US Consumers Unexpectedly Paid Down Their Credit Cards In November; Have Repaid $115BN In 2020

US Consumers Unexpectedly Paid Down Their Credit Cards In November; Have Repaid $115BN In 2020

There appears to be a major discrepancy between BofA debit/credit card data, which showed a remarkable increase in the month of November…

… and the Fed’s own consumer credit data aggregation, because according to the latest Consumer Credit report, in November revolving debt, i.e., credit card debt, shrank for a second consecutive month declining by $787MM following the $5.5 billion drop in October.

This means that in the first 11 months of 2020, US consumers have paid down a record $115bn in credit card debt.

The flip side, however, is that as revolving credit dropped, non-revolving credit rose, and in November US consumers increased their student and auto loans – the two largest component of this category – by $16 billion…

… bringing the total November change to $15.3 billion, well above the $9BN increase expected by economists.

Tyler Durden
Fri, 01/08/2021 – 15:18

via ZeroHedge News https://ift.tt/3q4OvYK Tyler Durden

BofA: Bitcoin Is Now “The Mother Of All Bubbles”… This Is How It Could Burst

BofA: Bitcoin Is Now “The Mother Of All Bubbles”… This Is How It Could Burst

Back in late 2017 when bitcoin surged higher to reach what would be its all time high of just under $20,000, a veritable cottage industry of experts calling bitcoin the biggest bubble in history emerged. But while the bubble-callers were vindicated for a few years, little did they know that just three years later what they thought was the biggest bubble ever, would be surpassed several times over with bitcoin now more than double its Dec 2017 all time high on the back of global central banks injecting $1.3 billion in liquidity in the market each and every hour.

What is behind this epic move higher? Simple: as Morgan Stanley’s Michael Wilson explained on Monday, with the Fed now openly manipulating and depressing yields, and the CPI a useless, politically-motivated indicator, bitcoin has emerged as one of the only accurate inflationary metric available to traders. This is what Wilson said:

We believe the big surprise of 2021 could be higher inflation than many, including the Fed, expect. Currently, the consensus is expecting a gradual and orderly increase in prices as the economy continues to recover. However, the move in asset prices like Bitcoin suggest markets are starting to think this adjustment may not be so gradual or orderly (Exhibit 5). We concur. With global GDP output already back to pre-pandemic levels and the economy not yet even close to fully reopened, we think the risk for more acute price spikes is greater than appreciated. That risk is likely to be in areas of the economy where supply may have been destroyed and ill prepared for what could be a surge in demand later this year—e.g. restaurants, travel and other consumer/business related services…inflation can be kryptonite for longer  duration bonds which would have a short term negative impact on valuations for all stocks should that adjustment happen abruptly…. The best inflation hedges are stocks and commodities in the intermediate term.

Today, BofA’s Michael Hartnett picks up on this theme and writes that as a result of the “violent inflationary price action past two months, bitcoin is up 180%, with the cryptocurrency market now more than >$1tn as Bitcoin past 2 years blows-the-doors-off prior bubbles.” And just in case we need visualization, here is how Bitcoin is now the “mother of all bubbles.”

So is bitcoin’s liquidity-fueled explosion here to stay? Nobody knows – and anyone who claims otherwise is a liar and a charlatan – but just to hedge, Hartnett lays out several “liquidity warning signs” explaining that the “contrarian bear catalyst in 2021” will be rates not profits, so keep an eye on early warning signs that rates are turning bearish for risk, among which are:

  • Credit: LQD drops below $133 and/or levered loans start to significantly outperform

  • Dollar: surprise rally as weaker Europe & Asia growth require bout of US dollar strength.
  • China: CNY and SHCOMP follow Chinese bond yields lower signaling weaker growth

  • Inflation: inflation prints spook Fed balance sheet bulls (food prices at 6-year highs, up 20% past 8 months)
  • Froth: higher yields trigger losses in speculative favorites e.g. XBT, TSLA.
  • Rate-sensitives: classic lower rate plays such as XHB, SOX breakdown.

As Hartnett concludes, warning that the bursting of the bubble remains the biggest bull risk, the “decade-long backdrop of maximum liquidity and technological disruption has caused maximum inequality & massive social and electoral polarization…value of US financial assets (Wall Street) now 6X size of GDP.”

Hartnett’s surprisingly frank slam of the biggest asset bubble ever – of which bitcoin is merely a symptom – concludes by pointing out that “investor price action is increasingly speculative (IPOs, SPACs), wealth gains are obscene… but extreme asset bubbles are a natural end to nihilistic bull markets of past decade; bubbles (e.g.) in risk asset prices ignore rising rates & humiliated investors worried about “peak positioning”; we’ll know if it’s a bubble by end-Q1.”

But until then… just buy everything.

Tyler Durden
Fri, 01/08/2021 – 15:01

via ZeroHedge News https://ift.tt/39cgEpK Tyler Durden

Cancel Crusade Reignites As Reddit Bans Pro-Trump Forum, Facebook Unpersons ‘Walk Away’ Movement

Cancel Crusade Reignites As Reddit Bans Pro-Trump Forum, Facebook Unpersons ‘Walk Away’ Movement

Cancel culture is back with a vengeance, after Reddit banned yet another pro-Trump forum, /r/DonaldTrump, from the public square in yet another example of leftist technocrats using outlier groups of extremists – in this case, the Capitol ‘raid’ – to justify their actions, while having given their own side a pass during four years of violence and incendiary rhetoric.

“Reddit’s site-wide policies prohibit content that promotes hate, or encourages, glorifies, incites, or calls for violence against groups of people or individuals. In accordance with this, we have been proactively reaching out to moderators to remind them of our policies and to offer support or resources as needed,” a Reddit spokesperson told an undoubtedly giddy Axios, who added “We have also taken action to ban the community r/donaldtrump given repeated policy violations in recent days regarding the violence at the U.S. Capitol.

In June, Reddit banned /r/The_Donald – one of the site’s largest political communities, right as the 2020 election began to heat up.

The company’s Friday ban-hammer comes on the heels of several other platforms taking actions against Trump or his supporters. As Axios notes:

  • Twitch and Snapchat disabled Trump’s accounts.
  • Shopify took down two online stores affiliated with the president.
  • Facebook and Instagram banned Trump from posting for at least the next two weeks, and faced calls to boot him permanently, including from former First Lady Michelle Obama and high-ranking Hill Democrats.
  • Twitter froze Trump out of his account Wednesday before reinstating him Thursday once he deleted problematic tweets.
  • YouTube says it’s accelerating its enforcement of voter fraud claims against President Trump and others based on Wednesday’s events.
  • TikTok is removing content violations and redirecting hashtags like #stormthecapitol and #patriotparty to its community guidelines.

Meanwhile, Facebook has removed the ‘Walk Away’ campaign from its platform and has banned founder Brandon Straka and his team – which had over 500,000 people who shared their testimonial videos about leaving the Democratic party.

And in what’s got to be the icing on the cancel cake, Lehigh University just revoked a 33-year-old honorary degree given to President Trump in 1988, after the school’s board of trustees voted to do so on Thursday following the violence in the Capitol. 

It seems like these institutions were just waiting for the right excuse…

Tyler Durden
Fri, 01/08/2021 – 14:45

via ZeroHedge News https://ift.tt/3pYE5d1 Tyler Durden

Biden Promises More Money For Black, Brown Businesses; Says Americans “Entitled” To $15 Min Wage

Biden Promises More Money For Black, Brown Businesses; Says Americans “Entitled” To $15 Min Wage

Just in case you wondered why stocks suddenly jerked back higher (after tumbling on Manchin comments over stimulus checks… and impeachment uncertainty), it’s simple – President-Elect Biden just promised even moar…

Headlines from his speech (via Bloomberg) were nothing new of course, fitting with the Democratic campaign plans:

  • *BIDEN: GAP IN BLACK, LATINO UNEMPLOYMENT IS `MUCH TOO LARGE’

  • *BIDEN: NEED RELIEF FOR WORKING FAMILIES, BUSINESSES NOW

  • *BIDEN: WILL LAY OUT FRAMEWORK FOR NEXT RELIEF PACKAGE NEXT WEEK

  • *BIDEN: VACCINE DISTRIBUTION IS GREATEST OPERATIONAL CHALLENGE

  • *BIDEN SAYS $600 RELIEF PAYMENTS AREN’T ENOUGH

  • *BIDEN: HOPE DEMOCRATIC CONGRESS CONTROL LEADS TO MIN WAGE BOOST

  • *BIDEN: AMERICANS ENTITLED TO $15/HOUR MINIMUM WAGE

  • *BIDEN: BLACK, BROWN-OWNED BUSINESS HAVE HAD LESS RELIEF ACCESS

  • *BIDEN: TENS OF THOUSANDS OF COS. GOT RELIEF THEY SHOULDN’T HAVE

  • *BIDEN: FOCUS TO BE ON SMALL BIZ WITHOUT CONNECTIONS

  • *BIDEN: WILL DIRECT RELIEF TO THOSE INDUSTRIES HIT THE HARDEST

  • *BIDEN: WILL HAVE NAVIGATORS TO HELP SMALL BIZ UNDERSTAND RELIEF

  • *BIDEN: WILL MAKE BANK EXPECTATIONS `CRYSTAL CLEAR’

The reaction – of course – was buying panic!

Because, fundamentals!

Tyler Durden
Fri, 01/08/2021 – 14:36

via ZeroHedge News https://ift.tt/39hUkLx Tyler Durden

Buchanan: The Worst Of Days For Trump & Trumpists

Buchanan: The Worst Of Days For Trump & Trumpists

Authored by Pat Buchanan via Buchanan.org,

President Donald Trump, it turns out, was being quite literal when he told us Jan. 6 would be “wild.”

And so Wednesday was, but it was also disastrous for the party and the movement Trump has led for the last five years.

Wednesday, the defeats of Senators Kelly Loeffler and David Perdue in Georgia’s runoff elections were confirmed. This translates into the GOP losing the Senate for the next two years.

Chuck Schumer now replaces Mitch McConnell as majority leader.

And the new 50-50 split will put Vice President-elect Kamala Harris, the president of the Senate on Jan. 20, in position to cast the deciding vote on every major issue where the two parties are evenly divided.

Wednesday, there also came the acceptance by both houses of Congress of Joe Biden’s 306-232 electoral vote victory over Trump. The last potential hurdle to Biden’s inauguration as 46th president of the United States has been removed.

But the worst of the day’s events for Trump came when a segment of a friendly crowd of 50,000 he just addressed concluded its march down the mall to the U.S. Capitol by smashing its way into the building and invading and occupying the Senate and House chambers.

Members of Congress were forced to flee and hide. A protester, an Air Force veteran, was shot to death by a Capitol cop. Vice President Mike Pence, who was chairing the joint session, was taken into protective custody by his Secret Service detail. Doors were broken open. Windows were smashed, and the building was trashed.

All this was seen on national television from midafternoon through nightfall. The East and West fronts of the Capitol were occupied for hours by pro-Trump protesters, whom the president, his son Don Jr., and Rudy Giuliani had stirred up in the hours before the march down the mall.

What Americans watched was a mob occupation and desecration of the temple of the American Republic. And the event will be forever exploited to discredit not only Trump but the movement he led and the achievements of his presidency.

He will be demonized as no one else in our history since Richard Nixon or Joe McCarthy.

Yet, just two months ago, Trump rolled up the highest vote total ever by an incumbent president, 74 million.

And, according to four major polls, his approval remains where it has been for four years, between 40 and 50%.

What took place Wednesday was a disgrace and a debacle. But it was not, as some have wildly contended, comparable to 9/11 or to the British burning of the Capitol in 1814 during the War of 1812. That is malicious hyperbole, establishment propaganda.

On Sept. 11, 2001, more than 3,000 Americans died horribly when Manhattan’s World Trade Center twin towers came crashing down and the Pentagon was hit by a hijacked airliner. And there have been far more serious events in the lifetimes of many of us than this four-hour occupation of the Capitol.

In May 1970, after Nixon ordered an invasion of Cambodia to clean out Communist sanctuaries, National Guard troops, in panic, shot and killed four students at Kent State University in Ohio.

Hundreds of campuses exploded; hundreds of universities shut down for the semester. Scores of thousands of demonstrators poured into D.C. Buses, end-to-end, circled the White House. U.S. troops were moved into the basement of the Executive Office Building.

Today, there is absurd media talk of removing the president through impeachment or invocation of the 25th Amendment.

If the House votes impeachment, is the Senate going to hold a trial in 12 days to put Pence in the Oval Office? As for removing Trump through the 25th Amendment, this would require a declaration by Vice President Pence and half of the Cabinet that Trump is unfit to finish out a term that ends in two weeks. Not going to happen.

But undeniably, the events of Wednesday are going to split the Republican Party. And what does the future of that party now look like?

After Trump leaves the presidency, he will not be coming back. The opposition to him inside the GOP would prevent his nomination or would defect to prevent his reelection were he nominated again.

Yet, the size and strength of Trump’s movement is such that no Republican candidate he declares persona non grata could win the nomination and the presidency.

Trump’s supporters are today being smeared and castigated by the same media who lionized the BLM and antifa “peaceful protesters” who spent their summer rioting, looting, burning and pillaging Minneapolis, Milwaukee, Portland, Kenosha, Louisville and scores of other cities.

The Trumpists have been demonized before. They are used to this. And whatever their sins, disloyalty and ingratitude to the man they put in the presidency is not one of them.

Wednesday was a bad day for America, but it was not the Reichstag fire.

Tyler Durden
Fri, 01/08/2021 – 14:15

via ZeroHedge News https://ift.tt/38qQOiu Tyler Durden

Deutsche Bank Pays $100MM To Resolve Chinese Bribery Scandal

Deutsche Bank Pays $100MM To Resolve Chinese Bribery Scandal

For a minute there, it looked like Goldman Sachs might steal Deutsche Bank’s crown as the most felonious bank on Wall Street. The massive penalty Goldman paid to resolve criminal proceedings tied to its role in helping a gang of corrupt plutocrats ransack a public development fund erased the fruits of a “blockbuster” quarter.

But out of nowhere, it looks like Deutsche Bank, which racked up more than $20BN in fines in the decade after the financial crisis, has emerged to defend its throne. To wit, the New York Times reported Friday that Deutsche Bank is expected to shell out $100MM to settle criminal charges that the bank bribed Chinese officials for business in the country. Bribing foreign officials to win business or access is a blatant violation of the Foreign Corrupt Practices Act.

The NYT added that the settlement would be, for Deutsche Bank, the latest black eye tied to its business in China and Russia. Back in 2019, the bank agreed to pay the SEC $16MM to resolve allegations that it bribed officials to win lucrative business deals. It looks like the settlement is tied to an investigation first reported by the NYT back in 2019. In the story, the NYT detailed DB’s long history of lavishing top Chinese political figures and their family members with lavish gifts. As the NYT reported at the time, it was all part of DB’s plan to break into the Chinese market.

A graphic published by the NYT details the web of top party officials connected to Wen Jiabao, China’s Premier between 2003 and 2013, and his wife and children.

Source: NYT

The lavish gifts included a crystal tiger (modeled after the recipient’s Chinese zodiac sign). For what it’s worth, the bank’s efforts paid off, and by 2011, it had made significant inroads into China.

The bank gave a Chinese president a crystal tiger and a Bang & Olufsen sound system, together worth $18,000. A premier received a $15,000 crystal horse, his Chinese zodiac animal, and his son got $10,000 in golf outings and a trip to Las Vegas. A top state banking official, a son of one of China’s founding fathers, accepted a $4,254 bottle of French wine – Château Lafite Rothschild, vintage 1945, the year he was born

Millions of dollars were paid out to Chinese consultants, including a business partner of the premier’s family and a firm that secured a meeting for the bank’s chief executive with the president. And more than 100 relatives of the Communist Party’s ruling elite were hired for jobs at the bank, even though it had deemed many unqualified.

This was all part of Deutsche Bank’s strategy to become a major player in China, beginning nearly two decades ago when it had virtually no presence there. And it worked. By 2011, the German company would be ranked by Bloomberg as the top bank for managing initial public offerings in China and elsewhere in Asia, outside Japan.

The NYT connected the strategy of bribing public officials to Josef Ackermann, DB’s longtime CEO, who left the bank in 2012. Ackermann was the mastermind of DB’s push into international markets in the US, Asia and elsewhere. It was this aggressive pursuit of growth at any cost that led the bank to do business with Donald Trump, who still owes DB $300MM tied to his Chicago tower.

Tyler Durden
Fri, 01/08/2021 – 13:59

via ZeroHedge News https://ift.tt/3hYQI58 Tyler Durden

Man Seen With Feet On Pelosi’s Desk Arrested In Arkansas

Man Seen With Feet On Pelosi’s Desk Arrested In Arkansas

That didn’t take long…

One of the most iconic images of the chaos at the Capitol this week was of a man sitting back with his feet on Nancy Pelosi’s desk…

The man, now identified as a Northern Arkansas Trump supporter by the name of Richard Bennett, has just been arrested, according to CNBC:

We are perhaps not surprised by the rapidity of his arrest as he spoke on record to The New York Times afterwards…

Brandishing a letter from Pelosi’s office…

Developing…

Tyler Durden
Fri, 01/08/2021 – 13:43

via ZeroHedge News https://ift.tt/3bhSNaV Tyler Durden

Apple Elbows Its Way Into EV Market, Rumors Of Hyundai Partnership Swirl

Apple Elbows Its Way Into EV Market, Rumors Of Hyundai Partnership Swirl

After Hyundai shares rose nearly 19% overseas on the heels of news that the automaker had reportedly been in talks with Apple about producing a self-driving vehicle, the company issued a statement backing away from the earlier report and saying it had been contacted by “a number of potential partners” for EV development on Friday morning. Hyundai had previously mentioned Apple’s name and confirmed talks before backing away. 

Hyundai instead said Friday morning “it received requests for potential cooperation from a number of companies,” according to Bloomberg. EV stocks in the U.S. responded to the news in pre-market trading, with names like Tesla, Nio, Xpeng and Workhorse rising across the board.

Previously, on Thursday evening, it was reported that an internal discussion at Hyundai about a partnership with Apple had already been complete and was awaiting the Chairman’s approval. Hyundai and Apple were reported to be working on Apple Car production, self-driving and battery development together. 

The news appeared to be somewhat amended by Engadget on Thursday night, who reported that Apple was speaking to several different automakers, not just Hyundai:

“We understand that Apple is in discussion with a variety of global automakers, including Hyundai Motor. As the discussion is at its early stage, nothing has been decided.”

Professional lagging indicator Dan Ives at Wedbush published a note early on Friday morning stating that “Hyundai could be the first electric-vehicle partnership for Apple” and “that it expects the tech giant to ultimately announce electric-vehicle strategic partnership this year,” according to Bloomberg. 

Ives said Apple has a 35% to 40% change of Apple unveiling their own car by 2024 despite the “Herculean” hurdles involved, including battery technology, financial implications and regulatory red tape. He calls it a “smart” strategic move for Apple and said that a “larger strategic partnership with an established electric-vehicle player like Tesla or Volkswagen would be a ‘golden’ partnership for the next decade”.

Earlier in the day on Thursday, news broke that an Apple Car was “at least” a half decade away. 

Tyler Durden
Fri, 01/08/2021 – 13:30

via ZeroHedge News https://ift.tt/39bgBdX Tyler Durden

Stimulus Shock: Democratic Senator Manchin Will “Absolutely Not” Support Biden $2,000 Stimulus Checks

Stimulus Shock: Democratic Senator Manchin Will “Absolutely Not” Support Biden $2,000 Stimulus Checks

Wall Street – which is now certain that the Democratic sweep will lead to trillions in new stimulus (Goldman yesterday revised its outlook to expect as much as $750BN in fresh stimulus as soon as next month) – may have to put the champagne on ice indefinitely because as the WaPo reports, Biden’s plans for a major new economic relief package boosting stimulus payments to $2,000 have run “into possibly fatal opposition from his own party Friday as Sen. Joe Manchin III (D-W.Va.) said he would “absolutely not” support a new round of checks.”

Manchin, who as the WaPo describes as “a moderate who will hold great sway in a Senate split 50-50 between Democrats and Republicans” made his views known even as the Biden team worked to develop a coronavirus relief package that would include new stimulus checks, extended unemployment benefits, and much more. The only problem: Biden did not expect one of his own to turn against him in what appears to be a reversal of the blue wave.

That may be just the start. Biden is also expected to push for additional funding for vaccine distribution, as well as money that will help states and cities, as part of his initial package, according to three people with knowledge of the matter, who spoke on the condition of anonymity ahead of a formal announcement.

And while stocks have yet to realize what is going on… they soon will.

Developing

Tyler Durden
Fri, 01/08/2021 – 13:18

via ZeroHedge News https://ift.tt/3bmDFc7 Tyler Durden

Peter Schiff: We Don’t Get Any Government For Free

Peter Schiff: We Don’t Get Any Government For Free

Via SchiffGold.com,

Last September, Peter Schiff warned during an interview on RT Crosstalk about the devaluation of the dollar.

Everybody in America is going to be impoverished to a degree by these failed policies.”

Peter recently appeared on the Chris Salcedo Show on NewsMax to talk more about government spending, inflation, and the weakening dollar.

The US government has spent trillions of dollars for coronavirus relief, running up massive budget deficits. Peter opened the interview by reminding viewers that every dollar spent by the US government has to be paid for.

The most expensive way to pay for government spending is through inflation – the printing of money, which unfortunately is how all the new government spending is being paid for now. Because we don’t get any government for free. Whenever the government spends money, it is taking resources out of the private sector.”

When the government funds its programs through taxation, it literally takes people’s money. But when it funds its activities through printing money it more subtly takes their purchasing power.

And that’s exactly what they’re doing. This is a massive inflation tax, and the American public, particularly the middle class and the working poor, are going to be hit exceptionally hard by the cost of all these deficits and all this stimulus.”

Salcedo noted that the US isn’t alone in its government spending, and central banks around the world are printing money. Global sovereign debt is approaching $277 trillion with a global debt-to-GDP ratio of over 360%. Where does America fall in the whirl-spin of spending?

Peter agreed that this is a global problem, but he said the US is doing it to a larger scale and from a more vulnerable position. As the issuer of the world reserve currency, the US depends on the overvalued dollar for its high standard of living.

We have huge trade deficits, which by the way are at record levels, along with record budget deficits. But the only reason we can finance these huge trade deficits is because the world has been willing to hold on to our currency because it is the reserve. But if we jeopardize that status, which I think we’re going to do — if the world balks at holding the trillions and trillions of dollars that are being printed and all these Treasuries to make all this deficit spending possible, then the dollar has a lot further to fall in terms of real purchasing power than other currencies.”

The US has benefitted the most from this dysfunctional financial system and it will suffer the most in the short-term if it comes to an end.

Could a weaker dollar benefit the US? Peter doesn’t think so.

Certainly, the world has thrown a lot of good money after bad when it comes to propping up the dollar. But when the dollar declines, it’s going to take the US economy down with it, and the standard of living of every American.”

As the dollar loses value, Americans collectively become poorer.

The rest of the world is going to benefit from the demise of the dollar because Americans have only been able to live beyond their means because the rest of the world has been willing to live beneath its means to make it possible. But as the world moves away from the dollar, foreign workers are finally going to start to consume all the goods that they produce instead of allowing Americans to consume them, and foreigners are going to invest their savings productively in their own economies rather than loaning them to the US government. So, Americans are going to wake up in a very different reality when we will have to start saving and producing and making a lot of stuff, but not going out and spending and borrowing money. And the US government is going to have to dramatically cut back on its government spending and level with a lot of the American public that they’re not going to get all the benefits that they’ve been promised because if we try to make good on these commitments, and we do it with a printing press, then the risk is hyperinflation, and we completely any value the dollar has. And that is the worst possible economic outcome.”

Tyler Durden
Fri, 01/08/2021 – 13:04

via ZeroHedge News https://ift.tt/3q85Gsp Tyler Durden