finance – Page 18427

Sell-Side Penguin Of The Day Award Goes To…

… Morgan Stanley’s “research analyst” David Risinger, who today, February 18, 2014, a day after the WSJ broke the news yesterday around 10:30 pm that Forest Labs would be acquired by Actavis for $25 billion, decided to upgrade FRX from Equal-Weight to Overweight, and boosted his price target from “NA” to $86 or about where the stock was trading first thing this morning after the WSJ news. And that, ladies and gentlemen, is undisputed sell-side research value added.

And… Penguins.

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The Idiocy Of “Blaming It On The Weather” Exposed

This morning's catastrophic drop in the National Association of ~~Hope~~ Home Builders sentiment index has rapidly been spun as due to the weather… of course, makes perfect sense, right? What would happen if these drops were actually real fundamentals? If the status quo, the "common knowledge" was shown to be full of shit (once again). Well, riddle us this Batman… if weather was to blame, then why did the "West" region plunge the most? In fact, why did The West plunge the most on record? Too much sunny dry weather not good for sales? In fact, even the entirely indpendent provider of real estate research Trulia said that weather is not to blame…

The West dropped the most on record – we assume that warm, dry weather is detrimental to home-buying in some way?

And kindly explain how the weather was the driver when The West dropped the most of all the regions… (West -14, NorthEast -8, MidWest -9, South -7)

And here's what Trulia told everyone…

Winter Weather is a Wobble, not a Hobble

Here’s what the weather wobble means for interpreting the forthcoming January construction and sales data. Because the weather had a slight negative impact on housing activity, flat month-over-month numbers for construction or sales would mean that other market forces were strong enough to offset the negative effect of bad weather. But if housing activity fell month-over-month in January by more than the predicted weather effect, don’t pin the entire drop on the cold.

That means if existing home sales fall by 5% month-over-month in January, for example, then only a bit of decline (1.1%) should be blamed on weather. The regional patterns in housing activity will also help reveal whether weather mattered. The impact of January’s weather on starts should be most negative in the Northeast and Midwest, so if starts decline most in the South and West, then weather’s not the culprit. Finally, housing activity tends to bounce partway back the month after bad weather (unless that next month is unusually bad, too). Rain and cold don’t last forever, and neither do their effects on housing.

Therefore, bad winter weather will only delay some construction and sales activity, rather than make it disappear. Severe winter weather may cause housing activity to wobble, but cold, rain, and snow won’t hobble the housing recovery.

But sure, as opposed to face up to reality, keep blaming the weather…

via Zero Hedge http://ift.tt/N6PzIx Tyler Durden

The Idiocy Of "Blaming It On The Weather" Exposed

The West dropped the most on record – we assume that warm, dry weather is detrimental to home-buying in some way?

And kindly explain how the weather was the driver when The West dropped the most of all the regions… (West -14, NorthEast -8, MidWest -9, South -7)

And here's what Trulia told everyone…

Winter Weather is a Wobble, not a Hobble

Here’s what the weather wobble means for interpreting the forthcoming January construction and sales data. Because the weather had a slight negative impact on housing activity, flat month-over-month numbers for construction or sales would mean that other market forces were strong enough to offset the negative effect of bad weather. But if housing activity fell month-over-month in January by more than the predicted weather effect, don’t pin the entire drop on the cold.

That means if existing home sales fall by 5% month-over-month in January, for example, then only a bit of decline (1.1%) should be blamed on weather. The regional patterns in housing activity will also help reveal whether weather mattered. The impact of January’s weather on starts should be most negative in the Northeast and Midwest, so if starts decline most in the South and West, then weather’s not the culprit. Finally, housing activity tends to bounce partway back the month after bad weather (unless that next month is unusually bad, too). Rain and cold don’t last forever, and neither do their effects on housing.

Therefore, bad winter weather will only delay some construction and sales activity, rather than make it disappear. Severe winter weather may cause housing activity to wobble, but cold, rain, and snow won’t hobble the housing recovery.

But sure, as opposed to face up to reality, keep blaming the weather…

via Zero Hedge http://ift.tt/N6PzIx Tyler Durden

Student Loans Hit Record $1.08 Trillion; Delinquent Student Debt Rises To All Time High

While the bulk of the quantity data contained in the Fed’s quarterly Household Debt and Credit Report is known in advance courtesy of the Fed’s monthly tracking of household revolving and non-revolving debt, the quality components always provide a welcome insight into the state of the US household. It is there that we find that the most disturbing trend in recent years: the encumbering of students with record amounts of loans continues. In fact, as of December 31, the total amount of non-dischargeable (for now) student loans hit a new all time high of $1.08 trillion an increase of $53 billion in the quarter. By comparison, total credit card debt as of the same period was “only” $683 billion. At this rate, total student loans will be double the size of all credit card debt within 2-3 years.

What’s worse, while the 90+ day student debt delinquency rate did post a tiny decline from 11.8% to 11.5% in Q4, on a total notional basis due to the increase in outstanding balances, as of this moment the amount of heavily delinquent student loans has just hit a fresh record high of $124.3 billion, up from $121.5 billion in the prior quarter.

So: when does the Fed finally admit i) there is a student loan problem and ii) the only way to solve said problem is to promptly monetize it?

Finally, putting new “debt” creation in perspective, in 2013 just student and car loans alone represented 108% (that’s right, more than all) of total household debt created.

Source

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Here’s What Happened When a Journalist Crashed a Wall Street Secret Society

Before we get into this post, let’s review the definition of Antisocial Personality Disorder according to the U.S. National Library of Medicine:

Antisocial personality disorder is a mental health condition in which a person has a long-term pattern of manipulating, exploiting, or violating the rights of others. This behavior is often criminal.

Now the symptoms:

Symptoms

A person with antisocial personality disorder may:

Be able to act witty and charming
Be good at flattery and manipulating other people’s emotions
Break the law repeatedly
Disregard the safety of self and others
Have problems with substance abuse
Lie, steal, and fight often
Not show guilt or remorse
Often be angry or arrogant

How about treatment?

Treatment

Antisocial personality disorder is one of the most difficult personality disorders to treat. People with this condition rarely seek treatment on their own. They may only start therapy when required to by a court.

Behavioral treatments, such as those that reward appropriate behavior and have negative consequences for illegal behavior, may hold the most promise. Certain forms of talk therapy are also being explored.

Exactly as many of us have said. Jail time and accountability are necessary to stop these people. Bailouts will only encourage continued sociopathic behavior, which is exactly what we have seen. Think about the above as you read this article. Enjoy.

The following article by Kevin Roose was published late last night by New York Magazine, and it recounts what the journalist saw when he crashed Wall Street fraternity Kappa Beta Phi’s private party back in 2012. Some elements of his experience were already published a couple years back in a New York Times piece, but his latest article adds an additional perspective and recounts many outrageous aspects of the event I had never read before. This article is particularly important considering the recent trend of billionaires running around on financial television claiming they are being prosecuted for no reason.

Basically, it will confirm what everyone already thought. That a great many of these oligarch financiers are complete and total sociopaths and a menace to society.

From New York Magazine:

Recently, our nation’s financial chieftains have been feeling a little unloved. Venture capitalists are comparing the persecution of the rich to the plight ofJews at Kristallnacht, Wall Street titans are saying that they’re sick of being beaten up, and this week, a billionaire investor, Wilbur Ross, proclaimed that “the 1 percent is being picked on for political reasons.”

Ross’s statement seemed particularly odd, because two years ago, I met Ross at an event that might single-handedly explain why the rest of the country still hates financial tycoons – the annual black-tie induction ceremony of a secret Wall Street fraternity called Kappa Beta Phi.

It was January 2012, and Ross, wearing a tuxedo and purple velvet moccasins embroidered with the fraternity’s Greek letters, was standing at the dais of the St. Regis Hotel ballroom, welcoming a crowd of two hundred wealthy and famous Wall Street figures to the Kappa Beta Phi dinner. Ross, the leader (or “Grand Swipe”) of the fraternity, was preparing to invite 21 new members — “neophytes,” as the group called them — to join its exclusive ranks.

Yeah Ross, what’s not to love about a guy like you.

Looking up at him from an elegant dinner of rack of lamb and foie gras were many of the most famous investors in the world, including executives from nearly every too-big-to-fail bank, private equity megafirm, and major hedge fund. AIG CEO Bob Benmosche was there, as were Wall Street superlawyer Marty Lipton and Alan “Ace” Greenberg, the former chairman of Bear Stearns. And those were just the returning members. Among the neophytes were hedge fund billionaire and major Obama donor Marc Lasry and Joe Reece, a high-ranking dealmaker at Credit Suisse. All told, enough wealth and power was concentrated in the St. Regis that night that if you had dropped a bomb on the roof, global finance as we know it might have ceased to exist.

If you recall, last year Mr. Benmosche compared anger at Wall Street bonuses to the lynching of black people in the south.

I’d heard whisperings about the existence of Kappa Beta Phi, whose members included both incredibly successful financiers (New York City’s Mayor Michael Bloomberg, former Goldman Sachs chairman John Whitehead, hedge-fund billionaire Paul Tudor Jones) and incredibly unsuccessful ones (Lehman Brothers CEO Dick Fuld, Bear Stearns CEO Jimmy Cayne, former New Jersey governor and MF Global flameout Jon Corzine). It was a secret fraternity, founded at the beginning of the Great Depression, that functioned as a sort of one-percenter’s Friars Club. Each year, the group’s dinner features comedy skits, musical acts in drag, and off-color jokes, and its group’s privacy mantra is “What happens at the St. Regis stays at the St. Regis.” For eight decades, it worked. No outsider in living memory had witnessed the entire proceedings firsthand.

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Global Gold Coin And Bar Demand Surged 28% To Record 1,654 Tonnes In 2013

Today’s AM fix was USD 1,314.00, EUR 957.59 and GBP 787.44 per ounce.
Yesterday’s AM fix was USD 1,326.00, EUR 967.60 and GBP 791.97 per ounce.

LBMA closing fix yesterday was USD 1,327.50, EUR 968.55 and GBP 794.15 per ounce.
The U.S. markets were closed for the President’s Day holiday yesterday.

Gold drifted lower today as traders took profits from recent gains, but gold held not far off 3 and a 1/2 month highs due to a weaker U.S. dollar and concerns over U.S. and global economic growth.

Webinar: Gerald Celente On Strategies For Protecting Your Wealth In 2014 And Beyond
Join Gerald Celente on this broadcast this Thursday as he examines the opportunities in 2014 and in the coming uncertain years.

Gold in U.S. Dollars, 5 Years – (Bloomberg)

Bullion is up 10% this year as investors and store of value buyers see the 28% fall in 2013 as a buying opportunity. The volatility and weakness in equities globally due to emerging market turmoil and economic concerns is leading to safe haven demand.

Silver also fell but wasn’t too far from a 3-1/2 month high of $21.96 hit on Monday. Spot silver prices rose for a 12th day yesterday, the longest rally since at least 1968, data compiled by Bloomberg show.

The World Gold Council’s global supply and demand figures have been released. They confirm what was already known – huge physical demand for coins and bars globally was counter acted by significant liquidations by COMEX speculators and weak hand ETF investors.

Gold Demand Trends Full Year 2013 makes interesting reading nevertheless. The World Gold Council said full-year 2013 gold demand was 3,756 tonnes, valued at $170 billion and down from 4,415 tonnes in the previous year due to ETF liquidations.

The data confirms that 2013 saw record demand for coins and bars globally but especially in China, Japan and much of Asia.

Annual global investment in bars and coins reached 1,654 tonnes, up from 1,289 tonnes in 2012, a rise of 28%, and the highest figure since the World Gold Council’s data series began in 1992. For the full year, Chinese and Indian investment in gold bars and coins was up 38% and 16%, respectively.

Although much smaller markets in terms of volume, in the U.S. bar and coin demand was up 26% to 68 tonnes, and in Turkey it was up 113% to 102 tonnes.

China became the world’s largest store of wealth buyer of gold in 2013. They are not consumers as only a tiny fraction of gold is ever consumed. Chinese people bought a record 1,066 metric tons of gold last year, as sudden price falls led to a 32% jump in bars, coins and jewelry buying.

China’s increased purchases helped limit the decline in gold prices as western speculators and investors sold 869.1 tons through exchange-traded products backed by bullion.

Chinese gold demand surged past Indian demand making China the world’s number one buyer of gold. However, India’s gold demand remained buoyant in 2013 and rose by 13% to 945 tonnes compared to 2012. The Indian demand number does not capture the full level of demand as the governments punitive import taxes led to a huge jump in black market activity and the smuggling of gold in huge quantities into India.

Gold demand in Japan jumped threefold in 2013 as people in Japan sought refuge from Prime Minister ShinzoAbe’s campaign to stoke inflation and weaken the yen. Demand for jewelry, bars and coins increased to 21.3 metric tons last year from 6.6 tons in 2012. Demand for jewelry rose 5.4% to 17.6 tons and Japan became a net buyer of bars and coins for the first time since 2005 with 3.7 tons of purchases. There is scope for a massive increase in Japanese investment, pension and store of wealth demand in the coming years.

Central banks added 61 tons to gold reserves in the fourth quarter, the least since the end of 2010, and full-year purchases declined 32% to 368.6 tons, according to the council. Nations added to holdings for 12 consecutive quarters and will continue purchasing amounts in the hundreds of tons which should support gold.

It is important to note that full-year 2013 total global gold demand of 3,756 tonnes is worth just $170 billion which is what the Federal Reserve prints in less than three months. It is much less than what the Fed, ECB, BOE, BOJ and PBOC and other central banks are printing every month.

Global gold coin and bar demand at 1,654 tonnes per annum is worth just $75 billion which is not far off what the Federal Reserve is printing each month now. This shows how while demand has increased in recent years, the demand is very sustainable and there remains room for a significant jump in demand in the coming years.

Webinar: Gerald Celente On Strategies For Protecting Your Wealth In 2014 And Beyond
Join Gerald Celente on this broadcast this Thursday as he examines the opportunities in 2014 and in the coming uncertain years.

Gerald Celente needs little introduction: Founder of The Trends Research Institute in 1980, Gerald Celente is a pioneer trend strategist. He is author of the national bestseller Trends 2000 and Trend Tracking (Warner Books) and publisher of the internationally circulated Trends Journal newsletter.

This webinar is scheduled for this Thursday, Feb 20, 2014 1:00 PM – 2:00 PM GMTand will be moderated by Mark O’Byrne, Head of Research at GoldCore.

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UK Inflation Slumps Below BoE Target (But Price Pressures Are Building)

Despite all the hoop-la of the UK economic recovery – and Mark Carney’s credibility-sapping dynamic forward guidance “we’ll know it when we see it” perspective – billions in QE has failed to spark enough ‘inflation’ to break the Bank of England’s oh so critical 2% inflation target. For the first time since November 2009, UK CPI fell below the 2% ‘threshold’ in January (must be the weather) as Japan’s deflation exporting (what goes up there must go down everywhere else) spreads from the US to the UK. Of course, the silver lining for equity markets is that this provides Carney just the right ammo to keep rates lower for longer at their record lows; but price pressures are building…

Of course this hasn’t stopped QE from driving UK house prices and the equity market to record highs as ‘asset’ inflation is all that really matters…

As Stefan Karlsson notes – it’s definitely not great news…

For the first time since 2009, when oil prices had collapsed and the VAT had been temporarily reduced, British inflation fell below 2%, to 1.9% to be more precise. Note however that this is still more than a percentage point higher than in the euro area, despite the fact that the pound is up about 6% against the euro (and up about 6% against the U.S. dollar) during the latest year.

When price inflation continues to exceed that in your major trading partners despite a rising currency, this suggests that domestic price pressures are very strong.

In Britain’s case it doesn’t reflect rising wages however, but falling productivity.

But hey – why not bid the FTSE up 1% anyway and outperform all European stocks.

Charts: Bloomberg

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IMF report: ‘Debt is good’. What are these people smoking?

February 18, 2014
Sovereign Valley Farm, Chile

Probably every kid in the world has at some point dreamed of having a time machine and being able to travel back to the past… usually to see dinosaurs or something like that.

Time travel is an almost universal fantasy. And if I could snap my fingers and turn the pages of time, I’d be seriously curious to check out the thousand-year period between the decline of the Western Roman Empire and the rise of the Renaissance.

They used to refer to this period as ‘the Dark Ages’ (though historians have since given up that moniker), a time when the entire European continent was practically at an intellectual standstill.

The Church became THE authority on everything– Science. Technology. Medicine. Education. And they kept the most vital information out of the hands of the people… instead simply telling everyone what to believe.

People living in that time had to trust that the high priests were smart guys and knew what they were talking about.

Interpreting facts and observations for yourself was heresy, and anyone who formed original thought and challenged the authority of church and state was burned at the stake.

Granted, human civilization has come a long way since then. But the basic building blocks are not terribly different than before.

Anyone who challenges the state is still burned at the stake. And our entire monetary system requires that we all trust the high priests of central banking and economics. Those that stray from the state’s message and spread economic heresy are cast down and vilified.

You may recall the case of Harvard professors Ken Rogoff and Carmen Reinhart who wrote the seminal work: “This Time is Different: Eight Centuries of Financial Folly”.

The book highlighted dozens of shocking historical patterns where once powerful nations accumulated too much debt and entered into terminal decline.

Spain, for example, defaulted on its debt six times between 1500 and 1800, then another seven times in the 19th century alone.

France defaulted on its debt EIGHT times between 1500 and 1800, including on the eve of the French Revolution in 1788. And Greece has defaulted five times since 1800.

The premise of their book was very simple: debt is bad. And when nations rack up too much of it, they get into serious trouble.

This message was not terribly convenient for governments that have racked up unprecedented levels of debt. So critics found some calculation errors in their Excel formulas, and the two professors were very publicly discredited.

Afterwards, it was as if the entire idea of debt being bad simply vanished.

Not to worry, though, the IMF has now stepped up with a work of its own to fill the void.

And surprise, surprise, their new paper “[does] not identify any clear debt threshold above which medium-term growth prospects are dramatically compromised.”

Translation: Keep racking up that debt, boys and girls, it’s nothing but smooth sailing ahead.

But that’s not all. They go much further, suggesting that once a nation reaches VERY HIGH levels of debt, there is even LESS of a correlation between debt and growth.

Clearly this is the problem for Europe and the US: $17 trillion? Pish posh. The economy will really be on fire once the debt hits $20 trillion.

There’s just one minor caveat. The IMF admits that they had to invent a completely different method to arrive to their conclusions, and that “caution should be used in the interpretation of our empirical results.”

But such details are not important.

What is important is that the economic high priests have proven once and for all that there are absolutely no consequences for countries who are deeply in debt.

And rather than pontificate what these people are smoking, we should all fall in line with unquestionable belief and devotion to their supreme wisdom.

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Venezuelan Authorities Detain Anti-Government Protest Leader – Live Feed

As was expected, President Maduro's forces have detained Leopoldo Lopez – the leader of the anti-government protesters. Having earlier stated, "I present myself here, willing for my arrest to wake up Venezuelans," it appears Venezuelan authorities have stepped in…

*VENEZUELA'S LOPEZ SAYS HE HAS NOTHING TO BE AFRAID ABOUT
*VENEZUELA'S LOPEZ DETAINED BY NATIONAL GUARD IN CHACAITO

Despite the ongoing proclamations of "absolute calm" the streets (below) appear anything but with hundreds of thousands on the streets… and protesters are blocking the National Guard van that holds Lopez.

Lopez added…

“In Venezuela, there is no justice. This fight is for the students, for those jailed, for the people suffering scarcity, for those without a job, for the youth without a future.”

Live Feed

The van holding Lopez is being held back by protesters…

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Ukraine’s Military Releases The Armored Vehicles And Fighter Jets

Days after Kazakhstan broke out is tanks post-devaluation, the promise to "Restore order by all means envisaged" is under way in Ukraine as military vehicles are being mobilized into the city center (and fighter jets are being reported overhead). As Martin Armstrong so eloquently noted recently, "the Western powers represented by the EU and the US have nothing to stand on to protect Ukraine and can only offer lip-service at best. So once again, it appears that Ukraine is doomed and the best one can hope for there, is that Russia will allow the West to leave. The countdown goes forward and the political and economic crisis is indicative of what we see with the first shot across the bow in the rising trend of the Cycle of War." The US has 'demanded' an end to the violence…

Via Voice Of Russia,