en Previewing The Day's Big Event: What To Expect From The Apple's Earnings Report <p>When Apple reports earnings after the close today, all eyes will be on its revenue, specifically how many fewer iPhones it sold in the quarter (consensus expects a drop of 22%), and more importantly profits for one reason: over the past several years Apple has been the single biggest contributor to S&amp;P profitabillity. In 2015, Apple's profit rose 21% and it made more money than any other company in the S&amp;P500 - at $53.7 billion in net income it accounted for 7% of the S&amp;P's bottom line. </p> <p>However, that ended promptly in the first quarter when APPL posted a substantial drop in both EPS and iPhone sales. It is about to get worse: according to Drexel Hamilton's Brian White, "the company is heading for its biggest iPhone decline ever."</p> <p>As such, AAPL is truly in a class of its own, details of which are revealed courtesy of <a href="">FactSet's John Butters</a> who writes that for the calendar second quarter (fiscal third quarter for Apple), <strong>the current mean EPS estimate is $1.40, compared to year-ago actual EPS of $1.85, </strong>a 24.5% decline on the back of a 22% drop in iPhone sales. If Apple reports a year-over-year decline in EPS for Q2 2016, it will mark the second straight quarter that the company has reported a year-over-year decline in EPS. The last time Apple reported two consecutive quarters of annual earnings declines was Q2 2013 through Q3 2013 (fiscal Q3 2013 through Q4 2013 for Apple).</p> <p><a href=""><img src="" width="500" height="326" /></a></p> <p>&nbsp;</p> <p>As a result of this projected decline in EPS, <strong>Apple is expected to be the largest contributor to the expected earnings decline for the S&amp;P 500 Information Technology sector for Q2 2016</strong>. The blended (combines actual results for companies that have reported and estimated results for companies yet to report) earnings decline for the Information Technology sector is -3.9%. <strong>Excluding Apple, the blended earnings growth rate for the sector would be 2.2%.</strong></p> <p><a href=""><img src="" width="500" height="327" /></a></p> <p>&nbsp;</p> <p>More surprising, is that while market participants have a habit of excluding energy companies when looking at S&amp;P performance, what they should be excluding instead is Apple (and Google). As the chart below shows, while the EPS of the S&amp;P500 are expected to decline 3% in Q2, if one excludes just AAPL and GOOG, revenues would increase by 2%, while EPS would rebound 6% Y/Y. In fact, the benefit of excluding AAPL and GOOG for Q2 S&amp;P500 results is greater than excluding all Energy companies.</p> <p><a href=""><img src="" width="500" height="549" /></a></p> <p>&nbsp;</p> <p>As of today, if Apple reports actual EPS equal to or below the mean EPS estimate for the quarter, <strong>it will mark the first time that Apple has been the largest detractor to earnings growth for the Information Technology sector for two consecutive quarters since Q2 2013 through Q3 2013</strong>.</p> <p>Should AAPL disppoint, the responsible culprit will be just one: the iPhone. Over the past three years on average, the iPhone product segment has accounted for about 60% of the total revenues generated by Apple. From Q1 2014 through Q4 2015, the iPhone product segment reported average year-over-year revenue growth of 31%. However, last quarter (Q1 2016), the segment reported a year-over-year decline in revenues of -18%. For Q2 2016, the iPhone product segment is projected to report a year-over-year decline in revenues of -22%.</p> <p>Still, even in a worst case scenario when AAPL misses already substantially discounted earnings, the story is not over according to Drexel Hamilton. As the abovementioned White writes, "similar to the negative sentiment that engulfed Apple in late 2012 through the summer of 2013, the “gloom and doom” around Apple resurfaced in late 2015 and has picked up steam in 2016. Akin to the dog days of 2013, we believe this summer will prove to be a bottoming process for Apple’s stock with our estimates pointing to a trough in the sales cycle, profit cycle and iPhone unit cycle in the June quarter."</p> <p>Then again, perhaps the magic has run out this time. Recall how Apple staged its dramatic recovery last time:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Apple’s launch of the iPhone 6/6 Plus with bigger screen sizes in September 2014 drove a massive upgrade that resulted in 37% iPhone unit growth in FY:15 and the after effect has us modeling an 11% decline in FY:16. This equates to average iPhone unit growth of nearly 13% over this two year period. Given more favorable comparisons and the expected launch of iPhone 7 this September, we believe iPhone units will resume growth in 2Q:FY17 and deliver growth for the full year FY:17. Although we expect a 25-35% YoY total 3Q:FY16 revenue decline in Greater China, India is ramping and we believe Apple has an opportunity to generate $10-15 billion in annual sales by FY:21. For 3Q:FY16<strong>, we are modeling iPhone units of 38.55 million and this 19% YoY decline represents the biggest decline ever</strong>, but also the trough in this iPhone cycle based on our current estimates.</p> </blockquote> <p>It remains to be seen if AAPL can pull off two historic comebacks in two years, but for now we will watch what Apple reports after the close, where expectations are as follows:</p> <ul> <li>3Q EPS est. $1.39 (range $1.32-$1.47)</li> <li>3Q rev. est. $42.1b (range $41.2b-$43.7b); AAPL forecast $41b-$43b (April 26)</li> <li>3Q gross margin est. 37.9% (range 37.5%-39.5%) AAPL forecast 37.5%-38%</li> <li>4Q EPS est. $1.60 (range $1.39-$1.77); avg. est. down ~2.2% over past 4 weeks</li> <li>4Q rev. est. $45.6b (range $42.4b-$49.4b)</li> <li>4Q gross margin est. 38.4% (range 36.5%-40.0%)</li> </ul> <p><strong>UNIT BREAKDOWN</strong></p> <ul> <li>3Q iPhone unit est. 39.9m (11 ests., complied by Bloomberg News) </li> <li>iPhone ASP est. ~$606 (7 ests.)</li> <li>3Q iPad unit est. 9.1m (9 ests.) </li> <li>iPad ASP est. ~$443 (5 ests.)</li> <li>3Q Mac unit est. 4.4m (9 ests.)</li> <li>3Q Watch est. 2.0m (8 ests.) </li> <li>Watch ASP ~$448 (5 ests.)</li> </ul> <p><strong>ANALYST COMMENTARY</strong></p> <ul> <li><strong>RBC (outperform): </strong>Expect 3Q rev., units in-line with ests.; potential for “more muted gross margin expansion” in 4Q and beyond due to iPhone SE, at least until iPhone 7 cycle kicks in <ul> <li>Investors will focus on iPhone units/mix, operating expense dynamics and whether AAPL will curtail opex given slower demand</li> </ul> </li> <li><strong>Nomura (buy): </strong>3Q and 4Q iPhone numbers look “uninspired” as SE demand has exceeded AAPL’s expectations, in part at the expense of 6s units <ul> <li>Early indications suggest iPhone demand may steady in 1Q due to iPhone 7 and carrier promotions</li> </ul> </li> <li><strong>UBS (buy): </strong>Other than solid services growth and maybe some improvement in China, there “probably won’t be too many positives” in qtr, with SE success likely to pressure ASPs</li> <li><strong>Oppenheimer (perform): </strong>Doesn’t expect 3Q results and 4Q forecasts to change view on AAPL; investors are looking beyond qtr to iPhone 7 introduction in Fall <ul> <li>Expect iPhone 7 product cycle to be weak due to lack of major improvements, with more major update expected in 2017</li> </ul> </li> </ul> <p><strong>HISTORICAL</strong></p> <ul> <li>AAPL has beaten EPS est. 7 of last 8 qtrs, beaten rev. est. 5 of last 8 qtrs; shrs fell day after 4 of previous 8 qtrs</li> <li>AAPL 43 buys, 7 holds, 2 sells, avg. PT ~$123: Bloomberg data</li> </ul> <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="768" height="501" alt="" src="" /> </div> </div> </div> Apple Bloomberg News China GOOG Google India OpEx recovery Tue, 26 Jul 2016 18:53:25 +0000 Tyler Durden 567295 at (Con)fidence Game <p><a href=""><em>Submitted by Jeffrey Snider via Alhambra Investment Partners,</em></a></p> <p><span style="color: #000000;"><strong>Oil prices fell again today and it seems that gasoline is now on everyone&rsquo;s mind.</strong> As <a href="">noted last week</a>, I don&rsquo;t think that is the reason for the price action except in that it tells a very different story than the one in the media about &ldquo;stimulus&rdquo; hope.</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #000000;">The significance of crude and gasoline is the difference in narratives and what is supporting them. Stock prices at record highs, or near them, is likely being driven by renewed hope for monetary policy wherever it may strike, all the while forgetting how patently ineffective past monetary policy has been. The energy sector and the renewed drop in the futures curve (the whole curve, though more so at the front) is remembering the consequences of monetary policy that doesn&rsquo;t work while at the same time finding still little evidence that anything has changed (and some evidence that if something has changed it is only further in the &ldquo;wrong&rdquo; direction). Stocks once more trading, though much less enthusiastically, on what &ldquo;should be&rdquo;; energy trading on what actually is. All that is also a replay of last year, specifically last July.</span></p> </blockquote> <p><span style="color: #000000;"><strong>As it turns out, there is a lot more to the gasoline &ldquo;glut&rdquo; than just the inventory numbers suggest.</strong> It has<em> already</em> become a major factor in actual activity, suggesting that there is a big problem here. In other words, unlike what is believed about monetary policy and especially <a href="">the whispers</a> of &ldquo;helicopter money&rdquo; more recently, the real world has way too much gas to the point of exposing in 2016 as 2015 <a href="">narrative vs. reality</a>.</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #000000;">In a summer of discontent with high inventories and an unseasonably weak demand, some refiners have started blending winter grade gasoline earlier than usual to sell later in the year, two trading sources told Reuters last week.</span><span style="color: #000000;">&nbsp;</span></p> <p>&nbsp;</p> <p><span style="color: #000000;">The switchover from summer blends, which are more environmentally friendly and costlier to produce, usually happens in August for sale starting on Sept. 15, the date allowed under U.S. government regulations. Winter blends are more likely to evaporate in the summer heat and cause smog.</span></p> </blockquote> <p><span style="color: #000000;"><strong>Betraying these actual physical conditions are news accounts of very &ldquo;strong&rdquo; particularly <a href="">US economic fundamentals</a> as well as near-record stock indices.</strong> Some of this disconnecting hope set purposely against physical condition can be traced to what is surely seasonality that escapes the traditional perspective of either recession or not recession. But I don&rsquo;t think that is the whole story.</span></p> <p><img alt="ABOOK July 2016 WTI Gas Inventory Last 2" class="aligncenter size-full wp-image-39460" height="361" src="" width="641" /></p> <p>&nbsp;</p> <p><span style="color: #000000;"><strong>There is another element to all this that is undoubtedly more difficult to find and unpack.</strong> I think more is occurring than we may be aware, and that includes central banks in places we might not suspect doing things we can&rsquo;t really define. If all that is a bit too nonspecific, there is a reason &ndash; in 2016, specific is a problem.</span></p> <p><img alt="ABOOK July 2016 More Oil WTI CNY" class="aligncenter size-full wp-image-39482" height="361" src="" width="641" /></p> <p>&nbsp;</p> <p><span style="color: #000000;"><strong>In 2015, central banks were, largely, content to depend upon their narrative of 2014, meaning that weakness was truly believed as temporary and would soon dissipate. </strong>The events since the middle of last year showed that was nothing but fantastic folly. But monetary policy around the world still depends upon that narrative, meaning central banks have put themselves in such a bind they can&rsquo;t really act without confirming they had 2015 all wrong. Discretion is advisable from their perspective; to get the world feeling better <em>without appearing</em> to do much to make that happen.<strong> Europe and Japan are the exceptions because there is no ambiguity.</strong></span></p> <p><span style="color: #000000;">One example, I think, is in oil with the<strong> Chinese <a href="">taking crude</a> rather than &ldquo;dollars.&rdquo; </strong>Another one may have presented itself in Brazil. The last IMF update (through April) suggests something <a href="">possibly extraordinary</a> (subscription required).</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #000000;">In February, the net short position was $108.1 billion, practically unchanged going back to September 2015. In March, the net short fell to $105.6 billion; then just $70.7 billion in April. In the breakout for the line in the IMF data, the overall short position itself remained exactly the same, meaning that what changed was the sudden and so far unexplained introduction of long positions in &ldquo;Financial instruments denominated in foreign currency and settled by other means.&rdquo; April&rsquo;s new &ldquo;long&rdquo; was more than $30 billion &ndash; a huge amount.</span></p> </blockquote> <p><span style="color: #000000;">In that article, I walk through a potential explanation of what this new &ldquo;long&rdquo; position <em>could</em> mean, though I have little hard data so it remains a speculative theory (which is why it stays behind the paywall). <strong>The notion is, however, consistent with China taking oil; desperate times call for desperate measures.</strong></span></p> <p><img alt="SABOOK July 2016 Real Brazil IMF Net Short" class="aligncenter size-full wp-image-39484" height="361" src="" width="681" /></p> <p><img alt="SABOOK July 2016 Real Brazil IMF Short v Long" class="aligncenter size-full wp-image-39483" height="361" src="" width="681" /></p> <p><span style="color: #000000;"><strong>That was always the danger to playing up the middle part of this year as some kind of rebirth. Not only did &ldquo;they&rdquo; do the same last year, these sorts of countermeasures, hidden, narrative, or explicit, are asymmetric risks.</strong> In other words, the payoff in particularly economic terms was always likely to be both small and improbable; the downside, by contrast, could be enormous in continuing the same line of &ldquo;harmful&rdquo; inquiry of markets further dismissing central banks as anything other than bluster.</span></p> <p><span style="color: #000000;"><strong>The financial and economic world in 2016 is, more than anything, a <a href="">confidence game</a> (dual meaning intended). The year started with confidence severely shaken, so gasoline (as one real economic variable) and hiding intervention (the further hint of desperation) are more likely to have lasting negative effects than effusive but unbacked mainstream praise for the nth year in a row. </strong>There are a lot of layers to untangle, but underneath all that it is really <a href="">simple &ldquo;dollar&rdquo; conditions</a> and the imperfect, ill-suited responses to them. &nbsp;</span></p> <p><img alt="ABOOK July 2016 Depression2b" class="aligncenter size-full wp-image-39488" height="621" src="" width="657" /></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="622" height="336" alt="" src="" /> </div> </div> </div> Brazil Central Banks China Crude Japan Monetary Policy Price Action Reality Recession Reuters Tue, 26 Jul 2016 18:40:00 +0000 Tyler Durden 567287 at Meanwhile At The DNC <p>Presented with no comment...<em> (ahead of today's roll-call vote)</em></p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="461" /></a></p> <p>&nbsp;</p> <p><a href=""><em>Source:</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="686" height="527" alt="" src="" /> </div> </div> </div> Tue, 26 Jul 2016 18:25:00 +0000 Tyler Durden 567286 at Are Apple Options Traders Too Complacent Ahead Of Earnings? <p>Despite the stock&#39;s recent demise, and &#39;shocking&#39; analyst downgrades, <strong>Apple options traders appear exceptionally calm</strong> ahead of tonight&#39;s earnings report...</p> <p>Even with Apple forecast to post a slide in quarterly earnings after the close, investors are<strong> calmer than they were before previous reports</strong>. As Bloomberg reports, The CBOE Apple VIX Index, which tracks volatility expectations for shares of the iPhone maker, closed yesterday at its<strong> second-lowest level on record before an earnings release, and 16 percent below its one-year average. </strong></p> <p><a href=""><img height="318" src="" width="600" /></a></p> <p>&nbsp;</p> <p>Options are pricing in a 4.4% gain or drop in the stock after the results, <em><strong>less than its average move following the past four reports.</strong></em></p> <p><em><strong><a href=""><img height="310" src="" width="600" /></a></strong></em></p> <p>Since the earnings tumble, it seems the correlation regime of the stock price and volatility has flipped (until very recently).</p> <p><em><strong>Charts: Bloomberg</strong></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="944" height="500" alt="" src="" /> </div> </div> </div> Apple CBOE Volatility Tue, 26 Jul 2016 18:13:23 +0000 Tyler Durden 567285 at Why Hillary Is Nervous: "More Leaks May Be Coming" <p>Over the weekend, Wikileaks posted a treasure trove of emails from various members of the Democrat party which has laid ruin to any hope for civility at the DNC's convention in Philadelphia.&nbsp; That said, <strong>Hillary's campaign seems to be even more concerned about what may be leaked next</strong>. &nbsp;&nbsp; </p> <p>Jennifer Palmieri, Hillary's communication director, recently told reporters:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“<strong>The WikiLeaks leak was obviously designed to hurt our convention, I don’t think they’re done. That’s how they operate.</strong>&nbsp; We can’t know, but it’s part of the reason that we wanted people to understand our belief that the Russians are behind this.&nbsp; People need to understand — when these leaks happen — what they’re designed to do.”</p> </blockquote> <p><strong>Palmieri added that the Clinton campaign was not worried about it's own email security</strong>...which we're sure the American people will find very reassuring in the wake of that pesky little FBI investigation in which we learned just how secure Hillary's email account was.</p> <p>Palmieri’s comments come as Democrats prepare to officially nominate Clinton for president, making her the first woman to be nominated for president by one of the two major political parties.<strong> Judging by yesterday's intraparty strife, one can only imagine how raucous today's roll-call will be.</strong></p> <p>Call us crazy, but the campaign seems to be spending way too much time spinning a narrative about Russian involvement, even going so far as to call on Hillary's friends at the FBI to look into the issue, for this scandal to fade quietly into the night.&nbsp; <strong>Something tells us that Jennifer knows more than she's letting on and that we'll get to review some more leaked emails soon.</strong></p> <p>Alternatively, we're sure Bill could arrange for a <strong>purely coincidental meeting with Putin on a tarmac somewhere</strong> to discuss his "grandchildren" but something tells us his audience might not be as "accommodating" as last time he tried that.<strong></strong></p> <p><strong><a href=""><img src="" width="506" height="347" /></a><br /></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="800" height="435" alt="" src="" /> </div> </div> </div> FBI Tue, 26 Jul 2016 18:00:14 +0000 Tyler Durden 567283 at Michelle Obama Takes A Shot At "Make America Great Again" <p><a href=""><em>Submitted by Kaitlan Collins via The Daily Caller,</em></a></p> <p><strong>Michelle Obama said Hillary Clinton is the only candidate in this election who she trusts to be president.</strong></p> <div class="wp-caption alignnone" id="attachment_5148793" style="width: 650px;"><img alt="(Photo: SAUL LOEB/AFP/Getty Images)" class="size-full wp-image-5148793" height="395" src="" width="640" /><br /> <p class="wp-caption-text"><em>(Photo: SAUL LOEB/AFP/Getty Images)</em></p> </div> <p>The first lady addressed the Democratic National Convention at the Wells Fargo Center in Philadelphia Monday night.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Thank you so much,&rdquo; Michelle said. &ldquo;It&rsquo;s hard to believe that it&rsquo;s been eight years since I first came to this convention. <strong>Remember how last time I told you about my husband&rsquo;s character and conviction?</strong> The traits we&rsquo;ve seen every day in the White House? I also told you about our daughters &mdash; how they are the heart of our hearts.&rdquo;</p> </blockquote> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p>Obama said&nbsp;she worries about what her children will learn from the next president.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;How do we insist that the hateful language they hear from public figures on tv does not represent the true spirit of this country?<strong> How do we explain that when someone is cruel, you don&rsquo;t stoop to the level of the bully? That when they go low, we go high. With every word we utter, every action we take, we know our kids are watching us</strong>.&rdquo;</p> </blockquote> <p>&ldquo;We know our words and actions matter, not just to our girls, but to kids across the country,&rdquo; she said. &ldquo;Kids, like the little black boy who looked at my husband with wonder and said, &lsquo;Is my hair like yours?&#39;&rdquo;</p> <div class="wp-caption alignnone" id="attachment_5148804" style="width: 650px;"><img alt="(Photo: ROBYN BECK/AFP/Getty Images)" class="size-full wp-image-5148804" height="637" src="" width="640" /> <p><em>(Photo: ROBYN BECK/AFP/Getty Images)</em></p> </div> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;In this election, and every election, it&rsquo;s about who will have the power to shape our children for the next four or eight years of their lives. I am here tonight, because in this election, there is only one person who I trust with that responsibility, <strong>only one person who I believe is truly qualified to be President of the United States, and that is our friend Hillary Clinton</strong>.&rdquo;</p> <p>&nbsp;</p> <p>&ldquo;See, I trust Hillary to lead this country because&nbsp;I&rsquo;ve seen <strong>her lifelong devotion to this nation&rsquo;s children</strong> &mdash; not just her own daughter who she has raised to perfection &mdash; but every child who needs a champion.&rdquo;</p> <p>&nbsp;</p> <p>&ldquo;When she didn&rsquo;t win the election eight years ago, <strong>she didn&rsquo;t get angry or disillusioned. Hillary did not pack up and go home</strong>. As a true public servant, Hillary knows this is so much bigger than her own desires and disappointments. So she proudly stepped up to serve our country once again.&rdquo;</p> <p>&nbsp;</p> <p>&ldquo;There were plenty of moments when she could have decided this was too hard. The price of public service too high. But here&rsquo;s the thing: what I admire most about Hillary is that she never buckles under pressure. She never takes the easy way out. Hillary Clinton has never quit anything in her life.&rdquo;</p> <p>&nbsp;</p> <p><strong>&ldquo;When I think about the kind of president I want for my girls, that&rsquo;s what I want.&rdquo;</strong></p> </blockquote> <p><u><strong>Then Obama took a shot at Donald Trump, without even saying his name.</strong></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;When you have the nuclear codes at you fingertips and military at your command, you can&rsquo;t make snap decisions,&rdquo; she said. <strong>&ldquo;You&nbsp;can&rsquo;t have thin skin or a tendency to lash out. You need to be steady and well-informed. I want a president with a record of public service, someone who&rsquo;s life work shows our children we don&rsquo;t chase fame and fortune for ourselves.&rdquo;</strong></p> <p>&nbsp;</p> <p>&ldquo;I want a president who will teach our children that everyone in this country matters.&rdquo;<strong> </strong></p> </blockquote> <div class="wp-caption alignnone" id="attachment_5148810" style="width: 650px;"><img alt="(Photo: SAUL LOEB/AFP/Getty Images)" class="size-full wp-image-5148810" height="457" src="" width="640" /><br /> <p class="wp-caption-text"><em>(Photo: SAUL LOEB/AFP/Getty Images)</em></p> </div> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;<strong>In this election, I&rsquo;m with her. </strong>Hillary Clinton has the guts and grace to keep coming back to put those cracks in the glass ceiling. That is the story of this country.&rdquo;</p> <p>&nbsp;</p> <p>&ldquo;I wake up every morning in a house that was built by slaves, and I watch my two black daughters playing with their dogs on the White House lawn,&rdquo; she said. &ldquo;Because of Hillary, my daughters now take for granted that a woman can be president of the United States.&rdquo;</p> <p>&nbsp;</p> <p>&ldquo;<strong>Don&rsquo;t let someone tell you this country isn&rsquo;t great &mdash; that we need to make it great again. Because, right now, this country is the greatest country on Earth.</strong></p> <p>&nbsp;</p> <p>&ldquo;Between now and November, we need to do what we did eight years ago &mdash; four years ago &mdash; we need to get our there and vote. We need to pour every last ounce of our strength into electing Hillary Clinton president.&rdquo;</p> </blockquote> <p>So that is what Michelle Obama actually said.</p> <p>*&nbsp; *&nbsp; *</p> <p>We wonder if, <a href="">as The Onion notes,</a> this<u><strong> is what she really wanted to say...</strong></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Her face fixed in an expression of apathetic detachment as she took the stage Monday night to raucous cheers and applause, First Lady Michelle Obama reportedly began her address to the Democratic National Convention by exhaling audibly and remarking that she would never get the past eight years of her life back.</p> <p>&nbsp;</p> <p><u><strong>&ldquo;Well, that was a colossal waste of my time,&rdquo; said Obama with an air of weary irritation before reminding the audience she had been 45 years old at her husband&rsquo;s inauguration and now she was &ldquo;fifty-fucking-two.&rdquo;</strong></u></p> <p>&nbsp;</p> <p><u><strong>&ldquo;You know, looking back on all of it, I&rsquo;m not sure there was a single worthwhile moment from the past eight years of my life. Nearly a decade down the drain. Jesus. Whatever, it&rsquo;s almost over</strong>.&rdquo;</u></p> <p>&nbsp;</p> <p><strong>The first lady then reportedly squinted at the prepared statement scrolling on the teleprompter in front of her, let out a fed-up sigh while slowly shaking her head, and walked silently offstage.</strong></p> </blockquote> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Incredible speech by an incredible woman. Couldn&#39;t be more proud &amp; our country has been blessed to have her as FLOTUS. I love you, Michelle.</p> <p>&mdash; President Obama (@POTUS) <a href="">July 26, 2016</a></p></blockquote> <script src="//"></script> <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="645" height="335" alt="" src="" /> </div> </div> </div> Donald Trump fixed President Obama The Onion Wells Fargo White House Tue, 26 Jul 2016 17:43:28 +0000 Tyler Durden 567240 at Stocks Slide After Japan's "Helicopter Money" Plan Leaks, Underwhelms <p>At the same time that the <a href="">Nikkei released its latest "market response" trial balloon</a>, where it posted an article around 2am local time clearly meant for US market consumption according to which BOJ officials "were said to be leaning more toward easing", the same Nikkei also published a preview of what Japan's helicopter money may look like. There is just one problem: at first read, and judging by the market's reaction, it appears to be rather underwhelming.</p> <p>As the <a href="">Nikkei reports</a>, "<strong>the Japanese government has proposed distributing 10,000 yen ($95) or more to low-income individuals as part of an upcoming plan for jump-starting economic growth." </strong></p> <p>Other proposals include a minimum-wage hike of 24 yen<strong>, or about 23 cents which would still be the most ever</strong>,&nbsp; to 822 yen an hour in fiscal 2016 as well as cutting the premiums that workers and their employers pay into the unemployment insurance program. The government submitted the outline to ruling coalition lawmakers Tuesday. </p> <p>The plan will span a supplementary budget slated for this coming fall and next fiscal year's main budget. The stimulus measures are expected to have a nominal value of 20 trillion yen to 30 trillion yen overall, with roughly 6 trillion yen over several years to consist of direct fiscal spending by the central and local governments. The rest would include such items as lending by government-backed financial institutions. </p> <p>Some more details from the Nikkei:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Ruling bloc member Komeito's proposal to issue vouchers meant to promote consumer spending was not included in the government-proposed outline. </p> <p>&nbsp;</p> <p><strong>The government favors distributing 10,000 yen in cash to low earners instead, but Komeito is holding out for 15,000 yen. </strong></p> <p>&nbsp;</p> <p>The roughly 22 million people who pay no residency tax because of insufficient income would be expected to qualify for the cash. Single individuals earning less than 1 million yen a year fall into this bracket. </p> </blockquote> <p>Some more details: officials also propose lowering the unemployment insurance premium from 0.8% of an insured worker's pay to 0.6% over several years. This would amount to 340 billion yen in relief for workers and employers, each of which contributes half. A company employee earning 4 million yen annually would save about 4,000 yen a year, which the government hopes would circulate back into the economy as spending. On the minimum wage, the Ministry of Health, Labor and Welfare will seek expanded subsidies for small and midsize enterprises to encourage them to raise pay. </p> <p>Productivity-boosting infrastructure improvements will also form part of the stimulus package. Taking advantage of ultralow borrowing costs, <strong>the government plans to provide some 6 trillion yen in financing for such investments. </strong>Part of this would go toward speeding up completion of JR Tokai's magnetic-levitation train line between Tokyo and Osaka by as much as eight years. A plan including infrastructure improvements meant to promote inbound international tourism and agricultural exports is due out later this year.</p> <p>* * * </p> <p>This is all great, there is just one problem. Judging by the market's kneejerk reaction, it was expecting more. </p> <p><a href=""><img src="" width="600" height="409" /></a></p> <p>Much more. </p> <p><a href=""><img src="" width="600" height="317" /></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="1247" height="851" alt="" src="" /> </div> </div> </div> Borrowing Costs Japan Nikkei Unemployment Unemployment Insurance Yen Tue, 26 Jul 2016 17:37:14 +0000 Tyler Durden 567282 at These Are The Best And Worst U.S. Cities To Own A House <p>Earlier today, in its latest update looking at March home prices, <a href="">Case Shiller pointed out that </a>"home prices continue to appreciate across the country", at just over 5%, a pace that has held since early 2015. </p> <p>Actually that is an understatement: in 16 of 20 of the tracked metro areas, the pace of home appreciation over the past year was 5% or higher, <strong>or equivalent to more than twice the pace of core inflation. </strong>And with rents continuing to soar across the country, in many <a href="">cases at a double digit clip</a>, not to mention <a href="">exploding healthcare costs</a>, one wonders just what the BLS "measures" with its monthly CPI update.</p> <p>In any case, for those lucky Americans who can afford to own a house instead of being stuck renting the New Normal American dream where they are prohibited from peddling fiction as their annual rent increases by 10% or more each year, here is the breakdown of the best and worst cities, if only from the perspective of price appreciation in the U.S.</p> <p>To be sure, one can make the argument that the best places to buy a house is inverted from where the current appreciation is highest, since this is where housing is relatively under undervalued.</p> <p>At the top, with annual price increases of 10% (rounded up) to over 12%, we find the usual west coast (and thus closest to China) suspects for the second month: Denver, Portland and Seattle. What is surprising is that what until recently was a superstart in this category, San Francisco, has seen its annual price increase drop to just 6.5% from 9.3% in February.</p> <p>On the other end once again are Washington, Chicago and, the worst performer of all, New York. We wonder if Case Shiller used the UMich "random" telephone directory to calculate that NYC home prices rose almost exactly at the rate of core inflation in the past 12 months while ignoring the dramatic moves in the ultra luxury high end segment.</p> <p><img src="" style="width: 500px; height: 414px;" /></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="817" height="676" alt="" src="" /> </div> </div> </div> BLS China CPI New Normal Tue, 26 Jul 2016 17:27:27 +0000 Tyler Durden 567279 at It's 2am In Japan, Time For Nikkei To Drop Another Tape Bomb <p>Yesterday at 2am local time, Japan's Nikkei reported a doubling of stimulus being proposed (to 6 trillion yen) after Goldman suggest 3 trillion was not enough. That spiked USDJPY briefly. Today, at 2am, Nikkei decided to try it again... announcing that <em><strong>"BoJ officials said to be leaning more toward easing,"</strong></em> and sure enough USDJPY spiked...</p> <p>&nbsp;</p> <p><img src="" width="600" height="318" /></p> <p>&nbsp;</p> <p><a href=""><em>As Nikkei reports,</em></a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Support is growing within the Bank of Japan for further monetary easing ahead of the two-day policy board meeting set to begin Thursday.</strong></p> <p>&nbsp;</p> <p>Such new easing would complement an upcoming government spending package, bolstering efforts to shore up Japan's economy and prices amid mounting global uncertainty stirred by issues including the U.K.'s vote to leave the European Union.</p> <p>&nbsp;</p> <p><strong>Top officials are looking at multiple proposals</strong>. The main options are to cut interest rates beyond the current level of minus 0.1%, buy more Japanese government bonds on top of the current 80 trillion yen annually or expand purchases of other assets, such as exchange-traded funds.</p> </blockquote> <p>As Bloomberg summarizes:</p> <ul> <li>Commercial banks oppose further negative rates</li> <li>Some govt officials advise against further negative rates</li> <li>Still, ETF purchases alone seen as insufficient</li> <li>Some in bank are starting to argue for more cooperation with govt</li> <li>Other policy board members likely to object to any of the proposals, saying current policy is still working and current level of cooperation is sufficient</li> </ul> <p>So absolutely nothing new, but just enough to get the algos moving and generate some positive momentum. It didn't work yesterday, and for now doesn't seem to be working 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="957" height="507" alt="" src="" /> </div> </div> </div> Bank of Japan European Union Japan Nikkei Yen Tue, 26 Jul 2016 17:14:55 +0000 Tyler Durden 567278 at Another Ugly Auction: Treasury Sells $34BN in 5Y Paper With Big Tail, Lowest Bid To Cover Since 2009 <p>The hits just keep on coming. After yesterday's ugly 2 Year auction, and following last month's less than stellar, tailing 5 Year auction, moments ago the Treasury sold $34 billion in 5 Year paper in what was another woeful issuance, one where the high yield of 1.18% was a substantial tail of 1.6bps to the 1.164% When Issued, and whose Bid to Cover dropped again, reaching 2.27, the lowest since September 2009. </p> <p>The internals were also very ugly, with the Indirect takedown sliding to just 53.6%, the lowest since January, Directs buying a paltry 4.7% of the final order, leaving 41.6% to Dealers, the most since August 2015. </p> <p>In short, the ugly taste left from yesterday's poor auction was confirmed with today's issue, which however was to be expected as a result of nervous bidders ahead of tomorrow's Fed statement which has the potential to wreak havoc on the short end should it comes more hawkish than some expect.</p> <p>One thing is clear: at least in the primary market, the short end continues to be quite undesirable and unless something dramatically changes, there may be a steep repricing in the coming weeks.</p> <p><a href=""><img src="" width="500" height="310" /></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="1142" height="709" alt="" src="" /> </div> </div> </div> High Yield Primary Market Tue, 26 Jul 2016 17:12:26 +0000 Tyler Durden 567277 at