http://www.zerohedge.com/fullrss2.xml/news/italy-miss-gdp-forecast-sees-sub-1-gdp-growth/%2A%7CUNSUB%7C%2A/feed en Marine Le Pen Temporarily Steps Down As Head Of National Front Party http://www.zerohedge.com/news/2017-04-24/marine-le-pen-temporarily-steps-down-head-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="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/le%20pen%20teaser%203_0.jpg?1493060998" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-24/marine-le-pen-temporarily-steps-down-head-national-front-party#comments Emmanuel Macron European people French people French presidential election Marine Le Pen National Front National Front party Politics Politics of France Runoff voting Two-round system Mon, 24 Apr 2017 19:14:25 +0000 Tyler Durden 594100 at http://www.zerohedge.com June Rate Hike Odds Soar To 69% As Debt Ceiling Looms http://www.zerohedge.com/news/2017-04-24/june-rate-hike-odds-soar-69-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="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_rate%20hike.jpg"><img height="253" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_rate%20hike_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>Even as the Treasury Bill curve inverts over debt ceiling fears...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_debt.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_debt_0.jpg" 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="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_rate%20hike1.jpg"><img height="313" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_rate%20hike1_0.jpg" 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="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170424_rate%20hike1.jpg?1493041969" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-24/june-rate-hike-odds-soar-69-debt-ceiling-looms#comments Business Debt Ceiling Economy of the United States US Federal Reserve Mon, 24 Apr 2017 19:05:34 +0000 Tyler Durden 594048 at http://www.zerohedge.com Trump To Order Corporate Tax Rate Cut To 15%, Load Up To $2 Trillion In Extra Debt http://www.zerohedge.com/news/2017-04-24/trump-order-corporate-tax-rate-cut-15-load-2-trillion-extra-debt <p>Ahead of Trump's much anticipated tax announcement on Wednesday, the <a href="https://www.wsj.com/articles/trump-wants-tax-plan-to-cut-corporate-rate-to-15-1493057898">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>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="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trump%20tax%20post.jpg?1493059833" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-24/trump-order-corporate-tax-rate-cut-15-load-2-trillion-extra-debt#comments American people of German descent Business Climate change skepticism and denial Donald Trump Economic policy of Donald Trump Economy of the United States Joint Committee on Taxation Kevin Brady National Economic Council Obama Administration Obama administration 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 18:51:23 +0000 Tyler Durden 594098 at http://www.zerohedge.com The Passive Indexing Trap http://www.zerohedge.com/news/2017-04-24/passive-indexing-trap <p><a href="https://realinvestmentadvice.com/the-passive-indexing-trap/"><em>Authored by Lance Roberts via RealInvestmentAdvice.com,</em></a></p> <p><em><img height="286" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_passive.jpg" width="600" /></em></p> <p>I have been in the <em>&ldquo;money game&rdquo;</em> for a long time starting with a bank just prior to the crash of 1987. I make this point only to say that I have seen several full market cycles in my life, and my perspectives are based on experience rather than theory.</p> <p>In 1999, there was a media personality who berated investors for paying fees to investment advisors/stock brokers when it was clear that ETF&rsquo;s were the only way to go. His mantra was simply:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><span style="color: #993300;"><em>&ldquo;Why pay someone to underperform the indexes?&rdquo;</em> </span></strong></p> </blockquote> <p>After the<em> &ldquo;Dot.com&rdquo;</em> crash in 2000, he was no longer on the air.</p> <p>By the time the markets began to soar in 2007, there was a whole universe of ETF&rsquo;s from which to choose. Once again, the mainstream media pounced on indexing and that <em>&ldquo;buy and hold&rdquo;</em> strategies were the only logical way for individuals to invest.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><span style="color: #993300;"><em>&ldquo;Why pay someone to underperform the indexes?&rdquo;</em></span></strong></p> </blockquote> <p>Then came the crash in 2008.</p> <p>Today, we are once again becoming inundated with articles as to why it&nbsp;is <em>&ldquo;apparent&rdquo;</em> that individuals should only be using low-cost indexing strategies and holding for the <em>&ldquo;long term.&rdquo;&nbsp;</em><a href="https://www.forbes.com/sites/lawrencelight/2017/01/15/why-you-should-be-an-index-investor-only/#2862f9e2578f" rel="noopener noreferrer" target="_blank">To wit:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;<strong>When it comes to investing, it&rsquo;s a losing proposition to try and be anything better than average</strong>.</em></p> <p>&nbsp;</p> <p><em>If there&rsquo;s no point in trying to beat the market through &lsquo;active&rsquo; investing &ndash; using mutual funds that managers run, selecting what they hope are market-beating investments &ndash; what is the best way to invest? Through &ldquo;passive&rdquo; investing, which accepts average market returns &shy;(this means index funds, which track market benchmarks)&rdquo;</em></p> </blockquote> <p>Of course, with the market seemingly impervious to any type of serious downturn, individuals are indeed listening.&nbsp;<a href="http://www.cnbc.com/2017/04/17/a-seismic-shift-is-happening-and-billions-are-pouring-into-these-funds.html" rel="noopener noreferrer" target="_blank">Via CNBC:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;Flows out of actively managed U.S. equity mutual funds leaped to $264.5 billion in 2016, while flows into passive index funds and ETFs were $236.1 billion, according to data provided by the Vanguard Group and Morningstar. <strong>That was the greatest calendar-year asset change in the last decade, during which more than $1 trillion has shifted from active to passive U.S. equity funds.&rdquo;</strong></em></p> </blockquote> <p><em><span style="color: #993300;">Of course, the next crash hasn&rsquo;t happened&hellip;yet.</span></em></p> <p>But therein is the point.</p> <p><strong>It is effectively the final evolution of <em>&ldquo;bull market psychology&rdquo;</em> as investors capitulate to the <em>&ldquo;if you can&rsquo;t beat&rsquo;em, join &rsquo;em&rdquo;</em> mentality.</strong></p> <p>But it is just that. The final evolution of investor psychology that always leads the <em>&ldquo;sheep to the slaughter.&rdquo;</em></p> <h2><u><span style="color: #000000;">The Inherent Costs Of &ldquo;Low Costs&rdquo;</span></u></h2> <p>There is a <em>&ldquo;cost&rdquo;</em> to chasing <em>&ldquo;low costs&rdquo; </em>and <em>&ldquo;being average.&rdquo;</em>&nbsp;<strong>I do NOT&nbsp;disagree that costs are an important component of long-term returns; however there are two missing ingredients of&nbsp;<em>&ldquo;buy and hold&rdquo;</em> index investing are ignoring: 1) time; and, 2) psychology.</strong></p> <p><a href="https://realinvestmentadvice.com/the-worlds-second-most-deceptive-chart/" rel="noopener noreferrer" target="_blank">As I have discussed previously,</a> the most important commodity to all investors is <em>&ldquo;time.&rdquo;</em> It is the one thing we can not manufacture more of. There is a massive difference between <strong>AVERAGE</strong> and <strong>ACTUAL</strong> returns on invested capital.&nbsp;<strong>The impact of losses, in any given year, destroys the annualized <em>&ldquo;compounding&rdquo;</em> effect of money.</strong></p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/01/SP500-Promised-Actual-Returns-011817.png"><img class="alignnone size-full wp-image-19092" src="http://realinvestmentadvice.com/wp-content/uploads/2017/01/SP500-Promised-Actual-Returns-011817.png" style="width: 601px; height: 341px;" /></a></p> <p>Individuals who experienced either one, or both, of the last two bear markets, now understand the importance of <em>&ldquo;time&rdquo;</em> relating to their investment goals. <strong>Individuals that were close to retirement in either 2000, or 2007, and failed to navigate the subsequent market drawdowns have had to postpone their retirement plans, potentially indefinitely.</strong></p> <p>While the media cheers the rise of the markets to new all-time highs, the reality is that most investors have still not financially recovered due to the second point of <em>&ldquo;psychology.&rdquo;</em></p> <p><strong>Despite the logic of mainstream arguments that <em>&ldquo;buy and hold&rdquo;</em> investing will work, given a long enough time frame, the reality is that investors generally don&rsquo;t invest <em>&ldquo;logically.&rdquo;</em></strong>&nbsp;All investors are driven by <em>&ldquo;psychology&rdquo;</em> in their decision-making which results in the age-old pattern of <em>&ldquo;buying high&rdquo;</em> and <em>&ldquo;selling low.&rdquo;</em></p> <p>The biggest problem for individuals, and the culprit of the great <strong><em>&ldquo;ETF buying panic,&rdquo;</em></strong>&nbsp;is the <em><a href="https://realinvestmentadvice.com/your-brain-is-killing-your-returns/" rel="noopener noreferrer" target="_blank">&ldquo;herding effect&rdquo; </a></em>as investors rush to chase market returns.<strong> The coming problem will be&nbsp;<em><a href="https://realinvestmentadvice.com/your-brain-is-killing-your-returns/" rel="noopener noreferrer" target="_blank">&ldquo;loss aversion,&rdquo;</a>&nbsp;</em>as the herding effect runs in reverse in the rush to get out.</strong></p> <h2><u><span style="color: #000000;"><strong>The&nbsp;Passive Indexing Trap</strong></span></u></h2> <p>Let me just clarify the record &ndash; <strong><em>&ldquo;There is no such thing as passive investing.&rdquo;</em> &nbsp;</strong></p> <p>While you may be invested in an&nbsp;<em>&ldquo;index,&rdquo;</em> when the next bear market correction begins, <em>and the pain of loss becomes large enough,</em><strong> <em>&ldquo;passive indexing&rdquo;</em> will turn into <em>&ldquo;active panic.&rdquo;</em>&nbsp;</strong></p> <p>Not surprisingly, as markets have risen, individuals begin to rationalize&nbsp;the current price trend will continue indefinitely. <strong>The longer the rising trend lasts, the more ingrained the belief becomes until the last of <em>&ldquo;holdouts&rdquo;</em> finally<em> &ldquo;buy in.&rdquo;</em></strong></p> <p>We can see this in the surge of ETF flows. As the &ldquo;<em>bull market&rdquo;</em>&nbsp;continues to run, the more rampant the increase in flows have become. <span style="color: #993300;"><em>(Note &ndash; they same thing was occurring in 2005-2007.)</em></span></p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/04/ETF-Proliferation.png"><img class="alignnone size-full wp-image-20695" src="http://realinvestmentadvice.com/wp-content/uploads/2017/04/ETF-Proliferation.png" style="width: 599px; height: 204px;" /></a></p> <p>Of course, while it is believed that ETF investors have become<em> &ldquo;passive,&rdquo;</em> <strong>the reality is they have simply become <em>&ldquo;active&rdquo;</em> investors in a different form.</strong>&nbsp;As the markets decline, there will be a slow realization <em>&ldquo;this decline&rdquo;</em> is something more than a <em>&ldquo;buy the dip&rdquo;</em> opportunity.&nbsp;<strong>As losses mount, the anxiety of those <em>&ldquo;losses&rdquo;</em> mounts until individuals seek to<em> &ldquo;avert further loss&rdquo;</em> by selling</strong>.</p> <p><strong>There are two problems forming.</strong></p> <p>The first is leverage. While investors have been chasing returns in the <em>&ldquo;can&rsquo;t lose&rdquo;</em> market, they have also been <a href="https://realinvestmentadvice.com/technically-speaking-leverage-hits-an-all-time-high/" rel="noopener noreferrer" target="_blank">piling on leverage in order to increase their return</a>.</p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/04/Margin-Debt-Net-Credit-SP500-040317.png"><img class="alignnone size-full wp-image-20388" src="http://realinvestmentadvice.com/wp-content/uploads/2017/04/Margin-Debt-Net-Credit-SP500-040317.png" style="width: 601px; height: 384px;" /></a></p> <p>However, <strong>it isn&rsquo;t just margin debt which has hit record highs as of late, but <em>&ldquo;shadow margin&rdquo;</em> as well.</strong> Via <a href="http://wolfstreet.com/2017/04/21/shadow-margin-debt-stock-market-time-bomb/" rel="noopener noreferrer" target="_blank">Wolf Richter:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #993300;"><em>&ldquo;</em><em>So how much margin debt is out there? We know only the $528 billion reported by NYSE. Then there are companies like Wealthfront. But it&rsquo;s just small fry. Big players have been doing this for a long time. <strong>These securities-based loans (SBLs) are called &lsquo;shadow margin,&rsquo;</strong></em></span><strong><span style="color: #993300;"><em> and no one knows how much of it is out there. But it&rsquo;s a lot.</em></span></strong></p> <p>&nbsp;</p> <p><span style="color: #993300;"><em>However, several advisers surveyed by The Post estimated there is between $100 billion and $250 billion in outstanding SBLs among all brokerages.</em></span></p> <p>&nbsp;</p> <p><span style="color: #993300;"><em>Morgan Stanley is one of the few firms that says how much in SBLs it&rsquo;s sold &ndash; $36 billion, as of Dec. 31, a 26-percent increase from the year before.</em></span></p> <p>&nbsp;</p> <p><span style="color: #993300;"><em>Other major sellers of the loans are UBS, Bank of America, Wells Fargo, Raymond James, and Stifel Nicolaus, sources said.</em></span></p> <p>&nbsp;</p> <p><strong><span style="color: #993300;"><em>If this &ldquo;shadow margin&rdquo; is $250 billion, it would bring total margin debt to $778 billion. That would make for a lot of forced selling.&rdquo;</em></span></strong></p> </blockquote> <p>The second, which will be greatly impacted by the leverage issue, is liquidity of these instruments.</p> <p>The head of the BOE Mark Carney <a href="http://www.reuters.com/article/2015/03/26/g20-carney-regulations-idUSF9N0VM01720150326">himself has warned about</a> the risk of <em>&ldquo;disorderly unwinding of portfolios&rdquo;</em> due to the lack of market liquidity.&rdquo;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #993300;"><em>&ldquo;Market adjustments to date have occurred without significant stress. <strong>However, the risk of a sharp and disorderly reversal remains given the compressed credit and liquidity risk premia</strong>.&nbsp;As a result, <strong>market participants need to be mindful of the risks of diminished market liquidity, asset price discontinuities and contagion across asset markets.&rdquo;</strong></em></span></p> </blockquote> <p>And then there was, of course, Howard Marks, who mused in his &ldquo;<a href="http://www.zerohedge.com/news/2015-03-26/what-would-happen-if-etf-holders-sold-all-once-howard-marks-explains">Liquidity</a>&rdquo; note:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #993300;"><em>&ldquo;ETF&rsquo;s have become popular because they&rsquo;re generally believed to be &lsquo;better than mutual funds,&rsquo; in that they&rsquo;re traded all day. <strong>Thus an ETF investor can get in or out anytime during trading hours.</strong><strong>&nbsp;But do the investors in ETFs wonder about the source of their liquidity?&rdquo;</strong></em></span></p> </blockquote> <p>What Howard is referring to is the <em>&ldquo;Greater Fool Theory,&rdquo; </em>which&nbsp;surmises there is always a <em>&ldquo;greater fool&rdquo;</em> than you in the market to sell to.&nbsp;<strong>While the answer is <em>&ldquo;yes,&rdquo;</em> as there is always a buyer for every seller, the question is always <em>&ldquo;at what price?&rdquo;</em>&nbsp;</strong></p> <p>The eventual reversion is part of the market cycle. This is why managing portfolio risk is so critically important and why if you don&rsquo;t sell high, you cannot buy low.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #993300;"><em>&ldquo;Being bullish on the market in the short term is fine &ndash; you should be. The expansion of Central Banks balance sheets and the hopes of a fiscal policy tsunami should continue to support stocks as long as no other crisis presents itself. <strong>However, the problem is that a crisis, which is ALWAYS unexpected, inevitably will trigger a reversion back to the fundamentals.&rdquo;</strong></em></span></p> </blockquote> <p>At some point, that reversion process will take hold. It is then investor <em>&ldquo;psychology&rdquo;</em> will collide with <em>&ldquo;margin debt&rdquo;</em> and ETF liquidity. <strong>It will be&nbsp;the equivalent of striking a match, lighting a stick of dynamite and throwing it into a tanker full of gasoline.</strong></p> <p>When the <em>&ldquo;herding&rdquo;</em>&nbsp;into ETF&rsquo;s begins to reverse, <strong>it will not be a slow and methodical process but rather a stampede with little regard to price, valuation or fundamental measures.</strong></p> <p><strong>Importantly, as prices decline it will trigger margin calls which will induce more indiscriminate selling. <span style="color: #993300;">The forced redemption cycle will cause catastrophic spreads between the current bid and ask pricing for ETF&rsquo;s.</span>&nbsp;</strong>As investors are forced to dump positions to meet margin calls, the lack of buyers will form a vacuum causing&nbsp;rapid price declines which leave investors helpless on the sidelines watching years of capital appreciation vanish in moments. <strong>Don&rsquo;t believe me? It happened in 2008 as the <em>&ldquo;Lehman Moment&rdquo;</em> left investors helpless watching the crash.</strong></p> <p><a href="http://realinvestmentadvice.com/wp-content/uploads/2017/04/SP500-LehmanMoment-042317.png"><img class="alignnone size-full wp-image-20704" src="http://realinvestmentadvice.com/wp-content/uploads/2017/04/SP500-LehmanMoment-042317.png" style="width: 600px; height: 272px;" /></a></p> <p><span style="color: #993300;"><strong>Over a 3-week span, investors lost 29% of their capital and 44% over the entire 3-month period. </strong><span style="color: #000000;">This is what happens during a margin liquidation event.</span><strong>&nbsp;It is fast, furious and without remorse.</strong></span></p> <p><strong>Currently, with complacency and optimism near record levels, no one sees a severe market retracement as a possibility. But maybe that should be warning enough.&nbsp;</strong></p> <p>If you are paying an investment advisor to index your portfolio with a <em>&ldquo;buy and hold&rdquo;</em> strategy, then <em>&ldquo;yes&rdquo;</em> you should absolutely opt for buying a portfolio of low-cost ETF&rsquo;s and improve your performance by the delta of the fees. <strong>But you are paying for what you will get, both now and in the future.</strong></p> <p>However, <strong>the real goal of any investment advisor is not to&nbsp;<em>&ldquo;beat the index&rdquo;</em> on the way up, but rather to protect capital on the </strong><em><strong>&ldquo;way down.&rdquo;</strong>&nbsp;</em>It is capital destruction that leads to poor investment decision making, emotionally based financial mistakes and destruction of financial goals. <strong>It is also what advisors should be hired for, evaluated on, and ultimately paid for, as their real job should be keeping you out of &ldquo;the trap.&rdquo; </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="610" height="291" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170424_passive.jpg?1493050581" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-24/passive-indexing-trap#comments Bank of America Bank of America Bank of England Bear Market BOE Business Central Banks Economy Finance Financial history of the Dutch Republic Financial markets Funds Howard Marks Index fund Institutional investors Investment Lehman Liquidity risk Market Cycles Market liquidity Money Morgan Stanley Morningstar Mutual fund Raymond James Reality Wells Fargo Mon, 24 Apr 2017 18:42:41 +0000 Tyler Durden 594076 at http://www.zerohedge.com Schumer: "U.S. Is No Longer Fact-Based" Nation; Breitbart News A "Threat To Democracy" http://www.zerohedge.com/news/2017-04-24/schumer-us-no-longer-fact-based-nation-breitbart-news-threat-democracy <p>Last Friday Attorney General Jeff Sessions issued a press release reminding sanctuary cities of their obligation to enforce federal immigration laws or risk losing their federal funding.&nbsp; Within the release, Sessions noted that Chicago's murder rate has risen "more than 50 percent from the 2015 levels" and that New York City continues to experience gang murders due to the city's "soft on crime" stance.&nbsp; Here's what he <a href="https://www.justice.gov/opa/pr/department-justice-sends-letter-nine-jurisdictions-requiring-proof-compliance-8-usc-1373">said</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"Additionally, many of these jurisdictions are also crumbling under the weight of illegal immigration and violent crime. <strong>The number of murders in Chicago has skyrocketed, rising more than 50 percent from the 2015 levels. New York City continues to see gang murder after gang murder, the predictable consequence of the city's “soft on crime” stance. </strong>And just several weeks ago in California’s Bay Area, after a raid captured 11 MS-13 members on charges including murder, extortion and drug trafficking, city officials seemed more concerned with reassuring illegal immigrants that the raid was unrelated to immigration than with warning other MS-13 members that they were next."</p> </blockquote> <p>We suspect that Sessions' "soft on crime" comment was in reference to an ongoing feud between the NYPD and Mayor Bill De Blasio that erupted back in 2014 after De Blasio effectively legitimized the assassination of two cops in broad daylight by referring to minorities as "oppressed" and "threatened" by local police.&nbsp; <strong>The situation garnered national media attention when the <a href="http://www.zerohedge.com/news/2014-12-30/nypd-boycotts-de-blasio-new-york-city-arrests-and-citations-plummet-cops-stage-virtu">NYPD turned their backs on De Blasio</a> after he showed up at the funeral ceremony of the murdered cops.</strong></p> <p>Of course, the main stream media had a slightly different interpretation of Sessions' "soft on crime" comment and has worked itself into a tizzy insisting that the Department of Justice is 'attacking' the NYPD.&nbsp; </p> <p>As evidence, here is a comical exchange from MSNBC this morning in which Joe Scarborough insists that Sessions is "attacking the NYPD" while Mika accuses the DOJ of propagating "fake news":</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Scarborough:&nbsp; <strong>"The Attorney General sends out a letter basically attacking the NYPD saying that they are 'soft on crime.'</strong>&nbsp; Has he never been to New York?"</p> <p>&nbsp;</p> <p>Schumer:&nbsp; "We are the lowest of the 25 biggest cities in crime."</p> <p>&nbsp;</p> <p>Mika:&nbsp; "But they say crime is out of control."</p> <p>&nbsp;</p> <p>Schumer:&nbsp; "My daughters ride the subway at 4am and I'm perfectly happy about it.&nbsp; We are a safe city.&nbsp; And, by the way, New York has grown from 7 million people in 1990 to 8.5 million today, the largest of any city because crime went down."</p> <p>&nbsp;</p> <p>Mika:&nbsp;<strong> "There's this talk about 'fake news' but that quote we just put up there is 'fake news' coming from the Attorney General."</strong></p> <p>&nbsp;</p> <p>Schumer:&nbsp; <strong>"We're no longer fact-based.&nbsp; The founding fathers created a country based on fact.&nbsp; We don't have a fact base.&nbsp; If Breitbart News and the New York Times are regarded with equal credibility, you worry about this democracy."</strong></p> </blockquote> <p><iframe src="https://www.youtube.com/embed/WM2OOarV_94?ecver=2" width="600" height="337" frameborder="0"></iframe></p> <p>&nbsp;</p> <p>We won't even bother to highlight all of the instances in which the New York Times decided to push 'fake news' regarding the Trump administration's alleged ties to Russian hackers (but feel free to read this for an example:&nbsp; "<a href="http://www.zerohedge.com/news/2017-02-14/nytimes-reports-trump-aides-repeated-contact-russian-intel-officials-admits-no-collu">NYTimes Reports Trump Aides' "Repeated Contact" With Russian Intel Officials, Admits No Collusion Discovered</a>").</p> <p>That said, we can at least agree with Chuck that many politicians no longer live in a "fact-based" world....in fact, here is just one of our favorite examples...</p> <p><iframe src="https://www.youtube.com/embed/EAb98GbYEKY?ecver=2" width="600" height="337" frameborder="0"></iframe></p> <p>&nbsp;</p> <p>...and this one is also very good.</p> <p><iframe src="https://www.youtube.com/embed/iGAdrQ2RpdM?ecver=2" width="600" height="337" frameborder="0"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="692" height="342" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017.04.24%20-%20Schumer%201.JPG?1493052818" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-24/schumer-us-no-longer-fact-based-nation-breitbart-news-threat-democracy#comments 8.5% American people of German descent Crime Department of Justice Department of Justice Donald Trump Jeff Sessions Law Mayors of New York City MSNBC New York City New York Times Trump Administration United States Mon, 24 Apr 2017 18:20:26 +0000 Tyler Durden 594091 at http://www.zerohedge.com WE'RE CLOSED... http://www.zerohedge.com/news/2017-04-24/were-closed <p><a href="https://www.flickr.com/photos/expd/33862184380/in/dateposted-public/" title="CLOSED"><img src="https://c1.staticflickr.com/5/4187/33862184380_9d092f0e55_b.jpg" alt="CLOSED" width="732" height="1024" /></a></p> <script src="//embedr.flickr.com/assets/client-code.js"></script> http://www.zerohedge.com/news/2017-04-24/were-closed#comments Baseball Hall of Fame balloting Education Politics Mon, 24 Apr 2017 18:11:36 +0000 williambanzai7 594092 at http://www.zerohedge.com What The Wage Equality Crusaders Don't Understand http://www.zerohedge.com/news/2017-04-24/what-wage-equality-crusaders-dont-understand <p><a href="https://mises.org/library/what-wage-equality-crusaders-dont-understand"><em>Authored by Brittany Hunter via The Mises Institute,</em></a></p> <div class="body-content"> <p><strong>Women in the workforce are constantly bombarded by rhetoric intended to make us feel less appreciated than our male colleagues. </strong>Politicians and Hollywood celebrities - many of whom have never worked one day in a traditional office setting - seem to take great pleasure in telling females that we are victims of the alleged gender wage gap.</p> <p><strong><em>Asserting that today&rsquo;s working women make only 78 cents for every dollar earned by a man, high profile personalities from comedian Sarah Silverman to former President Barack Obama have perpetuated this myth and used it to further their own agenda: more government control over wages.</em></strong></p> <p>Unfortunately for these wage crusaders, when the data is examined more closely what we find is <strong>not necessarily a wage gap,</strong> but what could more accurately be described as<strong> a &ldquo;preference&rdquo; gap that exists because of personal choice rather than gender</strong>.</p> <p>True, if we were to add up the salaries of every working man in the country, and then we compared that average to the average of the combined salaries of all working women, there would most certainly be a wage gap present. However, this statistic doesn&rsquo;t tell the whole story.</p> <p>The gender wage gap neglects to account for any other contributing factors aside from gender and wage earnings. It does not take into consideration, for example, that each individual, regardless of gender, is driven by a unique set of incentives. Instead, it assumes that wages are the end-all, be-all for every single American worker.</p> <p><strong>Human behavior is not a predictable science. </strong>We can never know for certain what drives another person to make their decisions, but the decisions themselves may tell us what a person values most.</p> <p><strong>Dedicating her career to understanding the gender wage gap, economist Claudia Goldin discovered that in the early years of career development there was virtually no wage gap between men and women working in the same field. </strong>In fact, when she compared male and female colleagues with almost identical resumes and intellect, a wage gap of less than one percent existed between them.</p> <p>However, as time went on this gap did eventually widen as some of these working women began making the decision to marry and have children. Once these women decided to take on more caregiving responsibilities, flexibility began to outweigh the opportunity to earn higher wages. In other words, their priorities shifted.</p> <p>Instead of seeking a promotion, which often means more responsibility and more time spent in the office, many females with caretaking responsibilities have instead chosen to accept lower pay in exchange for the benefit of spending more time outside the office.</p> <p><strong>A woman&rsquo;s decision to accept lower wages in exchange for added flexibility does not mean her employer has assigned less value to her work due to her gender. Instead, it shows that for many female employees, flexibility is worth more than having a higher salary and more office responsibilities. It is a manifestation of choice and human action.</strong></p> <p>When the 2014 Sony leaks revealed that Hollywood actress Jennifer Lawrence had made less money than her male costars in the film <em>American Hustle</em>, Hollywood was outraged and demanded that government help bridge the gender wage gap.</p> <p>Actress Robin Wright took a different approach to this issue by taking matters into her own hands. When it came time to negotiate her salary for the next season of House of Cards, Wright went into her contract meeting prepared to demonstrate her worth. Armed with data showing her character&rsquo;s rising popularity among viewers, she demanded to be paid as much as her male costar, Kevin Spacey. Once she presented her case, her demands were met and she was compensated accordingly.</p> <p>For Wright, putting up a fight was well worth potentially dragging out the negotiations process if it meant receiving higher wages. However, not all actresses value higher earnings over the burdensome struggle of salary negotiations.</p> <p>When asked how she felt about being paid less than her male costars, Lawrence admitted that the pay discrepancy was largely a result of her own unwillingness to negotiate a higher salary. Already making millions from two successful film franchises, Lawrence had no desire to drag out negotiations when she didn&rsquo;t really need or want the extra money. In short, she valued convenience over higher earnings and chose to end the negotiation process early.</p> <p><strong>The gender wage gap theory relies on a statistic that attempts to draw a very narrow conclusion from a very broad set of data.</strong> As individuals, we are each fueled by unique value systems which help us make thousands of decisions on a daily basis. <strong>To reduce each individual decision down to a person&rsquo;s gender is not only insulting, it also completely neglects the importance of human action.</strong></p> </div> <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="236" height="148" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170424_jobs.jpg?1493047447" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-24/what-wage-equality-crusaders-dont-understand#comments Barack Obama Economic inequality Economy Employment Equal pay for equal work Gender pay gap Gender role Gender studies Income distribution Labor Mises Institute Mises Institute Salary Sexism Structure Women in the workforce Mon, 24 Apr 2017 18:00:00 +0000 Tyler Durden 594075 at http://www.zerohedge.com US Sanctions 271 Syrians, Freezes Their US Assets http://www.zerohedge.com/news/2017-04-24/us-sanctions-271-syrians-freezes-their-us-assets <p>Two weeks after launching missile strikes on Syria, the U.S. Treasury announced it has sanctioned 271 employees of Syria's Scientific Studies and Research Center in response to the alleged sarin attack conducted by the Assad regime on Kahn Sheikhoun. It's one of the largest sanction actions in U.S. history.</p> <p>The action was announced in a statement by the Treasury Department, and Treasury Security Steve Mnuchin simultaneously briefed reporters at the White House.</p> <p>The action - which takes place in lieu of a probe demanded by Russia and Syria to determine if Assad was indeed responsible for the recent sarin attack - freezes the individuals’ U.S. assets - which we doubt exist - and generally prohibits U.S. persons from dealing with them</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">WATCH: At WH briefing, Treasury Sec. Steven Mnuchin announces new sanctions to be imposed on 271 people in Syria <a href="https://t.co/Okz2bwUl4f">https://t.co/Okz2bwUl4f</a> <a href="https://t.co/txS52FFPsC">pic.twitter.com/txS52FFPsC</a></p> <p>— CBS News (@CBSNews) <a href="https://twitter.com/CBSNews/status/856563534431490049">April 24, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>The sanctioned employees "have expertise in chemistry and related disciplines and/or have worked in support of SSRC’s chemical weapons program since at least 2012” said Treasury Secretary Steven Mnuchin, and added that "These sweeping sanctions target the scientific support center for Syrian dictator Bashar al-Assad’s horrific chemical weapons attack on innocent civilian men, women, and children."</p> <p>On the surface, the move seeks impact by targeting officials with expertise needed for developing these weapons and those who may seek to travel and use financial system outside of Syria, according to administration official quoted by Bloomberg. </p> <p>The new sanctions are the latest U.S. response to Assad's alleged use of chemical weapons, most recently in rebel-held northern Idlib, in an attack that killed more than 80 civilians. The U.S. retaliated earlier this month by launching missiles against a Syrian airfield.</p> <p>* * * </p> <p><em>Full statement from the <a href="https://www.treasury.gov/press-center/press-releases/Pages/sm0056.aspx">Treasury below</a></em><a href="https://www.treasury.gov/press-center/press-releases/Pages/sm0056.aspx"></a></p> <p><strong>Treasury Sanctions 271 Syrian Scientific Studies and Research Center Staff in Response to Sarin Attack on Khan Sheikhoun</strong></p> <p><em>Action Targets Syrian Government Agency Responsible for Developing Chemical Weapons and the Means to Deliver Them</em></p> <p><strong>Washington </strong>– Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is taking action in response to the April 4, 2017 sarin attack on innocent civilians in Khan Sheikhoun, Syria, by the regime of Syrian dictator Bashar al-Assad.&nbsp; In one of the largest sanctions actions in its history, OFAC is designating 271 employees of Syria’s Scientific Studies and Research Center (SSRC), the Syrian government agency responsible for developing and producing non-conventional weapons and the means to deliver them.&nbsp; These 271 SSRC employees have expertise in chemistry and related disciplines and/or have worked in support of SSRC’s chemical weapons program since at least 2012.</p> <p>“These sweeping sanctions target the scientific support center for Syrian dictator Bashar al-Assad’s horrific chemical weapons attack on innocent civilian men, women, and children.&nbsp; The United States is sending a strong message with this action that we will hold the entire Assad regime accountable for these blatant human rights violations in order to deter the spread of these types of barbaric chemical weapons,” said Treasury Secretary Steven T. Mnuchin.&nbsp; “We take Syria’s disregard for innocent human life very seriously, and will relentlessly pursue and shut down the financial networks of all individuals involved with the production of chemical weapons used to commit these atrocities.”</p> <p>Today’s action follows OFAC and the Department of State’s sanctions announced on January 12, 2017 against 18 senior regime officials and five branches of the Syrian military, along with entities associated with its chemical weapons program, in response to findings by the Organization for the Prohibition of Chemical Weapons – United Nations Joint Investigative Mechanism, that the Syrian regime was responsible for three chlorine gas attacks in 2014 and 2015.</p> <p>Today’s designation, less than three weeks after the attack on Khan Sheikhoun, more than doubles in a single action the number of individuals and entities sanctioned by the United States pursuant to Syria-related Executive Orders (E.O.s).&nbsp; These sanctions are intended to hold the Assad regime and those who support it – directly or indirectly – accountable for the regime’s blatant violations of the Chemical Weapons Convention and UN Security Council Resolution 2118.</p> <p>Today’s action was taken pursuant to E.O. 13582, which targets the Government of Syria and its supporters.&nbsp; The named individuals are designated for materially assisting, sponsoring, or providing financial, material, or technological support for, or goods or services in support of, and having acted or purported to act for or on behalf of, directly or indirectly, the Government of Syria.&nbsp; As a result of today’s action, any property or interest in property of the designated persons in the possession or control of U.S. persons or within the United States must be blocked, and U.S. persons are generally prohibited from dealing with them.</p> <p>For identifying information on the individuals designated today, click here:</p> <p><a href="https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20170424.aspx">https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20170424.aspx</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="717" height="405" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/sanctions%20syria.jpg?1493056306" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-24/us-sanctions-271-syrians-freezes-their-us-assets#comments Al-Assad family Assad family Bashar al-Assad Department of State Department of the Treasury Geography of Asia Government of Syria International reactions to the Syrian Civil War Middle East Mnuchin Organization for the Prohibition of Chemical Weapons Politics Politics of Syria Research Center Scientific Studies and Research Center Steven Mnuchin Syria Syria's Scientific Studies and Research Center Syrian Armed Forces Syrian Civil War Syrian government Syrian military Syrian Scientific Studies and Research Center Treasury Department Treasury Sec Twitter Twitter U.N. Security Council U.S. Department of the Treasury’s office of Foreign Assets Control U.S. Treasury United Nations War Western Asia White House White House Mon, 24 Apr 2017 17:47:51 +0000 Tyler Durden 594089 at http://www.zerohedge.com "It's All About Oil Now": Citi Charts The Biggest Risk To The Global Reflation Trade http://www.zerohedge.com/news/2017-04-24/its-all-about-oil-now-citi-charts-biggest-risk-global-reflation-trade <p>Despite today's surge in global equities, which may be as much driven by the France relief rally as the unwind of recent hedges, the latest attempt to reignite the reflation rally is fading as <a href="http://www.zerohedge.com/news/2017-04-24/dont-look-now-bond-yields-are-tumbling">US Treasury yields have given up on much </a>of the overnight move, following two weaker than expected "soft data" reports, the CFNAI and Dallas Fed, released earlier today.</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_bonds.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_bonds_0.jpg" width="505" height="264" /></a></p> <p>However, while today's soft data disappointed, there real reasons are to be found elsewhere. First, as Citi itself points out, discussing its own economic surprise index, Citi’s ESI has slumped and the underlying data has also turned down, and adds that in both cases, this has occurred at levels where previous post 2009 data cycles have turned over.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/citi%20surprise%201.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/citi%20surprise%201.jpg" width="508" height="322" /></a></p> <p>This also goes back to the previously discussed record divergence between soft and hard data (which has <a href="http://www.zerohedge.com/news/2017-04-24/despite-mega-relief-rally-rbc-warns-beware-reflation-trap">been closing fast in recent days</a>), and where the hard data is struggling to follow the lead of the stronger soft numbers, "<strong>bonds at least are still following the hard evidence.</strong>" </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/citi%20hard%20vs%20tsys.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/citi%20hard%20vs%20tsys.jpg" width="507" height="313" /></a></p> <p>But there is another, more troubling factor when looking forward, and one which may be a far greater hindrance to the reflation trade in general as well as interest rates in particular.</p> <p>Recall what <a href="http://www.zerohedge.com/news/2017-04-09/eric-peters-calls-it-%E2%80%9C-change-change-now-negative">Eric Peters said two weeks ago</a>: “Pretty much everything that happened in 2016 can be explained by two things; China and oil prices,” he said. “Literally, that’s it. <strong>China’s stimulus-induced rebound and the oil price recovery is all that mattered.</strong>"</p> <p>Well, as we noted recently, the <a href="http://www.zerohedge.com/news/2017-04-12/ubs-reveals-who-was-responsible-global-reflation">China reflation trade is now fading </a>as a result of the collapse in China's credit impulse.<strong>&nbsp;</strong> </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/UBS%20China%20inflation%204.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/UBS%20China%20inflation%204_0.jpg" width="500" height="299" /></a></p> <p>Which leaves only oil in the driver seat for the future of the reflation trade. And it is here that a flashing red sign has emerged.</p> <p>As Citi's Jeremy Hale wrote over the weekend, "<strong>inflation indicators have also turned lower. </strong>Key industrial commodities like iron ore and copper have breached supports, Chinese inflation surprises peaked in February and our US ISI will drop sharply in April after the March CPI miss. Oil prices are holding up helped by OPEC supply restraint so far. But the correction to the overshoot in medium term break-evens relative to oil continues. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/citi%20oil%201.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/citi%20oil%201_0.jpg" width="500" height="334" /></a></p> <p>&nbsp;</p> <p>Which brings us to Citi's punchline on why it is all up to oil now: "<strong><span style="text-decoration: underline;">unless oil really surges, year on year comparisons favour a sharp fall in G10 inflation surprises in coming months</span>.</strong>"</p> <p>Below we show what is the most troubling chart for those who still believe that the reflation trade is alive and well, courtesy of Citi:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/citi%20oil%202.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/citi%20oil%202.jpg" width="501" height="319" /></a></p> <p>Today, for whatever reason, not only is oil not "surging" to maintain the stronger year-over-year comps but is unable to catch a bid despite the broader risk-on euphoria&nbsp; (prompting some to ask if there isn't a fund liquidation quietly taking place in the background).</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/20170424_WTI1_0.jpg" width="500" height="258" /></p> <p>In any case, if China is no longer a driving force in the global reflation trade (and may soon be contributing to deflation) and if oil can not even rise above $50, then the two key drivers behind the biggest risk-on impulse of the past year - certainly since the Shanghai Accord last February - will no longer be a factor, putting the future of the reflation trade in peril, especially if as has been the case recently, Trump is unable to make headway with his own fiscal spending agenda in the US. </p> <p>It is also why two weeks after Deutsche Bank capitulated on its own short Treasury trade, Citi said "<strong>With all this in mind, we are going long TYM7, the 10y note future, targeting 2% 10y yields with a stop on the generic yield at 2.35%."</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="501" height="319" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/citi%20oil%202.jpg?1493055077" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-24/its-all-about-oil-now-citi-charts-biggest-risk-global-reflation-trade#comments Business CFNAI China Citigroup Copper CPI Dallas Fed Dallas Fed Deutsche Bank Economic bubbles Economic policy Economy France Futures contract Inflation OPEC OPEC Organization of Petroleum-Exporting Countries Petroleum politics Price of oil recovery Reflation U.S. Treasury Mon, 24 Apr 2017 17:32:48 +0000 Tyler Durden 594088 at http://www.zerohedge.com Wayfair Tumbles After Amazon Launches Furniture Seller Program http://www.zerohedge.com/news/2017-04-24/wayfair-tumbles-after-amazon-launches-furniture-seller-program <p>It looks like another &#39;retailer&#39; is about to be &#39;Amazon&#39;-ed. Wayfair - the retail household goods seller - is tumbling this morning after <a href="http://www.furnituretoday.com/article/542446-amazon-launching-new-furniture-seller-program"><strong>Amazon reportedly pitches a new furniture seller program</strong></a>. Additionally, not helping the stocks, <strong>Citron&#39;s Andrew Left goes negative </strong>on the stock, comparing the company&#39;s controls to Madoff.</p> <p><a href="http://www.furnituretoday.com/article/542446-amazon-launching-new-furniture-seller-program"><em>As FurnitureToday reports,</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Speaking to about 40 retailer members of the Furniture Marketing Group buying group here, Amazon representatives in the furniture category said the e-commerce giant hopes to launch the new &ldquo;Unified Delivery with Services&rdquo; change to its platform late in the third quarter.</strong></p> <p>&nbsp;</p> <p>Under the plan, furniture sellers, such as stores, won&rsquo;t be required to sell nationwide. The retailers will set their own pricing that can change with the services an Amazon customer chooses. White glove delivery (to a dry room) is the bare minimum service requirement &mdash; no drop-off at the door &mdash; but retailers can offer additional services, including delivery to the customers&rsquo; &ldquo;room of choice,&rdquo; set-up and haul away.</p> <p>&nbsp;</p> <p><strong>And the cost: Amazon is asking for a $39.99 monthly fee for an unlimited number of listings as well as 15% on the product sale and 20% on the services, according to Brett Hobson, </strong>Amazon business development representative in the furniture category. He added that retailers can choose to roll their services into the product price and offer just one price to customers for that 15% fee. However, in that case, Amazon shoppers wouldn&rsquo;t see a menu of service options.</p> <p>&nbsp;</p> <p><a href="http://www.furnituretoday.com/article/542446-amazon-launching-new-furniture-seller-program">Read more here...</a></p> </blockquote> <p>The result is not good...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_wayfair.jpg"><img height="460" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170424_wayfair_0.jpg" width="600" /></a></p> <p>And was not helped by <a href="http://www.investopedia.com/news/citron-research-wayfair-ponzi-scheme-w/"><strong>Citron&#39;s Andrew Left comparing the company to a ponzi scheme.</strong></a>..</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Wayfair may have buyers excited about rock-bottom prices for home goods, but its business model is unsustainable, Citron Research analyst Andrew Left says.</p> <p>&nbsp;</p> <p><u><em><strong>&quot;The accounts payable, the cash flow, the business model &ndash; it&#39;s stupid,&quot; Left said in a phone interview with Real Money. &quot;They&#39;ll never make money.&quot;</strong></em></u></p> <p>&nbsp;</p> <p>Left, a notable short seller, says shareholders should be alarmed that a company of Wayfair&#39;s size, with more than 10,000 suppliers, uses manual internal controls, or does accounting by hand instead of automation. <strong>He compared the process to that used by convicted Ponzi? schemer Bernie Madoff, who personally supervised his company&#39;s manual process.</strong></p> <p>&nbsp;</p> <p>In other areas of concern to Citron, Boston-based<strong> Wayfair&rsquo;s accounts payable comprises 50 percent of its total assets and are 10 percent more than its revenue</strong>. Its accounts payable is also more than its $100 million cash on hand, Left says in an unpublished report obtained by Real Money.</p> <p>&nbsp;</p> <p><a href="http://www.investopedia.com/news/citron-research-wayfair-ponzi-scheme-w/">Read more here...</a></p> </blockquote> <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="1362" height="1045" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170424_wayfair.jpg?1493054161" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-24/wayfair-tumbles-after-amazon-launches-furniture-seller-program#comments Amazon Amazon tax Amazon.com Bernard Madoff Business Business Charles Ponzi Confidence tricksters E-commerce Economics Economy Finance Madoff investment scandal Marketing Merchandising NASDAQ Online shopping Retail Review websites Wayfair Mon, 24 Apr 2017 17:15:02 +0000 Tyler Durden 594086 at http://www.zerohedge.com