's current ventures may not be particularly pleased to learn that the inventor has found yet another distraction from his already ambitious, and in the case of Tesla, lofty and overvalued goals. Currently, the 45-year-old Paypal founder splits his time between Tesla, which is under pressure to deliver its $35,000 sedan on time, and SpaceX, which aims to launch a satellite-internet business and a rocket that can bring humans to Mars. He is also pushing development of a super high-speed train called Hyperloop. And, the WSJ notes, somewhere in his packed schedule, he has found time to start a neuroscience company that plans to develop cranial computers, most likely to treat intractable brain diseases first, but later to help humanity avoid subjugation at the hands of intelligent machines.</p> <p>Musk had previously hinted at the existence of Neuralink a few times over the last six months or so. As the Verge notes, recently <a href="http://www.theverge.com/2017/2/13/14597434/elon-musk-human-machine-symbiosis-self-driving-cars">Musk told a crowd in Dubai, </a>“Over time I think we will probably see a closer merger of biological intelligence and digital intelligence.” He added that “it's mostly about the bandwidth, the speed of the connection between your brain and the digital version of yourself, particularly output." On Twitter, Musk has responded to <a href="https://twitter.com/elonmusk/status/769697521706860545">inquiring fans about his progress </a>on the so-called “neural lace,” which is sci-fi shorthand for a brain-computer interface humans could use to improve themselves.</p> <p>“If you assume any rate of advancement in [artificial intelligence], we will be left behind by a lot,” he said at a conference last June. The solution he proposed was a “direct cortical interface”—essentially a layer of artificial intelligence inside the brain—that could enable humans to reach higher levels of function.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Mr. Musk has discussed financing Neuralink primarily himself, including with capital borrowed against equity in his other companies, according to a person briefed on the plans. </p> <p>&nbsp;</p> <p>Neuralink has also discussed a possible investment from Founders Fund, the venture firm started by Peter Thiel, with whom Mr. Musk co-founded payments company PayPal, according to people familiar with the matter.</p> </blockquote> <p>For now, the types of brain-computer interfaces contemplated by Neuralink exist only in science fiction. In the medical realm, electrode arrays and other implants have been used to help ameliorate the effects of Parkinson’s, epilepsy, and other neurodegenerative diseases. However, it goes without saying that very few people have complex implants placed inside their skulls, while the number of patients with very basic stimulating devices number only in the tens of thousands. This is partly because it is incredibly dangerous and invasive to operate on the human brain, and only those who have exhausted every other medical option choose to undergo such surgery as a last resort.</p> <p>Still, as the Verge adds, this has not stopped a surge in Silicon Valley interest from tech industry futurists who are interested in accelerating the advancement of these types of far-off ideas. Kernel, a startup created by Braintree co-founder Bryan Johnson, is funding medical research out of the University of Southern California to try and enhance human cognition. With more than $100 million of Johnson’s own money — the entrepreneur sold Braintree to PayPal for around $800 million in 2013 — Kernel and its growing team of neuroscientists and software engineers are <a href="http://www.theverge.com/2017/2/22/14631122/kernel-neuroscience-bryan-johnson-human-intelligence-ai-startup">working toward reversing the effects of neurodegenerative diseases </a>and, eventually, making our brains faster and smarter and more wired.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“We know if we put a chip in the brain and release electrical signals, that we can ameliorate symptoms of Parkinson's,” Johnson told The <a href="http://www.theverge.com/2017/2/22/14631122/kernel-neuroscience-bryan-johnson-human-intelligence-ai-startup">Verge in an interview late last year</a>. (Johnson also confirmed Musk’s involvement with Neuralink.) “This has been done for spinal cord pain, obesity, anorexia… what hasn’t been done is the reading and writing of neural code.” Johnson says Kernel’s goal is to “work with the brain the same way we work with other complex biological systems like biology and genetics.”</p> </blockquote> <p>The verge notes that Kernel is upfront about the years of medical research necessary to better understand the human brain and pioneer new surgery techniques, software methods, and implant devices that could make a consumer brain-computer interface a reality. The Wall Street Journal says Neuralink was founded as a medical research company in California last July, which bolsters the idea that Musk will follow a similar route as Johnson and Kernel.</p> <p>Meanwhile, Musk appears to be aggressively growing the new venture. </p> <p>In recent weeks, Neuralink has reportedly hired leading academics in the field, according to another person familiar with the matter. They include Vanessa Tolosa, an engineer at the Lawrence Livermore National Laboratory and an expert in flexible electrodes; Philip Sabes, a professor at the University of California in San Francisco, who studies how the brain controls movement; and Timothy Gardner, a professor at Boston University who is known for implanting tiny electrodes in the brains of finches to study how the birds sing.</p> <p>It is unclear what sorts of products Neuralink might create, but people who have had discussions with the company describe a strategy similar to SpaceX and Tesla, where Mr. Musk developed new rocket and electric-car technologies, proved they work, and is now using them to pursue more ambitious projects. The company's first products could be advanced implants to treat intractable brain disorders like epilepsy or major depression, a market worth billions of dollars. Such implants would build on simpler electrodes already used to treat brain disorders like Parkinson’s disease.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>If Neuralink can prove the safety and efficacy of its technology and receive government approval, perhaps it then could move on to cosmetic brain surgeries to enhance cognitive function, these people say. Mr. Musk alluded to this possibility in his comments last June, describing how humans struggle to process and generate information as quickly as they absorb it.</p> </blockquote> <p>Kernel's Johnson said he has spoken Mr. Musk and that both companies want to build better neural interfaces, first to attack big diseases, and then to expand human potential.</p> <p>They are not alone: Facebook has posted job ads for “brain-computer interface engineers” and other neuroscientists at its new secret projects division. And the Defense Advanced Research Projects Agency is investing $60 million over four years to develop <a href="http://www.darpa.mil/news-events/2015-01-19">implantable neural interface technology</a>.</p> <p>Of course, loading up one's consciousness into a computer, which is the ultimate goal of such "neural lace" ventures will not happen tomorrow. The hurdles involved in developing these devices are immense. Neuroscience researchers say we have very limited understanding about how the neurons in the human brain communicate, and our methods for collecting data on those neurons is rudimentary. Then there’s the idea of people volunteering to have electronics placed inside their heads. </p> <p>“People are only going to be amenable to the idea [of an implant] if they have a very serious medical condition they might get help with,” Blake Richards, a neuroscientist and assistant professor and the University of Toronto, told The Verge in an interview earlier this year. “Most healthy individuals are uncomfortable with the idea of having a doctor crack open their skull.”</p> <p>At the end of the day, perhaps the latest Musk venture is nothing more than a vanity project: invest enough money into a project which if successful will allow if not Musk, then his mind, to live forever.&nbsp; We wish him all the best in this latest endeavor, but wonder how much of this particular pet project is funded directly and indirectly by taxpayers. </p> <p>Meanwhile, questions over Musk's own, carbon-based "bandwidth" will only grow. Tesla is building the largest battery factory on the planet to supply its forthcoming Model 3 electric vehicle, and it will need to produce hundreds of thousands of cars to meet its goal and justify its lofty market capitalization, which is approaching that of Ford. SpaceX has struggled to launch rockets fast enough to send satellites into orbit for its customers. Ultimately it wants to launch an internet-access business powered by more than 4,000 low-earth orbiting satellites, ferry space tourists to the moon and then bring astronauts to Mars. An unexpected project to enable interfacing with computers and ultimately, immortality, may not be what Musk needs to win over a rising tide of skeptics.</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="1169" height="692" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/musk%20neural.jpg?1490648635" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/elon-musk-launches-company-hook-people-computers#comments artificial intelligence Artificial intelligence Boston University Business Colonization of Mars Defense Advanced Research Projects Agency Dubai electric-car technologies Elon Musk Ford Health Hyperloop implantable neural interface technology Interplanetary Transport System Livermore Manned missions to Mars Mars neuroscience Reality Southern California Space tourism Spaceflight SpaceX Technology Transport Twitter Twitter University of California University of California in San Francisco University of Southern California University of Toronto Wall Street Journal White South African people Mon, 27 Mar 2017 21:13:40 +0000 Tyler Durden 591856 at http://www.zerohedge.com Despite Dip-Buying Panic, The Dow Has Not Seen Longer Losing Streak Than This Since 1978 http://www.zerohedge.com/news/2017-03-27/despite-dip-buying-panic-dow-has-not-seen-longer-losing-streak-1978 <p>Don&#39;t play...</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/NHWjlCaIrQo" width="560"></iframe></p> <p>&nbsp;</p> <p>The BTFD&#39;ers were back early on, but once the S&amp;P got within a tick of green, shortly after Europe closed, things stalled, only to ramp again in the last hour, pushing S&amp;P into the green, but that was it...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD13.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD13_0.jpg" style="width: 600px; height: 377px;" /></a></p> <p>&nbsp;</p> <p>It was all about crushing VIX (after tagging 15 overnight, the machines hammered it back to a 12 handle)</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD12.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD12_0.jpg" style="width: 600px; height: 381px;" /></a></p> <p>CNBC&#39;s Bob Pisani - &quot;A very impressive rally&quot; - except Bob we closed red.</p> <p>Nasdaq is the only major index in the green still for March...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD14.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD14_0.jpg" style="width: 600px; height: 339px;" /></a></p> <p>&nbsp;</p> <p>The Dow bounced perfectly off its 50DMA...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD9.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD9_0.jpg" style="width: 600px; height: 323px;" /></a></p> <p>&nbsp;</p> <p>The Dow is down 8 days in a row - the longest losing streak since 2011 - <em><strong>if it hits 9, that will be the worst streak since 1978!!</strong></em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170325_dow_1.jpg"><img height="388" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170325_dow_1_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>Banks were battered...but bounced (Goldman is now down on 14 of the last 16 days) - <strong>this is the worst drop for Goldman since Jan 2016</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD10.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD10_0.jpg" style="width: 600px; height: 396px;" /></a></p> <p>&nbsp;</p> <p>Banks dipped red for the year, Tech leads and Energy is the big laggard...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD5.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD5_0.jpg" style="width: 600px; height: 333px;" /></a></p> <p>&nbsp;</p> <p>March&#39;s great rotation from Goldman To safe-haven Snapchat...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD8.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD8_0.jpg" style="width: 600px; height: 474px;" /></a></p> <p>&nbsp;</p> <p>Across asset classes the moves were similar - all inflected at the US Open - but net net - the dollar is lower, yields lower, stocks flat, and gold higher...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD11.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD11_0.jpg" style="width: 600px; height: 484px;" /></a></p> <p>&nbsp;</p> <p><strong>Gold remains 2017&#39;s big winner </strong>as financials dipped into the red YTD today...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD4.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD4_0.jpg" style="width: 600px; height: 334px;" /></a></p> <p>&nbsp;</p> <p>Notably bond yields broke first, then stocks followed, recoupling shortly after the European close</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD2.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD2_0.jpg" style="width: 600px; height: 314px;" /></a></p> <p>&nbsp;</p> <p>Treasury yields were lower on the day, leaving <strong>all but 2Y yields lower on the year... 30Y &lt;3.00%, 10Y &lt;2.40%</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD3_0.jpg" style="width: 600px; height: 318px;" /></a></p> <p>&nbsp;</p> <p>Yen weakness ignited the rebound in the Dollar Index around the US Open...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD6.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD6_0.jpg" style="width: 600px; height: 314px;" /></a></p> <p>&nbsp;</p> <p>Gold and Silver gained again (pushing the former into the green for March). Copper spiked but crude slipped lower...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD7.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD7_0.jpg" style="width: 600px; height: 361px;" /></a></p> <p>&nbsp;</p> <p>While gold gained on the day, Bitcoin bounced back above $1000...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_EOD1_0.jpg" style="width: 600px; height: 319px;" /></a></p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="600" height="70" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170327_EOD_0.jpg?1490646819" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/despite-dip-buying-panic-dow-has-not-seen-longer-losing-streak-1978#comments Bitcoin Bob Pisani Bond Business CNBC Copper Crude Dow 30 Economy Mathematical finance NASDAQ Recoupling S&P Technical analysis Television Television in the United States VIX Yen Mon, 27 Mar 2017 20:52:50 +0000 Tyler Durden 591849 at http://www.zerohedge.com Artist's Impression Of GOP Obamacare Repeal Negotiations http://www.zerohedge.com/news/2017-03-27/artists-impression-gop-obamacare-repeal-negotiations <p>Mis-stakes were made...</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_mistakes.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170327_mistakes_0.jpg" width="600" height="409" /></a></p> <p><a href="http://michaelpramirez.com/index.html"><em>Source: MichaelPRamirez.com</em></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1078" height="735" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170327_mistakes.jpg?1490633973" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/artists-impression-gop-obamacare-repeal-negotiations#comments Habat Horse racing Marine isotope stage Obamacare Technology Thoroughbred racehorses Mon, 27 Mar 2017 20:50:00 +0000 Tyler Durden 591838 at http://www.zerohedge.com Shiller's CAPE – Is There A Better Measure? http://www.zerohedge.com/news/2017-03-27/shillers-cape-%E2%80%93-there-better-measure <p><a href="https://realinvestmentadvice.com/shillers-cape-is-there-a-better-measure/"><em>Authored by Lance Roberts via RealInvestmentAdvice.com,</em></a></p> <p>In <a href="https://realinvestmentadvice.com/shillers-cape-is-it-really-just-b-s-part-i/" target="_blank">&ldquo;Part 1&rdquo; </a>of this series, I discussed at length whether Dr. Robert Shiller&rsquo;s 10-year cyclically adjusted price-earnings ratio was indeed just <em>&ldquo;B.S.&rdquo;</em>&nbsp;&nbsp;The primary message, of course, was simply:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #993300;"><em>&ldquo;Valuation measures are simply just that &ndash; a measure of current valuation. If you &lsquo;overpay&rsquo; for something today, the future net return will be lower than if you had paid a discount for it.</em></span></p> <p>&nbsp;</p> <p><strong><span style="color: #993300;"><em>Valuation models are not, and were never meant to be, &lsquo;market timing indicators.&#39;&rdquo;</em></span></strong></p> </blockquote> <p>With that said, in this missive I want to address some of the current, and valid, arguments <strong>against</strong> a long term smoothed price/earnings model:</p> <ul> <li><em>Beginning in 2009, FASB Rule 157 was &ldquo;temporarily&rdquo; repealed in order to allow banks to &ldquo;value&rdquo; illiquid assets, such as real estate or mortgage-backed securities, <strong>at levels they felt were more appropriate rather than on the last actual &ldquo;sale price&rdquo; of a similar asset.</strong> This was done to keep banks solvent at the time as they were being forced to write down billions of dollars of assets on their books. <strong>This boosted banks profitability and made earnings appear higher than they may have been otherwise.&nbsp;<span style="color: #993300;">The &lsquo;repeal&rdquo; of Rule 157 is still in effect today, and the subsequent &ldquo;mark-to-myth&rdquo; accounting rule is still inflating earnings.</span></strong></em></li> <li><em>The <strong>heavy use of off-balance sheet vehicles</strong> to suppress corporate debt and leverage levels and boost earnings is also a relatively new distortion.</em></li> <li><em>Extensive cost-cutting, productivity enhancements, off-shoring of labor, etc. are all being heavily employed to boost earnings in a relatively weak revenue growth environment. I <a href="https://realinvestmentadvice.com/fade-to-black-03-24-17/">addressed this issue specifically&nbsp;</a>in this past weekend&rsquo;s newsletter:</em></li> </ul> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p style="text-align: justify;"><span style="color: #993300;"><em>&ldquo;What has also been stunning is the surge in corporate profitability despite a lack of revenue growth.&nbsp;<strong>Since 2009, the reported earnings per share of corporations has increased by a total of 221%. This is the sharpest post-recession rise in reported EPS in history. However, that sharp increase in earnings did not come from revenue which is reported at the top line of the income statement. Revenue from sales of goods and services has only increased by a marginal 28% during the same period.&rdquo;</strong></em></span></p> <p style="text-align: justify;">&nbsp;</p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/03/Reported-Earnings-Buybacks-032417.png"><img class="alignnone size-full wp-image-20225" src="http://realinvestmentadvice.com/wp-content/uploads/2017/03/Reported-Earnings-Buybacks-032417.png" style="width: 600px; height: 378px;" /></a></p> </blockquote> <ul> <li><em>The use of share buybacks improves underlying earnings per share which also distorts long-term valuation metrics. As</em>&nbsp;<em>the</em>&nbsp;<a href="http://online.wsj.com/news/articles/SB10000872396390444138104578030353195160818"><em><span style="text-decoration: underline;">WSJ article</span></em></a>&nbsp;stated:</li> </ul> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div> <p><em>&ldquo;If you believe a recent academic study, <strong>one out of five [20%] U.S. finance chiefs have been scrambling to fiddle with their companies&rsquo; earnings. </strong></em></p> <p>&nbsp;</p> <p><em>Not Enron-style, fraudulent fiddles, mind you. <strong>More like clever&mdash;and legal&mdash;exploitations of accounting standards that &lsquo;manage earnings to misrepresent [the company&rsquo;s] economic performance,&rsquo;</strong> according to the study&rsquo;s authors, Ilia Dichev and Shiva Rajgopal of Emory University and John Graham of Duke University. Lightly searing the books rather than cooking them, if you like.&rdquo;</em></p> </blockquote> <p><em>This should not come as a major surprise as it is a rather &ldquo;open secret.&rdquo; Companies manipulate bottom line earnings by utilizing &ldquo;cookie-jar&rdquo; reserves, heavy use of accruals, and other accounting instruments to either flatter, or depress, earnings.</em></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;The tricks are well-known: A difficult quarter can be made easier by releasing reserves set aside for a rainy day or recognizing revenues before sales are made, while a good quarter is often the time to hide a big &ldquo;restructuring charge&rdquo; that would otherwise stand out like a sore thumb.</em></p> <p>&nbsp;</p> <p><em><strong>What is more surprising though is CFOs&rsquo; belief that these practices leave a significant mark on companies&rsquo; reported profits and losses</strong>. When asked about the magnitude of the earnings misrepresentation, <strong>the study&rsquo;s respondents said it was around 10% of earnings per share.</strong>&ldquo;</em></p> <p>&nbsp;</p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2016/10/Cooking-The-books-2.png"><img class="alignnone size-full wp-image-17295" src="http://realinvestmentadvice.com/wp-content/uploads/2016/10/Cooking-The-books-2.png" style="width: 600px; height: 666px;" /></a></p> </blockquote> <p><em>As shown, it is not surprising to see that 93% of the respondents pointed to &ldquo;influence on stock price&rdquo; and &ldquo;outside pressure&rdquo; as the reason for manipulating earnings figures.</em></p> </blockquote> <ul> <li><em>The extensive interventions by Central Banks globally are also contributing to the distortion of markets.</em></li> </ul> <p>Due to these extensive changes to the financial markets since the turn of the century, <strong>I do not completely disagree with the argument that using a 10-year average to smooth earnings volatility may be too long of a period.</strong></p> <h2><u><span style="color: #000000;"><strong>Duration Mismatch</strong></span></u></h2> <p>Think about it this way. When constructing a portfolio that contains fixed income one of the most important risks to consider is a <em>&ldquo;duration mismatch.&rdquo;</em>&nbsp; For example, let&rsquo;s assume an individual buys a 20-year bond, but needs the money in 10-years. <strong>Since the purpose of owning a bond was capital preservation and income, the duration mismatch leads to a potential loss of capital if interest rates have risen at the time the bond is sold 10-years prior to maturity.</strong></p> <p>One could reasonably argue, due to the <em>&ldquo;speed of movement&rdquo;</em> in the financial markets, a shortening of business cycles, and increased liquidity, there is a <em>&ldquo;duration mismatch&rdquo;</em> between Shiller&rsquo;s 10-year CAPE and the financial markets currently.</p> <p>The first chart below shows the annual P/E ratio versus the inflation-adjusted (real) S&amp;P 500 index.</p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/03/PE-Shiller-Monthly-032617.png"><img class="alignnone size-full wp-image-20258" src="http://realinvestmentadvice.com/wp-content/uploads/2017/03/PE-Shiller-Monthly-032617.png" style="width: 599px; height: 333px;" /></a></p> <p>Importantly, you will notice that during secular bear market periods (green&nbsp;shaded areas) the overall trend of P/E ratios is declining.&nbsp; <strong>This <em>&ldquo;valuation compression</em>&rdquo; is a function of the overall business cycle as <em>&ldquo;over-valuation&rdquo;</em> levels are <em>&ldquo;mean reverted&rdquo;</em> over time.</strong>&nbsp; You will also notice that market prices are generally &ldquo;sideways&rdquo; trending during these periods with increased volatility.</p> <p>You can also see the vastly increased valuation swings since the turn of the century, which is one of the primary arguments against Dr. Shiller&rsquo;s 10-Year CAPE ratio.</p> <h2><u><span style="color: #000000;"><strong>Introducing The CAPE-5 Ratio</strong></span></u></h2> <p>The need to smooth earnings volatility is necessary to get a better understanding of what the underlying trend of valuations actually is. <strong>For investor&rsquo;s periods of <em>&ldquo;valuation expansion&rdquo;</em> are where the bulk of the gains in the financial markets have been made over the last 116 years.</strong> History shows, that during periods of <em>&ldquo;valuation compression&rdquo;</em> returns are much more muted and volatile.</p> <p>Therefore, in order to compensate for the potential <em>&ldquo;duration mismatch&rdquo;</em> of a faster moving market environment, I recalculated the CAPE ratio using a 5-year average as shown in the chart below.</p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/03/PE-CAPE5-1900-Present-032617.png"><img class="alignnone size-full wp-image-20260" src="http://realinvestmentadvice.com/wp-content/uploads/2017/03/PE-CAPE5-1900-Present-032617.png" style="width: 600px; height: 315px;" /></a></p> <p>There is a high correlation between the movements of the CAPE-5 and the S&amp;P 500 index. However, you will notice that prior to 1950 the movements of valuations were more coincident with the overall index as price movement was a primary driver of the valuation metric. <strong>As earnings growth began to advance much more quickly post-1950, price movement became less of a dominating factor.</strong>&nbsp;Therefore, you can see that the CAPE-5 ratio began to lead overall price changes.</p> <p><strong>A&nbsp;key <em>&ldquo;warning&rdquo;</em> for investors, since 1950, has been a decline in the CAPE-5 ratio which has tended to lead price declines in the overall market.</strong>&nbsp;The recent decline in the CAPE-5, which was directly related to the collapse and recovery in oil prices, has so far been an outlier event. However, complacency <em>&ldquo;this time is different,&rdquo;</em> will likely be misplaced as the corrective trend currently remains intact.</p> <p><strong>To get a better understanding of where valuations are currently relative to past history, we can look at the deviation between current valuation levels and the long-term average.&nbsp;</strong>The importance of deviation is crucial to understand. In order for there to be an <em>&ldquo;average,&rdquo;</em> valuations had to be both above and below that <em>&ldquo;average&rdquo;</em> over history. <strong>These <em>&ldquo;averages&rdquo;</em> provide a gravitational pull on valuations over time which is why the further the deviation is away from the <em>&ldquo;average,&rdquo;</em> the greater the eventual <em>&ldquo;mean reversion&rdquo;</em> will be.</strong></p> <p>The first chart below is the percentage deviation of the CAPE-5 ratio from its long-term average going back to&nbsp;1900.</p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/03/PE-CAPE5-1900-Present-Deviation-032617.png"><img class="alignnone size-full wp-image-20261" src="http://realinvestmentadvice.com/wp-content/uploads/2017/03/PE-CAPE5-1900-Present-Deviation-032617.png" style="width: 599px; height: 317px;" /></a></p> <p>Currently, the 56.97% deviation above the long-term CAPE-5 average of 15.86x earnings <strong>puts valuations at levels only witnessed five (5) other times in history.</strong>&nbsp;As stated above, while it is hoped <em>&ldquo;this time will be different,&rdquo;</em> which were the same words uttered during each of the five previous periods, you can clearly see that the eventual results were much less optimal.</p> <p><strong>However, as noted, the changes that have occurred Post-WWII in terms of economic prosperity, changes in operational capacity and productivity warrant a look at just the period from 1944-present.</strong></p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/03/PE-CAPE5-WWII-Present-Deviation-032617.png"><img class="alignnone size-full wp-image-20262" src="http://realinvestmentadvice.com/wp-content/uploads/2017/03/PE-CAPE5-WWII-Present-Deviation-032617.png" style="width: 600px; height: 318px;" /></a></p> <p>Again, as with the long-term view above, the current deviation is 44.19%&nbsp;above the Post-WWII CAPE-5 average of 17.27x earnings. <strong>Such a level of deviation has only been witnessed three times&nbsp;previously over the last 70 years in 1996, 2005 and 2013.&nbsp;</strong>Again, as with the long-term view above, the resulting <em>&ldquo;reversion&rdquo;</em> was not kind to investors.</p> <p>Is this a better measure than Shiller&rsquo;s CAPE-10 ratio?</p> <p>Maybe, as it adjusts more quickly to a faster moving marketplace. <strong>However, I want to reiterate that neither the Shiller&rsquo;s CAPE-10 ratio or the modified CAPE-5 ratio were ever meant to be <em>&ldquo;market timing&rdquo;</em> indicators.</strong></p> <p><strong>Since valuations determine forward returns, the sole purpose is to denote periods which carry exceptionally high levels of investment risk and resulted in exceptionally poor levels of future returns. </strong></p> <p>Currently, valuation measures are clearly warning the future market returns are going to be substantially lower than they have been over the past eight years.<strong>&nbsp;Therefore,</strong> <strong>if you are expecting the markets to crank out 10% annualized returns over the next 10 years for you to meet your retirement goals, it is likely that you are going to be very disappointed.</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="624" height="235" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170327_shiller.jpg?1490634658" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/shillers-cape-%E2%80%93-there-better-measure#comments B+ B.S. Bear Market Bond Business Central Banks Cyclically adjusted price-to-earnings ratio Duke University Duration Mismatch Economy Emory University ETC Finance Financial economics Financial ratios fixed Fundamental analysis Investment Market Timing Market trends Mean Reversion Mean reversion Money post-1950 Price–earnings ratio Real estate recovery Robert Shiller S&P 500 Valuation Volatility Mon, 27 Mar 2017 20:27:58 +0000 Tyler Durden 591839 at http://www.zerohedge.com Italian Officials Call For Investigation Of Soros-Supported NGO Migrant Fleet http://www.zerohedge.com/news/2017-03-27/italian-officials-call-investigation-george-soros-supported-ngo-migrant-fleet <div> <p><em>Authored by William Craddick via <a href="http://disobedientmedia.com/italian-officials-call-for-investigation-of-george-soros-supported-ngo-migrant-fleet/" target="_blank">Disobedient Media,</a></em></p> <p>Italian authorities are calling for <strong>monitoring of the funding of an NGO fleet bussing migrants into the EU from the North African coast</strong> after a report released the European Border and Coast Guard Agency&nbsp;has determined that&nbsp;the members of the fleet are acting as <strong>accomplices to people smugglers</strong> and directly contributing&nbsp;to the risk of death migrants face when attempting to enter the EU.</p> <p>The report from regulatory agency&nbsp;<a href="http://frontex.europa.eu/assets/Publications/Risk_Analysis/Annual_Risk_Analysis_2017.pdf" target="_blank">Frontex</a>&nbsp;suggests that NGOs sponsoring &nbsp;ships in the fleet are now acting as veritable accomplices to people smugglers due to their service which, in effect, <strong>provides a reliable shuttle service for migrants from North Africa to Italy</strong>. The fleet lowers smugglers&#39; costs, as it all but eliminates the need to procure seaworthy vessels capable making a full voyage across the Mediterranean to the European coastline. Traffickers are also able to operate with much less risk of arrest by European law enforcement officers. Frontex specifically noted that traffickers have intentionally sought to alter their strategy,&nbsp;sending&nbsp;their vessels to ships run by the NGO fleet rather than the Italian and EU military.</p> <p>On March 25th, 2017, Italian news source&nbsp;<a href="http://archive.is/vwrLa" target="_blank">Il Giornale</a>&nbsp;carried remarks from Carmelo Zuccaro, the&nbsp;chief prosecutor of Catania (Sicily) calling for monitoring of the funding behind the NGO groups engaged in operating the migrant fleet. <strong>He stated that &quot;the facilitation of illegal immigration is a punishable offense regardless of the intention.&rdquo; </strong>While it is not a crime to&nbsp;enter&nbsp;the waters of a foreign country and pick them migrants, NGOs are supposed to land them at the nearest port of call, which would have been somewhere along the North African coast instead of in Italy.&nbsp;The chief prosecutor also noted that Italy is investigating Islamic radicalization occurring in prisons and camps where immigrants are hired off the books.</p> <p><strong>Italy has for some months been reeling under the pressure of massive numbers of migrants who have been moving from North Africa into the southern states of the European Union. </strong>In December 2016,&nbsp;<a href="http://archive.is/zYYx4" target="_blank">The Express</a>&nbsp;cited comments made by Virginia Raggi, the mayor of Vatican City, stating that Rome was on the verge of a &quot;war&quot; between migrants and poor Italians. The wave of migrants has also caused issues in southern Italy, where<strong> the&nbsp;<a href="http://archive.is/vGSvG" target="_blank">Sicilian Cosa Nostra</a>&nbsp;has declared a &quot;war on migrants&quot; last year amid reports that the Italian mafia had begun fighting with North African crime gangs who entered the EU among migrant populations.</strong></p> <div class="mceTemp"> <dl id="attachment_2132"> <dt><img height="357" src="http://disobedientmedia.com/wp-content/uploads/2017/03/8c86fd0d6018bb26a53d804a75b7271c53379ec9.jpg" width="634" /></dt> <dt><em>CCTV footage showing an Italian gang leader, Emanuele Rubino, retrieve a handgun (circled) before shooting Gambian Yusapha Susso in a turf war last year</em></dt> </dl> </div> <p>In February 2016,&nbsp;<a href="http://disobedientmedia.com/ngo-fleet-bussing-migrants-into-the-eu-has-ties-to-george-soros-hillary-clinton-donors/" target="_blank">Disobedient Media</a>&nbsp;published research indicating that<strong> multiple ships operating in the fleet mentioned by Frontex are sponsored by NGO groups with financial ties to organizations run by George Soros and donors to Hillary Clinton.</strong></p> <p><a href="http://archive.is/MS04q" target="_blank">Reports</a>&nbsp;have also emerged citing a study&nbsp;by counter-extremism group Quilliam which states that <strong>ISIS now controls the human trafficking scene in North Africa</strong> and is actively recruiting from the migrant population. In addition to acting as de facto accomplices of human traffickers, the NGO&#39;s criticized by Frontex may also be contributing to the&nbsp;<a href="http://disobedientmedia.com/research-indicates-massive-isis-networks-in-europe-while-europol-warns-of-imminent-attacks/" target="_blank">worsening terror situation</a>&nbsp;in Europe though their actions.</p> </div> <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="593" height="327" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170325_italy.jpg?1490624333" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/italian-officials-call-investigation-george-soros-supported-ngo-migrant-fleet#comments Cultural globalization Demography European Border and Coast Guard Agency European migrant crisis European Union European Union Frontex George Soros Government Human migration Illegal immigration Italy Mediterranean Non-governmental organization North Africa Politics Social Issues Southern Italy Mon, 27 Mar 2017 19:55:00 +0000 Tyler Durden 591820 at http://www.zerohedge.com Questions Grow Over Nunes' Mystery White House "Source" Visit http://www.zerohedge.com/news/2017-03-27/questions-swirl-over-devin-nunes-mystery-white-house-visit <p>The mystery surrounding President Donald Trump's claim that he was wiretapped by Barack Obama during the 2016 election campaign deepened on Monday, when it was revealed that House Intel Committee Chair Devin Nunes was on the White House grounds where he reviewed classified information the day before he announced he had seen intelligence that showed members of President Trump's transition team had been caught up in surveillance operations. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/nunes%20door.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/nunes%20door_0.jpg" width="500" height="301" /></a></p> <p>U.S. Representative Devin Nunes, who has been embroiled in a firestorm of controversy over the past week, visited the White House the night before announcing on Wednesday that he had information that indicated some Trump associates may have been subjected to some level of intelligence activity before Trump took office on Jan. 20. <a href="http://www.thedailybeast.com/articles/2017/03/24/devin-nunes-vanished-the-night-before-he-made-trump-surveillance-claims.html">According to a Daily Beast report</a>, Nunes "went off the grid" that night to meet a source and view dozens of intelligence reports, including accounts of meetings involving President Donald Trump's advisers.</p> <p>Nunes admitted he was on White House grounds, but not in the White House itself, for meetings "to confirm what I already knew," and he noted no one in the White House knew he was there. Nunes then declined to comment further because he didn't want to "compromise sources and methods." </p> <p><strong>Then it gets weirder. </strong></p> <p>As <a href="https://www.bloomberg.com/view/articles/2017-03-27/devin-nunes-explains-his-white-house-visit">Bloomberg's Eli Lake adds</a>, "CNN is reporting that Nunes had in fact slipped off to the White House grounds last Tuesday to view the documents. And then on Wednesday, after briefing reporters on what he had found in those intelligence reports, he went back to the White House to inform the president."</p> <p>One question that has emerged since the details of Nunes' visit were revealed, is why would the Republican Intel Committee Chair need to brief the president on documents he viewed at a facility on White House grounds? The White House directed questions about the episode to Nunes.&nbsp; "We have been made aware through public reports that Chairman Nunes confirmed he was on the White House grounds on Tuesday and any questions concerning his meeting should be directed to the Chairman," the White House said. </p> <p>In an interview Monday, <strong>Nunes told Lake that he ended up meeting his source on the White House grounds because it was the most convenient secure location with a computer connected to the system that included the reports, which are only distributed within the executive branch</strong>. "We don't have networked access to these kinds of reports in Congress," Nunes said. He added that his source was not a White House staffer and was an intelligence official.&nbsp; </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Nunes, it should be said, has a history of cultivating independent sources inside the intelligence community. He made contact, for example, with the U.S. intelligence contractors who ended up saving most of the Americans stuck in the Benghazi outpost when it was attacked on Sept. 11, 2012. More recently, Nunes has reached out to his network of whistleblowers to learn about pressure inside the military's Central Command on analysts to write positive reports on the U.S. campaign against the Islamic State. </p> <p>&nbsp;</p> <p>In this case, Nunes had been hearing for more than a month about intelligence reports that included details on the Trump transition team, and had been trying to view them himself. <strong>He told me that when he finally saw the documents last Tuesday evening, he made sure to copy down their identifying numbers so he could request access to them formally for the rest of the committee. </strong></p> </blockquote> <p>Confirming Lake's account, Nunes spokesman Jack Langer said in a statement that Nunes "met with his source at the White House grounds in order to have proximity to a secure location where he could view the information provided by the source."</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Comment from Chairman Nunes' spox about his whereabouts the day before his announcement Trump/associates may be swept up in surveillance <a href="https://t.co/OZ06gSejbH">pic.twitter.com/OZ06gSejbH</a></p> <p>— Alex Moe (@AlexNBCNews) <a href="https://twitter.com/AlexNBCNews/status/846368043353681921">March 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>As <a href="http://www.reuters.com/article/us-usa-trump-russia-idUSKBN16Y1H6">Reuters&nbsp; adds</a>, it was the latest twist in a saga that began on March 4 when Trump said on Twitter that he "just found out that Obama had my 'wires tapped' in Trump Tower just before the victory." FBI Director James Comey told Congress last Monday he had seen no evidence to support the claim. Trump's mention of wiretapping drew attention away from U.S. intelligence agencies having said that Russia tried to help Trump in the election against Democrat Hillary Clinton by hacking leading Democrats and spreading disinformation. Moscow denies any such activities. Trump has also dismissed them.</p> <p>Nunes told reporters on Wednesday that he had briefed Trump "on the concerns I had about incidental collection and how it relates to President-elect Trump and his transition team and the concerns that I have." After an uproar over the allegations and the fact that he briefed Trump first before members of his own committee, Nunes apologized on Thursday for the way he handled the information. A congressional source said congressional investigators have questioned agencies directly to try to find out what intelligence reports and intercepts Nunes is referring to, but that as of Monday the agencies were still saying they did not know what Nunes was talking about. </p> <p>Earlier on Monday, the Washington Post reported that Nunes was on his way to an event late Tuesday when he left his staff and went to review classified intelligence files brought to his attention by his source, whom he has not identified.</p> <p>* * * </p> <p>Meanwhile, the White House has seized on Nunes' remarks to bolster Trump's unproven assertion that Obama wiretapped his campaign headquarters in Manhattan's Trump Tower. Nunes and some other Republicans have focused much of their concern over the investigation about the possibility that some Americans' names have been improperly "unmasked" and released to the public in leaks about the investigation of whether Trump's campaign colluded with Moscow. Nunes spokesman Langer cited concerns about the exposure of citizens' names in his statement.</p> <p>"The chairman is extremely concerned by the possible improper unmasking of names of U.S. citizens, and he began looking into this issue even before President Trump tweeted his assertion that Trump Tower had been wiretapped," Langer said.</p> <p>Democrats have questioned, given his actions, whether he can remain independent during the Intelligence Committee's own investigation of Russian meddling. </p> <p>It remains unknown who was Nunes' source and whether he was doing the White House's bidding in saying the transition team has been surveilled. Nunes said last week that the surveillance was not related to Russia and that the Trump officials had been caught up in legal snooping. </p> <p>Previously, CNN reported that Nunes was with a staff member at the White House when he reviewed the intelligence. A spokesman said the intelligence could not have been taken to the House. </p> <p><strong>“The information comprised executive branch documents that have not been provided to Congress,”</strong> a Nunes spokesman said. “Because of classification rules, the source could not simply put the documents in a backpack and walk them over to the House Intelligence Committee space. <strong>The White House grounds was the best location to safeguard the proper chain of custody and classification of these documents, so the Chairman could view them in a legal way."</strong></p> <p>* * * </p> <p>Going back to Lake, the Bloomberg reporter said that "Nunes told me these reports were sent to the Obama White House among other executive branch agencies. Nunes until now had only said the reports he viewed were widely distributed inside the government. "<strong>The reports included details about the Trump transition, meetings of Trump and senior advisers, they were distributed throughout the intelligence community and to the White House</strong>," Nunes said. "<strong>In some cases, there was additional unmasking of Trump transition team officials."</strong> </p> <p>As Lake concludes, "this is suggestive, though not yet proof, <strong>that White House officials privy to the Russia investigation wanted keep tabs on Trump and his advisers in the period after the election and before his inauguration. </strong>It also fits together with other facts in this story as well. For example, on March 1, the New York Times reported that Obama White House officials sought to preserve intelligence in the final days and weeks of his presidency on Team Trump's connections to Russia and Russia's campaign to influence the election. Though Nunes says the reports he viewed had nothing to do with Russia."</p> <p>The implications are two-fold as per Lake:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The good news is that we will soon get a second and third opinion. Nunes told me that he expects that his committee's members, including Democrats, will be able to read these documents themselves at secure locations outside of Congress as soon as this week. </p> <p>&nbsp;</p> <p>If it turns out that intelligence about the Trump transition was included in dozens of reports that were sent to the White House, then the House Intelligence Committee really has two investigations. <strong>The first is of course a probe into how the Russian state meddled in the election and whether it did so with the aid of Trump's associates or campaign. The second is about whether the Obama White House inappropriately spied on Trump and his advisers during the transition to power.</strong></p> </blockquote> <p>While incomplete information and partisan innuendo continues to swirl, both sides are accusing each other of conducting a misdirection campaign meant to cover up either Trump's links to Russia, or Obama's surveillance of Trump for reasons still unknown. If Lake is correct, the mystery over Nunes' White House visit will soon be resolved. As to whether Trump is an alleged puppet of Putin, or if Obama was actively spying on Trump, sadly that particular inquiry is only just starting.</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="703" height="367" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/nunes%20teaser%20door.jpg?1490641026" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/questions-swirl-over-devin-nunes-mystery-white-house-visit#comments Barack Obama Central Command Congress Devin Nunes Donald Trump Donald Trump wiretapping claim FBI Federal Bureau of Investigation House Intel Committee House Intelligence Committee Intelligence committee Mike Pence New York Times Politics Presidency of Donald Trump Republican Intel Committee Reuters Russian interference in the 2016 United States elections Trump Tower Twitter Twitter U.S. intelligence United States United States House Permanent Select Committee on Intelligence White House White House Mon, 27 Mar 2017 19:47:30 +0000 Tyler Durden 591848 at http://www.zerohedge.com Coming To An Inner-City Uprising Near You: The "Ultimate Riot Control Truck" Of The Future http://www.zerohedge.com/news/2017-03-27/coming-inner-city-uprising-near-you-ultimate-riot-control-truck-future <p>One upon a time, the benevolent future was supposed to bemuse with hoverboards, flying cars and interplanetary travel. Instead, according to the folks at <a href="http://www.bozena.eu/bozena-riot-new/">Slovakia's Bozena Riot Security Systems</a>, the dystopian future has arrived, and it is made of armored plates and riot gear.</p> <p><img src="https://i.kinja-img.com/gawker-media/image/upload/s--PMI2npFK--/c_scale,fl_progressive,q_80,w_800/cvvjlnngs9g8yutfkttz.jpg" width="500" height="281" /></p> <p>The Bozena Riot can handle virtually any duty when authorities need to put down an uprising: it is a remotely operated, armored vehicle designed to deal with riots and mobs in the streets and urbanized areas. The system offers a solution for both protecting the law-enforcement units in action and controlling the situation whenever peace maintenance is required. </p> <p>The truck right out of RoboCop's OCP Detroit, has three components: a carrier, a 3000 kg adjustable shield, and a water trailer. Two water cannons can send protesters flying from the front or the rear and if that doesn’t do the trick, police can always rely on the "high-pressure tear gas gun" to disperse any riot. </p> <p>As <a href="http://gizmodo.com/this-dystopian-riot-control-truck-is-the-vehicle-of-the-1793656046">Gizmodo points out</a>, the unmanned unit is covered in CCTV cameras assuring full video coverage, while the driver gets to enjoy inner-city riots from a comfortable safe distance courtesy of this virtual cockpit which puts all control options at one’s fingertips:</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/jl9zpfcdwzvvxouzbeib_0.jpg" width="500" height="292" /></p> <p>The truck's shield has six launching ports to fire guns or other rubber projectile launchers while keeping the heavily fortified shooters safe. Furthermore, should the truck's riot police passengers get stuck in an alleyway, the shield has bulldozing capabilities allowing authorities to directly engage with social discontents.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/bozena%20riot.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/bozena%20riot_0.jpg" width="500" height="273" /></a></p> <p>To be sure, the topic of <a href="http://www.newyorker.com/news/news-desk/do-not-resist-and-the-crisis-of-police-militarization">police militarization </a>in the US has been a particularly sensitive one in recent years, so perhaps the country will avoid this tool to quickly and efficiently restore post-riot order. Probably not: as Gizmodo notes, "the combination of an <a href="https://qz.com/933398/in-donald-trumps-america-first-budget-the-american-military-comes-first/">increase </a>in law enforcement spending and Attorney General Jeff Sessions’ pledge to <a href="https://www.nytimes.com/2017/02/28/us/politics/jeff-sessions-crime.html">stop monitoring </a>out-of-control police departments seems to set up just the right environment to make it happen."</p> <p>In any case, no matter on which side of the ideological divide one stands, and whether one roots for the authorities or the rioters who may soon suffer the wrath of the Bozena Riot, there are plenty reasons for everyone to be both delighted and concerned. </p> <p><em>The video below courtesy of Bozena shows the prototype in action.</em></p> <p><iframe src="https://www.youtube.com/embed/E8MK4fNqpkc" width="500" height="281" frameborder="0"></iframe></p> <p>&nbsp;</p> <p><em>For those who enjoy details, or are considering the purchase of one of these robotrucks for their own private neighborhood watch, below is the Bozena Riot's client brochure: <br /></em></p> <p> <iframe src="https://www.scribd.com/embeds/343196809/content?start_page=1&amp;view_mode=scroll&amp;access_key=key-Qm9mvEBYBMy3SFhVlcth&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="903" height="493" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/bozena%20riot.jpg?1490637510" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/coming-inner-city-uprising-near-you-ultimate-riot-control-truck-future#comments Detroit Law enforcement Militarization of police Police weapons Riot Riot police RoboCop: The Series War Water cannon Mon, 27 Mar 2017 19:45:42 +0000 Tyler Durden 591844 at http://www.zerohedge.com