Tag: finance

Erdogan Blasts: “Terrorist State” Israel Is “Guilty Of Genocide”, Withdraws US Ambassador

While Turkish officials on Monday condemned Israel’s mass slaughter of Palestinian resident, Turkish President Recep Tayyip Erdogan offered perhaps his most scathing criticism yet, according to the Anadolu News Agency.

In a scathing declaration, Erdogan blasted Israel’s killings as tantamount to genocide.

He also declared that Israel is a “terrorist state” following the murder of 55 Palestinians, while also describing the killings as a “humanitarian tragedy.”

“What Israel is doing is genocide,” he said. “We will continue to stand with the Palestinian people with determination. “We will not allow today to be the day the Muslim world loses Jerusalem…”

After blasting the US for moving its embassy in Tel Aviv to Jerusalem on Monday – a decision that many foreign leaders have said will only further inflame tensions between Palestinians and Israelis – Erdogan, who is visiting the UK this week, also declared a three-day period of national mourning in solidarity with the captive residents of that Gaza Strip, who were fired on en masse during Monday’s demonstration, which led to more than 55 being killed at last count. Meanwhile, nearly 2,000 had been wounded.

Turkey also called for an emergency meeting of the Organization of Islamic Cooperation to be held on Friday, according to Deputy Prime Minister Bekir Bozdag.

Bozdag

Bekir Bozdag

Bozdag, who made the announcement after a Council of Ministers meeting in Ankara, said the US had “violated” United Nations Security Council resolutions by opening its embassy in Jerusalem on Monday.

“Today will go down in the history as Bloody Monday for Muslims and Islamic countries,” Bozdag said. “Jerusalem’s historic and spiritual status will never change. As it was before, Jerusalem will continue to be independent Palestine’s capital.”

Turkey also withdrew its ambassadors from Tel Aviv and Washington so they can attend the meeting. The country’s foreign minister also called for a meeting of the UN General Assembly to address the latest massacre perpetrated by Israeli soldiers against thousands of unarmed Gazans.

Gaza

Recep Tayyip Erdogan

Israel has claimed that Monday’s demonstration, which was the final installment of the Hamas-organized “March for Return” protests, was a smokescreen meant to distract Israeli forces as Hamas militants sought to breach the fence and attack Israeli border settlements. The IDF said thousands of Israeli lives were at risk if it didn’t act to violently suppress the uprising.

But Bozdag wasn’t the only senior Turkish official to address the attacks. In a separate set of

Erdogan added that a “big rally would be held in Istanbul on Friday to demand justice for those murdered in Gaza.

Since the first rally along the Gazan border fence back in late March, more than 90 Gazans have been slaughtered by Israeli soldiers.

The rallies were meant to culminate on Monday with demonstrations marking the 70th anniversary of Israel’s Independence Day – which is known in the Palestinian territories as the “Nakba,” or “catastrophe” because it marks the anniversary of Palestinians being forced off their land by Israeli soldiers.

Israel

Erdogan also promised that the Turkish Red Crescent would deliver humanitarian aid to hospitals in Gaza.

Meanwhile, the Associated Press reported Monday that a senior official said the West Bank-based Palestinian leadership has decided to file a war crimes complaint against Israel with the International Criminal Court over its settlement construction on occupied lands. Saeb Erekat said a meeting between Palestinian President Mahmoud Abbas and senior PLO officials led to the decision to turn to the ICC.

The decision is a sign of a sharp deterioration in relations between Palestinians and Israelis. Palestinian territories have had access to the ICC since 2012, when Palestine was admitted to the UN as an “observer country.”

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Avenatti Sends “Insane” Email To The Daily Caller, Threatens To Sue

Stormy Daniels’ lawyer Michael Avenatti appears to be going off the rails following recent reports shedding light on his past.

Avenatti sent a threatening email to The Daily Caller‘s Peter Hasson after he and Joe Simonson reported on a variety of questionable business dealings – using publicly available information, such as a complaint to the California bar claiming his now-defunct venture into the coffee industry dodged millions in taxes after he mislead a business partner (who sued). Avenatti also reportedly stiffed a vendor on a $160,000 payment – which has since been paid following negative press. 

“Michael Avenatti never notified me that he intended to have or caused Global Baristas to borrow $2,000,000 for working capital, nor did he notify me that he planned to have or caused the company to pledge substantially all, if not all, of its assets to secure any loan,” Dempsey charged. Avenatti denied the accusations but agreed to a settlement just three days later. -Actor Patrick Dempsey as reported by The Daily Caller

Avenetti starts off his threatening email to The Daily Caller by trying to claim that the email was “off the record,” which – as short-lived White House Communications Director Anthony Scaramucci discovered doesn’t fly when you’re talking to a journalist who hasn’t agreed to it. 

“Let me be clear,” Avenatti writes, “If you and your colleagues do not stop with the hit pieces that are full of lies and defamatory statements, I will have no choice but to sue each of you and your publication for defamation.” Avenatti added that “During that process, we will expose your publication for what it truly is. We will also recover significant damages against each of you that participated personally. So if I were you, I would tell Mr. Trump to find someone else to fabricate things about me.”

“If you think I’m kidding, you really don’t know anything about me. This is the last warning,” Avenatti warned. 

Avenatti’s threats received an immediate pushback – with CNN’s Ryan Lizza commenting “This is the sort of intimidation tactic, suggesting a complete contempt for what reporters do, that someone like Michael Cohen would use,” adding “It seems fair and well-reported to me. If there is something specific that is false Avenatti should point that out rather than threatening the reporters.“

NBC Nightly News’ Daniel Medina tweeted “I’m guessing there would be more outrage at this behavior from @MichaelAvenatti if @peterjhasson were not from a conservative publication. As reporters, we must stand together, regardless of where we work, against these type of bullying tactics that seek to stifle reporting.”

The Hill‘s Julia Manchester says “it’s cray”, while the Daily Beast‘s Gideon Resnick calls it “bonkers”, while others even went so far as calling it “insane.”

Hasson and Simonson don’t seem too worried…

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Rosenberg: S&P “Should Be 1000 Points Lower Than It Is Today”

Authored by Olivier Garret via MarketWatch.com,

A reversion to the mean in U.S. stock prices could mean the market will fall by at least 20%, according to David Rosenberg of Gluskin Sheff and Associates, who gave his prediction at the Strategic Investment Conference 2018 in San Diego.

Rosenberg, the chief economist and strategist at Toronto-based Gluskin Sheff, said this is one of the strangest securities-market rallies of all time. That’s because all asset classes have gone up, even ones that are inversely correlated.

He thinks a breaking point is a year away, and so investors should start taking precautions now.

Smart money pulls back

The beginning of this year started off great for investors. The S&P 500 Index hit record highs at around 2,750 points, and stocks had their best January since 1987.

As if that was not enough, Rosenberg pointed out, many Wall Street strategists raised their target to 3,000. The media extrapolating record returns only added to the rise in investors’ unreasonable expectations.

However, increasingly more hedge fund managers and billionaire investors who timed the previous crashes are backing out.

One of them is Sam Zell, a billionaire real estate investor, whom Rosenberg says is a “hero” of his. Zell predicted the 2008 financial crisis, eight months early. But, essentially, he was right. Today, his view is that valuations are at record highs.

Then we have Howard Marks, a billionaire American investor who is the co-founder and co-chairman of Oaktree Capital Management. He seconds Zell’s view that valuations are unreasonably high and says the easy money has been made.

“And I don’t always try to seek out corroborating evidence. But there are some serious people out there saying some very serious things about the longevity of the cycle,” said Rosenberg.

Big correction coming

Later at the Strategic Investment Conference, Rosenberg shifted from quoting high-profile investors to showing actual data, which paints the same ominous picture.

For starters, Rosenberg pointed out that only 9% of the time in history have U.S. stocks been so expensive.

Then he showed a table with gross domestic product (GDP) growth figures in the last nine bull rallies. This table reveals a dire trend where each subsequent bull rally in the last 70 years generated less GDP growth. Essentially, that means we are paying more for less growth.

According to Rosenberg’s calculations, the S&P 500 should be at least 1,000 points lower than it is today based on economic growth. In spite of this, equity valuations sit at record highs.

Another historically accurate indicator that predicts the end of bull cycles is household net worth’s share of personal disposable income.

As you can see in the chart below, the last two peaks in this ratio almost perfectly coincided with the dot-com crash and the 2008 financial crisis.

Now the ratio is at the highest level since 1975, which is another sign that reversion is near.

What the Fed thinks

As another strong indicator that recession is around the corner, Rosenberg quoted the Federal Reserve Bank of San Francisco. He pointed out that, having access to tons of research, they themselves admit that equity valuations are so stretched that there will be no returns in the next decade:

“Current valuation ratios for households and businesses are high relative to historical benchmarks … we find that the current price-to-earnings ratio predicts approximately zero growth in real equity prices over the next 10 years.”

Basically, the Fed is giving investors an explicit warning that the market will “mean revert.”

But when we revert, we don’t stop at the mean, warned Rosenberg. He gave an example of how mean reversion in the household net worth/GDP ratio would create a snowball effect.

According to his calculations, if the household net worth/GDP ratio reverted to the mean, savings rates would go from 2% to 6%. As a result, GDP would go down 3%, which would have nasty consequences for the economy and, in turn, stocks.

Monetary regime change

Stretched valuations are not the only problem for the stock market. Rosenberg thinks that new Fed Chairman Jerome Powell marks the end of low interest rates, which will also add pressure to equities.

Even the biggest Fed doves admit that low rates created a heightened risk of asset bubbles and unstable asset inflation. And so, Rosenberg thinks, Powell will be more hawkish than people think.

“He’s [Jerome Powell] talked about risk-taking in the past, he’s talked about frothy financial conditions. He was adamantly against the prolonged period of zero percent interest rates. He was profoundly opposed to the repeated rounds of QE [quantitative easing], and now he’s in charge. So, for people to think he’s only going to go three times this year [raise official interest rates three times], I think he’ll go four. He may go more, depending on the circumstances.”

Rosenberg also thinks Powell won’t cut interest rates, even if we get a 20% sell-off. That’s how determined Powell is to normalize interest rates, according to Rosenberg.

In other words, we are in the middle of the Fed tightening cycle. As history shows, a tightening cycle is almost always followed by a recession.

Bottom line: All signs point to a recession, which, Rosenberg predicts, is a year away. As such, he suggests de-risking your portfolio. That means raising cash and investing in asset classes that are not correlated to the stock market.

Time-tested hedge

Finding assets uncorrelated to the stock market is not easy. Generally, bonds do well, but they are reaching historical highs. Plus, they are threatened by rising interest rates and excessive U.S. debt.

Dividends can cushion a fall in equity prices, but only to an extent.

That leaves us with gold a time-tested hedge against recessions that is largely uncorrelated to stocks and many other asset classes.

This means when the markets tumble, gold tends to rise. Here’s proof:

There have been seven recessions since 1965. In five of the seven recessions, gold prices rose.

This makes sense when you think about the nature of investing in gold. Gold is called a fear trade, meaning that when investors worry about instability in the market, they tend to buy gold, such as liquid sovereign gold coins or gold bars.

Not only that, gold’s correlation to stocks drops during a recession.

Look at the chart below to see what happens to gold’s correlation to other asset classes when the economy tumbles. (A “1” correlation means assets always move in the same direction; “0” means they move together 50% of the time; and “-1” means they never move together.)

Gold already has a negative correlation to the S&P 500 during periods of growth. In an economic collapse, the correlation grows even more negative.

That makes it a perfect hedge against the bubbly stock market that we have today.

*  *  *

Olivier Garret is the founding partner and CEO of Mauldin Economics, a publisher of financial research geared to individual investors and institutions. In 2012, he launched the Hard Assets Alliance, a trading platform for precious-metals investors. In addition, Garret is managing partner of three hedge funds invested in the resource sector.

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Rosenberg: S&P “Should Be 1000 Points Lower Than It Is Today”

Authored by Olivier Garret via MarketWatch.com,

A reversion to the mean in U.S. stock prices could mean the market will fall by at least 20%, according to David Rosenberg of Gluskin Sheff and Associates, who gave his prediction at the Strategic Investment Conference 2018 in San Diego.

Rosenberg, the chief economist and strategist at Toronto-based Gluskin Sheff, said this is one of the strangest securities-market rallies of all time. That’s because all asset classes have gone up, even ones that are inversely correlated.

He thinks a breaking point is a year away, and so investors should start taking precautions now.

Smart money pulls back

The beginning of this year started off great for investors. The S&P 500 Index hit record highs at around 2,750 points, and stocks had their best January since 1987.

As if that was not enough, Rosenberg pointed out, many Wall Street strategists raised their target to 3,000. The media extrapolating record returns only added to the rise in investors’ unreasonable expectations.

However, increasingly more hedge fund managers and billionaire investors who timed the previous crashes are backing out.

One of them is Sam Zell, a billionaire real estate investor, whom Rosenberg says is a “hero” of his. Zell predicted the 2008 financial crisis, eight months early. But, essentially, he was right. Today, his view is that valuations are at record highs.

Then we have Howard Marks, a billionaire American investor who is the co-founder and co-chairman of Oaktree Capital Management. He seconds Zell’s view that valuations are unreasonably high and says the easy money has been made.

“And I don’t always try to seek out corroborating evidence. But there are some serious people out there saying some very serious things about the longevity of the cycle,” said Rosenberg.

Big correction coming

Later at the Strategic Investment Conference, Rosenberg shifted from quoting high-profile investors to showing actual data, which paints the same ominous picture.

For starters, Rosenberg pointed out that only 9% of the time in history have U.S. stocks been so expensive.

Then he showed a table with gross domestic product (GDP) growth figures in the last nine bull rallies. This table reveals a dire trend where each subsequent bull rally in the last 70 years generated less GDP growth. Essentially, that means we are paying more for less growth.

According to Rosenberg’s calculations, the S&P 500 should be at least 1,000 points lower than it is today based on economic growth. In spite of this, equity valuations sit at record highs.

Another historically accurate indicator that predicts the end of bull cycles is household net worth’s share of personal disposable income.

As you can see in the chart below, the last two peaks in this ratio almost perfectly coincided with the dot-com crash and the 2008 financial crisis.

Now the ratio is at the highest level since 1975, which is another sign that reversion is near.

What the Fed thinks

As another strong indicator that recession is around the corner, Rosenberg quoted the Federal Reserve Bank of San Francisco. He pointed out that, having access to tons of research, they themselves admit that equity valuations are so stretched that there will be no returns in the next decade:

“Current valuation ratios for households and businesses are high relative to historical benchmarks … we find that the current price-to-earnings ratio predicts approximately zero growth in real equity prices over the next 10 years.”

Basically, the Fed is giving investors an explicit warning that the market will “mean revert.”

But when we revert, we don’t stop at the mean, warned Rosenberg. He gave an example of how mean reversion in the household net worth/GDP ratio would create a snowball effect.

According to his calculations, if the household net worth/GDP ratio reverted to the mean, savings rates would go from 2% to 6%. As a result, GDP would go down 3%, which would have nasty consequences for the economy and, in turn, stocks.

Monetary regime change

Stretched valuations are not the only problem for the stock market. Rosenberg thinks that new Fed Chairman Jerome Powell marks the end of low interest rates, which will also add pressure to equities.

Even the biggest Fed doves admit that low rates created a heightened risk of asset bubbles and unstable asset inflation. And so, Rosenberg thinks, Powell will be more hawkish than people think.

“He’s [Jerome Powell] talked about risk-taking in the past, he’s talked about frothy financial conditions. He was adamantly against the prolonged period of zero percent interest rates. He was profoundly opposed to the repeated rounds of QE [quantitative easing], and now he’s in charge. So, for people to think he’s only going to go three times this year [raise official interest rates three times], I think he’ll go four. He may go more, depending on the circumstances.”

Rosenberg also thinks Powell won’t cut interest rates, even if we get a 20% sell-off. That’s how determined Powell is to normalize interest rates, according to Rosenberg.

In other words, we are in the middle of the Fed tightening cycle. As history shows, a tightening cycle is almost always followed by a recession.

Bottom line: All signs point to a recession, which, Rosenberg predicts, is a year away. As such, he suggests de-risking your portfolio. That means raising cash and investing in asset classes that are not correlated to the stock market.

Time-tested hedge

Finding assets uncorrelated to the stock market is not easy. Generally, bonds do well, but they are reaching historical highs. Plus, they are threatened by rising interest rates and excessive U.S. debt.

Dividends can cushion a fall in equity prices, but only to an extent.

That leaves us with gold a time-tested hedge against recessions that is largely uncorrelated to stocks and many other asset classes.

This means when the markets tumble, gold tends to rise. Here’s proof:

There have been seven recessions since 1965. In five of the seven recessions, gold prices rose.

This makes sense when you think about the nature of investing in gold. Gold is called a fear trade, meaning that when investors worry about instability in the market, they tend to buy gold, such as liquid sovereign gold coins or gold bars.

Not only that, gold’s correlation to stocks drops during a recession.

Look at the chart below to see what happens to gold’s correlation to other asset classes when the economy tumbles. (A “1” correlation means assets always move in the same direction; “0” means they move together 50% of the time; and “-1” means they never move together.)

Gold already has a negative correlation to the S&P 500 during periods of growth. In an economic collapse, the correlation grows even more negative.

That makes it a perfect hedge against the bubbly stock market that we have today.

*  *  *

Olivier Garret is the founding partner and CEO of Mauldin Economics, a publisher of financial research geared to individual investors and institutions. In 2012, he launched the Hard Assets Alliance, a trading platform for precious-metals investors. In addition, Garret is managing partner of three hedge funds invested in the resource sector.

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Europe May Fold, but China and Russia See Opportunity

And we recently discovered, if it was not known before, that no amount of power can withstand the hatred of the many. 

–  Marcus Tullius Cicero

Although European leaders are talking a big game about keeping the Iran deal (JCPOA) alive following Trump’s unilateral withdrawal, there’s a good chance nations across the pond, especially the UK and France, will ultimately fold to U.S. demands. This is despite the fact these countries stand to lose far more economically than America. Acquiescing to U.S. imperial demands as submissive client states is simply what Europe does. On the other hand, China and Russia sense opportunity for major geopolitical gains and will not back down.

Political leaders in China and Russia must be licking their chops at the short-sighted stupidity of Donald Trump’s decision to ditch the Iran deal. As mentioned in previous pieces, the Trump administration isn’t just saying the U.S. will sanction Iran from its end, but that it could leverage the global financial system and its dependency on the USD, to punish those who dare defy U.S. policy.

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Dow Clings To Longest Win Streak In 8 Months; Dollar & Bond Yields Rise

Just when you thought the China trade-war was easing…

 

The Dow is up 8 days in a row – longest streak in 8 months…BUT look where the Dow stalled today – at its 50% retrace from the Feb tumble…

 

Russell 2000 ripped up to test its all-time closing high (1615.52), then tumbled back into the red…

And a weak close spoiled the party….

 

Wondering what sparked the selling at the close? Simple…

VIX bounced after pushing down to a 12 handle…

 

Tech stocks led the way early helped by NXP’s surge after hope that Trump’s backing down on ZTE opened the door for QCOM’s acquisition…

 

FANG pumped and dumped for the 3rd day in a row…

 

Treasury yields were marginally higher on the day…(chatter of a lot of IG issuance suggested that rate-locks were responsible for some of the rise in yields)…

 

10Y remains below 3.00%…

 

The Dollar Index traded in a very narrow band all day, slightly lower overnight and then gaining strength through the US session and rising a little after Wilbur Ross comments in the afternoon…

 

Meanwhile, Argentina’s Peso crashed again…holding at 25.00 where BCRA said it would buy $5bn in pesos.

And its default risk exploded higher…as its Century bond yields hit a record high at 8.45.

 

But we note that EM FX Carry broke its uptrend…

As Nedbank noted, the carry index is an important “canary” to monitor. The index has broken out of the bull trend at 260 and has rallied from the 255 neckline on Friday to test 260 from below. The next few days will be important, as a consolidation below 260 would confirm a major reversal. A break below the neckline at 255 and below the wave-A high at 252 would project substantial downside (to below the (red) wave-C low of early 2016). The MACD has also confirmed the break out of the bull trend.

Additionally, EM bond yields are spiking…(Dollar and local currency debt costs are soaring)

 

As Blockchain Week starts, crypto was bid today with Litecoin best since Friday’s close…

 

WTI managed to hold on to gains despite the dollar strength but PMs and copper slipped during the US day session…

 

Finally, the market seems to have forgotten about risk again…

The Bank of America Merrill Lynch GFSI Market Risk indicator, which hasn’t posted a weekly gain since March and fell to its lowest level since Jan. 22, is at a point indicating there is less stress than normal.

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Melania Trump Hospitalized For “Benign Kidney Condition” As Harry Reid Undergoes Pancreatic Cancer Surgery

First Lady Melania Trump is in the hospital after she underwent a successful “embolization procedure to treat a benign kidney condition,” according to a statement by her office. 

“This morning, First Lady Melania Trump underwent an embolization procedure to treat a benign kidney condition. The procedure was successful and there were no complications,” reads the statement. “Mrs. Trump is at Walter Reed National Military Medical Center and will likely remain there for the duration of the week. The First Lady looks forward to a full recovery so she can continue her work on behalf of children everywhere.” 

Meanwhile, former Senate Majority Leader Harry Reid (D-NV) underwent surgery for pancreatic cancer on Monday morning at Johns Hopkins Hospital in Baltimore, where doctors removed a tumor according to a statement from Reid’s family.

“Today, Former Democratic Leader Harry Reid underwent surgery at Johns Hokins Cancer Center to remove a tumor from his pancreas,” the statement reads. “His doctors caught the problem early during a routine screening and his surgeons are confident that the surgery was a success and tha tthe prognosis for his recovery is good.”

Reid, a Senator for 30 years, retired last year after announcing that he would not run for reelection, and has kept his diagnosis “very quiet” according to KLAS-TV journalist George Knapp. 

He will undergo chemotherapy for the next phase of his treatment, according to the statement.  

Senator Chuck Schumer (D-NY) says he has spoken with Reid’s family and that the operation “went well.” 

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Ron Paul Explains Trump’s Plan For Iran: Put Terrorists In Charge

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Back in the 2008 presidential race, I explained to then-candidate Rudy Giuliani the concept of “blowback.” Years of US meddling and military occupation of parts of the Middle East motivated a group of terrorists to carry out attacks against the United States on 9/11. They didn’t do it because we are so rich and so free, as the neocons would have us believe. They came over here because we had been killing Muslims “over there” for decades.

How do we know this? Well, they told us. Osama bin Laden made it clear why al-Qaeda sought to attack the US. They didn’t like the US taking sides in the Israel-Palestine conflict and they didn’t like US troops on their holy land.

Why believe a terrorist, some responded. As I explained to Giuliani ten years ago, the concept of “blowback” is well-known in the US intelligence community and particularly by the CIA.

Unfortunately, it is clear that Giuliani never really understood what I was trying to tell him. Like the rest of the neocons, he either doesn’t get it or doesn’t want to get it. In a recent speech to the MeK – a violent Islamist-Marxist cult that spent two decades on the US terror watch list – Giuliani promised that the Trump Administration had made “regime change” a priority for Iran. He even told the members of that organization – an organization that has killed dozens of Americans – that Trump would put them in charge of Iran!

Giuliani shares with numerous other neocons like John Bolton a strong relationship with this group. In fact, both Giuliani and Bolton have been on the payroll of the MeK and have received tens of thousands of dollars to speak to their followers. This is another example of how foreign lobbies and special interest groups maintain an iron grip on our foreign policy.

Does anyone really think Iran will be better off if Trump puts a bunch of “former” terrorists in charge of the country? How did that work in Libya?

It’s easy to dismiss the bombastic Giuliani as he speaks to his financial benefactors in the MeK. Unfortunately, however, Giuliani’s claims were confirmed late last week, when the Washington Free Beacon published a three-page policy paper being circulated among National Security Council officials containing plans to spark regime change in Iran.

The paper suggests that the US focus on Iran’s many ethnic minority groups to spark unrest and an eventual overthrow of the government. This is virtually the same road map that the US has followed in Iraq, Libya, Syria, and so on. The results have been unmitigated disaster after disaster.

Unleashing terrorists on Iran to overthrow its government is not only illegal and immoral: it’s also incredibly stupid. We know from 9/11 that blowback is real, even if Giuliani and the neocons refuse to understand it. Iran does not threaten the United States. Unlike Washington’s Arab allies in the region, Iran actually holds reasonably democratic elections and has a Western-oriented, educated, and very young population.

Why not open up to Iran with massive amounts of trade and other contacts? Does anyone (except for the neocons) really believe it is better to unleash terrorists on a population than to engage them in trade and travel? We need to worry about blowback from President Trump’s fully-neoconized Middle East policy! That’s the real threat!

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Harvard Endowment Goes All In Apple, Microsoft And Google

One year ago, the Harvard University endowment made news when it disclosed in its 13F filing, that its biggest publicly traded holding was a junk bond ETF, an indication of not only the recent infatuation with high yield bonds (which this year has proven to be all too dear to those who are still long junk) but also of the creeping shift to passive investments as the school replaced some of its own traders with external money managers.

That was the case until the fourth quarter, when Harvard’s latest $855MM position in HYG was dissolved, and in the fourth quarter, Harvard reported only $114.2 million in long equity exposure for 13F purposes, a steep drop from the $1.02 billion in holdings in Q3 2017.

Then late on Friday, the Harvard endowment reported its latest 13F, in which it had another surprise: of its $817 million in long positions as of March 31, 2018, the vast majority, or 72% to be precise, was just three stocks: Apple (35%), Microsoft (21%) and Alphabet (16%), with the remaining positions – mostly ETFs – accounting for just 28% of Harvard Endowment’s long equity positions.

Specifically, the Harvard Management Company bought 1.69 million of AAPL. 1.85 million shares of MSFT and 129,000 of GOOGL, the latest 13F revealed.

And while these investments are just a drop in the bucket for the entire Harvard Endowment, which amounted to $37.1 billion most recently, the sheer determination by the “smartest university in the room” to have FAANG exposure, or at least AMG, at any cost, explains the relentless rise in the tech sector, which continues to hit all time highs not so much on its own fundamental merits, but because everyone – from the Swiss National Bank to Harvard – is piling their cash into just this handful of stocks.

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Mueller Indicted A Russian Company That Didn’t Even Exist, Court Transcripts Say

Authored by Ryan Saavedra via The Daily Wire,

This week, one of the Russian companies accused by Special Counsel Robert Mueller of funding a conspiracy to meddle in the 2016 U.S. presidential election was revealed in court to not have existed during the time period alleged by Mueller’s team of prosecutors, according to a lawyer representing the defendant.

U.S. Magistrate Judge G. Michael Harvey asked Eric Dubelier, one of two lawyers representing the accused Russian company, Concord Management and Consulting LLC, if he was representing a third company listed in Mueller’s indictment.

“What about Concord Catering?” Harvey asked Dubelier.

“The government makes an allegation that there’s some association. I don’t mean for you to – do you represent them, or not, today? And are we arraigning them as well?”

“We’re not,” Dubelier responded.

“And the reason for that, Your Honor, is I think we’re dealing with a situation of the government having indicted the proverbial ham sandwich.”

“That company didn’t exist as a legal entity during the time period alleged by the government,” Dubelier continued.

“If at some later time they show me that it did exist, we would probably represent them. But for purposes of today, no, we do not.”

The term “indict a ham sandwich” is believed to have originated from a 1985 report in the New York Daily News when New York Chief Judge Sol Wachtler told the news publication that government prosecutors have so much influence over grand juries that they could get them to “indict a ham sandwich.”

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