en Is This How Trump Will Build The Wall Cost-Effectively? <p>We&#39;ve frequently warned of the unintended consequences of minimum wage hikes, including <a href="">here</a> and <a href="">here</a>.&nbsp; We&#39;ve also pointed out the availability of numerous empirical studies with mountains of evidence which prove that increases in minimum wage, like the one just passed in California that will raise the minimum wage by 50%, over 5 years, to $15 per hour, <strong>simply serve to drive increased mechanization in the workplace, and thus permanent job losses for unskilled labor, over an extended period of time.&nbsp; </strong></p> <p>To that end, advocates of minimum wage hikes, should take notice of a company that just went public in Australia.&nbsp; <strong>The company is called Fastbrick Robotics and its Hadrian 105 robot can perform the equivalent of a full days work for a human bricklayer in about 2 hours.</strong>&nbsp; Moreover, the company is working on an upgrade, to be called the Hadrian X, that can double the daily output of a human bricklayer in just an hour.</p> <p>You can take a look at the technology here:</p> <p><iframe frameborder="0" height="215" src="" width="386"></iframe></p> <p>This is just the latest example of the unintended consequences of minimum wages hikes and the simple truth that <strong>labor prices will always ultimately be set by supply/demand</strong>, just like any other market.&nbsp; But despite the empirical evidence to the contrary, we&#39;re <strong>certain that our elected officials will continue to promote higher minimum wages in fiery speeches around the country which take aim at the evils of capitalism and it&#39;s desire to strip workers of their &quot;decency&quot; and right to &quot;earn a living wage&quot;</strong> or whatever the prevailing soundbite of the time might be.&nbsp; <strong>Unfortunately, their &quot;success&quot; will ultimately result in the permanent unemployment of their supporters...but that isn&#39;t really the relevant motivator, is it?</strong></p> <p><u><em><strong>Is this how Trump will build the wall cost-effectively?</strong></em></u></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="972" height="718" alt="" src="" /> </div> </div> </div> Australia Unemployment Wed, 27 Jul 2016 19:21:16 +0000 Tyler Durden 567425 at Italy's Renzi Goes Toe-to-Toe with the EU over Italy's Troubled Banks <p>Only 17 percent of Italy’s money supply (M3) is accounted for by State money produced by the European Central Bank (ECB). The remaining 87 percent is Bank money produced by commercial banks through deposit creation. So, Italy’s banks are an important contributor to the money supply and, ultimately, the economy.</p> <p>In anticipation of poor results from the Italian banks’ stress tests (which will be reported on July 29th), Italy’s Prime Minister, Matteo Renzi, has indicated that his government will unilaterally pump billions of euros into Italy’s troubled banks to recapitalize them, so that they can continue to extend credit and contribute to the growth of Italy’s broad money supply. There is a problem with this approach: it is not allowed under new EU rules. These rules require that bank bondholders take losses (a bail-in) before government bailout money can be deployed. But, in Italy, a big chunk of bank debt (bonds) is held by retail investors. These retail investors vote in large numbers. So, the EU bail-in regulation, if invoked, will certainly put Renzi’s neck on the chopping block. And that will come sooner rather than later because the Prime Minister has called for a referendum on Italy’s constitution in October and stated that he’ll resign if the referendum is voted down.</p> <p>It’s no surprise that Renzi has his eye on banks. It’s also easy to see why he is worried and ready to pull the trigger on a state-sponsored bank bailout. The accompanying chart on non-performing loans should be cause for concern.</p> <p><img src="" width="1424" height="1035" style="display: block; margin-left: auto; margin-right: auto;" /></p> <p>To put the non-performing loans into perspective, there is nothing better than the Texas Ratio (TR). The TR is the book value of all non-performing assets divided by equity capital plus loan loss reserves. Only tangible equity capital is included in the denominator. Intangible capital — like goodwill — is excluded.</p> <p>So, the denominator is the defense against bad loans wiping the bank out, forcing it into insolvency. A TR over 100 percent means that a bank is skating on thin ice. Indeed, if the non-performing loans were written off, a bank with a TR in excess of 100 percent would be wiped out. All of the five big Italian banks in the accompanying table — including the Banca Monte dei Paschi di Siena (BMPS), the world’s oldest bank — fall into this ignominious category.</p> <p><img src="" width="662" height="470" style="display: block; margin-left: auto; margin-right: auto;" /></p> <p>They need to be recapitalized. This could be done by issuing new shares on the market. But, all these banks’ shares are trading well below their book values. BMPS’ price is only about 10 percent of its book value, and Intesa Sanpaolo (the best of the lot) is only about 66 percent. In consequence, any new shares issued on the market would dilute existing shareholders and be unattractive. This is why an Italian state rescue is the most attractive source for the recapitalization.</p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="500" height="500" alt="" src="" /> </div> </div> </div> Book Value European Central Bank Italy M3 Money Supply Non-performing assets non-performing loans Wed, 27 Jul 2016 19:18:21 +0000 Steve H. Hanke 567444 at Goldman Raises September Rate Hike Odds To 30%, Sees 70% Probability Of Another Hike in 2016 <p>In the absence of Jon Hilsenrath, whose "post-Fed-Mortem" is strangely missing today from the WSJ (although we haven't checked the ultra exclusive WSJ Pro), here is Goldman's assessment, which considering who makes NY Fed policy, is even more appropriate. According to Goldman, after parsing the Fed statement, September odds have risen to 30% (from 25%), while December incremental rate odds are 40%, "implying a roughly 70% probability of at least one rate increase this year."</p> <p><em>Full note:</em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>FOMC Sees Fewer Near-Term Risks</strong></p> <p>&nbsp;</p> <p>BOTTOM LINE: The FOMC indicated that near-term risks to the economic outlook have diminished, likely reflecting the recent easing in financial conditions and the improvement in economic data. We think the statement keeps open the committee’s options for a rate increase later this year, possibly as soon as September. <strong>Accordingly, we modestly raised our subjective odds of a rate hike at the September FOMC meeting to 30% from 25% previously. </strong></p> <p>&nbsp;</p> <p>MAIN POINTS:&nbsp; </p> <p>&nbsp;</p> <p>1. <strong>The FOMC indicated that “near-term risks to the economic outlook have diminished” in its post-meeting statement, likely reflecting the improvement in incoming data and the easing in financial conditions in recent months</strong>. We see this phrase as a half step toward the “nearly balanced” language the committee used to describe the outlook late last year, and an effective way to keep its options open for action as early as the September meeting. As a result, we have raised our subjective odds of a hike at the September meeting to 30% from 25% previously; we continue to see a 40% chance that the next hike will come in December—<strong>implying a roughly 70% probability of at least one rate increase this year. </strong></p> <p>&nbsp;</p> <p>2. The remainder of the FOMC statement was roughly in line with expectations. The committee upgraded its discussion of labor market developments following the rebound in payroll growth in June, and said that overall activity was “expanding at a moderate rate”. The statement again said that “most” survey-based measures of inflation expectations were little changed; we had thought the statement would drop the “most” qualifier (added at the June meeting) in light of the pickup in the University of Michigan inflation expectations measure. Kansas City Fed President Esther George dissented in favor of a rate increase—as she did at the March and April meetings.</p> <p></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="271" height="186" alt="" src="" /> </div> </div> </div> Michigan University Of Michigan Wed, 27 Jul 2016 19:00:13 +0000 Tyler Durden 567443 at This is How Facebook "Accidentally" Blocked DNC Email Leak Scandal <p><a href=""><em>Submitted by Everett Numbers via,</em></a></p> <p>Once again, the <strong>impartiality of Facebook&rsquo;s news feature is being called into question.</strong> This time, the social network claims it<em>&ldquo;<strong>accidentally</strong>&rdquo;</em> obstructed all links to the leaked Democratic National Committee emails published by Wikileaks just ahead of the party&rsquo;s convention.</p> <p>This past Friday morning, the infamous publisher of anonymous leaks released nearly 20,000 internal emails between members of the formal governing body of the Democratic Party. The news, where it was seen,&nbsp;<a href="" target="_blank">provoked outrage</a>, especially among supporters of Bernie Sanders, who was shown to have <a href="" target="_blank">received unfair treatment</a> by officially impartial party operators.</p> <p>While social media outlets have helped facilitate the spread of uncovered information in the past, Facebook is <a href="" target="_blank">no trusted ally of Wikileaks</a>.</p> <p><strong><em>&ldquo;@Facebook is blocking #DNCLeak email links,&rdquo;</em> </strong>Wikileaks tweeted Saturday evening, following other individual reports of Facebook suppressing the documents hours earlier.<em>&ldquo;Monday is the Democratic National Convention.&rdquo;</em></p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en"><a href="">@SwiftOnSecurity</a> <a href="">@wikileaks</a> It&#39;s been fixed.</p> <p>&mdash; Alex Stamos (@alexstamos) <a href="">July 24, 2016</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>&nbsp;</p> <p>In a reply about three hours later, Twitter user @SwiftOnSecurity said,<em>&ldquo;@wikileaks Facebook has an automated system for detecting spam/malicious links, that sometimes have false positives. /cc @alexstamos&rdquo;</em></p> <p>Then, without elaborating, <strong>Facebook Chief Security Officer Alex Stamos replied to both tweets: <em>&ldquo;It&rsquo;s been fixed,&rdquo; </em>Stamos said.</strong></p> <p>Wikileaks later tweeted that <strong>Facebook explained it all away as an<em>&ldquo;accident.&rdquo;</em></strong></p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en"><em>.<a href="">@Facebook</a> says it has unblocked the posting of links to <a href=""></a> and that the blocking was &#39;an accident&#39;.</em></p> <p><em>&mdash; WikiLeaks (@wikileaks) <a href="">July 24, 2016</a></em></p></blockquote> <p><em></em></p> <script async src="//" charset="utf-8"></script><p></p> <p>&nbsp;</p> <p>A Facebook representative attempted to clarify, <a href="" target="_blank">telling</a> <em>Gizmodo</em>,<strong> <em>&ldquo;Like other services, our anti-spam systems briefly flagged links to these documents as unsafe. We quickly corrected this error on Saturday evening.&rdquo;</em></strong></p> <p>But tech blogs aren&rsquo;t just letting this go. <em>The Next Web</em> <a href="" target="_blank">said</a><u><strong> Facebook&rsquo;s correction <em>&ldquo;is great &mdash; but also not really the point,&rdquo;</em> adding that there seems to be a <em>&ldquo;very tight reign on what&rsquo;s allowed on Facebook.&rdquo;</em></strong></u></p> <p>Complaining about Facebook is nothing new, but this episode of newswire censorship amounts to more than ignored demands for a Dislike button.</p> <p>In May, former employees of the social networking service <a href="" target="_blank">blew the whistle</a> on how news stories and trends were generated on the platform.<strong> Instead of an unbiased algorithm, human <em>&ldquo;curators&rdquo;</em> were revealed to be making decisions on what deserved to be a top headline.</strong></p> <p>More recently, Facebook took down and re-uploaded a Facebook Live video showing the immediate aftermath of the police shooting death of Philando Castile &mdash; an anomaly the site chalked up to a <em>&ldquo;technical glitch,&rdquo;&nbsp;</em><em>TechCrunch</em> <a href="" target="_blank">reported</a>.</p> <p><strong>One of the more peculiar cases of Facebook post policing occurred in November 2015, when U.K. student Roua Naboulsi had a lengthy status update removed.</strong> Her criticism of the selective sentimentality over the terrorist mass shooting attack in Paris, France, asking why the same response didn&rsquo;t come for brown-skinned victims of terror, garnered 9,000 shares and 12,000 likes before Facebook took it down, <em>RT</em> <a href="" target="_blank">reported</a>.</p> <p><strong>In a twist, Facebook also <a href="" target="_blank">faced</a> harsh criticism for what it refused to censor earlier this month; it shared a graphic Instagram video of victims in the Bastille Day attack in Nice, France, proving that as egregious as Facebook&rsquo;s latest censorship campaign may be, it is merely yet another expression of the same pattern.</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="290" height="91" alt="" src="" /> </div> </div> </div> Bernie Sanders fixed France Wed, 27 Jul 2016 18:47:19 +0000 Tyler Durden 567439 at Policy Error? Dollar Drops, Yield Curve Flattens, Gold Surges After Hawkish-er Fed <p>While rate-hike odds rose modestly (Dec 47% to 50%), it seems the <strong>bond market is questioning The Fed's hawkish-er tilt sending the 2s30s curve back near cycle record lows</strong>. Gold, stocks, and bonds are all rallying post-fed but WTI is fading...</p> <p><span style="text-decoration: underline;"><strong>No one is buying what The Fed is selling...</strong></span></p> <p>The initial jerk higher in The Dollar has disappeared...</p> <p><a href=""><img src="" width="600" height="307" /></a></p> <p>&nbsp;</p> <p>Hardly a move in FF implied odds...</p> <p><a href=""><img src="" width="600" height="240" /></a></p> <p>&nbsp;</p> <p>And the yield curve is flattening - policy-error-like..</p> <p><a href=""><img src="" width="600" height="302" /></a></p> <p>&nbsp;</p> <p>With gold leading post Fed for now...</p> <p><a href=""><img src="" width="600" height="361" /></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="948" height="485" alt="" src="" /> </div> </div> </div> 2s30s Bond Yield Curve Wed, 27 Jul 2016 18:24:43 +0000 Tyler Durden 567437 at How Citi Is Trading The Fed's "Mildly Hawkish" Statement <p>Here is the kneejerk reaction from Citi on what it dubbed a "mildly hawkish" statement:</p> <p>The only thing that's hawkish, says CitiFX Strategist Steven Englander: *<strong>FED SAYS `NEAR-TERM RISKS' TO ECONOMIC OUTLOOK HAVE DIMINISHED</strong></p> <p>However, Englander doesn't take this as a signal to jump into September pricing. He says the Fed likely just wants to inject some optimism in the economy given recent data. </p> <p>* * * </p> <p>CitiFX Strategist Richard Cochinos calls it <strong>mildly hawkish </strong>- citing the points noted on CitiFX Wire. George dissents again. Risks have diminished. He also nods to the Fed's note that labor utilization has diminished. What to trade?</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>"Best to trade long USD against the USD-bloc, our favorite being long USDCAD. Also EURUSD and GBPUSD to weaken - USDJPY might be a bit mixed until Friday. The market is likely to continue bias long-USD into NFP (which is still a week away), but given the trend in jobless claims, its hard not to have "some" positive expectations for next Friday."</strong></p> </blockquote> <p>* * * </p> <p>And the immediate FX reaction:</p> <ul> <li>USD has gained across the board, but the moves are already been partially retraced in G10, but not in EM FX.</li> <li>NZD has been the biggest mover against USD, losing about 45 pips in the sell off. AUD has also been hit somewhat, but it’s a fairly limited move.</li> <li>In G3, EURUSD trading down almost 40 pips before largely retracing. Similarly, the reaction in USDJPY was not significant, while GBPUSD is in fact bouncing up slightly on the decision.</li> <li>USDMXN has bounced up from 19.95 to a hhigh of 18.92. Elsewhere in Latam, USDBRL is not far behind trading higher by about 115 pips, now at 3.2923.</li> </ul> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="880" height="495" alt="" src="" /> </div> </div> </div> LatAm Steven Englander Wed, 27 Jul 2016 18:19:58 +0000 Tyler Durden 567436 at Un-Dovish Fed Stays On Hold, Upgrades Economy, Suggests "Risks Have Diminished", George Dissents <p>Following the longest streak of positive economic surprise in history, the stability of China, the Brexit non-event, and equity market record highs, it is perhaps no surprise that The Fed - once again - punted its decision to hike rates, although it made it clear that a rate hike is far closer than the market expects by adding language that &quot;<strong>near-term risks to the economic outlook have diminished.&quot;</strong></p> <ul> <li><strong>FED SAYS `NEAR-TERM RISKS&#39; TO ECONOMIC OUTLOOK HAVE DIMINISHED</strong></li> <li><strong>FED: JOB MKT STRENGTHENED, ECONOMY EXPANDING AT MODERATE RATE</strong></li> <li><strong>FED: HOUSEHOLD SPENDING GROWING STRONGLY, BIZ INVESTMENT SOFT</strong></li> <li><strong>FED REPEATS ECONOMY TO EVOLVE IN WAY WARRANTING GRADUAL HIKES</strong></li> </ul> <p>This all suggests rising probability of rate-hikes as the statement may not be full hawktard but is shifting that way. And further suggesting the Fed is turning Hawkish was the first dissent in over a year, when Kansas Fed&#39;s Esther George dissented.</p> <p>Here are the key changes in the form of lanugage removals, all focused mostly on jobs, which following the June &quot;stellar&quot; jobs report was to be expected:</p> <ul> <li><strong>the pace of improvement in the labor market has slowed</strong></li> <li><strong>Job gains have diminished.</strong></li> </ul> <p>Additions:</p> <ul> <li><strong>Job gains were strong in June following weak growth in May. On balance, payrolls and other labor market indicators point to some increase in labor utilization in recent months.</strong></li> <li><strong>Market-based measures of inflation remain low</strong></li> </ul> <p>And the most important standalone inclusion:</p> <ul> <li><strong>Near-term risks to the economic outlook have diminished</strong></li> </ul> <p>Finally, the dissenters are back:</p> <ul> <li><strong>Voting against the action was Esther L. George, who preferred at this meeting to raise the target range for the federal funds rate to 1/2 to 3/4 percent</strong></li> </ul> <p>* * *</p> <p>Pre-FOMC: S&amp;P Futs 2158, 10Y, Gold, JPY</p> <p><span style="text-decoration: underline;"><strong>Rate hike odds pre-Fed</strong></span>:</p> <p><a href=""><img src="" style="width: 600px; height: 321px;" /></a></p> <p><img alt="" src="" style="width: 366px; height: 251px;" /></p> <p><strong>Since the last FOMC: Stocks, Gold, and Bonds are up...</strong></p> <p><a href=""><img height="332" src="" width="600" /></a></p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>Best. Data. Streak. Ever...</strong></span>Amid the plethora of <em>11-foot-tall-men multiple-standard deviation beats</em> in recent economic data, the <strong>Citi Macro Surprise Index did something it has never done before - it rose for 21 days straight</strong> - breaking the last 5 years trends of seasonal dumps (into mid-year) and pumps (into fiscal year-end)...</p> <p><a href=""><img height="306" src="" width="600" /></a></p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>Best. Stock. Market. Ever..</strong></span>. (as fundamentals collapse)</p> <p>&nbsp;</p> <p><a href=""><img height="316" src="" width="600" /></a></p> <p>&nbsp;</p> <p>And so the Fed headlines explain why they held... again...</p> <ul> <li><strong>*FED: JOB MKT STRENGTHENED, ECONOMY EXPANDING AT MODERATE RATE (upgrade)</strong></li> <li><strong>*FED: HOUSEHOLD SPENDING GROWING STRONGLY, BIZ INVESTMENT SOFT</strong></li> <li><strong>*FED REPEATS JOB MKT TO STRENGTHEN, INFLATION SEEN STAYING LOW</strong></li> </ul> <p>But leaves itself an out...</p> <ul> <li><strong>*FED REPEATS CLOSELY MONITORING GLOBAL, FINANCIAL DEVELOPMENTS</strong></li> </ul> <p>And 1 Dissent:</p> <ul> <li><strong>*FED: GEORGE DISSENTS IN FAVOR OF QUARTER-POINT RATE RISE</strong></li> </ul> <p>Full Redline Statement Below:</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 512px;" /></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="672" height="458" alt="" src="" /> </div> </div> </div> China headlines Wed, 27 Jul 2016 18:02:43 +0000 Tyler Durden 567432 at Bridgewater's Culture Of "Probing" - Sex Scandal Strikes World's Largest Hedge Fund <p>In a complaint filed with the Connecticut Commission on Human Rights and Opportunities, Christopher Tarui, a 34 year old adviser to large institutional investors in Bridgewater, has alleged that he was consistently sexually harassed by his male supervisor over a period of a year.&nbsp; After filing a formal complaint with his superiors, Tarui claims that he was confronted by managers who asserted he was &ldquo;blowing this whole thing out of proportion&quot; and pressured him to rescind his claims.</p> <p>The complaint further describes Bridgewater as a&nbsp; <strong>&ldquo;cauldron of fear and intimidation&quot;</strong> where employees are forced to forfeit their cell phones when they arrive for work in the morning and are <strong>exposed to constant video surveillance</strong> and <strong>encounters with patrolling security guards that &quot;silence&quot; employees who do not fit the Bridgewater mold.</strong></p> <p>An article published in the <a href=";smid=nytcore-iphone-share&amp;_r=0&amp;;">New York Times</a> describes Mr. Tarui&#39;s encounters:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>In his complaint, Mr. Tarui said that the sexual advances began during a business trip to Denver in May 2014, when his supervisor &ldquo;caressed the small of my back&rdquo; while the two men were seated on a couch in the supervisor&rsquo;s hotel room. Mr. Tarui said the incident made him feel uncomfortable and he immediately left the room.</p> <p>&nbsp;</p> <p>But the supervisor continued to pursue him, Mr. Tarui said in his complaint. On one occasion, he said, his supervisor confided in him that he had an &ldquo;itch to scratch,&rdquo; and then asked Mr. Tarui whether he had ever thought about being with other men.&rdquo; Mr. Tarui said he told his supervisor he &ldquo;was not wired that way.&rdquo; But his supervisor persisted, Mr. Tarui said, adding that his boss then &ldquo;specifically asked whether I would consent to having a sexual experience with him.&rdquo;</p> <p>&nbsp;</p> <p>Mr. Tarui said he again rejected his supervisor&rsquo;s advances but his supervisor continued to make overt and subtle sexual overtures well into last summer.&nbsp; Mr. Tarui said in the complaint that he <strong>did not report the conduct out of fear it would become public because of the firm&rsquo;s policy of videotaping confrontations between employees.</strong></p> </blockquote> <p>Still other employees complained of other &quot;excessive&quot; behavior at the firm.&nbsp; In particular, <strong>several employees complained about an offsite retreat in 2012 with several top executives &mdash; including Greg Jensen, Bridgewater&rsquo;s co-chief investment officer &mdash; where employees got drunk and went swimming naked.</strong></p> <p>We thought it appropriate to remind our readers of our recent <a href="">post</a> which highlighted FBI director Comey&#39;s fond memories of working at Bridgewater:&nbsp;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Comey explicitly carried many of the lessons from Bridgewater, where he made millions of dollars a year, into his new role as FBI director, which pays significantly less but is for him a dream position.</p> <p>&nbsp;</p> <p>&ldquo;I went to Bridgewater in part because of that culture of transparency,&rdquo; he told Iowa Senator Chuck Grassley during his confirmation hearing in 2013. &ldquo;It&rsquo;s something that&rsquo;s long been part of me. I think it&rsquo;s incumbent upon every leader to foster an atmosphere where people will speak truth to power. <strong>Bridgewater and the FBI are two different institutions, but I promise I will carry those values with me and try to spread them as far as I can within the institution.</strong>&rdquo;</p> </blockquote> <p>In light of these new developments, <strong>we&#39;re left wondering which particular &quot;values&quot; Comey carried with him to the FBI and exactly how far he &quot;spread&quot; them within the organization</strong>.&nbsp; As we&#39;ve noted in our prior post, we were not particularly impressed with his ability to apply some of what we considered to be the more &quot;positive&quot; Bridgewater values:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The constant embrace of being &#39;probed or questioned&#39; - ironic given that he took no questions from the media after his stunning statement this week; the focus on &#39;accountability&#39; - odd given he has none at all; and his emphasis of &#39;transparency&#39; - mind-numbingly hypocritical given the lack of detail on how he and his team unanimously decided no charges would be pursued</p> </blockquote> <p>The complaint filed by the National Labor Relations Board against Bridgewater can be read below:</p> <p><iframe frameborder="0" height="600" scrolling="no" src=";view_mode=scroll&amp;show_recommendations=true&amp;show_upsell=true" width="100%"></iframe></p> <p>We thought you might also like this video where Ray Dalio discusses, in detail, Bridgewater&#39;s culture and &quot;The Power of Thoughtful Disagreement.&quot;</p> <p><iframe frameborder="0" height="315" src="" width="600"></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="1200" height="800" alt="" src="" /> </div> </div> </div> Bridgewater FBI Institutional Investors Jensen New York Times None Ray Dalio Transparency Wed, 27 Jul 2016 17:55:47 +0000 Tyler Durden 567412 at The Key Thing To Watch For In Today's FOMC Statement <p><strong>The Fed is expected to stay on hold today.</strong> Given the Fed’s dovish reaction to the weak May employment report, SocGen expects that officials are likely to be reluctant to commit to any particular path just yet <a href=""><em>(despite the <strong>longest streak of economically positive surprise in US history</strong>)</em></a>. In the absence of any signal regarding the next hike, <strong>attention will fall on their characterization of the economy</strong>. </p> <p>As Deutsche Bank adds,</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The key thing to watch at tonight's FOMC conclusion is how strong a signal they want to send about the possibility of a September hike. </strong></p> <p>&nbsp;</p> <p>The problem is that a<span style="text-decoration: underline;"><strong> big part of the reason for the recent rally in markets is that post the Brexit vote Fed hikes were practically priced out of the market over the subsequent 18 months</strong></span>. Although that's reversed a bit with the rally it's fair to say that a pretty benign looking Fed is keeping risk elevated.<strong>&nbsp;</strong></p> <p>&nbsp;</p> <p><strong>So they are a little trapped even if several on the committee would be only too pleased to have the licence to hike</strong>. Overall they are unlikely to close the door on September which may make for a slightly hawkish interpretation tonight but the reality is that 'doing' is proving a lot more difficult than 'saying'.&nbsp;&nbsp;&nbsp; </p> </blockquote> <p>For now rate-hike odds are higher BUT not elevated...</p> <p>&nbsp;</p> <p><a href=""><img src="" style="width: 600px; height: 321px;" /></a></p> <p>Here are <em><strong>five things to watch in the statement</strong></em>... <a href="">(via The Wall Street Journal)</a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>With <strong>no press conference scheduled after the meeting and no new economic forecasts to be released</strong>, the Fed’s policy statement will be scrutinized for any clues to whether a September rate increase is in play. Here are five things to watch in the statement, which is scheduled for release at 2 p.m. EDT Wednesday.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>1. How Do They Describe the Labor Market?</strong></span></p> <p>Recent news about U.S. job creation has been positive, but signals have been mixed over the past few months. Hiring has decelerated this year, to an average of 147,000 jobs gained a month in the second quarter compared with 196,000 in the first three months of the year. The Fed’s June statement noted that “the pace of improvement in the labor market has slowed,” reflecting the dismal gain of 11,000 jobs in May. However payroll growth bounced back in June, with&nbsp;<a href="">employers adding 287,000 jobs</a>, the strongest growth in eight months. Watch how Fed officials characterize the employment picture for signs of whether they have gained confidence it will continue to improve.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>2. How Are They Monitoring Global Developments?</strong></span></p> <p>The interest-rate-setting Federal Open Market Committee said in June it “continues to closely monitor inflation indicators and global economic and financial developments.” Fed officials have made no secret that concerns about global market volatility, such as that which followed the U.K. Brexit vote, have weighed on their minds. Fed officials generally agreed at their&nbsp;<a href="">June 14-15 meeting</a>&nbsp;that it was “prudent to wait” for additional data before considering another rate rise to see if the economy would keep improving and that new threats wouldn’t emerge after the Brexit referendum, according to&nbsp;<a href="">minutes of the session</a>. But remarks from Fed officials since the referendum indicate they see the Brexit fallout as contained. Atlanta Fed President&nbsp;Dennis Lockhart&nbsp;said in mid-July that<a href="">markets have been “quite orderly”</a>&nbsp;and “the financial market turbulence we’ve seen does not seem to have caused direct harm to the country’s economy.” If officials adjust the “closely monitoring” language to suggest less concern, that could signal they might be more open to a rate increase in September.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>3. How Good Is Growth?</strong></span></p> <p>The Fed’s June statement said growth in economic activity appeared to have “picked up” since April, although policy makers lowered their forecasts for this year and next. Watch the wording of the July statement to see whether they believe growth has bounced back to the “moderate” pace they saw in March. Federal Reserve Chairwoman&nbsp;<a href="">Janet Yellen</a>&nbsp;said in June testimony to Congress that she expects the economy will continue to grow, although she cautioned that “<a href="">considerable uncertainty</a>&nbsp;about the economic outlook remains.” Officials could judge that stronger consumer spending bodes well for the broader U.S. economy following the Commerce Department’s robust reading on&nbsp;<a href="">June retail sales</a>.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>4. How Do They Characterize Inflation?</strong></span></p> <p>Fed officials are likely to debate in their meeting where inflation is headed. Fed governor<a href="">Daniel Tarullo</a>&nbsp;said earlier this month that he wants to be “more convinced”&nbsp;<a href="">underlying inflation is near the Fed’s 2% target</a>, and that a recent uptick in inflation appears to be due to the waning effects of low energy prices. While core prices, which exclude the volatile categories of food and energy, increased 1.6% in May from a year earlier, overall measures of inflation remain weak. The personal-consumption expenditures price index, the Federal Reserve’s preferred inflation measure, rose 0.2% in May from the prior month, and 0.9% from a year earlier. According to the minutes from the June FOMC meeting, some participants said then that “persistent disinflationary pressures from very low inflation and weak economic growth abroad” hurt their confidence that inflation would hit the Fed’s target in the medium term. Watch the statement’s language on inflation for signs of whether the committee has gained any confidence.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>5. Will There Be Any Dissent?</strong></span></p> <p>Kansas City Fed President&nbsp;Esther George&nbsp;dissented in March and April when the Fed left interest rates unchanged, preferring to raise them. But in June, she voted with the rest of the FOMC to hold borrowing costs steady. However, Ms. George said in a July 14 speech in Oklahoma City that improvements in the U.S. economy should prompt the Fed to<a href="">continue raising interest rates gradually</a>. That could be a sign she might dissent again at this meeting if the rest of the FOMC opts to hold rates steady.</p> </blockquote> <p>After 18 months of disappointment, out of nowhere, the<strong> index ripped higher at the fastest rate since 2009 to its highest since Jan 2014</strong>.</p> <p><a href=""><img src="" width="600" height="300" /></a></p> <p>However, with <strong>China calm,</strong> Brexit behind us, US equities at record highs, volatility at near-record lows, and macro data trends never been better... <strong><em>what possible excuse does a 'data-dependent' Fed have for not hiking rates today?</em></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="243" height="147" alt="" src="" /> </div> </div> </div> Borrowing Costs China Dennis Lockhart Deutsche Bank Federal Reserve Janet Yellen Oklahoma Reality SocGen Testimony Volatility Wall Street Journal Wed, 27 Jul 2016 17:35:37 +0000 Tyler Durden 567431 at In Latest Political "Coup", Catalan Parliament Votes To Secede From Spain <p>In the aftermath of last month's Brexit vote, there was an outpouring of concern in Europe that the British decision would embolden similar separatist movements across the continent. Earlier Wednesday, this is precisely what happened when Catalan nationalists voted to approve a plan to secede from Spain, defying the nation’s Constitutional Court and challenging acting Prime Minister Mariano Rajoy, who is currently in political limbo as he struggles to form a government.</p> <p>The decision was approved by 72 regional MPs out of 135. Ten MPs from the CSP group linked to Podemos, Partido Popular and Ciudadanos walked out of the assembly and the Socialists did not vote.<strong> A recent poll shows that 48% of the Catalan population currently supports independence compared with 43% against it.</strong></p> <p>The vote, symbolic as it may be, was one of defiance toward Madrid as Spain's Constitutional Court had in recent days prohibited the regional parliament in Barcelona from voting on it. As <a href="">Ansa reports</a>, the resolution was presented by the pro-secessionist groups Junts Pel Si and CUP. The anti-secessionist parties - PP, Ciudadanos and PSC - have spoken out against the ''illegality'' of the decision. <strong>PP parliamentary chief Xavier Garcia Albiol has said that the act is tantamount to a ''coup'' against the government in Madrid and warned that there will be a price to pay for it. </strong>The head of the Socialist party, Pedro Sanchez, said there can be no democracy without common rules, while Albert Rivera, the Catalan-born leader of liberals Ciudadanos, described it as a attack on Spanish democracy. They both have rejected supporting Rajoy’s candidacy to become premier again.<strong><br /></strong></p> <p>Catalan regional president and pro-secessionist Carles Puidgemont instead says that the position taken by the regional MPs is ''legitimate'' and has in recent months confirmed that the goal is to achieve an independent ''Catalan Republic'' by the end of 2017. </p> <p>Meanwhile, Spain’s caretaker administration - recall that Spain has been unable to form a government after two consecutive elections - said it has called on the state’s attorney to present a challenge before the Constitutional Court dismissing the plan, which lists the steps that would be followed to create independence, including drafting a Catalan constitution.</p> <p>The latest escalation in the multiyear separatist movement signals renewed impetus from Catalans to break away from Spain. It coincides with a seven-month political deadlock sparked by two inconclusive elections that left the nation without a government. While Rajoy increased his party’s seats in parliament in the second vote, he’s failed to agree on governing terms with other parties, fueling prospects for a third election. Facing a parliamentary defeat, Rajoy has said he won’t undergo a vote of confidence in the 350-seat chamber that is needed to become PM unless he has received enough pledged support from rivals to guarantee his victory.</p> <p>And taking advantage of the political chaos in Spain, and the lack of an actual, elected government, Catalonia just became the second European state in the span of a month to demand secession. It may not be successful this time, but as Brexit showed, sooner or later the will of the majority will prevail. </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="460" height="276" alt="" src="" /> </div> </div> </div> Wed, 27 Jul 2016 17:17:12 +0000 Tyler Durden 567428 at