Thursday, January 5, 2017

Kyle Bass Has Found A "Breathtaking" Opportunity With The "Greatest Risk-Reward Profile Ever Encountered"

"Over the past 18 months, we have focused on a particular set of asymmetries, which we are now seeking to exploit. One opportunity in particular has the greatest risk-reward profile we have ever encountered in our decade of being a fiduciary."

Trumponomics Won’t Trump the Bond Market Bust

by Michael Pento, Market Oracle:
Despite the millions of dollars Wall Street plowed into the Clinton campaign in vain, the financial industry has nevertheless now become downright giddy with the prospects of a Donald Trump presidency. The imperative question investors need to determine is will the Trump presidency be able to generate viable growth. And, if he cannot produce robust and sustainable growth imminently, are the markets now priced for perfection that simply may never arrive?
Let’s look at the President Elect’s proposals to find an answer.
A top priority of the Trump presidency will be a reduction in the tax rate for the repatriation of foreign earnings on U.S. companies. According to Credit Suisse, the cumulative earnings parked by S&P 500 companies overseas is over $2 trillion.
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The "Russian Hacking" Story Changes Again

Overnight, the Russian hacking narrative changed again, after U.S. intelligence agencies told Reuters they obtained what they considered to be "conclusive evidence" after the November election that Russia provided hacked material from the Democratic National Committee to WikiLeaks. However, in the latest switch of the narrative, this time the allegation is that Russia provided the hacked data through a third party, three U.S. officials said on Wednesday.

The Fed’s Playbook for 2017

by Jim Rickards, DailyReckoning:
Fed forecasting is surprisingly easy despite the sturm und drang of the talking heads. It’s a matter of considering what we know, and what we don’t know, and observing the indications and warnings that presage the unknown.
What we know is that the Fed is biased toward rate increases as long as the economy is growing. This is because the Fed needs to raise rates to 3.25% before the next recession in order to cut them back to 0% when the recession hits; approximately the amount of cutting needed to pull the economy out of recession.
The Fed is unlikely to reach this goal without either causing a recession, or facing one anyway, but they will try.
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WTI, RBOB Tumble After Massive Product Inventory Builds

Following API's larger than expected crude draw (and huge product builds), DOE reports massive builds in Distillates (+10mm - biggest sine Jan 2015) and Gasoline (+8.3mm - biggest since Jan 2016) and another big build in Cushing inventories. Crude inventories drew down 7.05mm barrels - confirming API's data. US crude production also picked up and WTI prices tumbled.

"We're At The Edge Of A Terrible Period" - Chicago Cops Condemn "Sickening" Social Media Video Of Teen Kidnap, Attack

"We are right at the edge of a terrible period - which I know President-elect Donald Trump wants to avoid - of having a deep bitter division in the communities in a way that makes America very hard to govern...If this had been done to an African-American by four whites, every liberal in the country would be outraged..."

Uber Accuses NYC Of Snooping On Its Passengers: "They Want Full Details Of Every Trip You Ever Take"

"Today, New York City requires Uber and other companies to hand over a lot of sensitive personal passenger data, including where you're picked up on every trip. Now, New York City wants more. They're trying to force companies to tell them where you’re dropped off, as well."

The US Has Begun Amassing Troops On Russian Border

Lithuania has confirmed the presence of U.S. special forces inside its territory, stating the deployment’s purpose is to train local forces and act as a deterrent against Russian aggression.

US Services Economy "Loses Momentum" As Inflationary Pressure Surges

While better than expectations, Markit Services PMI dropped to 3-month lows at 53.9 in December as input prices soared at the fastest rate since July 2015 "which could feed through to reduced consumption." ISM Services was flat at 57.2 in December, holding at 14-month highs from November, with employment declining despite rising new orders.

Trump's Secertary Of State Tillerson Discloses $400 Million In Assets

One day after Exxon announced it would sever ties with its former CEO and Chairman, Rex Tillerson, who is slated to become Trump's secretary of state, in the process awarding him $182 million in deferred shares (presumably tax-free), today Tillerson disclosed assets worth as much as $400 million in an ethics filing that showed investments across more than a dozen nations.

Another Bubble Bursts - Bitcoin China Crashes Over 30%

First it was Chinese stocks, then Chinese real estate (twice), then Chinese commodities (twice), and now Chinese Bitcoin's bubble has burst as a massive short squeeze on the offshore Yuan combined with comments on 'virtual' capital controls has sparked a bloodbath in the cryptocurrency from 8,896 yuan to 6,101 yuan in the last few hours...a 31% collapse.

Apple Removes NYT App In China After Pressure From Beijing

"The request by the Chinese authorities to remove our apps is part of their wider attempt to prevent readers in China from accessing independent news coverage by The New York Times of that country," Murphy said.

Intelligence Community Testifies On "Russian Hacking" Allegations - Live Feed

At 9:30 AM the "Russian hacking" narrative will take center stage before a hearing of the Senate's Committee on Armed Services which is chaired by John McCain.  The witnesses appearing before the committee will include James Clapper, the Director of National Intelligence, Marcel Lettre, Under Secretary of Defense for Intelligence, and Admiral Michael Rogers, Commander, United States Cyber Command.  Will we final get some tangible evidence of "Russian hacking" or just more political rhetoric?

"Wrong Way Gartman"...

Gartman Covers His Market Short, Goes Long

"We are acting as a good “hedged” fund would act, being long of the things we like while being hedged against broad market risk at the same time."

Trump Trashes "Dishonest Mainstream Media Lies"

"The dishonest media likes saying that I am in Agreement with Julian Assange - wrong. I simply state what he states, it is for the people to make up their own minds as to the truth..."

A Stunned Wall Street Reacts To China's "Bear-Crushing" Yuan Carnage

"All of this is being done just to stop a few people shorting the currency to reflect the fact that everyone can see that capital is flowing out and that fundamentals argue for a weaker yuan" - Rabobank

Initial Jobless Claims Plunge Near 44 Year Lows As Continuing Claims Hit 4 Month Highs

Initial jobless claims plunged 28k to 235k - the second lowest print since 1973 - after surging in the post-Trump era. However, completly opposite to that possible holiday-related print, continuing jobless claims rose once again to its highest since the beginning of September.

In Latest Tweetstorm, Trump Blasts Chuck Schumer as "Head Clown"

ADP Employment Disappoints As Small Business, Manufacturing Payrolls Shrink

Despite the exuberance of US equity markets and sentiment indicators, ADP reports small businesses cut jobs (-3k) in December (as large businesses added) leaving ADP at 153k (considerably below the 175k expectation). Once again goods producing jobs declined as services improved. This is the 2nd lowest print for ADP since May and Mark Zandi has suddenly become a doomsayer: "As we enter 2017, the tightening labor market will likely slow the growth.”

Bitcoin Bloodbath As Mexican Peso Surges After Central Bank Intervention

Following yesterday's 'panic' among mexican officials that Trump has considerably more leverage than the elites believed, the peso is soaring suddenly this morning as Banxico intervention took place. At the same time, following comments from official reserachers in China on capital controls and crackdown on 'virtual' outflows, Bitcoin is getting hammered - biggest drop in 2 years.

China Threatens Trump With "Big Sticks" If He Wages A Trade War

"There are flowers around the gate of China’s Ministry of Commerce, but there are also big sticks hidden inside the door -- they both await Americans," the Communist Party’s Global Times newspaper wrote in an editorial Thursday in response to Trump’s plans to nominate anti-China lawyer Robert Lighthizer as his trade rep.

42 Years of Fractional Reserve Alchemy – Craig Hemke

by Craig Hemke, Sprott Money:
It has now been 42 years since The Global Bankers successfully alchemized gold through the advent of futures trading so we begin the new year by looking back at how we got into this position in the first place.
To that end, let’s start 2017 by going back to 1974.
Over the past few years, you’ve often heard me reference the HISTORY and FACT of gold price suppression and manipulation. Whenever it comes up in an interview or presentation, it often goes like this:
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Bitcoin Freefall: Prices Drop Nearly $200 in 1 Hour

by Stan Higgins, Coin Desk:
Bitcoin prices tumbled sharply this morning.
According to data from CoinDesk’s Bitcoin Price Index, markets averages dropped only days after passing the $1,000 mark on 1st January. This morning’s fall came after prices reached a high of $1,153.02 in early morning trading.
Still, despite coming within reach of all-time highs, prices fell more than 20% across global exchanges before recovering, with markets reaching a low of $887.47, the lowest figure observed on the BPI since 25th December.
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WikiLeaks To Sue CNN For Defamation

from ZeroHedge:
Moments ago, Wikileaks tweeted that as a result of a segment airing on CNN, the whiste-blowing organization announced it has “issued instructions to sue CNN for defamation.”
Wikileaks was referring to a segment in which CNN had the ex-Deputy-Director of the CIA “falsely calling Assange a ‘pedophile.’
Phil Mudd on Hannity’s Assange interview: “They skirted the bottom line”
— New Day (@NewDay) January 4, 2017
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How Bad Will the “Bond Massacre” Get?

by Wolf Richter, Wolf Street:
Worse “than the 1994 ‘Bond Massacre,’” with “sustained double-digit losses on bonds, subpar growth in developed markets, and balance sheet risks for banking systems….”
The backdrop: after 36 years of bond bull market, the amount of US bonds has ballooned to $47 trillion, up 24% from just ten years ago:
US Treasurys ($19.8 trillion),
Municipal bonds ($3.8 trillion)
Mortgage related bonds ($8.9 trillion)
Corporate bonds ($8.6 trillion)
Federal Agency bonds ($2 trillion)
Money Markets ($2.6 trillion)
Asset backed Securities ($1.3 trillion)
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Trump Will Let The Bankers Continue Destroying The U.S.

by Dave Kranzler, Investment Research Dynamics:
About 30 days into Obama’s first term I predicted that, “Obama will eventually go down as a worse President than W, which is hard to do because W might be one of the worst Presidents in U.S. history.” I am making the same prediction of Trump: he’ll go down as a worse President than Obama.
I would surmise that a majority of Trump’s voters voted for Trump as a vote against Hillary. Many of them have expressed relief that “Trump is not as bad a Hillary.” But, au contraire. The decision faced by voters was no different than choosing between liver cancer and pancreas cancer.
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Glyphosate: Unsafe On Any Plate

by Adam Taggart, Peak Prosperity:
In November, a very concerning report — Glyphosate: Unsafe On Any Plate — was released by The Detox Project and Food Democracy Now!, raising the alarm of the high levels of glyphosate in the US food supply and the (deliberate?) low levels of awareness of its associated health risks.
Dave Murphy, executive director of Food Democracy Now!, joins us this week to explain the finding of this new report on the world’s most-used herbicide (more commonly known by its retail brand: Roundup). As happened in past decades with the alcohol and tobacco industries, there’s compelling evidence that profits have taken a priority over consumer safety — and as public health concerns are being raised, Big Ag is circling its wagons and attacking the questioners rather than embracing open scrutiny.
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