en Google Market Cap Hits An All Time High $600 Billion <p>Even as the US retail industry is in a tailspin of historic proportions, the ad spending market must be better than ever, because on Monday Google parent Alphabet closed up 2.3% at a new record high, and as Bloomberg pointed out, the company's market value crossed above $600 billion for the first time ever. </p> <p><a href=""><img src="" width="500" height="264" /></a></p> <p>Investors chose not to wait for GOOGL earnings, and bought up shares ahead of the announcement driven by positive analyst comments ahead of 1Q results on April 27 and as the S&amp;P North American tech index rose 1.4% with broader markets rallying.</p> <p>Whether ad spend, and earnings, will justify GOOGL's astronomic market value, second just behind AAPL, will be revealed later this week, but for now it remains clear that just five tech companies - the biggest ones - namely Apple, Google, Microsoft, Amazon and Facebook remain the backbone of the stock market, and carry the weight of much of the stock market on their shoulders. </p> <p>As CNBC <a href="">noted recently</a>, Apple is up over 23% year to date, Google parent company Alphabet is up over 10 percent, Microsoft is up over 6%, Amazon has soared over 20% and Facebook is up over 25% just in the past four months. The relentless strength of these tech titans is why the overall market has been so solid in recent months. Meanwhile, some 130 stocks in the S&amp;P 500 are trading below their 200 day moving average. </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="507" alt="" src="" /> </div> </div> </div> Alphabet Inc. Apple Apple Inc. Business Computing Facebook Google Google Microsoft Online advertising S&P 500 Social media Social networking services Software Technology Technology World Wide Web Mon, 24 Apr 2017 21:07:23 +0000 Tyler Durden 594119 at New Poll Finds Record Number Of Americans Want More Government In Their Lives <p><a href=""><em>Authored by Simon Black via,</em></a></p> <p>In <a href="" target="_blank">a poll</a> conducted a few days ago by NBC News / Wall Street Journal, <strong>a record 57% of Americans responded that they want MORE government in their lives,</strong> and that the government should be doing more to solve people&rsquo;s problems.</p> <p>That&rsquo;s the <strong><em>highest percentage since they started asking this question in 1995.</em></strong></p> <p><strong>In fact, 57% is nearly double what people responded in the mid-90s.</strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 437px;" /></a></p> <p>Furthermore, the number of Americans who feel the opposite, i.e. responded that the government is doing too many things that should be left to private businesses and individuals, fell to a near record-low 39%.</p> <p><u><strong>Bottom line: people want more government.</strong></u></p> <p>It&rsquo;s hard to even know where to begin with this.</p> <p>&nbsp;</p> <p><a href=""><img height="390" src="" width="601" /></a></p> <p><strong>First- more government is nearly an impossibility.</strong></p> <p>As I&rsquo;ve written several times in the past, the US federal government already spends almost all of its tax revenue on mandatory entitlements like Social Security, and interest on the debt.</p> <p>They could literally cut nearly everything we think of as government&ndash; national parks, Homeland Security, even the IRS&ndash; and still not make a dent in paying down the national debt.</p> <p><strong>According to the US government&rsquo;s own financial statements, their <a href="" target="_blank">net operating loss</a> in 2016 was an unbelievable $1.05 TRILLION.</strong></p> <p>Think about that&ndash; they lost more than a trillion dollars in a completely unremarkable year.</p> <p>They weren&rsquo;t waging world war, funding a major infrastructure project, or dealing with an economic crisis.</p> <p>It was just business as usual. And they STILL lost over a trillion dollars.</p> <p>More government is going to cost even more money that they don&rsquo;t have&hellip; which means even more debt and even more pain in the future.</p> <p>The usual refrain is to pay for more government programs by raising taxes on the rich, or big corporations, or whoever the evil villain du jour is.</p> <p>Anyone who thinks this actually works needs to study history.</p> <p><strong>Simply put, RAISING TAXES DOES NOT RAISE TAX REVENUE.</strong></p> <p>I wish every Bernie Sanders voter could understand this very simple fact:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><u><em>Since the end of World War II, US federal government tax revenue as a percentage of GDP has been nearly constant at 17%.</em></u></strong></p> </blockquote> <p>In other words, while the actual dollar amount of tax revenue goes up every year due to inflation and economic expansion, the government&rsquo;s slice of the total economic pie is 17%.</p> <p>Yet during the previous eight decades, actual -tax rates- have been all over the board&ndash; sometimes rates were higher, sometimes rates were lower.</p> <p>Back in 1963, for example, the highest marginal tax rate on individuals exceeded an unbelievable 90%.</p> <p><strong>I&rsquo;m sure there are plenty of Americans who would love to see the wealthiest citizens paying 90% again.</strong></p> <p>Yet in 1963, even with rates that high, the total amount of tax revenue that the US government collected was 16.7% of GDP.</p> <p>In 1988 when the highest tax rate was slashed to just 28% under Ronald Reagan, total tax revenue 17.3% of GDP.</p> <p>It doesn&rsquo;t matter if tax rates were high or low&ndash; the actual tax revenue that the government collects stays constant at around 17% of GDP.</p> <p>This raises a point that these socialists never seem to understand:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>If the government&rsquo;s slice of the pie never seems to change no matter how high or how low tax rates are, shouldn&rsquo;t they focus on making the pie bigger?</strong></p> </blockquote> <p>Duh.</p> <p>And it seems intuitive that higher taxes obstruct economic growth (i.e. make the pie smaller) because there&rsquo;s less money in people&rsquo;s pockets to spend and invest.</p> <p>Then, of course, we have to touch on the issue of competence.</p> <p><strong>It&rsquo;s absurd to want a government that has a nearly interminable track record of overreach, waste, and failure, to be even MORE involved in people&rsquo;s lives.</strong></p> <p>We&rsquo;re talking about the same institution that wastes taxpayer money to study monkeys on treadmills&hellip;</p> <p>&hellip; or spent $1 billion to destroy $16 billion worth of perfectly good ammunition&hellip;</p> <p>&hellip; or $2 billion to build a website.</p> <p>It&rsquo;s extraordinary that these people are already in charge of educating our children, regulating our savings, and now our medical care.</p> <p>It&rsquo;s even more appalling that given such dismal performance people want more.</p> <p>As the old saying goes, the classic definition of insanity is trying the same thing over and over again and expecting a different result.</p> <p><u><strong>A final point I&rsquo;ll mention is that it&rsquo;s concerning to see people in the Land of the Free and Home of the Brave expect the government to solve their problems.</strong></u></p> <p><u><em><strong>What ever happened to self-reliance? The pioneering spirit? Good ole&rsquo; American can-do ingenuity?</strong></em></u></p> <p>In truth there are countless ways for a motivated person to solve problems. Or at least to make forward progress.</p> <p>For example, to all these kids that have their hands out demanding free university education, I always ask the same questions:</p> <p><em>How many books did you read in the last twelve months?</em></p> <p><em>How many FREE online courses from <a href="" target="_blank">Harvard and MIT</a> did you take?</em></p> <p><em>Are you actually doing anything to help yourself? Or are you just whining on social media about how no one is giving you anything for free?</em></p> <p><strong>America was founded as a place where people take responsibility for themselves.</strong></p> <p>But this now seems to be an outdated, minority view.</p> <p>The Land of the Free is truly <strong><em>becoming the Land of Getting Free Stuff.</em></strong></p> <p><a href=""><u><em><b>Do <span class="underline_text">you</span> have a Plan B?</b></em></u></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="601" height="390" alt="" src="" /> </div> </div> </div> B+ Bernie Sanders Business Deficit reduction in the United States Economic globalization Economy Harvard Internal Revenue Service International taxation MIT National Debt NBC Political debates about the United States federal budget Politics Presidency of George W. Bush Tax Tax Revenue U.S. federal government United States Wall Street Journal Mon, 24 Apr 2017 20:45:12 +0000 Tyler Durden 594080 at In "Spectacular Heist" Dozens Of Heavily-Armed Robbers Steal $40 Million From Paraguay Vault <p>In what has been dubbed a "spectacular heist" reminiscent of any number of B-rated Hollywood action movies, an army of heavily armed robbers, estimated between 50 and 60, targeted the cash storage facility of a Prosegur SA security vault in Paraguay's Ciudad del Este, stealing as much as $40 million. During the three-hour long theft, the dozens of assailants who used grenades, explosives and military assault rifles, killed one police officer, injured another and left three civilians wounded. According to <a href="">Fox News</a>, the robbers blew open one of three vaults, they said. The remaining two were not accessed.</p> <p>According to media reports, <strong>the assault was carried out with a wide array of weapons, including AK 47s, C4 explosives, infrared weapons, snipers and even anti-aircraft guns and a helicopter</strong>.</p> <p><em><a href=""><img src="" width="500" height="281" /></a><br />The explosion from the robbert destroyed a secured car belonging to Prosegur</em></p> <p>Police sources <a href="">told Ultima Hora </a>the robbers had between five and eight vehicles at their disposal, with which they closed the perimeter in a 600-yard radius almost an hour ahead of time.</p> <p>After snatching the loot, the thieves then managed to get away without a glitch. The violent robbery started around midnight and ended after 3 a.m., neighbors said. It has left the city in a state of panic, especially because none of the robbers has been caught. Schools were closed Monday.</p> <p>Numerous witnesses said they heard the heavily armed men speaking in Portuguese, leading to speculation that they could be members of the First Command of the Capital (PCC), one of the largest criminal groups in Brazil.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="es">El edificio de PROSEGUR en Ciudad del Este, esta mañana, después del feroz ataque de esta madrugada.<a href="">#DiaADiaPy</a> <a href="">@AM_1080</a> <a href=""></a></p> <p>— Oscar H. Acosta C. (@oscar_marandu) <a href="">April 24, 2017</a></p></blockquote> <script src="//"></script><p>It appears that the robbers had had an eye on the Prosegur headquarters in Ciudad del Este for a long time: the company had entered the authorities’ radar in 2015 when they found a tunnel running under the&nbsp; building."<strong>They found an L-shaped tunnel that ran under Prosegur and connected to a house. Two years later, they managed to rob it," </strong>said Richard Vera, Paraná's homicide chief, as <a href="">quoted by El Pais</a>. </p> <p>The brazen theft took place in Paraguay's Ciudad del Este - the country's second largest city - near the border with Brazil and Argentina; the city has gained notoriety for trade in illicit and counterfeit items, rampant crime, and the presence of international criminal groups. </p> <p><a href="">According to Bloomberg</a>, the gang set fire to numerous vehicles during the assault in the early hours of Monday morning, blocking roads around the facility. Paraguay’s interior ministry said it believed the robbery was carried out by a Brazilian criminal organization. </p> <p>In a statement, Prosegur offered condolences for the death of the police officer and expressed support for the work of the law enforcement agencies in the city. It also noted its concern over the "organization, capacity and war-like equipment used by organized crime in this act." </p> <p>Bloomberg adds that Argentina has strengthened security at its nearby border, is helping Paraguay trace the origin of the weapons and has offered its neighbor assistance, Security Minister Patricia Bullrich said.</p> <p>If the thieves were inspired by any of the countless Need for Speed sequeles, any attempts to detain them - likely located on a different continent by now - will be moot.</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="1960" height="1103" alt="" src="" /> </div> </div> </div> Americas Argentina–Paraguay border Brazil Ciudad del Este Ciudad del Este District Command of the Capital Fox News Government Law None Paraguay Police Political geography Prevention Prosegur Prosegur Police Safety Security Theft Twitter Twitter VeRA World Mon, 24 Apr 2017 20:20:12 +0000 Tyler Durden 594109 at The 56 French Villages Where Marine Le Pen Didn't Get A Single Vote <p>Despite coming second in the results, trailing Macron by just over 2% in the final vote, there were several places in France where Marine Le Pen didn't manage to get a single vote: 56 places in fact.</p> <p>The map below, courtesy of <a href=""></a>, shows a zoomed out version of the map (so not all 56 points may be fully visible) displaying the villages, all under 100 inhabitants strong, where not a single box was ticked on the ballot paper for Le Pen. It shows two clear clusters of non-Le Pen voting villages, one large group in the south-west, and another tightly packed group of FN-shunners between Grenoble and Marseille. The rest are spread across the east and north, creating a crescent of Le Pen no-go zones.</p> <p><a href=""><img src="" width="500" height="447" /></a></p> <p><em>To see the full list on <a href="">France Info click here</a>. </em></p> <p>So who was their preferred candidate instead?</p> <p>The difference between the clusters is that while the villages in the south and Corsica largely picked Jean-Luc Mélenchon or Emmanuel Macron over Le Pen, many of the villages to the north and east chose rival right-wing candidate François Fillon. </p> <p>All five of the villages in the north of France chose Fillon, the largest being Saint-Valery, a commune of 58 voters on the Somme bay, and the smallest being Canteleux, a hamlet of just 13 voters.</p> <p>One of the smallest villages in the southern clusters, Cabous in south-west France, only had 16 people signed up to vote, of which the biggest group voted for Jean-Luc Mélenchon. One of the biggest villages was Samaran, with 72 voters situated between Toulouse and Pau, which shunned Le Pen in favour of Macron.</p> <p>None of the villages were found in Le Pen's stronghold of the Provence-Alpes-Côte d’Azur (PACA) region, where her father Jean-Marie Le Pen built up support in the 1970's. But there were some Le Pen voter free villages in France's far north, another National Front key area. Below is a map of how all the communes in France voted.</p> <p><a href=""><img src="" width="500" height="467" /></a></p> <p><em>Source: <a href="">NYT</a></em><a href=""></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="999" height="750" alt="" src="" /> </div> </div> </div> Anti-German sentiment Environment European Parliament constituencies in France France François Fillon French presidential election Jean-Luc Mélenchon Jean-Marie Le Pen Le Pen Le Pen family National Front None Politics of France west France Mon, 24 Apr 2017 20:18:48 +0000 Tyler Durden 594062 at Le Pen 'Loss' Sparks VIX-Driven Stock-Buying-Panic But Bond Yields, Crude, & Dollar Drop <p>The next two weeks in France...</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p>&nbsp;</p> <p>According to the bookies, it&#39;s a done deal...</p> <p><a href=""><img height="311" src="" width="600" /></a></p> <p>Stocks Up, Oil Down</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 379px;" /></a></p> <p>So stocks soared... Trannies best on the day but Nasdaq hit a new record high, desperately trying to tag 6,000...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 372px;" /></a></p> <p>&nbsp;</p> <p>and legged higher in the last hour as machines misintepreted Le Pen stepping down as head of the National Front as some bullish factor for markets (that was the big volume spike) which hit about 15 mins after WSJ reported Trump chatter of a 15% tax rate...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 366px;" /></a></p> <p>&nbsp;</p> <p>With VIX slammed back to a 10 handle...But that did nothing for the S&amp;P...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 324px;" /></a></p> <p>&nbsp;</p> <p><strong>And VIX crashed most since Aug 2011</strong> (more than Trump&#39;s election) - <strong><em>think about that - Anti-establishment Trump wins, VIX collapse; Establishment-ist Macron wins, VIX collapse</em></strong>...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 241px;" /></a></p> <p>&nbsp;</p> <p>But it seems all the action was pre-market as stocks flatlined from the initial cash print...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 373px;" /></a></p> <p>&nbsp;</p> <p>Thanks to a yuuge short squeeze...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 313px;" /></a></p> <p>&nbsp;</p> <p>NOTE - the last few times the S&amp;P has gapped up on a huge VIX collapse has not ended well...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 324px;" /></a></p> <p>&nbsp;</p> <p>So stocks surge on hedge unwinds BUT bonds are bid, yield curve flattens, the dollar drops, and crude tumbles as the reflation trade is entirely missing</p> <p><a href=""><img src="" style="width: 600px; height: 311px;" /></a></p> <p>&nbsp;</p> <p>Oh and The Dollar tumbled despite a surge in rate hike odds...</p> <p><a href=""><img src="" style="width: 600px; height: 311px;" /></a></p> <p>&nbsp;</p> <p>So, bond yields rolled over all day and the yield curve flattened... but bank stocks were bid!?</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 313px;" /></a></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 388px;" /></a></p> <p>The kneejerk move was EUR bid and JPY offered but all day long that reversed - the dollar index remained lower on the day...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 315px;" /></a></p> <p>&nbsp;</p> <p>Still EURJPY remained positive on the day</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 315px;" /></a></p> <p>&nbsp;</p> <p>USDJPY ended at the LoD...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 322px;" /></a></p> <p>&nbsp;</p> <p>For the 7th day in a row, spot gold was hit right before the London Fix...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 313px;" /></a></p> <p>&nbsp;</p> <p>But while Gold closed red, it staged two solid bounces intraday...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 366px;" /></a></p> <p>&nbsp;</p> <p>Crude was clobbered again - having erased 75% of the bounce... (chatter of some big liquidations overnight)</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 366px;" /></a></p> <p>&nbsp;</p> <p>*&nbsp; *&nbsp; *</p> <p>So stocks love a Le Pen loss...BUT...<span style="text-decoration: underline;"><strong>There&#39;s just a couple of problems... </strong></span></p> <p><strong>Macro data is collapsing...</strong></p> <p><a href=""><img src="" style="width: 600px; height: 314px;" /></a></p> <p>&nbsp;</p> <p><strong>Earnings expectations are falling</strong>...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 360px;" /></a></p> <p>&nbsp;</p> <p>And <strong>debt ceiling concerns are growing...</strong></p> <p><a href=""><img src="" style="width: 600px; height: 320px;" /></a></p> <p>&nbsp;</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="60" alt="" src="" /> </div> </div> </div> Bond Business Crude Debt Ceiling Economy Finance France Market sentiment Mathematical finance Money NASDAQ National Front S&P Stock market Technical analysis VIX Volume Spike Yield Curve Yield curve Mon, 24 Apr 2017 20:02:44 +0000 Tyler Durden 594108 at Will Macron Serve The Interests Of The American Deep State? <p><a href=""><em>Authored by Howard Kunstler via,</em></a></p> <p>As I write, the French stock market (the CAC 40), is doing a grand jeté (up 4.5 percent!) in <strong>celebration of Emmanuel Macron&rsquo;s <em>assumed</em> slaying of the dragon Le Pen.</strong> But that was just the first round under the interesting French election system. Consider that two other candidates who were eliminated, Monsieurs Fillon and Mélenchon, got nearly 40 percent of the vote. Are we so sure about where their voters go in the second and final round two weeks from now?</p> <p><strong>I suspect that most Americans &mdash; even the ones who follow Rachel Maddow &mdash; are about as interested in French politics as differential calculus. </strong>Macron, 36, is a blank slate. He was finance minister under current president François Hollande, of the Socialist Party, but declared during the election campaign that he&rsquo;s not a socialist, he only wanted to be of service to his country, and this time he ran under his own party, <em>En Marche!</em> He appears to represent the continuation of business-as-usual with the European Union, which seems to put him on the wrong side of history at this crucial moment &mdash; if you suppose, as I do, that the EU is so riddled with hopeless financial contradictions and centrifugal political tensions that it is unlikely to persist.</p> <p><strong>Yet, understandably, people are reluctant to change the system they&rsquo;re living under.</strong> Le Pen wants to blow the EU up, especially the bureaucracy lodged in Brussels that has become a self-serving and self perpetuating monster. Blowing up the EU would necessarily, it seems,<strong> mean the end of the European Central Bank, and with it the scams and Ponzi schemes that have provided an appearance of normality, despite an official 10.5 percent unemployment rate in France and a constant chain of public massacres by resident Jihadistas</strong> of one sort or another, some of them perpetrated by radical refugees allowed in under EU policy.</p> <p><strong>Macron might serve the interests of the American Deep State, which is determined to drive a wedge between Europe and the Chinese-Russian-Iranian &ldquo;silk road&rdquo; economic bloc </strong>that would consolidate trade in the Eastern Hemisphere. The US wants &ldquo;the West&rdquo; to remain what it had been for seventy years: the dominant posse. Even if the underlying conditions remained the same, this might not be possible.</p> <p><strong>But those underlying conditions are changing, and in ways that much of the political maneuvering across the West cannot alter, or even comprehend,</strong> for instance, the inability of these mature industrial economies to grow anymore. That is largely a function of the end of affordable energy. Unfortunately, the absence of growth portends not stagnation but collapse as society fails to generate enough new wealth to pay its debts.</p> <p>Now, we&rsquo;ve seen a pretty impressive demonstration of <strong>advanced nations playing financial games to cover up this corrosive condition.</strong> But the dishonesty at work is pretty obvious, and the problem with dishonesty in financial affairs is that it represents unreality. The accrued momentum in colossal sums of money flowing this way and that way has <strong>allowed unreality to reign in international finance for a while</strong>. But that is now flying apart. The ultimate reality, politicians and economists will soon discover, is that <strong>you can&rsquo;t create your own reality.</strong></p> <p><u><strong>So whatever you think now about the French election, or the fate of the EU, is liable to change as the great debt crack-up our time finally gets underway and suddenly every nation has to scramble desperately to keep its shit together. </strong></u>That magic moment may be at hand this week as the US congress returns from Easter recess to face its budget and debt ceiling dilemmas. If the credit-worthiness of this country takes a wrong turn, it will upset the global currency system. In fact, it will rip a hole in financial time-and-space into which the presumed value of all sorts of things represented on paper and computer drives will disappear, never to be seen again.</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="266" height="140" alt="" src="" /> </div> </div> </div> Anti-German sentiment CAC 40 Debt Ceiling Economy of the European Union Emmanuel Macron Euro Europe European Central Bank European Central Bank European Union European Union European Union Eurozone France François Fillon Jean-Luc Mélenchon Politics of France Reality Socialist Party Socialist Party U.S. Congress Unemployment Mon, 24 Apr 2017 19:50:34 +0000 Tyler Durden 594056 at Goldman Burned By These Corporate Debt Trades In Q1 <p>Last week we noted that Goldman posted a 'yuge' miss in fixed income trading of $335 million (see "<a href="">Goldman Misses As FICC Disappoints, Stock Slides As Average Banker Comp Hits $360K</a>"):</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Broken down by key operating group, most segments reported numbers that beat expectations with the exception of FICC: </p> <p>&nbsp;</p> <ul> <li>FICC sales &amp; trading revenue was $1.695bn, missing estimates of $2.03bn</li> <li>Overall sales and trading revenue $3.36 billion, missing estimates of $3.62 billion</li> <li>Investment banking revenue of $1.7bn beating estimates of $1.56bn.</li> <li>Investment and Lending, formerly known as prop, reported $1.48bn in revenue, virtually unchanged from a year ago.</li> </ul> <p>&nbsp;</p> <p>The full breakdown of Goldman's various revenue segments is shown in the chart below:</p> <p><a href=""><img src="" width="500" height="328" /></a></p> </blockquote> <p>&nbsp;</p> <p>The massive miss perplexed wall street as other banks posted solid YoY gains in fixed-income trading revenue...</p> <p><a href=" - Goldman 2.JPG"><img src="" style="width: 600px; height: 295px;" /></a></p> <p>&nbsp;</p> <p>...which caused a nasty little selloff in Goldman's stock.</p> <p><a href=" - Goldman 1.jpg"><img src="" style="width: 600px; height: 360px;" /></a></p> <p>&nbsp;</p> <p>When pressed on the issue during Goldman's earnings call, CFO Martin Chavez attributed the massive miss to<strong> "underperformance in commodities and currencies"</strong> and <strong>"business mix."</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"Sure, as I said, we underperformed this quarter, and the <strong>underperformance was driven by commodities and currencies.</strong> We note that some of our competitors have bigger financing businesses and more significant corporate footprints as a result of larger lending books. <strong>But again, it's one quarter, and business mix differences might reflect relative performance quarter to quarter.</strong> But we believe our model has lots of leverage. It's improving client activity. Harvey, would you like to add anything?"</p> </blockquote> <p>But, at least according to <a href="">Bloomberg</a>, the CFO's non-specific attribution to "underperformance in commodities and currencies" can loosely be translated into the more specific reason for Goldman's miss which was <strong>massive losses on coal, energy and retail bonds on the company's distressed trading desk.</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Goldman Sachs held roughly $200 million in Peabody bonds, about 10 times more than other major dealers,</strong> as the coal miner prepared earlier this year to exit bankruptcy protection, according to data from Securities and Exchange Commission filings and a person with knowledge of the restructuring’s terms. Those bonds would have lost about $40 million this year as their value slumped.</p> <p>&nbsp;</p> <p><strong>The bank also got hurt by Energy Future after Texas regulators blocked the sale of a key unit that was designed to pay off some debts.</strong> The debacle prompted about $1 billion in losses for a roster of creditors including hedge funds Elliott Management and York Capital Management.</p> <p>&nbsp;</p> <p><strong>In retail, debts owed by teen and children’s clothing chains Rue21 and Gymboree have traded lower this year as their private-equity owners prepared the companies for potential bankruptcy filings.</strong> Neither of their bonds trade for more than 13 cents on the dollar. Bonds from tween jewelry retailer Claire’s have been trading below 45 cents on the dollar as it tries to keep up with more than $2 billion in debt.</p> </blockquote> <p>Of course, we're quite certain that holding 10x the inventory of any other large investment bank in Peabody bonds was simply what Goldman needed to satisfy trading flow and was compliant with the Volcker Rule.&nbsp; <strong>However, as Bloomberg notes, those pesky Volcker lines can be 'blurry'.</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="885" height="464" alt="" src="" /> </div> </div> </div> Bloomberg L.P. Business Creditors Economy of New York City FICC Finance Financial services fixed goldman sachs Goldman Sachs Goldman Sachs Investment banking Primary dealers Rockefeller Center Securities and Exchange Commission Securities and Exchange Commission Subprime mortgage crisis Systemic risk Volcker Rule Mon, 24 Apr 2017 19:34:25 +0000 Tyler Durden 594057 at Marine Le Pen Temporarily Steps Down As Head Of National Front Party <p>In a headline that spooked headline-scanning algos, moments ago French presidential candidate Marine Le Pen announced that she is stepping down as head of her National Front party. What the headline ignored to add is that her leadership departure is only "temporary", and as AP notes is just an attempt by Le Pen, who according to polls is trailing Macron as much as 25 points in the runoff round, to embrace, or rather be embraced by, a wide range of potential voters ahead of the May 7 vote between herself and Emmanuel Macron.</p> <p>Cited by AP, Le Pen said on public TV that"tonight, I am no longer the president of the National Front. I am the presidential candidate."</p> <p>To be sure, Le Pen has said in the past that she is not a candidate of her party, and made that point when she rolled out her platform in February, saying the measures she was espousing were not her party's, but her own.</p> <p>Le Pen has worked to bring in voters from the left and right for several years, cleaning up her party's far-right image in the process. Facing a deficit of at least 20 points in the runoff round, the anti-establishment candidate will face an uphill climb if she hopes to catch up to Macron over the next two weeks, assuming of course that the polls are accurate. </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="700" height="394" alt="" src="" /> </div> </div> </div> European people French people Marine Le Pen National Front party Politics Politics of France Runoff voting Two-round system Mon, 24 Apr 2017 19:14:25 +0000 Tyler Durden 594100 at Trump To Order Corporate Tax Rate Cut To 15%, Load Up To $2 Trillion In Extra Debt <p>Ahead of Trump's much anticipated tax announcement on Wednesday, the <a href="">WSJ reports </a>that the president has ordered his (mostly ex-Goldman) White House aides to accelerate efforts to create a tax plan "slashing the corporate rate to 15% and prioritizing cuts in tax rates over an attempt to not increase the deficit" which means that without an offsetting source of revenue, Trump is about to unleash the debt spigots, a <strong>proposal which will face fierce pushback from conservatives as it is nothing more than a continuation of the status quo under the Obama administration, and may well be DOA.</strong></p> <p>The WSJ adds that during an Oval Office meeting last week, "Trump told staff <strong>he wants a massive tax cut to sell to the American people"&nbsp;</strong>and that it was "less important to him if the plan loses revenue." </p> <p>Hoping to add a sense of dramatic urgency - after all his 100 day deadline hits on Saturday - Trump told his team to <strong>“get it done,” </strong>in time to release a plan by Wednesday. </p> <p>Translation: Trump's massive tax cut will be funded by debt, and as a result, will be at best temporary as it will be in breach of the revenue constraints in the reconciliation process; <strong>at worst it will never happen as it will now require Democrat votes. </strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn are scheduled to meet Tuesday to discuss Mr. Trump’s tax proposals with Senate Majority Leader Mitch McConnell, House Speaker Paul Ryan, Senate Finance Chairman Orrin Hatch and House Ways and Means Chairman Kevin Brady of Texas. The meeting comes in advance of a Wednesday announcement by Mr. Trump about his principles for tax policy.</p> </blockquote> <p>While Trump promised to cut corporate rates to 15% from 35%, with the BAT now out of the picture, there aren’t enough business tax breaks that could be repealed to offset the fiscal cost, meaning such a move would increase budget deficits, the WSJ notes. <strong>Roughly, each percentage-point cut in the tax rate lowers federal revenue by $100 billion over a decade, so a 20-point cut would cost the government $2 trillion, according to the congressional Joint Committee on Taxation</strong>.</p> <p>And, as we noted above, the fact that Trump has flip-flopped on revenue offsets may have also doomed Trump's tax plan: as the WSJ points out:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"<strong>any plan that adds to budget deficits would be difficult to advance on Capitol Hill, for both procedural and partisan reasons</strong>. The president’s fellow Republicans, who control both the House and Senate, are aiming to pass a tax bill through a process known as reconciliation, which means they wouldn’t need votes from Democrats. <strong>However, bills passed under reconciliation can’t increase deficits beyond the typical 10-year time frame against which tax and spending policies are projected</strong>."</p> </blockquote> <p>Meanwhile, The House Republican tax proposal calls for a 20% corporate tax rate, <strong>with the cost covered by including a border-adjustment feature that taxes imports and exempts exports</strong>. Trump’s White House has sent mixed messages about whether it would support the border-adjustment plan.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Asked Monday if the president’s tax plan would be revenue-neutral, meaning it wouldn’t add to the debt, Mr. Mnuchin told reporters that it would “pay for itself with economic growth.” By that he meant that the administration expects to be able to project faster growth due to tax cuts, which would in turn increase revenue and avert the risk of bigger budget deficits. Many economists doubt whether economic growth can ramp up on a sustained basis without a big pickup in productivity and labor-force growth, and it is uncertain the tax-policy changes would do that. </p> <p>&nbsp;</p> <p>“They will lose a boatload of revenue that we can’t afford to lose and far more than this team will offset by closing loopholes,” said Jared Bernstein, who was an economic adviser to former Vice President Joe Biden. Cutting marginal tax rates for businesses could generate some economic growth, he said, but not nearly enough to pay for itself with increased revenue. </p> <p>&nbsp;</p> <p>“These promises about all kinds of growth and investment that are going to be triggered by these tax cuts never appear, and the empirical historical record is clear on that,” Mr. Bernstein said.</p> </blockquote> <p>In other words, that makes it <strong>"difficult if not impossible for Republicans to pass a deficit-financed tax cut that doesn’t expire without getting Democratic votes in the Senate. </strong>Democrats are against large tax cuts for corporations, especially at a time when Mr. Trump is proposing cuts to government spending programs they prioritize, like housing, arts and the environment."</p> <p>It also means that as Compass Point's Isaac Boltansky wrote earlier today, Trump's release of tax details on Wednesday will likely deliver only "a vague generalization" of his goals in coming tax reform effort; and, if the WSJ is correct in laying out Trump's uber-ambitious plan, the generalizations will also be impossible to be implemented, effectively killing most if not all hope of tax reform for the foreseeable future as the bickering between Democrats and Republicans will be effectively insurmountable. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="959" height="558" alt="" src="" /> </div> </div> </div> American people of German descent Business Climate change skepticism and denial Donald Trump Economic policy of Donald Trump Economy of the United States Joe Biden Joint Committee on Taxation Kevin Brady National Economic Council Obama Administration Obama administration Political debates about the United States federal budget Politics Presidency of Barack Obama Reconciliation Senate Steven Mnuchin Tax cut The Apprentice United States White House White House WWE Hall of Fame Mon, 24 Apr 2017 19:08:23 +0000 Tyler Durden 594098 at June Rate Hike Odds Soar To 69% As Debt Ceiling Looms <p>It appears the hope that a centrist candidate will win the French election is enough to trump tumbling macro-economic data, disappointing earnings, and flailing inflation in the US economy. <em><strong>June rate hike odds have spiked to 69% overnight (even as debt ceiling risks begin to price in... and the dollar drops)</strong></em>...</p> <p>So The Fed gets the all-clear from the market to hike in June...</p> <p><a href=""><img height="253" src="" width="600" /></a></p> <p>&nbsp;</p> <p>Even as the Treasury Bill curve inverts over debt ceiling fears...</p> <p><a href=""><img src="" style="width: 600px; height: 320px;" /></a></p> <p>&nbsp;</p> <p>And the <strong>Dollar is not buying it at all...</strong></p> <p><a href=""><img height="313" src="" width="600" /></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="966" height="504" alt="" src="" /> </div> </div> </div> Business Debt Ceiling Economy of the United States US Federal Reserve Mon, 24 Apr 2017 19:05:34 +0000 Tyler Durden 594048 at