Category: zerohedge

“There Will Be No Place To Hide” – Markets Are Over 50% More “Exuberant” Than In 1996

“It is really going to end badly,” is the ominous warning that Damien Cleusix has issued to his clients as he believes we are now reaching the top of the secular bull market. Crucially, he sees US stock markets as “grossly over-valued” but that it is hidden from most people’s perceptions because (just as in 2000 and 2007) there are marginal sectors that make the ‘aggregate’ seem reasonable (not to mention the dreams of forward earnings.) His novel approach of a point-in-time Price-to-Sales comp shows the median valuation its highest in 23 years.. and Alan Greenspan’s infamous “exuberance” valuations in 1996 were 40% below current levels of elation. Today, the big difference with 2000 and 2007 is that government and central banks have already spend a lot of firing power to “make believe” that everything is fine again. He concludes, “there will be no place to hide when the tide turns.”

 

Via Damien Cleusix,

It is really going to end badly…

What if we are indeed only now reaching the top of the secular bull market… What if

It is no secret that we view the US stock markets as grossly over-valued. In recent meetings, as in the Spring of 2007, we have insisted that not only are markets more overvalued than what they seem, the overvaluation is also general. Ed Easterling wrote a provocative article not long ago on the subject. Those who have read his two books, “Unexpected Returns” and “Probable Outcome” know the quality of his research.

  • In 2000 while TMT companies were reaching absurd valuation, small caps and quality value stocks where cheap. Remember that Berkshire Hathaway made its low the same day as the Nasdaq made its top or the same month as Julian Robertson, one of the best value stock picker of history, liquidated his fund.
  • In 2007, the overvaluation was general but here again you had a sector distorting the various valuation ratios – financial companies. In the bear market that ensued, nobody who was long, even the best conservative value stock pickers, made money if they were long-only. There was carnage.

Today our contention is that markets are more overvalued than in 2007.

There will be no place to hide when the tide turns. No place. The best value managers will lose a lot of money, factors which have historically worked well will suffer a lot too (small caps will be crushed and could lose more than 60% from current levels, high dividend paying and shareholder yield stocks too as they are expensive relative to an expensive markets, quality stocks will outperform but not by much and given the concentration of hedge fund investors in some of them, they will be liquidated without mercy when blood will run in the street).

Margin factors are also the highest against the markets they have been since we have data in the early 90’s (and we doubt they were more expensive on a relative basis before).

In the graph below you can see 3 different valuation ratios where we try to remove the margin and sector overvaluation effect.

 

Data is based on Point in Time S&P 500 constituents since 1990. The red line is the median Price-to-Sale (P/S) ratio. The light blue line is the average of each components PS (an equal weighted P/S if you want) where the overvaluation of 2000 still stands out because of the SUN Micro of the time. The dark blue line is the average of the and and third quartile PS (we used Bloomberg for the components and the P/S data).

Remember Alan Greenspan’s irrational exuberance? It was in December 1996 and at the time it was indicating that the market were extremely expensive compared to history. Well in December 1996 the 3 ratios where 40% below current levels.

Today, the big difference with 2000 and 2007 is that government and central banks have already spent a lot of firing power to “make believe” that everything is fine again.

The current environment is structurally deflationary and real trend growth is much lower than what the Fed and most analysts are believing. For many, many years we have talked about this (demography, overindebtness, oversupply,…).  It means that inflation rate will be lower and unemployment higher than what the Fed is predicting. It also means that this is structural and not cyclical. It also means that the Fed, as long as it does not realize this, is going to continue what it has been doing for a very very long-term.

We have long said that investors bias causes them to sometimes struggle to see the world as it is and instead prefer to see it as it should be. Investors are too naive. Current policies are not what they should be (productive investment, deleveraging to move away from this culture of speculation and easy money) and we need a trigger to make this change. Could it be a more hawkish Fed with new governors nominated next year and/or realizing that they have created a fantastic bubble in the equity and corporate bond markets (both linked as most of the borrowing is done to buyback shares or other companies and hence the productive capital base is not increased further lowering long-term growth potential ceteris paribus).

With regard to the short-term markets movement we can only repeat what we said recently:

“Market short-term volatility (intra-day) has increased markedly in the past few weeks. Important tops (cyclical) are made when valuations are extended (check), important divergences are forming (check), market uniformity decreasing substantially (check), exuberant optimism (check and congrat to R. Shiller…), markets overbought (check but could be more extreme on the daily time frame) and, finally, increased short-term volatility (check). You can use some pattern (serie of small range days) if you really want to be cute.

 

The only ingredient missing here is a sell signal from our cyclical models which have stayed stubbornly positive since 2009 with the exception of a  short-lived sell signal during the  2011 route. By definition, those cyclical signals will miss the first part of the decline which make a 10-12% drawdown at the beginning of an cyclical bear market a rule rather than the exception. The above checks are all warnings that cyclical signals could turn down during the next correction (or at least in the near-term).”


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/xFgikufJGL0/story01.htm Tyler Durden

Guest Post: The Rise Of The Sheeple

Submitted by Jeff Thomas via Doug Casey's International Man blog,

Currently, a clever young man, Mark Dice is producing a series of videos in which he approaches strangers in public places in the US and asks them to sign a prepared petition that he is holding. Invariably, Mark behaves in a polite, congenial manner and makes a clear effort to appear as harmless as possible. However, the subjects of his petitions are the antithesis of his demeanour.

The subject of a Dice petition may be the repeal of the Second Amendment to the Constitution, a move to assure that old people are exterminated under Obamacare, or, as in the attached video, to ask potential petition signers to support Karl Marx as the next president of the US.

 

 

In each video, Mark's approach is the same. He chooses a large, open public space, dresses casually and hands his clipboard to someone who is passing and politely asks for his signature in support of a concept that is ludicrous. He does this with a straight face and always behaves pleasantly. Once the passer-by has taken the clipboard and is looking for the place to sign, Mark describes details (again, in a pleasant manner) of what is being proposed, such as,

"We're just gathering signatures to show support for Obama and his communist agenda, so we're gonna get Karl Marx on the 2016 ballot and continue the Marxist takeover."

Invariably, the prospective signers seem not to take in the significance of what Mark is saying. They seem to be focused more on where they are supposed to sign. No matter how many horrific details Mark offers the signers to provoke them to think about what they are signing, nothing seems to sink in.

Of course, we recognise that the video may contain only those people who were actually empty-headed enough to sign, and, surely, there were others who refused. However, this does not alter the fact that so many people simply "go along," seemingly oblivious to what they are signing.

Surely, for any reader of this publication, these videos will be both entertaining and exasperating, as they demonstrate the stupidity and complacency of so many people.

However, if we look a little deeper, what we see in the videos is even more revealing—to the point that we might consider that the "sheeple" we are observing are not simply buffoons; they pose a threat to our personal future.

Looking back into history, we see a parallel in Germany. In the late 1940s, many Germans were interviewed as to how it had been possible for Hitler to effect his extreme policies. They were asked how they could have sat by whilst the atrocities occurred. The Germans interviewed stated vaguely that they were not aware of the atrocities. When they were pointedly asked about seeing the Jews being dragged off and thrown on trains, or asked about the smell from the smokestacks at the concentration camps, the interviewees would shrug their shoulders and say that they had not realised the significance of what was happening.

At that time, Americans were rightfully outraged that the German people could have been so callous, so unobservant, or so dim-witted as to have been unaware of what was happening around them. Surely, at some point, the German people should have said, "That's enough. This is wrong and must stop."

And the Americans were correct, although it is also true that, having won the war, it was easy for them to criticise, as they had not been the people who had been under the thumb of an over-reaching fascist government.

Today, of course, the shoe is on the other foot. The US is tragically, but assuredly, the home of a fascist over-reaching government. On a very regular basis, Americans are subjected to new measures of control that they should feel are beyond the pale and are to be rejected. However, just as in Nazi Germany in the 1930s, the threat from the government towards those who do not comply is developing in lockstep with the increasing controls.

If we were to imagine a Mark Dice in Germany in late 1930s Berlin, stopping people in a friendly way to ask for their signatures on a petition that, say, called for the extermination of Jews, they might well have signed, finding it easier to "go along" than to question the validity of the idea being proposed.

The reason? Well, at some point in the destruction of a democracy, a mild fear sets in the minds of a people that all will not turn out well. At that point, many begin to shut down. Their ability to react to outrageous developments fades into a state of numbness. It no longer matters how irrational the proposal may be, it is simply accepted on the face of it, as it is easier to "go along" than to question. It is also less distressing.

If we watch the video that is attached, we may shake our heads that the petition signers do not react to the idea that a dead man (Karl Marx) is running for president. Neither do they react to the suggestion that they show support for Obama's "communist agenda." Neither do they react to the suggestion of a full communist takeover.

This does not necessarily mean that the petition signers are incredibly stupid. What it means is that they have chosen to tune out. It is best not to think. The petitioner is pleasant, and it does not pay to contest the issues in question. It is easier to simply sign.

At some point in the future, interviewers may ask Americans, "How could you just sit by whilst the atrocities occurred?" Americans may shrug their shoulders and say that they were not really aware of what was happening. If and when this comes to pass, will they be lying? Possibly not. It may be that those who had simply "tuned out" were no longer cognizant of the meaning of events around them and were functioning as automatons—servants of the American Reich.

It is sadly true that the signing of a Mark Dice petition is a mere symptom of a greater concern—the conversion of the American people from a once-proud culture of self-determination, to a lesser species of cooperative sheeple.

For the observer, it suggests that the US has passed the point of no return; that this may end as it has historically—in a period of warfare abroad and subjugation at home.

The warning signs are becoming more numerous with each passing day.

The choice for Americans today is whether to wait and see whether history repeats or whether to plan to be elsewhere before the deterioration advances further.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1R4AAZdRR4g/story01.htm Tyler Durden

Despite President's Urging, Obamacare Helpline Lives Up To Its Name

It would appear, despite the President's urging, that Obamacare's helpline is living up to its mnemonics. As The National Review reports, President Obama emerged on Monday to assure Americans that the “kinks” surrounding the federal and state health-care exchanges are improving and urged consumers to call the exchange hotline if they continue to encounter problems online. Shortly after he made the suggestion, Twitter lit up with reporters and others who attempted to do so but failed to get through to a navigator as promised.

 

Indeed, Mr. President, 1-800-318-2596 to you too.

 

 

Via The National Review,

…

After dialing the number, some callers got a busy signal, others received an automated message, and yet others were referred back to Healthcare.gov.

 

 

 

In his speech, President Obama said that there was “no excuse” for the problems plaguing the website and assured Americans, “These problems are getting fixed.” He also said that the issues with the online exchanges do not reflect flaws in the legislation itself, which he said offers a high-quality product.

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/jm0xh-W5v6Y/story01.htm Tyler Durden

Despite President’s Urging, Obamacare Helpline Lives Up To Its Name

It would appear, despite the President's urging, that Obamacare's helpline is living up to its mnemonics. As The National Review reports, President Obama emerged on Monday to assure Americans that the “kinks” surrounding the federal and state health-care exchanges are improving and urged consumers to call the exchange hotline if they continue to encounter problems online. Shortly after he made the suggestion, Twitter lit up with reporters and others who attempted to do so but failed to get through to a navigator as promised.

 

Indeed, Mr. President, 1-800-318-2596 to you too.

 

 

Via The National Review,

…

After dialing the number, some callers got a busy signal, others received an automated message, and yet others were referred back to Healthcare.gov.

 

 

 

In his speech, President Obama said that there was “no excuse” for the problems plaguing the website and assured Americans, “These problems are getting fixed.” He also said that the issues with the online exchanges do not reflect flaws in the legislation itself, which he said offers a high-quality product.

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/jm0xh-W5v6Y/story01.htm Tyler Durden

Stephen Roach: What The Debt Ceiling Debacle Should Teach China

Authored by Stephen Roach, originally posted at Project Syndicate,

Yes, the United States dodged another bullet with a last-minute deal on the debt ceiling. But, with 90 days left to bridge the ideological and partisan divide before another crisis erupts, the fuse on America’s debt bomb is getting shorter and shorter. As a dysfunctional US government peers into the abyss, China – America’s largest foreign creditor – has much at stake.

It began so innocently. As recently as 2000, China owned only about $60 billion in US Treasuries, or roughly 2% of the outstanding US debt of $3.3 trillion held by the public. But then both countries upped the ante on America’s fiscal profligacy. US debt exploded to nearly $12 trillion ($16.7 trillion if intragovernmental holdings are included). And China’s share of America’s publicly-held debt overhang increased more than five-fold, to nearly 11% ($1.3 trillion) by July 2013. Along with roughly $700 billion in Chinese holdings of US agency debt (Fannie Mae and Freddie Mac), China’s total $2 trillion exposure to US government and quasi-government securities is massive by any standard.

China’s seemingly open-ended purchases of US government debt are at the heart of a web of codependency that binds the two economies. China does not buy Treasuries out of benevolence, or because it looks to America as a shining example of wealth and prosperity. It certainly is not attracted by the return and seemingly riskless security of US government paper – both of which are much in play in an era of zero interest rates and mounting concerns about default. Nor is sympathy at work; China does not buy Treasuries because it wants to temper the pain of America’s fiscal brinkmanship.

China buys Treasuries because they suit its currency policy and the export-led growth that it has relied on over the past 33 years. As a surplus saver, China has run large current-account surpluses since 1994, accumulating a massive portfolio of foreign-exchange reserves that now stands at almost $3.7 trillion.

China has recycled about 60% of these reserves back into dollar-denominated US government securities, because it wants to limit any appreciation of the renminbi against the world’s benchmark currency. If China bought fewer dollars, the renminbi’s exchange rate – up 35% against the dollar since mid-2005 – would strengthen more sharply than it already has, jeopardizing competiveness and export-led growth.

This arrangement fits America’s needs like a glove. Given its extraordinary shortfall of domestic saving, the US runs chronic current-account deficits and relies on foreign investors to fill the funding void. US politicians take this for granted as a special privilege bestowed by the dollar’s position as the world’s major reserve currency. When queried about America’s dependence on foreign lenders, they often smugly retort, “Where else would they go?” I have heard that line many times when I have testified before the US Congress.

Of course, America benefits from China’s outward-facing growth model in many other ways, as well. China’s purchases of Treasuries help hold down US interest rates – possibly by as much as one percentage point – which provides broad support to other asset markets, such as equities and real estate, whose valuation depends to some extent on Chinese-subsidized US interest rates. And, of course, hard-pressed middle-class American consumers benefit hugely from low-cost Chinese imports – the Walmart effect – that enable them to stretch their budgets in an era of unrelenting pressure on jobs and real incomes.

For more than 20 years, this mutually beneficial codependency has served both countries well in compensating for their inherent saving imbalances while satisfying their respective growth agendas. But here the past should not be viewed as prologue. A seismic shift is at hand, and America’s recent fiscal follies may well be the tipping point.

China has made a conscious strategic decision to alter its growth strategy. Its 12th Five-Year Plan, enacted in March 2011, lays out a broad framework for a more balanced growth model that relies increasingly on domestic private consumption. These plans are about to be put into action.  An important meeting in November – the Third Plenum of the Central Committee of the 18th Chinese Communist Party Congress – will provide a major test of the new leadership team’s commitment to a detailed agenda of reforms and policies that will be required to achieve this shift.

The debt-ceiling debacle has sent a clear message to China – and comes in conjunction with other warning signs. Post-crisis sluggishness in US aggregate demand – especially consumer demand – is likely to persist, denying Chinese exporters the support they need from their largest foreign market. US-led China bashing – a bipartisan blame game that reached new heights in the 2012 political cycle – remains a real threat. And now the safety and security of US debt are at risk. Economic alarms rarely ring so loudly. The time has come for China to respond with equal clarity.

Rebalancing is China’s only option. Several internal factors – excess resource consumption, environmental degradation, and mounting income inequalities – are calling the old model into question, while a broad constellation of US-centric external forces also attests to the urgent need for realignment.

With rebalancing will come a decline in China’s surplus saving, much slower accumulation of foreign-exchange reserves, and a concomitant reduction in its seemingly voracious demand for dollar-denominated assets. Curtailing purchases of US Treasuries is a perfectly logical outgrowth of this process. Long dependent on China to finesse its fiscal problems, America may now have to pay a much steeper price to secure external capital.

Recently, Chinese commentators have provocatively referred to the inevitability of a “de-Americanized world.” For China, this is not a power race. It should be seen as more of a conscious strategy to do what is right for China as it confronts its own daunting growth and development imperatives in the coming years.

The US will find it equally urgent to come to grips with a very different China. Codependency was never a sustainable strategy for either side. China just happens to have understood this first. The days of its open-ended buying of Treasuries will soon come to an end.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1E5PgvWMcCA/story01.htm Tyler Durden

Marc Faber Blasts “We Are The Bubble… There Is No Exit Strategy”

“The question is not ‘tapering’,” Marc Faber exclaims to his hosts on CNBC’s Squawk Box this morning, “the question is at what point will they increase the asset purchases to say $150 [billion] , $200 [billion], or a trillion dollars a month.” QE-4-EVA is here to stay, as Faber explained “every government program that is introduced under urgency and as a temporary measure is always permanent.” Simply put, “The Fed has boxed itself into a position where there is no exit strategy,” and while inflation may not be present in the ‘chosen’ indicators, Faber blasts, there’s been incredible asset inflation – “we are the bubble. We have a colossal asset bubble in the world [and] a leverage or a debt bubble.” There will be massive wealth destruction, he concludes, “one day this asset inflation will lead to a deflationary collapse one way or the other. We don’t know yet what will cause it.”

 

The Fed is Boxed In….

 

The world is in a gigantic bubble…

 

Back in April 2012, Faber said the world will face “massive wealth destruction” in which “well to-do people will lose up to 50 percent of their total wealth.”

In today’s “Squawk” appearance, he said that could still happen but possibly from higher levels because of the “asset bubble” caused by the Fed.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/voIblqgwiNk/story01.htm Tyler Durden

Marc Faber Blasts "We Are The Bubble… There Is No Exit Strategy"

“The question is not ‘tapering’,” Marc Faber exclaims to his hosts on CNBC’s Squawk Box this morning, “the question is at what point will they increase the asset purchases to say $150 [billion] , $200 [billion], or a trillion dollars a month.” QE-4-EVA is here to stay, as Faber explained “every government program that is introduced under urgency and as a temporary measure is always permanent.” Simply put, “The Fed has boxed itself into a position where there is no exit strategy,” and while inflation may not be present in the ‘chosen’ indicators, Faber blasts, there’s been incredible asset inflation – “we are the bubble. We have a colossal asset bubble in the world [and] a leverage or a debt bubble.” There will be massive wealth destruction, he concludes, “one day this asset inflation will lead to a deflationary collapse one way or the other. We don’t know yet what will cause it.”

 

The Fed is Boxed In….

 

The world is in a gigantic bubble…

 

Back in April 2012, Faber said the world will face “massive wealth destruction” in which “well to-do people will lose up to 50 percent of their total wealth.”

In today’s “Squawk” appearance, he said that could still happen but possibly from higher levels because of the “asset bubble” caused by the Fed.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/voIblqgwiNk/story01.htm Tyler Durden

The Cargo Problem

If there was ever a more complicated place in the world it’s Kenya. I just got back from my third trip there. It made me think about why they are so poor and we are so rich.

There are 42+ million people in Kenya and most of them are poor. The government says they are expanding at 4-5% per year. Annual GDP is only $71.4 billion. Apple had $156 billion in revenues in 2012. 40% of the workforce is unemployed. Per capita income is about $900 per year making one of the poorest countries on the planet. Yet the media there are brimming with optimistic reports of economic progress.

The capital, Nairobi, is a growing, sprawling city with an official population of 3,500,000 but it’s really much, much larger. There are large slums on the outskirts. While there is an emerging middle class and a top tier of 5,000 millionaires, most Nairobians are struggling.

It is not as if there has been no progress. There has been a lot of construction in and around Nairobi and real estate is in a boom phase. New shopping strip malls and housing developments serve the growing middle class. And many people (60% of the “poor”) have cell phones. More cars, more jitneys, and more buses clog the roads. And more inflation which robs people of their savings.

There are two foundations of their economy: agriculture and tourism. Tourism by far is the most important since it brings good jobs and foreign exchange. Tourism accounts for more than 50% of the economy. Half of farming is subsistence level only.

It makes you wonder. If things are so good, why are things so bad?

It isn’t the people. Many speak English and are well educated. But their talents are wasted because of a lack of opportunity. I discussed politics with a waiter who had wanted to be a biologist. A safari guide who speaks 3 or 4 languages, who is a trained and certified wildlife expert is paid $30 a month and relies on tips from generous tourists to get by. It is considered a very good job.

There are many explanations for poverty. One popular idea is Jared Diamond’s theory espoused in the book, Guns, Germs and Steel. He takes an historical look at why some parts of the globe thrived and some didn’t. His explanation for success was: the rise of grain agriculture in temperate zones, the decimation of non-temperate zone populations from diseases spread by temperate zone invaders, and the technology of advanced weaponry. Cultures living in temperate zones of the planet thrived and those elsewhere failed to grow beyond subsistence levels.

Diamond’s book was a response to a question from a New Guinean who asked him, “Why do you have so much cargo and we so little?” “Cargo” being pidgin for material goods. I believe that Diamond’s answer only goes so far. Those factors can explain many things in the dim historic past, but it is not as applicable today. It leaves out one really important thing: ideas. Or, to be more accurate, the right ideas.

For example, another question one can ask is: “Why do some societies in the temperate zones thrive and others fail?” Or, “Why do some societies in tropical zones thrive and others fail?” It’s not because technology isn’t known to poor societies. Everybody (almost) everywhere has access to this knowledge. The thing missing in Diamond’s theory are the sociological factors: the methods of human organization. Here I am talking about economic and political systems. These are the ideas the make us or break us.

The formula for success anywhere on the planet isn’t that difficult to discover. You need freedom. That is, solid property rights, a just legal system that protects property rights and the enforcement of contracts, and limited government and low taxation. Add in the personal freedom to do what you damn well please as long as you don’t abridge someone else’s rights. If you do these things, capital (wealth from savings) and an entrepreneurial spirit will rise and drive human progress. These are the ideas that emerged from the Enlightenment and culminated in the founding of the United States of America. It has worked everywhere it has been tried.

These are the things that Kenya and most African countries lack.

Since gaining independence from Britain in 1960, Kenya took the socialist path and the economy stagnated. Bad roads, bad communications, state owned industries, rising poverty, corruption. Basically they just spent the capital that had been accumulated during colonial times. Colonialism was bad but so were and still are the successive socialist-kleptocratic regimes that suck the country dry and keep them poor. They just raised the national sales (VAT) tax to 16% and everyone is complaining because prices have shot up. In 1989 impoverished China took a different road and now they are building roads in Kenya as part of their foreign aid (with a commercial ulterior motive, of course).

Everyone I talked to at “ground level” in Kenya said the number one problem is corruption. When you get down to the detail of what they really mean by that is that they lack the above mentioned freedoms needed for success. The courts are corrupt. The politicians are corrupt. The police are corrupt. The bureaucrats are corrupt. Crony capitalism is rampant. While they espouse the philosophy of “democracy”, that usually means the winners get to distribute political spoils to their cronies and fellow tribesmen.

How do you change that? Can you just change the system and expect human behavior to change overnight? Well, you’ve got to start somewhere. It won’t happen overnight, but if freedom breaks out in these countries, I believe things and people will change for the better. I believe that stripped down to our essentials, human beings behave pretty much the same. It’s all the crap that’s piled on top of us starting at birth that is the problem.

Free market capitalism is what I have been talking about here. It is what is called an emergent system, that is, a spontaneous social organization that emerges when the right conditions (freedom) are present. It is a ground up mostly self-regulating system. It’s not something that government invents (a top down system), but it’s the system that most closely matches human nature and allows individuals to reach their potential. Before you get too excited, recall the conditions of freedom I mentioned above require government to protect and enforce our human rights. It’s not easy; it takes time. And it’s not perfect, but as history has shown, it sure as hell beats anything else.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Api6j7Ft2Yg/story01.htm Econophile

Hedgers Active As Stocks Languish (At All-Time Highs) On Low Volume

The high-beta honeys were not amused (despite another melt-up in NFLX into earnings) as the Russell 2000 underperformed (-0.25% on the day). The Dow and S&P ended practically unch, Nasdaq bid (helped by AAPL ahead of the product news tomorrow) and Trannies closed their highs of the day exuberating all the way… Treasury yields rose 2-3bps (steepening). FX was quiet with the USD very slightly higher (helped by JPY weakness) but AUDJPY was in charge of S&P 500 trading today. Oil dropped 1.6% closing back under $100 and Silver rallied 1.3%. Hedgers were active (6though clearly the selling was limited) as credit spreads and volatility markets saw protection buyers active.

 

Equity indices were quite notably divergent today…

 

But it was clear that macro overlays were being laid out once again in credit…

 

and in VIX…

 

Bonds quietly limped higher in yield but FX markets were dead…

 

with only AUDJPY (JPY weakness dominant) leading stocks…

 

Charts: Bloomberg

Bonus Chart: Apple catches up to Gold ahead of tomorrow’s product announcement


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/qxkWDUjgR7A/story01.htm Tyler Durden

Is This Where Your Egg McMuffin Comes From?

And the hits just keep on coming for McDonalds. An animal rights organization is urging McDonald’s Canada to take a firm stand against what it calls “shocking animal cruelty” captured on a graphic video it says was taken at two Alberta farms, which shows dead hens rotting in the cages, and chicks being covered in feces. . As The Globe and Mail reports, McDonald’s, however, says while it does get eggs from Burnbrae along with many other Canadian companies, it says its eggs do not come from the farms referenced in the W5 story.

 

 

Via The Globe And Mail,

“They’re so crammed inside those cages they can’t spread their wings, they can’t walk, they can’t turn around, they can’t engage in any of their natural behaviour,” said Stephane Perrais, director of operations with Mercy For Animals Canada.

 

“They spend one year of their miserable life in there, basically producing eggs and after that time period, they’re considered spent by the industry because their productivity is declined, and then they’re slaughtered.”

 

The group says the footage was taken by an undercover investigator who was hired as a farm worker by Ku-Ku Farms and Creekside Grove Farms for 10 weeks in May.

 

The video also shows dead hens rotting in the cages, and chicks being covered in feces.

A statement said McDonald’s said it does not condone animal abuse by its suppliers.

 

…

 

“We care about the humane treatment of animals and believe they should be free from cruelty, abuse and neglect,” said spokeswoman Karin Campbell in the written statement emailed to The Canadian Press.

 

“Abuse is never tolerated in our supply chain and McDonald’s has strict policies in place concerning the treatment of animals that our suppliers must adhere to at all times. We also work with our suppliers and outside experts to continuously improve our standards and practices, both within McDonald’s and across the industry.”


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/8vGBXxvvsW8/story01.htm Tyler Durden