Tag: finance

Submitted by Duane via Free Market Shooter blog,

This weekend, hundreds of thousands of protesters descended on Washington DC and many other other cities across our nation.  The aim of the protests was to demonstrate women’s rights, and use female disgust for Trump’s alleged lack of respect for women as a springboard to protesting Trump’s inauguration as the 45th President of the United States.

The farcical and hypocritical nature of the “women’s rights” protest was on display from the get-go, as they were focused on Trump alone, with no mention of another womanizer in attendance at Trump’s Inauguration, who just so happened to be a former President of the United States as well.  Notably, his womanizing was on full display, as he ogled Ivanka (or was it Melania?) Trump at the Inauguration:

Lest you all of a sudden forget the sexual depravity of Bill Clinton, the things he has done are at least as bad as what Trump has said, and at worst criminal acts in their own right.  Even worse, Hillary has condoned Bill’s behavior, and often slandered those who would dare speak out against it.  You should note, no such protests occurred 20 years ago, during Bill’s presidency and impeachment trial.  And, for the record, of all the things to impeach Bill Clinton for and attempt to remove him from office, his womanizing behavior is near the bottom of the list.  That is a problem for him and Hillary, not the rest of the country.

But did the protesters make any mention of Bill Clinton’s misconduct?  Of course not.  They were there for Trump, and made this protest about partisan politics instead of the “women’s rights” they were allegedly in support of.   But don’t worry, when it comes to personal behavior, its a one-way, partisan street from the protesters, and you get a pass if you’re from their party.

The protesters had no regard for law enforcement or criminal behavior, smashing windows and engaging with police on many occasions, far too many to list.  But the worst part was the fact that they were protesting the authorities themselves for saving someone having a heart attack, even when the “someone” turned out to one of their own protesters:

WATCH : Anti- @realDonaldTrump protesters BOO law enforcement and medical staffers trying to save a protester who had a heart attack's LIFE! http://pic.twitter.com/mRUGerpVXX

— DefendingtheUSA (@DefendingtheUSA) January 23, 2017

The protesters even made the ignorant comparison of women’s rights to gun rights, blissfully unaware of the truth that Gun Owners Across America so eloquently pointed out:

 

via http://ift.tt/2kq9XFJ Tyler Durden

 

The Dow soared non-stop (along with a VIX crash), seemingly on the heels of Senate Democrats' $1 trillion infrastructure plan…(NOTE – VIX was crushed into the close and stocks also fell!)

As RBC's Charlie McElligott notes, some focus in macro community today (with v little interest paid in equities, curiously) on the proposal from Senate Democrats of their own $1T infrastructure plan to President Trump per the NYT this morning.

The reason macros care so much of course is that a coherent and detailed infra policy would be another major boost to their view on higher rates / reflation.

Trump’s purported infra plan has had rough details out for months now via his website @ $1T in its own right, theoretically spread over 5 years but most importantly, with private-funding aspirations.  The Republicans are ironically the issue here for Trump, as historically this sort of “job / works program” stuff is the stuff they have despised as “big government mismanagement / pork barrel “creep.”  So this could be a fascinating test as to whether or not Trump can move across the aisle and ‘coalition build’….IF the plan has enough overlap with his own of course.  
 
From the ‘color me skeptical’ side: this is likely a symbolic gesture with no real intent or expectation to ‘get a deal done,’ where actual hope is to float this plan in ahead of the Jan 27th ‘due date’ on the Obamacare “reconciliation” bill.  If the new administration and Republicans can’t get their stuff together on that front, and the Dems were to ‘beat them to the punch’ on infra too, it would be an embarrassing PR start for Trump’s team.  
 
From a trading perspective, it would likely take further air out of the USD-longs and likely see rates travel lower as “reflation” bets come off.

As the Trumpflation trade came back to life… cyclicals soaring over defensives…

 

All major indices are now green on the year and post-inauguration…

 

Today was the biggest short-squeeze since the first day of 2017…

 

The last month has seen the lowest trading range for The Dow since 1900…

 

And as realized volatility has collapsed…

As BofA notes, Implied vol remains low on the back of anemic S&P 500 realized volatility.

In fact, through Monday 23-Jan, the S&P 500 is on track to record its 5th lowest volatility for the month of January in 90 years.

 

Low short-dated vol is contributing to extremely steep implied volatility term structure and the spread between SPX 3m to 1m ATM volatility is near two-year highs.

Nasdaq and S&P hit new record highs…

 

An ugly 2Y auction spiked rates…

 

But the entire bond complex was a one-way street higher in yield today… pushing 30Y and 2Y briefly higher on the week…

 

The Dollar and Yields decoupled today…

 

The USD Index flip-flopped around all day… having tumbled to the lowest levels since The ECB meeting in December…

 

Copper was the biggest beneficiary of today's Trumpflation trade…

 

Oil clung to gains despite the modest USD strength as $53 appears the new Maginot Line…ahead of tonight's API data…

 

Notably, after piling into bets that the benchmark prices for crude oil traded in New York and London would converge by December 2019, traders are now paring those wagers. Doubts have cropped up that a Republican Congress will be able to push through plans for a levy on imports and an exemption for exports, moves that would favor U.S. produced West Texas Intermediate over the global benchmark Brent.

 

Gold slipped notably lower today (despite only modest moves in the USD) – almost the worst day for gold since the Fed hiked rates…

 

Ans gold still leads in 2017…

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Kellyanne Conway – arguably Trump’s most recognizable aide – has been assigned Secret Service protection after receiving threats against her life, presumably from tolerant anti-Trump protesters.

.@KellyannePolls talks to @HardballChris about receiving death threats and the need to end incendiary rhetoric https://t.co/wF6jv1b8nl

— Hardball (@hardball) December 9, 2016

Conway had previously blasted the president-elect’s critics — namely Hillary Clinton supporters — for fueling a barrage of death threats against her…

 

“Anytime I respond, anytime I defend myself against these … allegations that are now leading to death threats … I’m seen as ungracious,” Conway said during an interview Thursday on MSNBC with Chris Matthews, referring, in part, to claims that the Trump campaign gave a platform to white nationalists.

 

“Why are we sore winners? I’m not a sore winner. I’m a winner. My guy is a winner. He’s the next president of the United States.”

As The New York Post reports, it is unclear what threats Conway, Trump’s
final campaign manager, was facing, but during a recent interview with Sean Hannity on the Fox News Network, Conway said that multiple packages containing “white substances” have been delivered to her home causing panic.

“We have packages delivered to my house with white substances. That is a shame,” she told the sympathetic Fox host. “Because of what the press is doing now to me, I have Secret Service protection.”

But while her Secret Service
detail is unusual, it is not without precedence.

Barack Obama’s closest adviser, Valerie Jarrett, also was protected by the agency.

 

Asked about the relationship between Trump’s top advisers — herself, Steve Bannon, Jared Kushner and Reince Priebus, Conway said it was good.

 

“We’re a cohesive unit,” she told The Washington Post.

 

“The senior team exhibits many of the characteristics President Trump has always valued: cohesion, collaboration, high energy and high impact,” she added.

 

According to the report, Conway will be focused on health care and issues related to veterans — and is expecting to spend less time on TV.

Given the lack of consequence to Madonna’s “bomb the White House”
remarks, it is perhaps not entirely surprising that death threats are
tossed about.

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In a response filed moments ago by TransCanada, the company said it is currently preparing a follow up application, and will take up President Donald Trump’s invitation to again seek permit for the Keysteon XL pipeline. It further adds that Keystone XL will add more than $3 billion to U.S. GDP and create “thousands” of construction jobs.

Full statement below:

We appreciate the President of the United States inviting us to re-apply for KXL.

 

We are currently preparing the application and intend to do so. KXL creates thousands of well-paying construction jobs and would generate tens of millions of dollars in annual property taxes to counties along the route as well as more than $3 billion to the U.S. GDP.

 

With best-in-class technology and construction techniques that protect waterways and other sensitive environmental resources, KXL represents the safest, most environmentally sound way to connect the American economy to an abundant energy resource.

Ironically, as the back and forth was taking place, news emerged that a pipeline in the western Canadian province of Saskatchewan leaked 200,000 liters (52,834 gallons) of oil in an aboriginal community, the provincial government said on Monday according to Reuters. The government was notified late in the afternoon on Friday, and 170,000 liters have since been recovered, said Doug McKnight, assistant deputy minister in the Ministry of the Economy, which regulates pipelines in Saskatchewan.

The spill came seven months after another major incident in Saskatchewan, in which a Husky Energy Inc pipeline leaked 225,000 liters into a major river and cut off the drinking water supply for two cities. It was not immediately clear how the current incident happened or which company owns the underground pipeline that leaked the oil.

McKnight said Tundra Energy Marketing Inc, which has a line adjacent to the spill, is leading cleanup efforts. “There are a number of pipes in the area,” he told reporters in Regina. “Until we excavate it, we won’t know with 100-percent certainty which pipe.”

Tundra, a privately held unit of Canadian grain trading and energy conglomerate James Richardson and Sons Ltd, released a statement saying it is cooperating with all levels of government and will ensure “the affected land is restored appropriately.”

The incident happened in the lands of the Ocean Man First Nation 140 km (87 miles) southeast of the provincial capital of Regina, according to the province.

It is still unclear how environmental groups will react to today’s executive orders by Trump.

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An obscure Danish penny stock company called Victoria Properties has a lot of investors, and its own management team, dumbfounded after it surged nearly 1,000% in just a matter of days and for no apparent reason whatsoever.  Per Bloomberg, the company invests in residential and retail real estate in Germany but a quick review of financials reveals minimal revenue, consistent cash flow burns for several years running, minimal assets and very little remaining cash.

The sudden surge in the company’s stock price even forced management to issue a statement confirming that Victoria’s equity value is “still equal to about zero kroner”…which we assume is just a rough estimate.

“The management in Victoria Properties wants to make clear that there has been no change in Victoria Properties’ economic conditions and that no plans have been disclosed regarding the company’s future strategy,” Chief Executive Officer Rasmus Bundgaard said in the stock-exchange announcement. “The company’s equity is therefore still equal to about zero kroner.”

 

According to Bloomberg, no one could explain the sudden surge in Victoria’s equity though most of the trading came from retail brokerage accounts held at NordNet AB.

Traders and analysts called by Bloomberg were unable to explain the company’s share move on Monday. Most of the trading was done by a brokerage that mainly serves retail clients, called NordNet AB. Its transactions accounted for about half of total trades.

 

Victoria’s shares had fallen for six straight calendar years before 2017, so even after January’s stunning gains, the company is still worth about 98 percent less than at its 2006 peak, just before Denmark’s property bubble burst.

 

The last time the company issued stock-exchange announcements was on Dec. 29, when majority owner Euroinvestor.com sold its entire 64.95 percent stake to three different companies, including one controlled by Victoria’s CEO.

Nefarious plot or trading algos gone wild?

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While much has been said about the impact on the dollar from the proposed Border Tax Adjustment, which may or may not be implemented depending on what Trump says/tweets on any given day (and as a reminder, there has already been a loud outcry against it by powerful lobby groups, including the Kochs, as a result of the expected decimation of US retailers should BTA be implemented) little has been said about how it could impact US commodity production in general, and oil in particular.

This morning, in a note titled “Destination-based taxation and the oil market”, Goldman’s Damien Courvalin focused on this issue and found that the price gain from shift to destination-based border adjusted corporate tax would prompt US drillers to “sharply increase activity” as a result of lower US corporate tax rates, which would aggressively incentivize shale drilling, resulting in a global oil price shock, sending domestic prices spiking, as global prices slide.

The border tax would have an inflationary impact on U.S. service costs and reduce U.S. dollar costs of foreign producers. A lower U.S. corporate tax rate “could force a deflationary tax policy response” elsewhere further reducing the marginal cost of oil. In short, “US oil prices would appreciate immediately and sharply vs. global oil prices“

Some observations:

If domestic oil prices remained at the same level as imported crude oil prices upon implementation of the BTA,  US refiners would have an incentive to consume only domestically produced crude instead of importing crude as only the cost of domestic crude would be deducted for tax purposes, and (2) US producers would have an incentive only to export crude rather than to sell to domestic refiners as there  would be no taxes on exports. This would lead to a sharp appreciation of the US domestic oil price relative to the global price oil.

 

 

 

Because US oil demand of 19.6 mb/d currently vastly exceeds domestic crude production of 13.5 mb/d, the US market requires imports of crude. As a result, refiners would bid domestic crude up until domestic prices rise enough to leave them indifferent about importing crude for their incremental barrels. Put another way, pricing power would be in the hands of producers upon introduction of this policy and they could charge US refiners up until these prefer to import foreign crude instead. Financial markets would anticipate this new equilibrium, with domestic oil prices reacting immediately to offset the impact of the border adjustment and leave refiners with the same pre-policy incentives to consume domestic or imported crude oil.

 

 

The magnitude of this relative price move would be determined by the new US corporate tax rate and, at 20% (the rate currently being proposed by the Republican tax BluePrint), it would imply US prices trading at a 25% premium over global oil prices.

 

Goldman warns that rising U.S. production would create a “renewed large oil surplus into 2018” and that there would be an “immediate decline in global oil prices” as other producers offset ramp-up in U.S. output. OPEC would probably raise production, supplies would grow and forward curve would move into “steep contango.”

As an example, assuming a 15% dollar gain and 30% pass through to global production costs, Brent would decline to $50/bbl in 2019 from ~$57/bbl now.

In pricing terms, the higher U.S. crude price would pass through to consumers with modest impact on U.S. fuel demand growth. With $5/bbl rise in U.S. crude, demand to rise 70k b/d in 2018, 55k b/d below present forecast. Meanwhile, refiners would be left with excess returns as a result of the border tax.

In the longer term, Goldman predicts that a “new market equilibrium would arise” with U.S. prices returning to pre-policy level. Border tax would reduce imports and boost exports “in theory” causing dollar to appreciate 25% to reverse initial distortion; the USD appreciation has been duly noted. However, the medium-term outcome would likely be “modestly higher U.S. oil prices and sustainably lower global oil prices, with a shift down by U.S. producers and refiners on the global cost curve.”

* * *

Here is the big picture from Goldman:

A switch to Border-Adjusted Tax (BTA) would immediately lead to a 25% appreciation of US crude and product prices vs. global prices (at a 20% corporate tax rate). This appreciation would provide excess returns to domestic producers and incentivize them to sharply increase activity. This improvement in shale’s competitiveness would be exacerbated by the introduction of a lower US corporate tax rate funded by the BTA. While the BTA’s inflationary impact on US service costs and the deflationary impact of USD appreciation on foreign costs should theoretically offset these shifts and push global prices down by 20%, the contracted nature of oil services implies that the BTA will initially leave US producers moving down on the global cost curve and capturing higher returns.

 

This significant incentive to ramp up US production in a market that is only starting to rebalance would create a renewed large oil surplus in 2018, likely exacerbated by a reversal of the OPEC cuts. This prospect should lead to an immediate sharp decline in global oil prices to try to offset such a potential US ramp-up, either by creating an offsetting foreign production decline or by normalizing US excess returns. Over the longer term, the decline in the US corporate tax rate and shale’s significant growth potential at higher returns could force a deflationary tax policy response abroad, sustainably reducing oil’s marginal cost of production.

 

Importantly, there would initially be no changes in US crude differentials and crude or product trade flows, with all US refiners benefiting from higher margins because of the lower tax rate. Differentiation between US refiners would only materialize if the supply response of US producers creates logistical constraints and wider domestic crude differentials.

And the executive summary:

Among the meaningful potential changes to the US corporate tax code, the most controversial appears to be the House Republicans’ proposal for a shift to a destination-based border-adjusted corporate tax (BTA) alongside a reduction of the federal statutory corporate tax rate. The practical effect of switching to destination-based taxation would be that US firms would exclude export revenues but would no longer deduct import costs when calculating their tax base.

 

There remains high uncertainty on whether this proposal will go ahead given the disruption that such an abrupt change in corporate tax policy likely entails. As a result, our economists assign only a 20% subjective probability to this policy being implemented , with the potential exemption of certain industries lowering the chances that it would impact the oil market further. Current WTI and Brent oil futures imply a 9% probability for a shift to BTA with no oil exemption.

 

Despite this perceived low probability, we believe that a switch to BTA would have significant impacts on the oil market:

1. Because the US oil market is short domestic crude production relative to domestic demand, the impact of such a tax shift would be an immediate appreciation by 25% of US oil prices relative to global oil prices (at a new 20% corporate tax rate). This appreciation would initially leave US crude and product trade flows unchanged but would provide excess returns to domestic crude producers and would incentivize them to sharply increase activity. This improvement in shale’s competitiveness would be exacerbated by the introduction of a lower US corporate tax rate funded by the BTA.
2. This significant incentive to ramp up US production in a market that is only starting to rebalance with the help of OPEC producers would create a renewed large oil surplus into 2018. This reversal of oil fundamentals and the gain in competitiveness of US producers would further likely lead low-cost producers to reverse their decision to cut production and instead return to growing output to maintain market share and long-term revenues.
3. Such a prospect should therefore lead to an immediate decline in global oil prices to try to offset this ramp-up in US production, either by creating an offsetting foreign production decline or by normalizing US excess returns. Because the velocity of shale’s supply growth exceeds the ability for the rest of the world’s supply to decline, and because OPEC would likely resume production growth, it is likely that inventory would nonetheless resume rising in 2018, driving the oil forward curve back into a steep contango.
4. Beyond this bearish impact on 2018 spot prices, the extent of the decline in deferred global oil prices needed to rebalance the oil market over the medium term will be a function of the respective shifts in the US and global costs curves, driven by a combination of the BTA’s inflationary impact on US service costs and the deflationary impact of USD appreciation on foreign production costs. Because of the contracted nature of oil services, these shifts in costs would pass through gradually and would initially leave US producers moving down on the oil cost curve. A decline in the US corporate tax rate could further force a deflationary tax policy response abroad, sustainably reducing the oil’s market marginal cost of production and long- term oil prices.
5. Assuming a 15% USD appreciation upon implementation of the BTA and a 30% immediate pass through to global production costs, we believe that 2019 Brent prices could decline to $50/bbl, from $57/bbl currently. In the short term, the prospect of rising inventories and the reversal of the OPEC cuts could drive prices meaningfully lower, while, longer term, a greater pass through of the USD appreciation onto global costs and our 2020 Brent base case forecast of $53/bbl would imply global prices falling to $40/bbl. Over both horizons, the decline in global oil prices would help offset the outright appreciation in US prices with a likely greater fall in global oil prices than rally in US oil prices.
6. With refining a low-margin industry, the appreciation in US crude oil prices would be almost entirely passed through to the US consumer, with only modest offsets from compressing marketing margins. This appreciation in domestic prices would therefore negatively impact US domestic demand, although the effect’s magnitude would be offset by lower global oil prices. All else constant, a $5/bbl increase in US oil prices would, for example, lead US demand to grow 70 kb/d in 2018, only 55 kb/d less than our current base case forecast of 125 kb/d.
7. The impact of BTA on US refiners would be similar to that on US producers: the appreciation in US crude and petroleum product prices would be immediate and exceed the inflationary impact of the BTA, leaving them with excess returns (outright and vs. foreign refiners), especially if the corporate tax rate is reduced as well. Higher returns would translate into higher US refinery utilization and would push global refining margins lower, negatively impacting marginal refiners in Europe and Asia. There would initially be no change in US domestic crude differentials and crude or product trade flows, with all US refiners benefiting from higher margins . Differentiation in returns between US regional refiners would only materialize if the supply response of US producers once again creates logistical constraints and wider domestic crude differentials.
8. Over the long run, a new oil market equilibrium would arise and, conceptually, it should be one in which US oil prices return to their pre-policy level. Border adjustment would reduce demand for imports and increase demand for exports, in theory causing the USD to appreciate by 25% to reverse the initial distortion of competitiveness and trade flows. Over the long run, the deflationary passthrough effect of this stronger USD on foreign service costs should lead to a decline in global prices of 20%. At such a new equilibrium, US prices would therefore revert to their pre-policy levels, although still up 25% vs. global oil prices.
9. This new equilibrium is unlikely to be reached as the USD is unlikely to appreciate by 25% given currency intervention in many trading partners. Further, potential barriers to entry and termed service contracts would lead the US and global cost adjustments to be only gradual, leaving the evolving macro-economic landscape to create a new equilibrium beforehand. The medium-term outcome of the introduction of the BTA would therefore be one of modestly higher US oil prices and sustainably lower global oil prices, with a shift down by US producers and refiners on the global cost curves.

 

These shifts in local vs. global prices and returns would hold for other commodity markets, such as metals, as well as markets where the US is a larger producer than consumer, like agriculture. It will also hold for the global gas market, depressing global LNG prices, although the less-fungible nature of natural gas and the current US logistical bottlenecks may initially lead to mostly regional shifts in US gas prices.

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Now part of common parlance when referring to the overly-sensitive, easily-outraged, excessively-entitled Left, London’s Evening Standard asked Fight Club author Chuck Palahniuk about the popularisation of the term: “It does come from Fight Club. There is a line, ‘You are not special. You are not a beautiful and unique snowflake.’”

 

As The Standard writes, in Fight Club, Tyler Durden leads a generation of emasculated men to rediscover their inner strength by beating the hell out of each other.

Two decades later, Palahniuk sees the modern generation as delicate flowers more than ever. “There is a kind of new Victorianism,” he said.

 

“Every generation gets offended by different things but my friends who teach in high school tell me that their students are very easily offended.”

Now snowflakes have blown across the Atlantic and entered into British parlance. Last week, Boris Johnson warned François Hollande not to administer “punishment beatings” in the Brexit negotiations. His old friend Michael Gove piled in, saying those offended were “deliberately obtuse snowflakes”. And the term has already been re-appropriated by its targets: at the Women’s March in London on Saturday were signs with slogans such as “Damn right we’re snowflakes: Winter is coming”.

Chuck says this is a problem with the Left, not the Right.

“The modern Left is always reacting to things,” he opined.

 

“Once they get their show on the road culturally they will stop being so offended.”

 

He added self-effacingly: “That’s just my bulls**t opinion.”

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Submitted by Chris Hamilton via Econimica blog,

No difficult economic terms, no tough charts, just simple math.

1 – The worlds population of under 40 year olds (excluding Africa) has essentially peaked (chart below…bars represent 0-40yr/old population, dashed lines UN future estimates).  What is interesting about the under 40 year old population is that they are responsible for about 97% of all pregnancies / births.  It's not impossible for 40+ year old women to have children, just statistically very rare (particularly outside the developed world).

Ok, we've established the global under 40 population (excluding Africa) has essentially peaked…now we lay out the chart below that a shrinking population (above) isn't replacing themselves.  Chart below shows world fertility rates, again breaking world fertility (ex-Africa) from the African fertility rate.  The world (ex-Africa) has fallen below the 2.1 births per female replacement level…and even Africa is rapidly slowing.

A flat to shrinking child bearing population that is not reproducing at a rate to replace themselves and the fertility rates continue to fall.  This all points to the potential the low UN 0-40yr/old population estimate could be fairly accurate (chart 1, lower bound).  With either the medium or low estimate, the UN is telling us they expect a massive depopulation of under 40 year olds world-over.  Somewhere between 1 billion to 2.5 billion fewer under 40yr/olds by the turn of the century & perhaps well in excess of a 50% decline (except for Africa?!?).  I lay out why the Ex-Africa approach to viewing global economics makes sense, HERE.

The next three charts show annual global population growth, excluding Africa (the charts show average annual population growth per five year periods).

Chart below, (1) annual population growth clearly peaked in the '85-'90 timeframe at about +75 million year over year growth, and 2 – the makeup of that growth has entirely shifted from primarily among under 40yr/olds to primarily 65+yr/olds.  These trends are about to get much worse, from an economic and consumption standpoint.

The chart below is focusing on the changing nature of the annual global population growth.

Finally, a quick look at select years to show the changing nature of the global population growth…shifting from nearly entirely growth among the young to declines among the young only somewhat offset by the elderly living far longer.

All the interest rate cuts and debt has been undertaken under the paradigm that it would be more easily repaid in the future…but now we've come to "the future" where there are fewer of us to service the debt, buy homes, buy cars, consume our way to prosperity…or pay the taxes to keep the social systems solvent.  Basically, we are doing our best Wile E. Coyote impression…we've gone over the cliff but somehow haven't realized it quite yet.  What this has looked like in the US and globally…HERE.

Of course, the flipside is the 40+ year old world (ex-Africa) population is set to continue soaring (chart below).  Unfortunately, by age 65, the population consumes at about 70% of it's peak earning years…and by 75, consumption falls to somewhere around 50-60%.  The elderly are credit averse, have made their major life purchases and spending (kids, homes, college) and turn to net sellers in retirement.  Absent a growing population of young to buy their assets (IRA's, homes, etc.), we have a small problem (central bank asset purchases to the rescue).  As for Africa, the population growth there generally consume at a rate of 5-10% the consumption of the depopulating young they are replacing.  Global economic activity and consumption are likely to fall off a steep, high precipice.

The implications economically, financially, societally, etc. etc. of a collapsing population of young and soaring older population should be ringing alarm bells…but instead our politicians seem officially mindless (or intentionally misleading the populace) in the face of a cataclysmic shift.

Just to make the point…here is what the shift looks like for the US.  The breakdown in growth among 25-54yr/old employees (blue line) coinciding with interest rate cuts (black line) and massive federal debt increases (red line). 

The chart below shows total federal debt apportioned per the nearly 100 million 25-54yr/old employees (red columns) vs. the non-growth in wages shown by the real median household income (green line).

 

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Shortly after the melt-up in US bank stocks began following Trump's election victory, we noted heavy insider-selling (and options expiration) among Goldman Sachs executives. Well the selling never stopped, as WSJ reports executives at the biggest Wall Street banks have sold nearly $100 million worth of stock since the presidential election, more than in that same period in any year over the past decade.

As we detailed in mid-November, while the mainstream media proclaims the surge in bank stocks as heralding a new dawn in everything-is-awesome-ness for America, we note that insiders at Goldman Sachs sold $205 million of stock since Nov. 8, company filings show.

That’s three times more than the group has sold in any month for at least five years, data compiled by Bloomberg show.

Not a bad week for Cohn, Blankfein, and Viniar…

 

And since then, as the bank's stock prices have soared, despite lackluster earnings expectations and a yield curve that did not steepen (pumping up NIM)…

 

The Wall Street Journal reports, bankers sold nearly $100 million worth of stock since the presidential election, more than in that same period in any year over the past decade…

The share sales occurred as financial stocks soared since Nov. 9 on expectations of lighter regulation, lower taxes and pro-growth economic policies. The KBW Nasdaq Bank index is up nearly 20% since Donald Trump’s victory, about triple the gains notched by the broader market.

 

In addition to the share sales, bank executives have sold another $350 million worth of stock to cover the cost of exercising options, filings show. That is twice the amount sold for that purpose at big banks in the year leading up to the election.

 

An added bonus: The post-election run-up in share prices gave value to some options that were likely to expire worthless. At Goldman Sachs Group Inc., for instance, the postelection bounce turned half a billion dollars worth of stock options into winners—some just days before they were set to expire.

They are all doing it…

Further selling may be in store, and not all big banks have filed reports on selling by all their top executives.

What’s more, bank employees typically can’t sell shares or exercise options in the run-up to earnings reports. The big banks finished posting their latest round of earnings last week, meaning employees will now in most cases be free to sell.

 

Those sales won’t be as apparent, though. Banks only have to disclose trades for a handful of top executives, although some rank-and-file employees are paid largely in stock and options.

So who is the sucker at this table?

Dick Bove gets it… "banks won't be able to hold on to the earnings boost they get from higher interest rates. The hole in the bottom of the piggy bank, as he described it, would be that higher rates would also hurt the value of financial assets held by the bank, thus leaking out any benefits from increasing borrowing costs."

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