Category: zerohedge

Never one to stray off message, DoubleLine Capital’s Jeff Gundlach sat down for a mid-day interview with CNBC’s Scott Wapner on Tuesday, where he elaborated on many of his talking points from his headlining appearance at Sohn.

As one of the few speakers at Sohn whose pitches have actually generated alpha for anybody willing to heed his advice (at last year’s conference, Gundlach recommended traders short Facebook and buy oil companies), the audience and the financial press listened attentively on Monday as he recommended shorting the lowest polling Democratic contenders (presumably on PredictIt or some other online betting platform), and touched on a familiar topic: The risks posed by the surging US debt interest.

In keeping with his preternatural talent for sniffing out contrarian positions that eventually triumph over the consensus, Gundlach pitched the Sohn crowd on a long-rates volatility play that pits him against that most insurmountable of market adversaries: The now uber-dovish Feb.

As equities spiraled toward their lows of the day on Tuesday, Gundlach, who offended Jim Cramer late last year when he sent stocks reeling after he declared equities to be in a bear market during a brief interview with CNBC, doubled down on that view during his interview with Wapner.

Equity bulls can repeat stats about the market’s Q1 rebound – admittedly, one of the best in decades – until they are red in the face, but, Gundlach argued, until the NYSE Composite surpasses its highs from January 2018, the US will remain in a cyclical bull market.

“People keep acting like this is some sort of locomotive that’s chugging along but the New York Stock Exchange Composite Index – which to me is the most important one because it’s the biggest – it peaked in January of 2018 and then couldn’t quite make it back to that peak in October and now it couldn’t quite get back to that October level and now it’s rolling over again,” Gundlach said.

“A bear market is really more about cycles and manias and then things one by one rolling over and the market getting narrower and narrower, and I think all of that has been happening over about an 18-month time period,” Gundlach said.

But lest readers are left with the impression that Gundlach’s bearish view is based purely on technicals, the DoubleLine founder explained that, in the near term, he expects stocks to power lower as trade talks between the US and China collapse, a process that has already started to unravel. As of now, he sees a 50% chance that Trump moves ahead with new tariffs.

“I think we’re going to keep seeing more tension and I think the 25% tariff bump is better than 50% chance” Gundlach told Wapner. “Both the premier of China and the president of the United States want to come across that they prevailed and didn’t give in.”

“I think you’ve got an irresistible force meeting an immovable object,” Gundlach said.

“I think that you’ve got an irresistible force meeting an immovable object,” @DLineCap CEO @TruthGundlach says on U.S.-China trade talks. He says it’s more than likely that new tariffs will happen. https://t.co/3NKMBDXoMC pic.twitter.com/6k7loScA7h

— CNBC (@CNBC) May 7, 2019

If the White House follows through with its threats to raise tariffs on Friday, Gundlach believes stocks will move even lower.

“It’s already happening, I think. The market obviously doesn’t want increased tariffs, so it’s been kind of reacting to that,” Gundlach said.

“I think that we’re in a late cycle and I think the market can only be termed by the way I look at evolution of market prices as a bear market,” Gundlach said. “The market hasn’t gone anywhere in 15 months and its down in many parts of the world.”

So, I don’t know – I’m going to flip the question. If anybody wants to say how can I say it’s a bear market, how can I say it’s a bull market? I mean it’s been a good year to date, yes I agree. But to characterize the last 15 months as a bull market is just wrong.”

Moving on, the conversation soon turned to a discussion of the cognitive dissonance between Trump’s celebration of economic data that confirms his market narrative, and his insistence that the Fed must cut rates to keep the party going. Gundlach said he doesn’t think Trump can “get away with it…blaming it on” the Fed.

Trump is wrong on both counts, according to Gundlach: Not only has the labor market picture actually deteriorated under Trump, but if the Fed keeps policy easy and the economy still prints a negative, then Trump “can’t brag about the economy any more.”

“It’s unbelievable the Twilight Zone that we’re sort of living in, where people just say things and it gets repeated,” Gundlach says. “I think probably we’re numb to that because of social media.” pic.twitter.com/oFffkDEg6C

— CNBC (@CNBC) May 7, 2019

He also took a jab at Americans’ passive acceptance of what Trump has been saying as fact, blaming social media for turning everyone in Lemmings. In reality, the economy is incredibly vulnerable, and the US would be in serious trouble if a down turn hits.

“The economy is in such bad shape to withstand a downturn. Again, the national debt is exploding while we’re having some of the best GDP year-over-year that we’ve had in recent years. Right? So the economy is not in any kind of condition for the government to come to the rescue other than really wickedly extraordinary policies a la the ECB and the BOJ.”

“That’s what he’s about: bragging about the economy,” Gundlach said. “He keeps talking about how the jobs have never been created so much ever in history. Except for one little fact: If you take the number of months Trump’s been in office and take the average nonfarm payrolls and compare it to the same number of months at the end of the Obama president, there were more under Obama!”

“It’s unbelievable the twilight zone that we’re sort of living in, where people just say things and it gets repeated. I think probably we’re numb to that because of social media,” Gundlach added.

Though like Trump, Gundlach didn’t shy away from bashing the Fed and Chairman Jay Powell.

“Well, frankly, Jay Powell’s most recent press conference looked lost to me. Or maybe the right word is scared. Scared to say anything. So, we’re kind of rudderless now I think in terms of the Fed. They just want things to be okay and to hold together and they don’t want to say anything or change their rhetoric or scare anybody.”

Moving away from markets – at least for the moment – Gundlach railed against the national debt, calling it “totally out of control,” and again warned about the simmering risks in the corporate debt market.

“Bond King” Jeffrey Gundlach says the national debt is “totally out of control.” https://t.co/mg5DCJoPt6 pic.twitter.com/hakrVyPc2E

— CNBC (@CNBC) May 7, 2019

He blamed the ballooning deficit and national debt (something we’ve also discussed at length) as the “main reasons” the 3s5s curve has steepened. He also warned that blowing out the deficit, as Trump did, would leave the US incredibly vulnerable during the next down turn.

“People are starting to realize that the deficit and debt are totally out of control,” Gundlach said.

“The economy is in such bad shape to withstand a downturn again,” Gundlach said. “The national debt is exploding while we’re having some of the best GDP year over year that we’ve had in recent years.”

The corporate bond market, meanwhile, are “so much worse today than it was in 2006.” The corporate bond market has tripled in size, and a BBB rated bond market that is now bigger than the junk-bond market. Using leverage ratios alone, “45%, not just of the BBB but the entire corporate bond market would be junk right now,” he said, citing figures from Morgan Stanley.

A recession or downturn could “spark” a wave of downgrades from investment grade bonds into junk bonds (another issue that we’ve discussed at length).

Finally, Gundlach discussed his Sohn trade reco, advising Wapner that investors could get rich on interest-rate volatility, which has sunk to multi-year lows since the beginning year, leaving options incredibly cheap.

The Fed has been all over the place, Gundlach argued, and the level of the volatility probably won’t stay this low for another year, especially with the Treasury floating so many new bonds. Even if the Fed goes all in on MMT, sine volatility is so cheap, an options straddle should yield immense profits even if there’s only a short-term increase in rates.

At @SohnConf, Gundlach said investors can get rich off interest rate volatility ahead. He explains his #Sohn2019 picks: https://t.co/6OkHNYVeMb pic.twitter.com/rpsCSE1lQ0

— CNBC (@CNBC) May 7, 2019

While a 30-40 basis point move would make the straddle profitable, Gundlach says he believes traders could profit on both sides when rates climb and the Fed ultimately comes to the rescue.

via ZeroHedge News http://bit.ly/2VjiqRT Tyler Durden

Well that re-escalated quickly…

A small bounce in China did nothing to lipstick that pig…

 

European stocks were ugly as various data and forecasts disappointed…

 

And Bund yields dropped back below zero…

 

And then there was ‘Murica! Futures dumped right after the bell on Lighthizer confirmation of increased tariffs, then spiked during the EU session on headlines that China VP Liu would make it to DC, but that didn’t last long as yet another dead-cat-bounce died… The machines went panic-bid into the close

In cash markets, Trannies lead the collapse on the week but Nasdaq was ugly today…The Dow was down 648 points at the lows of the day…

Today was The Dow, S&P and Nasdaq’s biggest daily point loss since 2018

While the S&P held above its 50DMA, Dow broke and closed below its 50DMA – the first close below it since Jan 15th…

 

As Semis were slaughtered…worst day since the start of 2019…

As Nomura’s Charlie McElligott shows in this stunning intraday chart, the magnitude of the excess Futures notional of S&P, Nasdaq and Russell above the combined Cash notional (and adjusting ‘roll’ days, defined as the first future traded notional-second fut traded notion) is supportive of the view that today’s trade is absolutely driven by futures deleveraging…

…And perhaps indicative that this is indeed both the 1) Asset Manager monetization of “Longs;” 2) our estimate that CTA Trend models may be reducing their “Long” (as described in more detail below) and of course 3) dealer Gamma hedging activity.

Additionally, McElligott warned, we are now in “negative Gamma” territory in SPX / SPY and QQQ options landscape –

All as the VIX curve inverts and forces “short vega” covering from systematics…

With VVIX really beginning to dance and price some serious “gap” / tail-risk @ 111:

 

Given the record short positioning…

VIX is notably inverted…

It is not a surprise that VIX is dramatically underperforming credit (although spreads have started to crack wider)…

 

Treasury yields tumbled intraday…

 

With 10Y Yields back at their lowest since April 1st…

 

And the yield curve flattened… with 3m10Y spread back near inverted…

 

The market’s expectations for rate-moves this year shifted dovishly today as stocks fell – dropping to a 30bps rate cut…

 

The dollar index managed modest gains on the day, once again in demand overnight…

 

Cryptos were extremely noisy today with a broad-based sell program hitting this morning…

As Bitcoin twice tried for $600, and was rejected…

 

PMs were higher, crude and copper lower on the day…

 

Finally, a reminder from BMO’s Brad Wishak highlighted, the world’s favorite (and also largest) index to completely ignore is flashing another negative divergence here…the exact same divergence that kicked off the the fall equity slide lower.

Back in SEP the SPX pushed to new all time highs while the NYSE did not, flagging the initial divergence. Just last week, the SPX again made fresh all time highs with the NYSE again NOT confirming.

Is it different this time?

Not according to options traders as Bloomberg reports that a growing cohort of investors is betting the worst is yet to come.

Demand for protection against more losses over the next month is higher than at any time during the fourth-quarter rout that almost ended the bull market, going by relative levels of implied volatility on S&P 500 options. The derived price for one-month puts that pay off if the S&P 500 falls 10 percent below its current level has soared compared to the cost for calls that would pay out if the benchmark gauge rose 5 percent in that time.

“This is an event being priced in the very near term that didn’t exist just a few days ago,” said Pravit Chintawongvanich, Wells Fargo’s equity derivative strategist, who emphasized that the reaction in very near-dated options was disproportionately large relative to longer-dated options.

“Vol is well bid, and it makes sense given we suddenly got a 2 percent move out of nowhere.”

We leave you with a new hope…

Help us Larry Kudlow, you’re our only hope pic.twitter.com/YJRThFBZZZ

— Quoth the Raven (@QTRResearch) May 7, 2019

via ZeroHedge News http://bit.ly/2H7pnwI Tyler Durden

Those who have bothered to read SOUTHCOM’s comprehensive, multi-pronged plan to destabilize and ultimately topple Nicolas Maduro – a plan that, notably, ends with coalition troops on the ground – will recognize that two of the final steps involves enticing Venezuelan professionals to flee while encouraging military officials to give a coup d’etat one more try.

That appears to be what the US had in mind on Tuesday when it lifted sanctions on a Venezuelan general who broke ranks with the regime following a week of largely unsuccessful street demonstrations.

And in a speech in Washington on Tuesday, Vice President Mike Pence is expected to announce the removal of all sanctions on Gen. Manuel Cristopher Figuera, a general who warned 25 supreme court magistrates that they would be “held accountable” unless they backed opposition leader Juan Guaido, according to WSJ.

During the speech, Pence is expected to denounce Venezuela’s courts as a tool of corruption, and dangle sanctions relief in front of any other senior military or government officials willing to turn on Maduro.

In a speech later today Washington, Vice President Mike Pence will say Venezuela’s supreme court has “become a political tool for a regime that usurps democracy, indicts political prisoners, and promotes authoritarianism.”

“It’s time for this body to return to its founding purpose,” Mr. Pence will say, according to prepared remarks. “If the Supreme Court of Venezuela does not return to its constitutional mandate to uphold the rule of law, the United States will hold all 25 of its magistrates accountable for their actions.”

Mr. Pence will highlight the removal, effective immediately, of all sanctions on Venezuelan Gen. Manuel Cristopher Figuera, the director the country’s intelligence service, Sebin, who is no longer supporting Venezuelan President Nicolás Maduro. Gen. Figuera issued a statement last week announcing his break with Mr. Maduro.

Pence’s speech comes as support for opposition leader Juan Guaido’s has been flagging, as many Venezuelans are exhausted with being used as “cannon fodder” against the military and pro-regime thugs. Pence is also expected to announce the deployment of a hospital ship to the region.

Despite President Trump’s productive call with Putin late last week, Russia won’t escape criticism, as Trump and Pence now appear to be engaged in a game of good-cop-bad-cop with the Russians. Pence is expect to denounce Moscow as Venezuela’s biggest weapons supplier and accuse it of seeking a “foothold” in the southern hemisphere.

The U.S. has sanctioned more than 150 government officials and state-owned businesses loyal to Mr. Maduro.

“The United States will give sanctions relief to all those willing to step forward, stand up for the constitution, and support the rule of law,” Mr. Pence will say.

Mr. Pence is also set to announce the deployment of USNS Comfort, a military hospital ship, to the Caribbean, Central America and South America to respond to the crisis in Venezuela.

If this isn’t enough to undermine support for Maduro among the military, the most vital power bloc standing between Guaido and control of the levers of power, an invasion might be the only option left.

via ZeroHedge News http://bit.ly/2YfRZtn Tyler Durden

After a few months of wild swings in mid-2018, followed by solid growth at the end of last year, in March growth in US consumer credit continued to slow, rising by only $10.3 billion, far below the $16 billion expected following February’s $15.5 billion increase, and the lowest monthly increase since June of 2018.

Despite the slowdown, the continued increase in borrowings saw a new all time high of $4.045 trillion on the back of a America’s ongoing love affair with auto and student loans, if not so much credit cards: in fact, the reason for the sharp slowdown in March was due to an unexpected $2.2 billion decline in credit card debt, the first of 2019, and the third biggest in post-crisis history. This reduced the total outstanding credit card debt to $1.057 trillion, still just shy of all time highs.

Non-revolving credit, i.e. student and auto loans, rose jumped by $12.5 billion, almost unchanged from last month’s 12.4 billion and in line with recent monthly increases; the latest jump brought the nonrevolving total also to a new all time high of $2.995 trillion.

And while February’s sudden drop in credit card use may prompt some concerns about the financial stability and propensity of the US consumer to spend, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers hit fresh all time highs as of March 31, with a record $1.598 trillion in student loans outstanding, a whopping increase of $30 billion in the quarter, while auto debt also hit a new all time high of $1.161 trillion, an increase of $8.3 billion in the quarter.

In short, whether they want to or not, Americans continue to drown even deeper in debt, and enjoying every minute of it.

via ZeroHedge News http://bit.ly/2YfRY8N Tyler Durden

The Trump Administration is looking into altering how it determines the national poverty level, which may put some Americans at risk of losing access to welfare programs, according to Bloomberg. The move might occur from changing how inflation is calculated in the “official poverty measure” according to a regulatory filing by White House Office of Management and Budget. That formula has been used for decades to try and determine where the poverty line is and what people qualify for social programs and federal benefits.

The measure is calculated at three times the cost of a minimum food diet and adjusted every year as prices rise. It was first set in the 1960s and, in 2018, a family of four making no more than $25,900 was considered under the poverty line. This figure determines eligibility for federal, state and nonprofit programs like Medicaid and food stamps.

By changing this measure, the poverty level could wind up rising at a slower rate. One proposal has been a shift  to “chained CPI”, which regularly shows a slower pace of price gains than the already rigged traditional measures. It shows slower inflation growth because it assumes consumers will substitute less expensive items when prices rise.

The Office of Management and Budget said: “Because of this, changes to the poverty thresholds, including how they are updated for inflation over time, may affect eligibility for programs that use the poverty guidelines.”

The change is being reported as an effort by the Trump administration to make it more difficult to access welfare programs. Last year, the president signed an executive order calling on federal agencies to strictly enforce current work requirements for welfare recipients and propose new stricter requirements that could reduce eligibility.

Trump said in December: “Millions of able-bodied, working-age adults continue to collect food stamps without working or even looking for work. Our goal is to move these Americans from dependence to independence, and into a good-paying job and rewarding career.”

This isn’t the first time that the government has suggested using chained CPI to bring down the cost of government programs. While democrats won’t like to hear it, but President Barack Obama proposed switching cost-of-living adjustments in Social Security and other retirement programs to the index in 2014. Obama ultimately abandoned the proposal after outrage from congressional Democrats. Something tells us Trump may not fall victim to that same pressure, however.

At the beginning of the year, we reported that the U.N. Special Rapporteur on extreme poverty and human rights in the United States found about 40 million live in poverty, 18.5 million in extreme poverty, and 5.3 million live in Third World conditions. 

The U.N. Special Rapporteur on extreme poverty warned the U.S. has one of the highest rates of income inequality among Western nations, while critiquing the Trump administration for the $1.5 trillion in debt-fueled tax cuts in December 2017 that overwhelmingly benefited the wealthy and worsened inequality among the middle class and poor.

via ZeroHedge News http://bit.ly/2Vje9xP Tyler Durden

Authored by Patrick Buchanan via Buchanan.org,

Last week, it was Venezuela in America’s gun sights.

“While a peaceful solution is desirable, military action is possible,” thundered Secretary of State Mike Pompeo. “If that’s what is required, that’s what the United States will do.”

John Bolton tutored Vladimir Putin on the meaning of the Monroe Doctrine:

“This is our hemisphere. It’s not where the Russians ought to be interfering.”

After Venezuela’s army decided not to rise up and overthrow Nicholas Maduro, by Sunday night, it was Iran that was in our gun sights.

Bolton ordered the USS Abraham Lincoln, its carrier battle group and a bomber force to the Mideast “to send a clear and unmistakable message to the Iranian regime that any attack on United States interests or those of our allies will be met with unrelenting force.”

What “attack” was Bolton talking about?

According to Axios, Israel had alerted Bolton that an Iranian strike on U.S. interests in Iraq was imminent.

Flying to Finland, Pompeo echoed Bolton’s warning:

“We’ve seen escalatory actions from the Iranians, and … we will hold the Iranians accountable for attacks on American interests. … (If) these actions take place, if they do by some third-party proxy, whether that’s a Shia militia group or the Houthis or Hezbollah, we will hold the … Iranian leadership directly accountable for that.”

Taken together, the Bolton-Pompeo threats add up to an ultimatum that any attack by Hezbollah in Lebanon, the Houthis in Yemen, or Iran-backed militias — on Israel, Saudi Arabia, the UAE or U.S. forces in Iraq, Syria or the Gulf states — will bring a U.S. retaliatory response on Iran itself.

Did President Donald Trump approve of this? For he appears to be going along.

He has pulled out of the Iran nuclear deal and re-imposed sanctions. Last week, he canceled waivers he had given eight nations to let them continue buying Iranian oil.

Purpose: Reduce Iran’s oil exports, 40% of GDP, to zero, to deepen an economic crisis that is already expected to cut Iran’s GDP this year by 6%.

Trump has also designated Iran a terrorist state and the Republican Guard a terrorist organization, the first time we have done that with the armed forces of a foreign nation. We don’t even do that with North Korea.

Iran responded last Tuesday by naming the U.S. a state sponsor of terror and designating U.S. forces in the Middle East as terrorists.

Iran has also warned that if we choke off its oil exports that exit the Persian Gulf through the Strait of Hormuz, the Strait could be closed to other nations. As 30% of the world’s oil shipments transit the Strait, closing it could cause a global crash.

In 1973, when President Nixon rescued Israel in the Yom Kippur War, the OPEC Arabs imposed an oil embargo. Gas prices spiked so high Nixon considered taking a train to Florida for Christmas vacation.

The gas price surge so damaged Nixon’s standing with the public that it became a contributing factor in the drive for impeachment.

Today, Trump’s approval rating in the Gallup Poll has reached an all-time high, 46%, a level surely related to the astonishing performance of the U.S. economy following Trump’s tax cuts and sweeping deregulation.

While a Gulf war with Iran might be popular at the outset, what would it do for the U.S. economy or our ability to exit the forever war of the Middle East, as Trump has pledged to do?

In late April, in an interview with Fox News, Iran’s foreign minister identified those he believes truly want a U.S.-Iranian war.

Asked if Trump was seeking the confrontation and the “regime change” that Bolton championed before becoming his national security adviser, Mohammad Javad Zarif said no.

“I do not believe President Trump wants to do that. I believe President Trump ran on a campaign promise of not bringing the United States into another war.

“President Trump himself has said that the U.S. spent $7 trillion in our region … and the only outcome of that was that we have more terror, we have more insecurity, and we have more instability.

“People in our region are making the determination that the presence of the United States is inherently destabilizing. I think President Trump agrees with that.”

But if it is not Trump pushing for confrontation and war with Iran, who is?

Said Zarif, “I believe ‘the B-team’ wants to actually push the United States, lure President Trump, into a confrontation that he doesn’t want.”

And who makes up “the B-team”?

Zarif identifies them: Bolton, Benjamin Netanyahu, Crown Prince Mohammed bin Salman and Crown Prince Mohammed bin Zayed.

Should the B-team succeed in its ambitions — it will be Trump’s war, and Trump’s presidency will pay the price.

via ZeroHedge News http://bit.ly/2JoszWa Tyler Durden

On Sunday evening, when futures were tumbling in kneejerk response to Trump’s one-two trade war tweet shock, we said that all eyes were on 2,890, which was the level where according to Nomura, dealer gamma turns negative again and selling begets more selling.

But while on Monday we saw a miraculous recovery in the S&P just as the futures were flirting with breaching 2,890 preventing an all out rout, today the bulls have had no such luck as it now appears that the US trade tariffs are virtually certain to begin at midnight on Friday, and as such the selloff has resumed and accelerated notably below 2,900 as of Tuesday afternoon, with the S&P sliding below 2,890, which has triggered various liquidation strats.

Nomura’s Charlie McElligott lays out all the key reversal points which are suddenly in play on Tuesday as the S&P tumbles below 2,900:

• CTA deleveraging risk levels for US Equities (sending signals from+100% down to +60%) now back “in play” following the “tariff tweet” follow-through gap lower (ESA 2895—SPOT CURRENTLY ‘THROUGH’, NQA 7598, RTYA 1584 CURRENTLY ‘THROUGH’—but note: technically most would need to see a hold and close below those respective levels) PLUS
• The convergence of the CTA Trend deleveraging level with our estimates on where index / ETF options Gamma flips “negative” with BOTH CURRENTLY ‘THROUGH’ (SPX / SPY consolidated @ 2893, QQQ @ 188.36) PLUS
• Asset Managers selling-down / monetizing their enormous “length” accumulated in US Equities over the course of the year-to-date ($62B) to start the move PLUS
• VIX futures curve now riddled with inversions—as highlighted yesterday, this source is likely behind much of this now-forced covering of ‘short vega’ from systematics and “roll-down” strategies

It was these catalysts that the Nomura strategist said yesterday “could converge to create a “flow” risk (“supply over demand” imbalance) for US Equities off the back of the tariff drama reacceleration” and it certainly looks as if as we are seeing this supply “tip” into realization as of Tuesday afternoon, “with both SPX and RTY through their CTA deleveraging levels, a move exacerbated by the slide of the S&P in “negative Gamma” territory in SPX/SPY and QQQ options landscape—all as the VIX curve inverts and forces “short vega” covering from systematics.”

There are two ways to observe the internals of today’s massive puke (three if one includes the actual plunge in the S&P). The first is that the NYSE TICK registered the second biggest selling program in the past two months at 1pm…

…  but for the real nature of what is behind today’s liquidation look no further than the next chart showing the magnitude of the Futures over Cash notional today: currently intraday Nomura notes that “the excess Futures notional of S&P, Nasdaq and Russell above the combined Cash notional is supportive of the view that today’s trade is absolutely driven by futures deleveraging“, and is indicative that this:

1. Asset Manager monetization of “Longs;”
2. CTA Trend models may be reducing their “Long” (as described in more detail below) and of course
3. Dealer Gamma hedging activity.

And this is what the market’s record futures puke looks like:

Meanwhile, with everyone pointing out as recently as last week how low both the VIX and net specs on the VIX had tumbled, look no further than VVIX, or the vol of the VIX, to see what happens when everyone is on the same side of the boat: as McElligott writes “VVIX really beginning to dance and price some serious “gap” / tail-risk @ 111″, and as for our question from this past Sunday, namely “Is The VIX About To Explode Higher Thanks To A Record Short Squeeze“, we now know the answer.

Finally, those wondering were are the next selling triggers, here are McElligott’s observations on what will catalyze even more selling:

• S&P 500, 100.0% long into today but ‘spot’ is currently through the sell-trigger level (note: needs to HOLD & CLOSE below), selling under 2894.82 to get to 60% as both the 2w and 1m signals “flip” to SELL, more selling under 2642.11 to get to -100%, flip to short under 2642.41, max short under 2642.11
• NASDAQ 100, 100.0% long into today, selling under 7597.86 (to get to 60%, more selling under 6699.38 to get to -100%, flip to short under 6700.16, max short under 6699.38
• Russell 2000, 100.0% long into today but “spot” is currently through the sell-trigger level (note: needs to HOLD & CLOSE below), selling under 1584.44 to get to 60%, more selling under 1579.99 to get to -100%, flip to short under 1580.15, max short under 1579.99

And the biggest irony: after defying the rally for so long, it was only in the past few days that asset managers finally threw in the towel, and rush to get equity exposure. And, as so often happens, that’s precisely when the trapdoor opened.

via ZeroHedge News http://bit.ly/2VRgxLC Tyler Durden

A fire department in Waco, Texas is urging drivers to “sit up” and “pay attention” after a Tesla sedan collided with a fire engine on I-35 yesterday. The driver was going southbound and the fire truck was parked near a crash zone to help divert traffic and protect first responders on the scene.

The accident occurred on Interstate 35 in a construction zone, according to the Waco Tribune. The Tesla hit the front driver side of the fire truck, damaging the bumper, emergency lights and door area. Initial reports are indicating that the driver “may have been distracted” before the crash.

Waco Deputy Fire Chief R.M. Bergerson said:

“We would just like to ask everyone to pay attention while they are driving and keep in mind with the expansion of I-35, traveling may become more difficult through Waco in the next four years. We are going to continue to do what we need to do, but we hope drivers will pay attention and drive safe.”

Bergerson also commented that this crash highlighted the need for all motorists to “remain vigilant”. He noted that distracted drivers have put local firefighters at risk in recent years, especially his station who often responds to accidents on I-35.

The “blocking procedure” – where the firetrucks block off an accident scene to keep first responders safe – was implemented after October 2015, when another driver seriously injured two firefighters while crews were working to put out a grass fire near the interstate. In that instance, one firefighter was severely injured.

“That incident actually totaled Engine No. 5, because it hit so hard. Our current engine replaced it, but it’s been hit a few more times,” Bergerson said.

This incident comes during a difficult year in terms of public relations for Tesla. Most recently, an unplugged Tesla in San Francisco caught fire while parked in a garage, days after another Tesla burst into flames in a Chinese parking garage. The company’s financials also looked close to spontaneously combusting when Tesla reported an ugly Q1 in late April, weeks before its recent desperate cash infusion capital raise.

In this case, the firetruck served its purpose by protecting the first responders on the scene, but we have to ask how this incident would have played out without the truck standing in the way of the Tesla and emergency workers? How long will regulators let these types of accidents go un-investigated? How long until someone loses their life and the potential blame starts to shift from Tesla to the NHTSA and NTSB?

via ZeroHedge News http://bit.ly/304Coi0 Tyler Durden

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

Zero Hedge ran an article about omissions from the Mueller report and/or investigation. It’s instructive, but there is more. First, some bits from that article: Major Mueller Report Omissions Suggest Incompetence Or A Coverup

Robert Mueller’s 448-page “Investigation into Russian Interference in the 2016 Presidential Election” contains at least two major omissions which suggest that the special counsel and his entire team of world-class Democrat attorneys are either utterly incompetent, or purposefully concealing major crimes committed against the Trump campaign and the American people.

First, according to The Federalist’s Margot Cleveland (a former law clerk of nearly 25 years and instructor at the college of business at the University of Notre Dame) – the Mueller report fails to consider whether the dossier authored by former MI6 spy Christopher Steele was Russian disinformation, and Steele was not charged with lying to the FBI.

“The Steele dossier, which consisted of a series of memorandum authored by the former MI6 spy, detailed intel purportedly provided by a variety of Vladimir Putin-connected sources. For instance, Steele identified Source A as “a senior Russian Foreign Ministry figure” who “confided that the Kremlin had been feeding Trump and his team valuable intelligence on his opponents, including Democratic presidential candidate Hillary Clinton.”

Other supposed sources identified in the dossier included: Source B, identified as “a former top-level Russian intelligence officer still active inside the Kremlin”; Source C, a “Senior Russian Financial Officer”; and Source G, “a Senior Kremlin Official.” -The Federalist

As Cleveland posits: “Given Mueller’s conclusion that no one connected to the Trump campaign colluded with Russia to interfere with the election, one of those two scenarios must be true—either Russia fed Steele disinformation or Steele lied to the FBI about his Russian sources.”

Mueller identified only two principal ways Russia interfered in the 2016 presidential election: “First, a Russian entity carried out a social media campaign that favored presidential candidate Donald J. Trump and disparaged presidential candidate Hillary Clinton. Second, a Russian intelligence service conducted computer-intrusion operations against entities, employees, and volunteers working on the Clinton Campaign and then released stolen documents.”

Surely, a plot by Kremlin-connected individuals to feed a known FBI source—Steele had helped the FBI uncover an international soccer bribery scandal—false claims that the Trump campaign was colluding with Russia would qualify as a “principal way” in which Russia interfered in the 2016 presidential election.

[..] the only lawmaker to even mention this possibility has been Sen. Chuck Grassley (R-IA), who raised the issue with Attorney General William Barr last week: “My question,” said Grassley, “Mueller spent over two years and 30 million dollars investigating Russia interference in the election. In order for a full accounting of Russia interference attempts, shouldn’t the special counsel have considered whether the Steele dossier was part of a Russian disinformation and interfere campaign?” [..] Barr said that he has assembled a DOJ team to examine Mueller’s investigation, findings, and whether the spying conducted by the FBI against the Trump campaign in 2016 was improper.

 Mueller’s second major oversight – which we have touched on repeatedly – is the special counsel’s portrayal of Maltese professor Joseph Mifsud as a Russian agent – when available evidence suggests he may have been a Western agent.

Weeks after returning from Moscow, Mifsud – a self-described Clinton Foundation member – ‘seeded’ the rumor that Russia had ‘dirt’ on Hillary Clinton with Trump campaign adviser George Papadopoulos on April 26, 2016, according to the Mueller report.

As Rep. Devin Nunes (R-CA) noted on Fox News on Sunday, “how is it that we spend 30-plus-million dollars on this, as taxpayers and they can’t even tell us who Joseph Mifsud is?” “…this is important, because, in the Mueller dossier, they use a fake news story to describe Mifsud. In one of those stories, they cherry- pick it,” Nunes added.

[..] As conservative commentator and former US Secret Service agent Dan Bongino notes of Mifsud, “either we have a Russian asset who’s infiltrated the highest echelons of friendly Intelligence Services, or we have a friendly who was setting up George Papadopoulos.”

This poses questions about Mueller, Mifsud and Steele and many other people and organizations involved, but the central question remains unaddressed: did Russia truly meddle and interfere in the 2016 election?

We don’t know, we have only Mueller’s word for that, and he’s ostensibly based it on reports from US intelligence, which has very obvious reasons to smear Russia. That Mifsud is presented as a Russian agent, with all the doubts about that which we have seen presented, doesn’t help this point.

That Steele hadn’t visited Russia since 1993 when he complied his dossier is not helpful either. His information could have originated with “the Russians”, or with US intelligence, and he would never have been the wiser. That is, even IF he was a straight shooter. What are the odss of that?

And of course the strongest doubts about Russian meddling and interference, along with offers of evidence to underline and reinforce these doubts, have been offered by Julian Assange and the Veteran Intelligence Professionals for Sanity (VIPS) group.

But as I’ve repeatedly said before, after Mueller had to let go of the “Russia collusion with the Trump campaign” accusation, he was free to let the “Russian meddling aided and abetted by Julian Assange” narrative stand, because he didn’t have to provide proof for that, as long as he didn’t communicate with either the Russians (easy), the VIPS (whom he stonewalled) or Assange (who’s been completely silenced).

So we have -at least- 4 major omissions in the Mueller investigation and report:

1) the Mueller report failed to consider whether the dossier authored by former MI6 spy Christopher Steele was Russian disinformation (and Steele was not charged with lying to the FBI).

2) Mueller’s portrayal of Maltese professor Joseph Mifsud as a Russian agent – when available evidence suggests he may have been a Western agent.

3) Mueller declined to talk to the VIPS, who offered evidence that the DNC servers were not hacked but content was copied onto a disk at the server’s location

4) Mueller refused to hear Julian Assange, who offered evidence that it was not the Russians that had provided WikiLeaks with the emails.

Mueller was supposedly trying to find the truth about Trump’s ties to Russia/Putin, and he refused to see and hear evidence from two organizations, WikiLeaks and the VIPS, which he absolutely certainly knew could potentially have provided things he did not know. Why did he do that? There’s only one possible answer: he didn’t want to know.

Why not? Because he feared he would have had to abandon the “Russian meddling and interference” narrative as well. If, as both WikiLeaks and the VIPS insisted, the emails didn’t come from “the Russians”, all that would have been left is an opaque story about “Russians” buying $100,000 in Facebook ads. And that, too, is awfully shaky.

That’s an amount Jared Kushner acknowledged he spent every few hours on such ads during the – multi-billion-dollar – campaign. Moreover, many of these ads were allegedly posted AFTER the elections. And we don’t even know it was Russians who purchased the ads, that’s just another story coming from US intelligence.

It is not so hard, guys. “Omissions” or “oversight” is one way to put it, but there are others. Assange could have cleared himself of any claims of involvement in meddling and perhaps proven Guccifer 2.0 was not “Russian”. His discussions with the DOJ, preparations for which were in an advanced stage of development, were killed in 2017 by then-FBI head James Comey and Rep. Mark Warner.

Mueller never wanted the truth, he wanted to preserve a narrative. The VIPS, too, threatened that narrative by offering physical evidence that nobody hacked the emails. Mueller never reached out. Mueller, the former FBI chief, who must know who these men and women are. Here’s a list, in case you were wondering:

Steering Group, Veteran Intelligence Professionals for Sanity

• William Binney, former Technical Director, World Geopolitical & Military Analysis, NSA; co-founder, SIGINT Automation Research Center (ret.)

• Bogdan Dzakovic, former Team Leader of Federal Air Marshals and Red Team, FAA Security (ret.) (associate VIPS)

• Philip Giraldi, CIA, Operations Officer (ret.)

• Mike Gravel, former Adjutant, top secret control officer, Communications Intelligence Service; special agent of the Counter Intelligence Corps and former United States Senator

• James George Jatras, former U.S. diplomat and former foreign policy adviser to Senate leadership (Associate VIPS)

• Larry Johnson, former CIA Intelligence Officer & former State Department Counter-Terrorism Official, (ret.)

• Michael S. Kearns, Captain, USAF (ret.); ex-Master SERE Instructor for Strategic Reconnaissance Operations (NSA/DIA) and Special Mission Units (JSOC)

• John Kiriakou, former CIA Counterterrorism Officer and former Senior Investigator, Senate Foreign Relations Committee

• Karen Kwiatkowski, former Lt. Col., US Air Force (ret.), at Office of Secretary of Defense watching the manufacture of lies on Iraq, 2001-2003

• Clement J. Laniewski, LTC, U.S. Army (ret.)

• Linda Lewis, WMD preparedness policy analyst, USDA (ret.)

• Edward Loomis, NSA Cryptologic Computer Scientist (ret.)

• David MacMichael, former Senior Estimates Officer, National Intelligence Council (ret.)

• Ray McGovern, former US Army infantry/intelligence officer & CIA presidential briefer (ret.)

• Elizabeth Murray, former Deputy National Intelligence Officer for the Near East & CIA political analyst (ret.)

• Todd E. Pierce, MAJ, US Army Judge Advocate (ret.)

• Peter Van Buren,U.S. Department of State, Foreign Service Officer (ret.) (associate VIPS)

• Robert Wing, U.S. Department of State, Foreign Service Officer (former) (associate VIPS)

• Ann Wright, U.S. Army Reserve Colonel (ret) and former U.S. Diplomat who resigned in 2003 in opposition to the Iraq War

And then you lead a Special Counsel investigation, you spend 2 years and $30 million, you get offered evidence in what you’re investigating, and you just ignore these people?

And there are still people who want to believe that Robert Swan Mueller III is a straight shooter? They must not want to know the truth, either, then.

Here’s wondering if Bill Barr does, who’s going to investigate the Mueller investigation. Does he want the truth, or is he just the next in line to push the narrative?

Is there anyone in power left in America who has any courage at all to expose this B-rated theater?

Tulsi Gabbard has been reviled for talking to Assad. Why not talk to Assange as well, Tulsi? How about Rand Paul? We know he wanted to talk to Assange last year. Anyone?

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via ZeroHedge News http://bit.ly/2H4ziTA Tyler Durden

Bloomberg’s Michael Regan has taken a lot of heat for his Friday article “The U.S. Stock Market Can’t Stop, Won’t Stop Its Endless Rally“, which prompted some to ask if Bloomberg, with its “millennialized”, click-optimized newsroom, has become the new Barron’s.

And yet, Regan’s less than prescient headline notwithstanding, he made an accurate point in his teaser, namely that “regular investors are leaving.“

That, as we have pounded the table week after week after week, has been the real story of 2019 – not the relentless, artificial melt-up in the market on the back of a dovish reversal by central banks and the daily US-China trade talk “optimism” which we now know is not happening.

Confirming that this trend continued for one more week, even as the S&P hit new all time highs, Bank of America’s strategist Jill Carey Hall writes that last week, during which the S&P 500 was up +0.2%, virtually everyone sold stocks, as “Institutional clients, hedge funds and private clients sold the highs in equities last week.” And yet, somehow the S&P hit a new all time high. How? The answer: “Corporate buybacks ramped up.”

As BofA elaborates, “buying was led by corporate buybacks, as all other groups (hedge funds, institutional and retail clients) were net sellers of equities for the second consecutive week.”  This means that for one more week, traditional investors were – as Regan noted above – boycotting stocks, and were delighted to sell stock back to the companies that were once again aggressively buying back their own stock with the S&P hitting all time highs, to wit:

• Clients were net sellers of single stocks (2nd straight week), but continued to buy ETFs (8th straight week). Cumulative flows into ETFs YTD turned positive, reversing outflows seen earlier this year (Chart 1).
• Buybacks last week were their highest since early Feb: they tend to be strong during earnings seasons and seasonally peak in mid/late May. Buybacks YTD are +20% YoY, though the growth rate continues to decline.

But if everyone else was selling, how did buybacks offset the selling avalanche? Simple: according to BofA’s stock repurchase desk, “buybacks last week were their highest since early Feb: they tend to be strong during earnings seasons and seasonally peak in mid/late May. Buybacks YTD are +20% YoY, though the growth rate continues to decline.”

While this means that we can once and for all forget about the recurring lie of a buyback blackout period – which as we explained before applies only to a very narrow subset of stock repurchases – it also means that we have reached a level of market lethargy where stock buybacks are powerful enough to offset all other selling. .

 

via ZeroHedge News http://bit.ly/2JphQLo Tyler Durden