en IBM Reports 22nd Consecutive Quarter Of Declining Sales, "Beats" EPS On Drop In Effective Tax Rate <p>Last quarter, IBM - once again - <a href="">almost fooled the market </a>when it "beat" but only thanks to using the lowest (until then) effective non-GAAP tax rate in recent history (excluding one charge-filled quarter when the rate was negative and thus N/M). Fast forward to this quarter when IBM has done it, or at least tried it, again: in the three months ended Sept 30, IBM reported Non-GAAP EPS of $3.30, above the expected $3.28. How did IBM "beat" again? By once again applying a lower tax rate than a year ago: a paltry 11.0%, down from the already laughable 12.5% in Sept 30, 2016. Had IBM used even last quarter's 12.5% tax rate, it would have missed.</p> <p><a href=""><img src="" width="500" height="204" /></a></p> <p>Amusingly, and just like in Q2, while both GAAP EPS and margins declined Y/Y, non-GAAP EPS was the only thing that was magically flat (with even non-GAAP net income down):</p> <p><a href=""><img src="" width="500" height="269" /></a></p> <p>At this rate IBM will soon need a negative non-GAAP tax rate to make its negative non-GAAP earnings turn positive, or some other double negative...</p> <p><a href=""><img src="" width="500" height="325" /></a></p> <p>Although for some reason IBM is confident it won't need to:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The company continues to expect a full-year effective operating (non-GAAP) tax rate of 15 percent, plus or minus 3 points, excluding discrete items.</p> </blockquote> <p>Considering IBM's effective tax rates in Q1-Q3 have all been below 12%, this would mean that in Q4 IBM's tax rate will have to be well over 20%.&nbsp; Good luck.</p> <p>However while IBM is an undisputed wizard when it comes to fudging the bottom line, there was nothing it could do about the top line, and it was here that IBM's remained, because while it beat modest expectations of $18.6 billion, generating $19.2 billion in revenue...</p> <p><img src="" width="500" height="339" /></p> <p>... <strong>this was also the 22nd consecutive quarter of declining revenues for the company which lately can't seem to get any traction on the top line.</strong></p> <p><a href=""><img src="" width="500" height="331" /></a></p> <p>Oh, and while IBM beat on the top line, it still missed its Q3 adjusted gross margin of 47.6%, which came in below the estimate of 47.9% </p> <p>Away from the top and bottom line, IBM reported that in Q3 it generated net cash from operating activities of $3.6 billion, or $3.3 billion and free cash flow of $2.5 billion. And, as has been the case every quarter, IBM returned $1.4 billion in dividends and $0.9 billion of gross share repurchases to shareholders, virtually covering all its free cash flow. At the end of September 2017, IBM had $1.5 billion remaining in the current share repurchase authorization. We expect the company will have authorize another $5-10 billion or so in new buybacks. </p> <p>"We finished the first half of the year where we expected, including continued strong free cash flow generation," said Martin Schroeter, IBM senior vice president and chief financial officer. "This allowed us to continue our strong R&amp;D investment levels and return more than $5 billion to shareholders through dividends and gross share repurchases during the first half."</p> <p>IBM ended the third quarter of 2017 with <strong>$11.5 billion of cash on hand, a decrease of $0.8BN from the second quarter</strong>. And since the company drew down on its cash, debt predictably remained flat at $45.6 billion, which is up from $42.2 billion at the end of 2016.</p> <p>For now, the stock is happy by the modest revenue beat, although once it becomes apparent that the company used the exact same gimmicks as last quarter, we expect this to change.</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="838" height="554" alt="" src="" /> </div> </div> </div> Business Business Cash flow Economy Fear, uncertainty and doubt Free cash flow GAAP IBM Income statement Tax Tue, 17 Oct 2017 20:44:02 +0000 Tyler Durden 605512 at WTI Shrugs Despite Huge Crude Draw <p>A v-shaped recovery in WTI/RBOB today (amid a dollar reversal at the EU close and chatter about a big crude draw) led prices higher into the API print (but after last week&#39;s 100% incorrect API vs DOE reversal, who knows what it means). And the rumors were true - <strong>a huge crude draw (biggest in 2 months) and the first build at Cushing in 8 weeks</strong>. However WTI prices didn&#39;t move much as <strong>product builds weighed on RBOB prices</strong>.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>API</strong></span></p> <ul> <li><strong>Crude -7.13mm (-3.2mm exp) - bigget draw in 2 months</strong></li> <li><strong>Cushing -151k - first draw in 2 months</strong></li> <li>Gasoline +1.951mm (+1.05mm exp)</li> <li><strong>Distillates +1.644mm - biggest in 3 months</strong></li> </ul> <p><strong>After last week&#39;s 100% wrong API data (API crude build, gas draw; DOE crude draw, gas build),</strong> who knows what will happen.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 320px;" /></a></p> <p>&nbsp;</p> <p>Early weakness (strong dollar and weak IP) rebounded after Europe closed and the dollar sold off, leaving WTI/RBOB at its highs ahead of API. The initial reaction was RBOB lower and WTI higher...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 284px;" /></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="2200" height="1041" alt="" src="" /> </div> </div> </div> API Benchmark Crude Distillates Economy Energy economics European Union Price of oil Pricing Primary sector of the economy recovery World oil market chronology from Tue, 17 Oct 2017 20:37:29 +0000 Tyler Durden 605510 at The United States Of Weinstein: Complicity, Greed, & Corruption Is The Status Quo <p><a href=""><em>Authored by Charles Hugh Smith via OfTwoMinds blog,</em></a></p> <p><em>If integrity means more than any of these baubles, then prepare to fail. </em></p> <p><em>The theme this week is The Rot Within.</em></p> <p><strong>The sordid story of Harvey Weinstein is being presented as an aberration. It is not an aberration; it is merely a high-profile example of how the status quo functions in the USA</strong>, a.k.a. <em>The United States of Weinstein</em>, in which complicity, greed and corruption reign supreme in every sector and in every nook and cranny of power.</p> <p><strong>The dirty secret of America&#39;s status quo is that power and wealth are both extremely concentrated, which means there are <em>gatekeepers</em> who must be bribed, sated or serviced if you want to claw your way up the wealth-power pyramid.</strong> Mr. Weinstein&#39;s alleged conduct and payoffs of those he exploited is par for the course in the corridors of power in the USA.</p> <p>As a <em>gatekeeper</em> in Hollywood, Mr. W. could make or break careers with absurd ease.</p> <p><strong><em>Gatekeepers</em> are the key functionaries in a <em>rentier economy</em> in which the few at the top skim the wealth of the many.</strong> Want to play in the big leagues of Hollywood, Washington D.C., the Pentagon, or the various HQs of Global Corporate America? You have to pay the Gatekeepers what they demand.</p> <p><strong>It might be the casting couch or a slice of the profits, or a vote in committee, but the price of admission will always include complicity--silence about the crimes committed and the endemic corruption</strong>, and a sacrifice of moral standards. This is the minimal price of &quot;success&quot; in the elite circles of wealth and power in America.</p> <p><strong>If you doubt this, dig deep into any concentration of power in America and see what you find.</strong> Outsiders won&#39;t find anyone willing to talk, of course; that&#39;s how complicity works.</p> <p><strong>The overheated engine of complicity is greed.</strong> Hollywood kept quiet about Mr. Weinstein because insiders and wannabes alike hoped to score a plum role in Mr. W.&#39;s next hitmaking production, or secure a couple of points of the gross. (1 point = 1%.)</p> <p><strong>This is the evil fruit of a system that ruthlessly concentrates power and wealth,</strong> not just in Hollywood and Washington D.C. but in the judiciary, in higher education, in Big Pharma, the National Security State, Corporate America and yes, the Deep State, which is comprised not of the bureaucratic functionaries (sorry to pop your balloon) of the state but those one level above the gatekeepers.</p> <p><strong>Every American has a simple but profound choice.</strong> Either place your integrity above all else, and refuse to climb the putrid pyramid of wealth and power, <strong>or succumb to greed and become complicit in an empire of greed, complicity and corruption.</strong></p> <p>If &quot;success&quot; means a fat salary, points of gross, invitations to A-list parties, access to the inner circle, being the right-hand boy/girl of someone powerful, a seat on the private jet, etc., then you will be required to service the gatekeepers and sacrifice whatever integrity you once possessed.</p> <p><strong>If integrity means more than any of these baubles, then prepare to fail.</strong> You won&#39;t clamber up the putrid pyramid, you won&#39;t get past the gatekeepers, and you won&#39;t be invited to join the elite skimming the nation&#39;s wealth for its own gratification and greed.</p> <p>But you will still have yourself, your pride, and your integrity.</p> <p><strong>It&#39;s not an easy choice. Choose wisely.</strong> As Orwell observed about a totalitarian oligarchy, <em>some are more equal than others.</em> But the sacrifices required to become more equal than than the bottom 99.5% are irrevocable--you will have to sacrifice everything but your greed, your appetite for corruption and your willingness to hide the truth from the outside world.</p> <p>True success lies outside the empire of greed, complicity and corruption.</p> <p><img align="middle" border="0" class="wide" src="" /><br />*&nbsp; *&nbsp; *</p> <p><em>If you found value in this content, please join me in seeking solutions by <a href="" target="resource">becoming a $1/month patron of my work via</a>. Check out both of my new books, <a href=";camp=1789&amp;creative=9325&amp;creativeASIN=B01MSP2SXM&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=e45dbb20ba66e69c33a3a26772391278" target="resource">Inequality and the Collapse of Privilege</a> ($3.95 Kindle, $8.95 print) and <a href=";camp=1789&amp;creative=9325&amp;creativeASIN=B01ELXQZGE&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=33DAOPEVGBNGBS37" target="resource">Why Our Status Quo Failed and Is Beyond Reform</a> ($3.95 Kindle, $8.95 print, $5.95 <a href=";camp=1789&amp;creative=9325&amp;creativeASIN=B01M7YCLI2&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=60a5ab448cf91113c0df9df97732358e" target="_blank"> audiobook</a>) For more, please visit the <a href="" target="resource">OTM essentials website</a>.</em></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="659" height="314" alt="" src="" /> </div> </div> </div> Cinema of the United States Corporate America Corruption ETC Fail Film Greed national security Pentagon Political corruption Private Jet The Gatekeepers The Power of Five Washington D.C. Wealth Tue, 17 Oct 2017 20:25:56 +0000 Tyler Durden 605498 at Dow Fails To Hold 23,000 As Yield Curve Carnage Continues <p>The Dow is now up 17% YTD - crushing bonds and bullion - <u><strong>NOTE everything changed when China&rsquo;s central bank <a href="">decided that it would remove a </a>reserve requirement for financial institutions trading in FX forwards for clients by cutting it to zero from 20% currently..</strong></u></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 276px;" /></a></p> <p>&nbsp;</p> <p>But let&#39;s not spoil the party!</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p><u><strong>Dow 23,000...</strong></u></p> <p><a href=""><img height="450" src="" width="600" /></a></p> <p>&nbsp;</p> <p>1200 points in 27 days...</p> <p><a href=""><img height="304" src="" width="600" /></a></p> <p><img height="338" src="" width="600" /></p> <p>&nbsp;</p> <p>The Dow is now the most overbought in 8 months (and the past three times, the rally has stalled)...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 304px;" /></a></p> <p>&nbsp;</p> <p>We have never seen a divergence between VIX and The Dow this wide for this long...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 315px;" /></a></p> <p>&nbsp;</p> <p>Additionally, as BofA notes, <strong>the S&amp;P 500 has only traded 1% or more in either direction 8 times so far in 2017, tied with 1965 (full year) for the third&nbsp; fewest in history.</strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 304px;" /></a></p> <p>The only years with fewer moves in excess of +/-1% were 1964 (3 times) and 1963 (6 times).</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 435px;" /></a></p> <p>For comparison the most +/-1% moves occurred during the height of the Great Depression in 1932 (181 times), and the most in recent history was during the GFC in 2008 (134 times). The above stat is yet another striking depiction of today&rsquo;s historic low vol environment.</p> <p>*&nbsp; *&nbsp; *</p> <p>Anyway - moving on from all that malarkey.</p> <p>Small Caps and Trannies were notably weaker today as The Dow did what it does...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 284px;" /></a></p> <p>&nbsp;</p> <p><strong>VIX was very illiquid again and actually rallied along with stocks today... </strong>Dow was ramped back to 23,000 once again into the close but failed to hold it...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 284px;" /></a></p> <p>&nbsp;</p> <p>Small Caps stumbled notably today...(worst day in 6 weeks)</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>This is the widest divergence between stocks and vol since the 2015 China deval collapse...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 332px;" /></a></p> <p>&nbsp;</p> <p>PG&amp;E soared after headlines about arrest in the CA wildfires BUT then dropped when clarified as a different arsonist..</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 362px;" /></a></p> <p>&nbsp;</p> <p>NFLX was a big &#39;sell the news&#39; event...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 362px;" /></a></p> <p>&nbsp;</p> <p>Banks had an ugly after a hopeful pre-market earnings from MS and GS...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 314px;" /></a></p> <p>&nbsp;</p> <p>And finally started to rollover as the yield curve collapse continues...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 318px;" /></a></p> <p>&nbsp;</p> <p>Treasuries were mixed today with the long-end rallying but short-end seing yields rise further with yet more dramatic curve flattening...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>The bond market bloodbathery continues to crush the dreams of the &#39;recovery-hypers&#39;...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 315px;" /></a></p> <p>&nbsp;</p> <p>FX markets were volatile today...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 314px;" /></a></p> <p>&nbsp;</p> <p>With a big reversal in the dollar...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 313px;" /></a></p> <p>&nbsp;</p> <p>As the Peso and Loonie dumped early on NAFTA disagreements then<strong> surged after NAFTA negotiators claimed &quot;success&quot; in round 4...and talks will extend beyond 2017 deadline</strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 362px;" /></a></p> <p>&nbsp;</p> <p>Gold and Silver were lower today...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 362px;" /></a></p> <p>&nbsp;</p> <p>WTI and RBOB both gained ahead of tonight&#39;s API data (WTI barely but RBOB solid)</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 362px;" /></a></p> <p>&nbsp;</p> <p>Finally - for good measure - &#39;Industrial&#39; Production remains well below 2014 highs... but the &#39;Industrial&#39; Average is soaring to new record highs...</p> <p><a href=""><img src="" style="width: 600px; height: 315px;" /></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="600" height="75" alt="" src="" /> </div> </div> </div> API Bond Business China Dow Dow 30 Great Depression headlines Mathematical finance People's Bank of China S&P 500 S&P 500 Index Technical analysis VIX Yield Curve Tue, 17 Oct 2017 20:02:33 +0000 Tyler Durden 605506 at Yes, Robot Lawyers Are Now A Thing <p><a href=""><em>Via,</em></a></p> <p><strong>In China,</strong> where artificial intelligence (AI) is gradually being integrated into the court system,<strong> the latest development is a robot that helps litigants with legal advice. </strong></p> <p><img height="292" src="" width="600" /></p> <p>Xiaofa, the state-run&nbsp;<em>China Daily</em><a href="" rel="noopener" target="_blank">&nbsp;reported</a>&nbsp;Friday, is 1.46 meters tall, can move its head and hands, and speaks in a child&rsquo;s voice.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;Xiaofa explains complicated legal terms in everyday language to help the public better understand legal definitions,&rdquo;</em><a href="" rel="noopener" target="_blank">&nbsp;said</a>&nbsp;Du Xiangyang, the founder of the company that designed the machine.&nbsp;</p> <p>&nbsp;</p> <p><strong><em>&ldquo;We used a child&rsquo;s voice to ease the tense emotions of litigants who come here for help.&rdquo;</em></strong></p> </blockquote> <p><strong>On the screen on the Xiaofa&rsquo;s chest, answers to&nbsp;<em>&ldquo;over 40,000 litigation questions and 30,000 legal issues&rdquo;</em> will appear for those seeking advice,&nbsp;</strong><em>China Daily</em>&nbsp;reports.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 428px;" /></a></p> <p><strong>Legal professionals tested the machine before it debuted in a Beijing court on Thursday.</strong></p> <p>Ma Laike, deputy head of Beijing No. 1 Intermediate People&rsquo;s Court, says<strong> incorporating artificial intelligence into the legal system&nbsp;<em>&ldquo;will decrease the cost of litigation, save trial resources and improve the efficiency of justice.&rdquo;</em></strong></p> <p>Xiaofa isn&rsquo;t the first AI to make an appearance in a Chinese court, and it certainly won&rsquo;t be the last, as&nbsp;<em>China Daily</em>&nbsp;explained in its Friday article:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;The Supreme People&rsquo;s Court has ordered Chinese courts at all levels to build technology-friendly systems for lawsuits and explore the use of big data and AI to help judges and litigants search documents and resolve cases.&rdquo;</em></strong></p> </blockquote> <p>Last October, the country<a href="" rel="noopener" target="_blank">&nbsp;unveiled</a>&nbsp;Faxiaotao, a robot that helps people determine if they have a lawsuit. If the robot determines they do have a legal issue, it also helps them find the right attorney. Jiang Youyi, who is in charge of Faxiaotao&rsquo;s technology, used copyright infringement as an example in describing the machine&rsquo;s function.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;Within a few minutes, the robot verifies whether there is an actionable unfair competition dispute and tells the inquirer who the three best specialist lawyers are to handle the case,&rdquo;</em>&nbsp;</strong>he<a href="" rel="noopener" target="_blank">&nbsp;told</a>&nbsp;<em>China Daily</em>.</p> </blockquote> <p>On the criminal side of things, the&nbsp;<em>Telegraph</em>&nbsp;<a href="" rel="noopener" target="_blank">reported</a>&nbsp;in August that AIs have helped determine sentences in over 15,000 cases since debuting in Chinese courts last year. <strong>Those robots, which the outlet describes as having&nbsp;<em>&ldquo;heads shaped like toasters,&rdquo;</em>&nbsp;can approve indictments and even generate search warrants.</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="705" height="343" alt="" src="" /> </div> </div> </div> artificial intelligence Beijing court China Chinese court Intermediate People’s Court Law Lawsuit Lawyer Learning Philosophy of law Robot Supreme People’s Court UN Court Tue, 17 Oct 2017 19:50:00 +0000 Tyler Durden 605489 at Schrodinger's Market: Goldman Now Has Two Year-End S&P Price Targets <p>For months, we were wondering how much longer Goldman would ignore the relentless market meltup without revising its year-end S&amp;P500 price target, which at 2,400 was not only among the lowest on Wall Street, but also some 150 points away from twhere the S&amp;P currently is. Furthermore, as of this weekend, Goldman's 2018 and 2019 targets for the US equity index, were 2,500 and 2,600, implying there was only 50 points of upside for the next 26 months.</p> <p>All that changed today, when Goldman unveiled that quantum mechanics is not the only arena where objects can exist in superposition: it turns out the "Schrodinger's S&amp;P" can also have two distinct <span style="text-decoration: line-through;">states</span> prices at the same time, too. </p> <p>In a report from chief equity strategist David Kostin, he unveils that Goldman now has not one but two price targets for the S&amp;P500: the first one is the traditional one, the same 2,400 as noted before. However, in a plot twist, one which casts the entire role of equity strategist into question, Kostin also said that the S&amp;P 500 price target may "perhaps be 2650" if tax reform passes.</p> <p>As he explains, "<strong>the 2400 target assumes no reform and P/E of 17.3x. 65% probability of passage by 1Q." However, "with tax reform, target could be 2650 (17.9x)</strong>."</p> <p>Of course, the fact that it is Kostin's job to take all these probabilities into account when making his year end price target - his <strong>one </strong>price target - seems to be lost on the strategist, who like the rest of Wall Street had no idea how far the S&amp;P would keep rising and instead of chasing the market, has decided to just bracket it with a low and high "target." And what better way to avoid getting pestered by angry clients at the end of the yearm than to just give them the option of picking which target they like better. </p> <p>This is how Goldman gets from its baseline 2018 EPS of $139 to the higher possible scenarios, incorporating a tax plan, and boosting EPS by as much as 12%:</p> <p><a href=""><img src="" width="500" height="361" /></a></p> <p>What makes today's report even more awkward is that despite the cheap cop out in which Goldman kinda, sorta raises its price target but doesn't really (recall Goldman's baseline is that the odds of a tax deal getting done by Q1 are 65%), is that in the very next sentence Goldman admits that stocks are already overvalued: </p> <ul> <li><strong>S&amp;P 500 index trades at high valuation on most metrics vs. last 40 years (88th percentile). <br /></strong></li> </ul> <p>Even more troubling, while the average index shows some room for upside at "only" the 88th percentile of historical caluations (which is dragged lower by the fact that companies no longer spend on CapEx), <strong>the median stock now trades at 98% percentile of all tiem valuations, meaning that for all intents and purposes, it has never been higher.</strong></p> <p><a href=""><img src="" width="500" height="374" /></a></p> <p><a href=""><img src="" width="500" height="367" /></a></p> <p>Here are the visual breakdowns of some key valuation metrics:</p> <p><img src="" width="500" height="378" /></p> <p>And while stocks may appear cheap on a FCF yield basis, Goldman concedes that this merely reflects the "plunge in capital spending."</p> <p><a href=""><img src="" width="500" height="386" /></a></p> <p>Nowhere is the plunge in investment spending more obvious than in the following chart which shows <strong>that real capex has been flat since 2001</strong>!</p> <p><a href=""><img src="" width="500" height="286" /></a></p> <p>Finally, for those who aren't skeptical enough already, here is Goldman admitting that the only source of stock purchases are... <strong>the companies themselves</strong>:</p> <ul> <li><strong>Money Flow: Positive net demand for shares only because Buybacks offset aggregate net selling by combination of other ownership categories</strong></li> </ul> <p><a href=""><img src="" width="500" height="301" /></a></p> <p>Luckily, none of the above matters in a world in which Bill Blain, <a href="">said yesterday</a>, "<strong>This Time It Really Is Different! The Machines Have Taken Over And They Will Never Sell." </strong>Blain was joking, although perhaps ironically he had stumbled upon the truth that has made this market into what it is today. </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="441" height="208" alt="" src="" /> </div> </div> </div> Business Meltup None S&P S&P 500 Tue, 17 Oct 2017 19:40:14 +0000 Tyler Durden 605503 at Hawaii Judge Blocks Trump's Travel Ban For The Third Time <p>In the latest court challenge to the Trump administration&rsquo;s push to prevent potentially dangerous individuals from entering the US, a district court judge has blocked the Trump administration&#39;s third travel ban, which it had introduced late last month following the expiration of a temporary ban that had been hobbled by court challenges.</p> <p>The decision from Hawaii-based Judge Derrick K. Watson &ndash; a recurring Trump antagonist who also challenged the last two bans - in Hawaii is sure to be appealed.<strong> But for now, at least, it means that the administration cannot restrict the entry of travelers from six of the eight countries that officials said were either unable or unwilling to provide information the US wanted to vet their citizens, </strong>according to the <a href="">Washington Post.</a></p> <p>The Trump administration unveiled the updated ban late last month. The updated ban &ndash; which, like its predecessor, was purportedly designed to avoid a court challenge &ndash; <strong>abandoned wholesale prohibitions in favor of severe restrictions on travelers from an expanded group of eight countries.</strong></p> <p><a href=""><img alt="" src="" style="width: 500px; height: 282px;" /></a></p> <p><strong>The open-ended ban targeted people from Iran, Libya, Syria, Yemen, Somalia, Chad and North Korea, as well as certain government officials from Venezuela. It was slated to take effect tomorrow,</strong> according to <a href="">Reuters</a>.</p> <p>When President Trump issued the third version of his travel ban in late September, the Supreme Court canceled oral arguments for two challenges to the policy&#39;s second iteration. They later dismissed one of the challenges to the March version of the ban.</p> <p>The State of Hawaii, the International Refugee Assistance Project and other groups who had sued Trump over the March travel ban asked judges to block the ban, <strong>arguing that Trump had exceeded his legal authority to set immigration policy, and that the latest measure &mdash; like the last two &mdash; fulfilled his unconstitutional campaign promise to implement a Muslim ban.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;The ban, like its predecessors, delivers on the President&rsquo;s longstanding promise to exclude Muslims from the United States, striking at the very core of our Nation&rsquo;s founding values of religious freedom and equality,&rdquo; </strong>those suing in a separate case in federal court in Maryland wrote.</p> <p>&nbsp;</p> <p><strong>&ldquo;Unlike its predecessors, the new ban is indefinite, and potentially permanent.&rdquo;</strong></p> </blockquote> <p><strong>The block will most likely be challenged,</strong> and a <u><strong>final ruling will likely be issued by the Supreme Court.</strong></u></p> <p>Fortunately for Trump, legal analysts have said those challenging the latest travel ban face an uphill battle because the ban represents a considered effort following a lengthy back-and-forth with the governments of the affected countries. The new ban includes two countries &ndash; North Korea and Venezuela &ndash; that are not majority Muslim, weakening the plaintiff&rsquo;s argument that the ban is discriminatory.</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="806" height="455" alt="" src="" /> </div> </div> </div> American people of German descent Climate change skepticism and denial Derrick Watson Donald Trump Environment Executive Order 13769 Group of Eight Group of Eight Iran Muslim ban North Korea Political positions of Donald Trump Politics Presidency of Donald Trump Reuters Somalia Supreme Court The Apprentice Trump Trump Administration United States WWE Hall of Fame Tue, 17 Oct 2017 19:20:26 +0000 Tyler Durden 605502 at Peso, Loonie Spike After NAFTA Discussions End With "Success"... Delay Until 2018 <p>NAFTA negotiators said they <strong>"successfully completed" Round 4 of their discussions</strong>... adding tha<strong>t talks will be extended past the end-2107 deadline</strong> (odd definition of success?). Nevertheless, this seems to have appeased the FX markets as both the peso and loonia are spiking..</p> <ul> <li><strong><br /> *NAFTA NEGOTIATORS SAY THEY SUCCESSFULLY COMPLETED ROUND 4</strong></li> <li>*NAFTA MINISTERS SAY MEXICO TO HOST ROUND 5 NOVEMBER 17-21</li> <li>*NAFTA MINISTERS EXTEND PERIOD BETWEEN ROUND 4 AND ROUND 5</li> <li>*NAFTA MINISTERS SAY NEW PROPOSALS HAVE CREATED CHALLENGES, GAPS</li> <li>*FREELAND: NAFTA HAS BEEN GOOD FOR MILLIONS IN ALL THREE NATIONS</li> <li><strong>*NAFTA MINISTERS SAY MORE ROUNDS TO BE SCHEDULED THROUGH Q1 2018</strong></li> </ul> <p>And the dollar is being sold...</p> <p><a href=""><img src="" width="600" height="362" /></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="2024" height="1220" alt="" src="" /> </div> </div> </div> Americas Business Canada Canada–United States trade relations Economy Economy of North America FX International relations Mexico Mexico Nafta Negotiation North American Free Trade Agreement Politics Presidency of Bill Clinton Tue, 17 Oct 2017 19:16:15 +0000 Tyler Durden 605501 at Bubble-nomics <p dir="ltr"><em><a href="">Authord by Chris Hamilton via Econimica blog,</a></em></p> <h3 dir="ltr"><u><em>Question: What is a bubble?</em></u></h3> <p dir="ltr"><strong>Answer: </strong>A bubble is trade in an asset at a price range that strongly exceeds the asset&#39;s intrinsic value.&nbsp; Or it could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.</p> <h3 dir="ltr"><em><u>Question: How do you know when you are in a bubble?</u></em></h3> <p dir="ltr"><strong>Answer: </strong>Gauge asset prices against a standard, foundational premise to determine if the price appreciation is warranted.</p> <p dir="ltr">Lucky for us, the Federal Reserve provides exactly what is needed to show how unjustifiable current prices are against households disposable income.&nbsp; The chart below is all US household&#39;s net worth (current value of all real estate, stocks, bonds, etc.) as a percentage of their disposable personal income (disposable income is what they have left to spend or save after paying their taxes).&nbsp; To round out the picture, I&#39;ve added in the net growth in full time workers during each period, dramatically decelerating.</p> <p dir="ltr"><a href=""><img alt="" src="" style="width: 601px; height: 353px;" /></a></p> <p dir="ltr"><strong>Since 1970,</strong> every time asset values have risen above 520% of households disposable income (the dashed line in the chart) then <strong>the US has been in a bubble and a subsequent crash has followed.</strong></p> <p dir="ltr">This has simply meant asset values growing much faster than households income or households capability to sustain those price increases.<strong>&nbsp; The depth of each crash has been relative to the overshoot of asset values on the upside. </strong></p> <h3 dir="ltr"><u><em>Why???</em></u></h3> <p dir="ltr"><strong>I hear much discussion that the millennials are the largest age group in US history and are expected to drive growth in demand.&nbsp; However, most people fail to understand what this truly means.&nbsp;</strong></p> <p dir="ltr">The millennials are just marginally larger than the boomers but what this truly means is zero growth.&nbsp; The millennials are just meeting the previous high water mark the boomers set.&nbsp; When the boomers came through, they nearly doubled the previous high water mark.</p> <p dir="ltr"><strong>The chart below shows annual population change of the 25 to 54year old US population vs. the HHNW as a percentage of disposable income.&nbsp; They are essentially mirror inverse images of one another</strong>.</p> <p dir="ltr"><a href=""><img alt="" src="" style="width: 600px; height: 280px;" /></a></p> <p dir="ltr">If we broaden out to view the annual change of the entire working age population (15 to 64 year olds) since 1970 vs. HHNW as a percentage of their disposable income...we have something.&nbsp;</p> <p dir="ltr"><strong>I think we are pretty safe to say the bubbles have been in response to the decelerating population growth (said otherwise, decelerating growth in demand).</strong></p> <p dir="ltr"><img alt="" src="" style="width: 601px; height: 276px;" /></p> <p dir="ltr">What&#39;s it all about...I take my best guess <a href="" target="_blank">HERE</a>.&nbsp; However, discussions of EROI should probably also be in the mix as well.</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="519" height="305" alt="" src="" /> </div> </div> </div> Business cycle Demand Economic bubble Economy ETC Fail Federal Reserve Finance Financial crises Financial economics Millennials Money Personal Income Real estate Real estate bubble US Federal Reserve Valuation Tue, 17 Oct 2017 19:10:00 +0000 Tyler Durden 605486 at Harvey Weinstein Officially Resigns From Weinstein Co. Board <p><strong>Two weeks after he was unceremoniously fired from the board of the film studio he co-founded, disgraced Hollywood producer Harvey Weinstein has officially announced his &quot;resignation&quot; from the Weinstein Co. Board of Directors,</strong> <a href="">Variety </a>reported, presumably ending his quest to be reinstated as head of the company.</p> <p>Weinstein made the resignation official at the company&rsquo;s Tuesday board meeting, where it was rumored he would press the board to rescind his firing, likely instigating a clash with his brother Bob, with whom he co-founded the production company.</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 255px;" /></a></p> <p><strong>Weinstein is in rehab in Arizona</strong>, but he was expected to call in to the meeting and threatened to sue the company he founded with his brother in 2005. Harvey owns 22% of the company&rsquo;s stock, according to Variety.</p> <p>The board had already fired Weinstein on Oct. 8, just days after the New York Times published the first of a series of stories exposing the producer&rsquo;s 30-year history of harassing and assaulting women. In its original story, the Times confirmed that Weinstein had reached settlements with eight victims that included non-disclosure agreements.</p> <p><strong>More than 30 women have accused Weinstein of harassment, groping and assault.</strong> The list includes famous actresses including Gwyneth Paltrow and Angelina Jolie.</p> <p>After the New Yorker reported that the New York Police Department had been planning to arrest Weinstein before Manhattan Attorney Cyrus Vance Jr. quashed the investigation, the NYPD and Scotland Yard both announced that they had opened investigations into Weinstein. The FBI is also reportedly pursuing a federal case. &nbsp;</p> <p>As Variety notes, the Weinstein Co. board has faced uncomfortable questions about how much it knew, with top company figures like Bob Weinstein and president David Glasser saying they knew that Harvey Weinstein could be angry and abusive, and knew that he cheated on his wife, but did not know of his alleged sexual abuses.</p> <p>After initially denying that it was pursuing a sale, WSJ reported yesterday that <strong>Thomas Barrick&rsquo;s Colony Capital had extended an emergency loan to Weinstein, </strong>and was also in talks to buy the film studio.<br />&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="590" height="301" alt="" src="" /> </div> </div> </div> Cinema of the United States Colony Capital Entertainment FBI Federal Bureau of Investigation Film Hoodwinked! New York Police Department New York Times Scotland Yard The Weinstein Company Weinstein Tue, 17 Oct 2017 18:53:32 +0000 Tyler Durden 605499 at