Category: zerohedge

When it comes to the “fair value” of stocks, nobody knows it better than insiders, who tend to aggressively offload shares any time they see the price of their equity holdings as generously high. This, however, may be a problem for the broader market because according to research from Smart Insider, the market is now the most overbought since the first dotcom bubble, as “executives across the US are shedding stock in their own companies at the fastest pace in two decades, amid concerns that the long bull market in equities is reaching its final stages.”

As the FT reports, corporate insiders – typically CEOs, CFOs, and board members, but also venture capital and other early state investors – sold a combined $19BN of stock in their companies through to mid-September. Annualized, this puts them on track to hit $26BN for the year, which would mark the most active year since 2000, when executives sold $37bn of stock amid the giddy highs of the dotcom bubble. That 2019 total would also set a post-crisis high, eclipsing the $25bn of stock sold in 2017.

For those wondering which insiders are scrambling to part with their equity holdings, the answer is simple: virtually everyone – from the VCs behind bungled, rushed IPOs of companies such as WeWork, Uber and Lyft, to iconic stakeholders including members of the Walton family, who have sold a combined $2.2BN of shares in the Walmart retail empire. Executives at Estée Lauder, the cosmetics giant, and clothing group Lululemon Athletica also appear among the most active sellers, according to Smart Insider.

The reason investors care about insider stock sales is that it has traditionally been a handy marker for the confidence of executives in their own companies’ prospects, and the broader valuation of the market. Spikes in selling indicate that top figures in boardrooms around the country are taking advantage of high valuations in the US stock market.

Troy Gayeski, co-chief investment officer for SkyBridge Capital, said that recent moves by central banks to ease monetary policy, in response to deteriorating economic data, are a sign that companies can expect profits to fade.

“In management, you know the boom times are over in terms of record profitability. Why wouldn’t you take money off the table?” Mr Gayeski said.

For those countering that insiders tend to always sell, the truth is that insiders not only paused stock sales late last year when the worst December for US stocks since 1931 sent the market to a brief -20% drop, which ended the year down about 6 per cent, at which point insiders turned buyers. However, since then, the S&P 500 has come roaring back, rising by almost 20% as central banks around the world turned dovish, cut rates and have expanded their direct liquidity injection; and the insider selling has exploded.

But if the insiders are selling who is buying? The answer will come as a surprise to exactly no one. As Bank of America explains, “despite what is usually a seasonally weak time for buybacks, corporate buybacks remained strong last week, driven by Tech for the fourth week in a row.” As a result, cumulative buybacks YTD are already up +20% YoY compared to 2018 which was already a record year for stock buybacks, meaning 2019 will be another record, while rolling 4-wk avg. buybacks are +122% YoY, the highest of any point this year.

To summarize:

1. Companies issue record amounts of debt
2. Companies use the debt to repurchase record amounts of stock
3. Insiders sell (near) record amounts of stock to their own company, even as retail investors buy everything with the S&P at all time high

And that’s why billionaires – like Jamie Dimon – are richer than you.

 

Authored by Marie Huillet via CoinTelegraph.com,

Bitcoin’s network hash rate dipped a record 40% yesterday, Sept. 23, in a sudden shock for the network.

Bitcoin network hash rate, Nov. 2018-present. Source: Coin.dance

Data from Coin.dance – corroborated by other sources – indicates that the network’s hash rate plummeted yesterday from over 98,000,000 TH/S to 57,700,000 TH/s.

Mystery flash crash remains unexplained

The flash drop remains unexplained as of press time and is all the more striking given the Bitcoin network’s record-breaking string of new all-time high hash rates throughout summer.

Just five days ago, Cointelegraph had reported that Bitcoin’s hash rate had passed a record 102 quintillion hashes in a historic milestone.

As previously noted, the hash rate of a cryptocurrency — sometimes referred to as hashing or computing power — is a parameter that gives the measure of the number of calculations that a given network can perform each second. 

A higher hash rate means greater competition among miners to validate new blocks; it also increases the number of resources needed for performing a 51% attack, making the network more secure.

By press time, Bitcoin’s hash rate has somewhat recovered back to almost 88,300,000 TH/s — yet remains well below its earlier records.

Throughout summer, cryptocurrency analysts had argued that the network’s record-breaking streak of all-time hash rate highs was a bullish indicator for the top coin’s price performance. 

In a tweet posted this August, Bitcoin investor Max Keiser had claimed that:

“Price follows hashrate and hashrate chart continues its 9 yr bull market.”

But, sure enough, Bitcoin is sliding today after that drop in the hash-rate:

Source: Bloomberg

Altcoins are getting hit worse however…

Source: Bloomberg

Back in November 2017, Bitcoin had seen a sudden hash rate downturn of almost 50%, accompanied by slowed transaction processing times, a price dip, and even miners’ short-lived switch over to the forked network, Bitcoin Cash (BCH).

PredictIt odds of President Trump’s impeachment by the end of his first term have soared in the last 12 hours in heavy volume. 

About 14 hours ago, volume started pouring in, increasing the odds from about 35% to almost 60% in the overnight hours.

Tuesday morning, the odds have traded from 40% to 60% range – consolidating after a massive ramp. 

As of Tuesday morning, nearly 150 House Democrats are supporting impeachment action after “President Trump repeatedly pressured the president of Ukraine to investigate Joe Biden and his son Hunter at a time when Ukraine was desperate for military aid from the United States,” said Michael Snyder via The End of The American Dream blog. 

The political storm surrounding President Trump’s admitted call for Ukraine’s President to investigate Joe Biden may have been what sparked impeachment odds to spike. 

According to Politico, sources have been telling them that the possibility of impeachment proceedings is “approaching a certainty.”

“But House Democrats have been pulling together a wide-ranging case to impeach President Donald Trump on a series of alleged past and ongoing crimes against the country — a set of charges that goes far beyond the Mueller report — and all signs point to a possible public inflection point later this week, when acting Director of National Intelligence Joseph Maguire testifies before the House Intelligence Committee.”

“The dam could break on Thursday,” one senior House Democratic aide, whose boss has not endorsed impeachment, told NBC News.

Multiple senior House Democrats and congressional aides told The Washington Post that Speaker Nancy Pelosi has been strategizing on whether the time is right to impeach President Trump. 

Pelosi has been assessing the mood of her caucus members about whether they believe the allegations that Trump urged the Ukrainian president to investigate a political opponent is enough to start impeachment proceedings. 

The sudden jump in PredictIt impeachment odds of the president could have been led by Washington insiders who are in the know. 

As shown below, heavy volume started pouring in yesterday evening and into the overnight.

The odds of President Trump being impeached by year-end appear to be in a new bull market. 

With E-mini S&P 500 futures contracts near record highs, the market has yet to price in an impending political storm in Washington. Add the threat of impeachment to the market’s long list of troubles. 

Newly unsealed court documents published by PlainSite on Monday reveal that shareholders are accusing Tesla of improperly valuing its acquisition of SolarCity, providing “flawed analysis and misleading investors”, according to CNBC. They also allege that Tesla withheld key information about its acquisition of SolarCity from Ernst & Young. 

The lawsuit was filed in 2016 and is one of the more notable legal actions proceeding against Tesla and Elon Musk, who also face lawsuits regarding solar panel fires and Autopilot deaths – in addition to the ongoing defamation lawsuit by Vern Unsworth. 

Tesla commented that the allegations lodged against it are: “…based on the claims of plaintiff’s lawyers looking for a payday, and are not representative of our shareholders who support our mission and ultimately voted in favor of the acquisition.”

The company continued, stating: “The accusations made in the plaintiff’s brief are false and misleading, as Tesla and SolarCity published all material information in its proxy and other public filings for all shareholders to consider before deciding on the transaction. Providing clean, renewable energy generation through solar has been a critical part of our mission ever since 2006, and our acquisition of SolarCity has enabled and continues to enable a significantly faster path to achieve our goals.”

But the newly unredacted documents show a “tangled” personal and financial relationship between Musk and his investments. 

The suit alleges: 

“Prior to the Acquisition, Musk described Tesla, SolarCity, and SpaceX as a ‘pyramid’ atop which he sat; it was ‘important that there not be some sort of house of cards that crumbles if one element of the pyramid . . . falters.’”

As a reminder, Musk had invested SpaceX money in SolarCity. Notable aspects of that investment were “hidden” from auditors Ernst & Young before the acquisition, shareholders claims. 

The brief says that SpaceX had put about $165 million into SolarCity as non-recourse bonds and that SolarCity failed to disclose to Ernst & Young how quickly they would have to make two substantial payments related to these bonds back to SpaceX.

Shareholders also claim that even though Musk recused himself, he was never separated from the dealmaking process. To make that point, they argue that Musk and his first cousin, Lyndon Rive, spent time “hatching out a plan to save the solar company from a liquidity crisis while on vacation in Lake Tahoe in early 2016”. Shortly thereafter, Tesla’s CFO put together a proposal to acquire SolarCity.

The filing stated: “The Board did not reject Musk’s proposal, as represented in the Proxy. Instead, the Board ‘authorized management to gather additional details and to further explore and analyze’ a SolarCity acquisition.”

Ernst & Young went on to claim that the solar company was insolvent shortly after Tesla closed its $2.6 billion acquisition. 

The brief also claims that a “majority” of Tesla’s board members had financial interests on both sides of the deal. Elon and Kimbal Musk, Antonio Gracias, and Steve Jurvetson, for example, were all Tesla board members at the time of the acquisition and were also early backers and board members of SpaceX.

As CNBC also points out:

Ira Ehrenpreis, a long-time Tesla board member, held a board seat at SolarCity after funding it via his venture firm, Technology Partners. Kimbal Musk is Elon Musk’s brother. And Lyndon and Peter Rive, co-founders of SolarCity, are first cousins of Elon and Kimbal Musk.

Court filings also claim that a “fairness committee” put together at Evercore, who was hired to analyze the deal, failed to issue an opinion on the deal. Filings also claim that Lazard, another financial adviser, solicited bids for SolarCity and couldn’t find a single one. PlainSite has also sought to unseal additional redacted court documents relating to the case. 

Recall, just yesterday we documented a Colorado resident who had their solar panels catch fire on top of their home.

We had already documented how Walmart is suing Tesla for solar panels that allegedly caught fire on the roofs of not one, not two – but seven different Walmart stores. We also documented how Amazon followed suit with complaints about its solar panels spontaneously igniting.

Last month we noted several homeowners who reported horror stories about their residential solar panels catching fire.

Finally, in early September, we posted a podcast with a solar panel expert who explained exactly how SolarCity’s panels work and what he believes is making them defective, along with his analysis of the Tesla acquisition and ongoing lawsuit.

Authored by Patrick Buchanan via Buchanan.org,

With the revelation by an intel community “whistleblower” that President Donald Trump, in a congratulatory call to the new president of Ukraine, pushed him repeatedly to investigate the Joe Biden family connection to Ukrainian corruption, the cry “Impeach!” is being heard anew in the land.

But revisiting how this latest scandal came about, and how it has begun to unfold, it is a good bet that the principal casualty could be the former vice president. Consider:

In May 2016, Joe Biden, as Barack Obama’s designated point man on Ukraine, flew to Kiev to inform President Petro Poroshenko that a billion-dollar U.S. loan guarantee had been approved to enable Kiev to continue to service its mammoth debt.

But, said Biden, the aid was conditional. There was a quid pro quo.

If Poroshenko’s regime did not fire its chief prosecutor in six hours, Biden would fly home and Ukraine would get no loan guarantee. Ukraine capitulated instantly, said Joe, reveling in his pro-consul role.

Yet, left out of Biden’s drama about how he dropped the hammer on a corrupt Ukrainian prosecutor was this detail.

The prosecutor had been investigating Burisma Holdings, the biggest gas company in Ukraine. And right after the U.S.-backed coup that ousted the pro-Russian government in Kiev, and after Joe Biden had been given the lead on foreign aid for Ukraine, Burisma had installed on its board, at $50,000 a month, Hunter Biden, the son of the vice president.

Joe Biden claims that, though he was point man in the battle on corruption in Ukraine, he was unaware his son was raking in hundreds of thousands from one of the companies being investigated.

Said Joe on Saturday, “I have never spoken to my son about his various business dealings.”

Is this credible?

Trump and Rudy Giuliani suspect not, and in that July 25 phone call, Trump urged President Volodymyr Zelensky to reopen the investigation of Hunter Biden and Burisma.

The media insist there is no story here and the real scandal is that Trump pressed Zelensky to reopen the investigation to target his strongest 2020 rival. Worse, say Trump’s accusers, would be if the president conditioned the transfer of $250 million in approved military aid to Kiev on the new regime’s acceding to his demands.

The questions raised are several:

Is it wrong to make military aid to a friendly nation conditional on that nation’s compliance with legitimate requests or demands of the United States? Is it illegitimate to ask a friendly government to look into what may be corrupt conduct by the son of a U.S. vice president?

Joe Biden has an even bigger problem: This issue has begun to dominate the news at an especially vulnerable moment for his campaign.

Biden’s stumbles and gaffes have already raised alarms among his followers and been seized upon by rivals such as Cory Booker, who has publicly suggested that the 76-year-old former vice president is losing it.

Biden’s lead in the polls also appears shakier with each month. Sen. Elizabeth Warren has just taken a narrow lead in a Des Moines Register poll and crusading against Beltway corruption is central to her campaign.

“Too many politicians in both parties have convinced themselves that playing the money-for-influence game is the only way to get things done,” Warren told her massive rally in New York City: “No more business as usual. Let’s attack the corruption head on.”

Soon, it will not only be Trump and Giuliani asking Biden questions abut Ukraine, Burisma and Hunter, but Democrats, too. Calls are rising for Biden’s son to be called to testify before congressional committees.

With Trump airing new charges daily, Biden will be asked to respond by his traveling press. The charges and the countercharges will become what the presidential campaign is all about. Bad news for Joe Biden.

Can he afford to spend weeks, perhaps months, answering for his son’s past schemes to enrich himself through connections to foreign regimes that seem less related to Hunter’s talents than his being the son of a former vice president and possible future president?

“Ukraine-gate” is the latest battle in the death struggle between the “deep state” and a president empowered by Middle America to go to Washington and break that deep state’s grip on the national destiny.

Another issue is raised here – the matter of whistleblowers listening in to or receiving readouts of presidential conversations with foreign leaders and having the power to decide for themselves whether the president is violating his oath and needs to be reported to Congress.

Eisenhower discussed coups in Iran and Guatemala and the use of nuclear weapons in Korea and the Taiwan Strait. JFK, through brother Bobby, cut a secret deal with Khrushchev to move U.S. missiles out of Turkey six months after the Soviets removed their missiles from Cuba.

Who deputized bureaucratic whistleblowers to pass judgment on such conversations and tattle to Congress if they were offended?

Momentum is dramatically bid this morning as bond yields and bitcoin tumble and the S&P 500 reverses early gains following disappointing consumer confidence data…

Value factor is being sold as momo goes fomo…

Source: Bloomberg

Treasury yields are also diving, below yesterday’s lows…

Source: Bloomberg

And Bitcoin is being dumped to near one-month lows…

Source: Bloomberg

As the S&P 500 loses 3k again…

 

Ahead of his third speech to the UN General Assembly, the novelty surrounding President Trump has mostly worn off.  This year he will approach the podium as a known quantity – an experienced world leader who has dealt with his share of geopolitical disputes.

However, in both tone and substance, this year’s speech doesn’t sound much different from last year’s, according to WSJ which reported on excerpts: Trump will exhort the international community to join with the US to hold Iran and other dangerous regimes accountable. He is also expected to paint a picture of a world that is more ‘respectful’ of American strength, while insisting that he’s open to talks with “anyone” – be it the leaders of Iran, North Korea, or any other hostile world power that wants to negotiate with the US. 

Though Iran’s Supreme Leader said there would be no meeting with Trump, the president hasn’t ruled out the possibility of a meeting with Iranian President Hassan Rouhani.

Trump goes live at 10:15. Watch the speech below:

In August, Americans were the most confident about the current situation since November 2000 (as expectations for the future dipped), but headline confidence was expected to slide in September and did, far more than expected:

• Headline consumer confidence fell to 125.1 vs 133.0 last month

• Present situation confidence fell to 169.0 vs 176.0 last month

• Consumer confidence expectations fell to 95.8 vs 106.4 last month

This is the biggest drop in ‘expectations’ since Dec 2018 as stocks plummeted.

Source: Bloomberg

The Labor Differential indicator dipped (after exploding higher in August back near record highs).

All age cohorts saw confidence slide, but higher income Americans confidence dropped notably as lower incomes rose modestly.

Buying plans weakened for homes, cars, and large appliances.

However, this level of decoupling between savings and confidence has historically not ended well…

Source: Bloomberg

Still, as long as The Fed and Trump can keep jawboning stocks near recorder and recorder highs, what could go wrong?

Though by now Washington appears no closer to military strikes on Iran than it was before the Sept. 14 Saudi Aramco attack, a joint statement by Britain, France, and Germany has brought the kind of international allied consensus the US administration is looking for.  

The three European countries announced it was “clear” Iran was responsible for the twin aerial strikes on the facilities, however, stopped short of calling for any military retaliation, instead urged Iran to reengage negotiations on its nuclear and missile programs. The statement does warn of “risk of a major conflict” and underscores making “collective efforts towards regional stability and security” which includes bringing the Yemen war to an end. 

“The time has come for Iran to accept a long term negotiation framework for its nuclear program, as well as regional security issues, which include its missile programs,” the three governments said. Iran has in the past said its missile programs complied with international norms and remains a non-starter in any negotiations with the US or its allies. 

Interestingly, the statement condemns Iran for the attack but also admits the investigation is ongoing. According to the statement: 

We condemn in the strongest terms the attacks on oil facilities on Saudi territory on September 14th, 2019 in Abqaiq and Khurais, and reaffirm in this context our full solidarity with the Kingdom of Saudi Arabia and its population.

It is clear to us that Iran bears responsibility for this attack. There is no other plausible explanation. We support ongoing investigations to establish further details.

Citing no evidence, the statement surprisingly appeals to there supposedly being “no other plausible explanation” — despite many possibilities being documented by analysts and international publications.

The joint statement was issued upon French President Emmanuel Macron, British Prime Minister Boris Johnson and German Chancellor Angela Merkel meeting during the annual United Nations assembly of world leaders this week, where they discussed the Iran nuclear deal and ratcheting tensions in a trilateral dialogue. 

The UK’s Johnson has urged Iran to back a new “Trump deal” after Washington backed out of the 2015 nuclear deal in May 2018. “If it was a bad deal — and I’m willing to accept that, it had many, many defects — then let’s do a better deal,” the prime minister told NBC News. 

This marks a sharp change in Britain’s rhetoric on the JCPOA, which up until Johnson’s interview had been to follow the rest of Europe in seeking to uphold its terms. 

As the media stays as far away as possible from digging into the globetrotting financial adventures of Hunter Biden and his once-powerful father Joe, the Wall Street Journal has shifted the focus to an allegation that President Trump ordered his acting chief of staff to put a hold on $391 million in military aid to Ukraine more than a week before a July 25 phone call with his Ukrainian counterpart, Volodymyr Zelensky. 

While the aid was approved by congress to help Ukraine in its ongoing conflict with Russia, Trump – along with advisers John Bolton, Defense Secretary Mark Esper and others – had a June discussion about pausing the assistance while the administration placed it under review, according to the report. 

In July, Mr. Trump directed acting White House chief of staff Mick Mulvaney to do just that, and the decision was passed along to lower-level officials during a July 18 meeting, according to the official. The Washington Post first reported the news of the president’s directive to Mr. Mulvaney.

The official said the request reflected the president’s concerns about how the U.S. is spending aid money and whether U.S. allies are adequately contributing. The Pentagon has long been in favor of pressing forward on military aid.

Another administration official said the reasons given internally for the decision to hold up the funds were the lack of support from other countries to Ukraine and concerns about corruption in the country. Mr. Trump has repeatedly pointed to corruption in Ukraine in his calls for an investigation of Mr. Biden in recent days. –Wall Street Journal

On Monday, President Trump insinuated that he was vetting Ukraine before releasing the funds – telling reporters in New York: “It’s very important to talk about corruption,” adding “If you don’t talk about corruption, why would you give money to a country that you think is corrupt?” 

Later that day, Trump said he didn’t threaten the aid if his top 2020 Democratic rival Joe Biden wasn’t investigated – saying “I did not make a statement that you have to do this or I won’t give you aid,” though he did add “I think it would probably, possibly have been OK if I did.” 

During the July 25 call between Trump and Volodymyr, Trump is said to have repeatedly urged the Ukrainian president to work with his lawyer, Rudy Giuliani, to investigate Biden and his son. Giuliani met with an official from the Ukrainian prosecutor general’s office in June to discuss just that. 

Messrs. Trump and Giuliani have pressed for an inquiry into Mr. Biden’s anticorruption efforts in Ukraine while he was vice president and while his son Hunter Biden had business interests there. Ukraine’s prosecutor general at the time said earlier this year he had no evidence of wrongdoing by Mr. Biden or his son. On Saturday, Joe Biden said he had never discussed with his son any overseas business dealings and accused Mr. Trump of abusing his office. 

The administration’s reason for putting a hold on the Ukraine funds—which for weeks this summer proved elusive to lawmakers who were eager for answers—is at the center of the expanding investigation on Capitol Hill into whether there was any connection between the review of foreign aid and efforts by the president and Mr. Giuliani to urge Ukraine to investigate Mr. Biden. The examination of Mr. Trump’s dealings with his Ukrainian counterpart is likely to escalate this week as Congress continues to probe a whistleblower complaint concerning Mr. Trump, an aspect of which involves the Ukraine call, according to a person familiar with the matter. –Wall Street Journal

Blood in the water, but not Biden’s

Democratic lawmakers have seized on the situation – with Senate Minority Leader Chuck Schumer (D-NY) calling on Majority Leader Mitch McConnell (R-KY) to launch an investigation into who directed the suspension of aid – and said it should be incorporated into a wider-ranging probe. Speaking from the Senate floor, McConnell said he urged the administration to release the aid “throughout July, August and early September,” adding that he urged Esper to do so twice, and even mentioned it to Secretary of State Mike Pompeo. 

And in a joint letter from the Democratic chairs of the House foreign affairs, intelligence and oversight committees, a subpoena was threatened against Pompeo if documents related to the decision weren’t turned over by the State Department. 

While Trump has suggested that the aid was withhold because other countries haven’t done enough to help Ukraine financially, Vice President Mike Pence said one day after a September 2 meeting with Zelensky that “as President Trump had me make clear, we have great concerns about issues of corruption.” 

“There was a lot of consternation about why this was held up and what was going on,” said Sen. Chris Coons (D-DE), who sits on the Senate Foreign Relations Committee, adding “I don’t remember ever hearing a clear response about what the holdup was.“

Finally – one day before the Senate Appropriations Committee was scheduled to vote on a 2020 defense-spending bill attachment to force the release of funds to Ukraine, the White House ordered the hold lifted – releasing the military aid and $141 million in additional funds from the State Department.