Tag: finance

The Fed’s Casino Is Giving Away Free Gambling Chips (But Only To The Super-Rich)

Authored by Charles Hugh Smith via OfTwoMinds blog,

The rest of us eat our losses, either all at once or in bitter bites as we trudge through the financial wasteland left after bubbles burst.

The news that the Federal Reserve Casino is giving away free gambling chips triggered a frenzied rush that trampled the bears, including poor Yogi:

There’s just one catch to the giveaway: you have to be rich, and if you want more than a token free gambling chip, you need to be super-rich. Then you get a pile of free chips.

If you’re not rich–none for you, debt-serf! If you’re already super-rich, the Federal Reserve Casino has plenty of free gambling chips for you, which you are free to “invest” (heh) in just about any asset, since they’re all going higher: gold, silver, bitcoin, stocks, bonds, bat guano, quatloos and of course shorting volatility, since volatility dies when the gambling chips are free.

If you’re not rich, you’re only allowed to gamble with cash you’ve saved from hard-earned income. And since your income has been stagnant for years or decades when adjusted for real-world inflation, that means you’ll never have the leverage the super-rich have to acquire assets and watch them loft ever higher as the Federal Reserve Casino continues issuing free gambling chips to financiers, global corporations, banks and the super-wealthy.

The non-rich are allowed to borrow–but only at high rates of interest for worthless college degrees, rapidly depreciating pick-up trucks, groceries, $5 coffee beverages, etc.

When all is said and done, what’s left from all this borrowing by the non-rich is the interest due the super-wealthy, who just so happen to own all the debt.

The only Federal Reserve Casino table open to the non-rich is housing, but with prices at bubble highs, it’s a risky bet. Although you won’t find any corporate media coverage of this, if you poke around the legal notices in newspapers (yes, the dead-tree variety), you’ll find a steady trickle of mortgage foreclosures, as all the losers from the casino’s housing roulette wheel are foreclosed by entities such as Deutsche Bank National Trust Company as Trustee for Morgan Stanley ABS Capital I, Inc. Trust and Deutsche Bank National Trust Company as Indenture Trustee for New Century Home Equity Loan Trust 2004-2.

Many of these defaulted mortgages date from the last housing bubble a decade ago. The lenders and mortgage-backed securities pools (legally, trusts managed by entities such as the Deutsche Bank National Trust Company) have kept these bad loans (non-performing loans, in the polite language of financial ruin) on the books, often under purposefully misleading guises to mask the enormity of the losses that are yet to be taken.

The bagholders of the defaulted mortgages are slowly liquidating the thousands of foreclosed homes under the radar now that absurd valuations are once again the norm. Since many of the foreclosed homes have not been maintained, they don’t fetch much on the auction block.

The main point here is that there are losers even when the Federal Reserve is giving away free gambling chips. Since the stock market is the key signaling device that every gambler is a winner (so keep buying!), everyone reading the headlines and listening to to the daily reports of stocks rising to new highs is lulled into a very hazardous complacency: only the super-rich get bailed out when their bets go bad.

The rest of us eat our losses, either all at once or in bitter bites as we trudge through the financial wasteland left after bubbles burst.

*  *  *

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via ZeroHedge News http://bit.ly/2x5FUvd Tyler Durden

Suicide Rates Among Young Americans Accelerates To Highest Level Since 2000 

A new study of national data on suicide rates among young Americans reveals rates have hit their highest point since 2000, reported Reuters.

Rates among Americans started to increase during the financial crisis (2007), sharp accelerations were also seen on a post-crisis basis between 2014 and 2017, according to the report published in JAMA. The study, called Suicide Rates Among U.S. Adolescents, Young Adults Continue to Increase, showed teen suicides had been growing faster in girls than boys until when it flipped to boys in 2015.

“There is a surge of suicides in adolescent males,” said the study’s lead author Oren Miron, a research associate in the department of biomedical informatics at the Harvard Medical School. “Previous research has talked about the rise in females. Our study shows both are at much higher risk.”

For a closer examination at suicides by age, Miron and his team pulled data from the Centers for Disease Control and Prevention’s Underlying Cause of Death database.

Researchers noted that out of 6,241 suicides in individuals aged 15 to 24 in 2017, at least 80% were males and 20% females. The rate of suicides in teens aged 15-24 in 2017 was 11.8 per 100,000, and 17.9 per 100,000 boys and 5.4 per 100,000 girls. Young adults aged 20-24 had suicide rates for 2017 at 17 per 100,000 overall and 27.1 per 100,000 young men and 6.2 per 100,000 young women.

In contrast, the rate among teenagers in 2000 was 8 per 100,000, which continued unchanged until the financial crisis in 2007. The rate increased by 3% per year between 2008 to 2014 and jumps 10% per year between 2014 and 2017.

In boys, the rate declined between 2000 and 2007 then troughed and moved higher: 2.6% per year between 2007 and 2014 and 14.2% per year between 2015 and 2017. In girls, the rate was below trend between 2000 and 2010 but then jumped by 8.2% per year between 2010 and 2017.

Rates for young adults were rising between 2000 and 2013 but soared by 5.6% per year from 2013 to 2017. In young men, rates increased by 5.5% per year between 2013 and 2017, and in young women, they increased by 4% between 2000 and 2017.

The accuracy of the deaths was based on death certificates, which can sometimes be subjected to error.

Researchers also failed to investigate the factors behind the suicide rate increases.”Future studies should examine possible contributing factors and attempt to develop prevention measures by understanding the causes for the decrease in suicides found in the late 1990s,” the researchers wrote.

Nadine Kaslow, a professor of psychiatry and behavioral sciences at the Emory University School of Medicine and chief psychologist at the Grady Health System in Atlanta, who wasn’t involved in the study, told CNN that the research highlights a tremendous surge in suicide rates among young people, “this is unfortunately not a surprise.”

We have reported before on the jump in suicides, particularly among millennials, but this new study “adds a couple of points; one is noting this particular increase in young males and also in this younger age group of 15 to 19,” Kaslow said.

“There have been a number of things that people have talked about lately. One is just sort of increasing rates of psychological pain or psychological distress in young people — more anxiety and more depression — and I think that’s for a number of reasons,” Kaslow said.

And here at Zerohedge, we find it very interesting that suicide rates among young Americans moved higher right before and after the financial crisis. Perhaps, millennials have finally figured out the American Dream is dead, the gig-economy is a scam, housing isn’t affordable, opioids are highly addictive, wages are terrible, and student debt is holding back major life decisions.

via ZeroHedge News http://bit.ly/31KxQ13 Tyler Durden

With Libra Launch, Is Facebook Trying To Become A Virtual Country?

Authored by Bryan Keogh via TheConversation.com,

Facebook has announced a plan to launch a new cryptocurrency named the Libra, adding another layer to its efforts to dominate global communications and business. Backed by huge finance and technology companies including Visa, Spotify, eBay, PayPal and Uber – plus a ready-made user base of 2 billion people around the world – Facebook is positioned to pressure countries and central banks to cooperate with its reinvention of the global financial system.

In my view as a social media researcher and educator, Facebook CEO Mark Zuckerberg is clearly seeking to give his company even more political power on a global scale, despite the potential dangers to society at large. In a sense, he is declaring that he wants Facebook to become a virtual nation, populated by users, powered by a self-contained economy, and headed by a CEO – Zuckerberg himself – who is not even accountable to his shareholders.

Facebook hasn’t behaved responsibly in the past, and is still wrestling with significant public concerns – and investigations – about its privacy practices, information accuracy and targeted advertising. Therefore, it’s important to see through the hype. People must consider who is reshaping the world, and whether they are doing it in the best interests of humankind – or whether they are just seeking to benefit the new class of elite technology executives.

Humanity needs ethical leadership, and time to think through the potential repercussions of rapid technological change. That’s why, in my view, Facebook’s cryptocurrency should be blocked by financial regulators until its design has been proved to be safe for all of global society.

[ZH: Maxine Waters agrees:

“It’s very important for them to stop right now what they’re doing so that we can get a handle on this…”

“This is like starting a bank without having to go through any steps to do it…”

“We can’t allow Facebook to go to Switzerland and begin to compete with the dollar without having any regulatory regime that’s dealing with them.”

]

You might not want to trust this man.

Understanding Libra

Technology companies are interested in a global currency that is native to the internet. That could allow companies like Facebook and Twitter to bring in more users to their platforms, and collect money from businesses who want to join the new system. They also want to siphon off business from the existing financial services industry. That sector is worth trillions of dollars, is enormously profitable, and yet has struggled to implement its own digital currency.

The technical details of Facebook’s plans are still emerging, but it seems that the company is not seeking to compete with Bitcoin or other cryptocurrencies. Rather, Facebook is looking to replace the existing global financial system with an all-new setup, with Libra at its center.

The company may be counting on increased public interest in cryptocurrencies and financial technologies, and its market strength, to overcome objections. However, I don’t believe Facebook should be allowed to wreck the global financial system like it has, as many see it, wrecked global communications.

Speeding global exchange

There is definitely a need for smoother, faster and cheaper ways to send money around the world, and to provide access to financial services to the many people who do not have formal bank accounts. There is real potential to Libra, but there are likely to be ways to improve even more, developing a payment system that better serves the world as a whole.

At least at the moment, the Libra is being designed as a form of electronic money linked to many national currencies. That has raised fears that Libra might someday be recognized as a sovereign currency, with Facebook acting as a “shadow bank” that could compete with the central banks of countries around the world.

It doesn’t help that Facebook is already positioning itself to evade regulatory scrutiny by creating a corporate subsidiary that will join an ostensibly independent governing body for the Libra.

To protect consumers, regulators should look carefully at whether the new system supporting the Libra is sound. It may be that an entirely new set of financial rules and regulations is needed to shield the existing financial system from harm if the Libra becomes more popular than national currencies. At the very least, governments need to proceed slowly and carefully when new products may introduce systemic risks into our environment. Even the CEO of Google has acknowledged that. In my opinion, Libra’s planned launch in 2020 does not allow enough time to fully vet this technology and its risks.

Protecting the global financial system

Financial regulations have developed over time to encourage trust between unknown parties, and to protect regular customers from fraudsters and corporate greed. There are also rules that help governments prevent and detect transactions that support crime and terrorism.

This is not to say that all payments and purchases should be tied to a known entity online or in real life. Cash and anonymity is also a civil right and is key to privacy and personal freedoms.

As new digital financial services, methods of electronic payment and currencies develop and become popular, they should not be allowed to undermine longstanding financial safety systems, even in the name of smoother, cheaper transactions.

My concern is not just about large-volume transactions. Facebook has shown how even small amounts of money can buy microtargeted ads with the power to influence public opinion and election outcomes in the U.S. and around the world.

Product design and risk assessment

Facebook has a long history of questionable business models and privacy practices. The public, and their representatives in government – including elected officials, financial regulators and central bank authorities – should carefully scrutinize all aspects of Facebook’s cryptocurrency plans.

This concern is especially urgent because Facebook also has a long history of launching products and services, like political ads and live-streaming video, without fully considering their potential to damage democracy and the global society at large.

Mark Zuckerberg didn’t think enough about how people could use Facebook for ill.

The company has demonstrated its inability to serve society beneficially – and it may not even be interested in trying. All the signals suggest that customers and regulators alike should carefully examine whether Facebook’s Libra is truly innovative or just a way to avoid restrictions on a potentially hazardous financial product.

Defending democracy

Facebook’s entrance into the financial industry is a threat to democracies and their citizens around the world, on the same scale as disinformation and information warfare, which also depend on social media for their effectiveness.

It may be hard for world leaders to understand that this is an emergency, as they cannot see the virtual powers aligning against them. But they must huddle quickly to ensure they have– and keep – the power to protect their people from technology companies’ greed.

It will be key to understand if Facebook’s future cryptocurrency will ultimately function more like anonymous cash, or more like a traceable credit card transaction. Facebook has the blockchain and encryption technology to create an anonymous digital cash-like system, or a private digital currency, which has not been created yet. Anonymity would heighten the risks of abuse such as money laundering, so it’s worth watching out for a cash-like Facebook cryptocurrency that mirrors the central banks’ cash system.

In addition, I cannot help but reflect on the name that Facebook chose for this, the Libra, which is a reference to the Roman measurement for a pound, once used to mint coins. In many ways the company that Mark Zuckerberg is building is beginning to look more like a Roman Empire, now with its own central bank and currency, than a corporation.

The only problem is that this new nation-like platform is a controlled company and is run more like a dictatorship than a sovereign country with democratically elected leaders. Even now, the company may have as much power as some countries – and more than others.

In the wake of the not too distant global financial crisis, and the “fake news” and disinformation culture that is developing, people must slow down and fully evaluate disruptive technology of this magnitude. Society cannot withstand a launch of a cryptocurrency in Facebook’s infamous “move fast and break things” style.

via ZeroHedge News http://bit.ly/2N06DnE Tyler Durden

‘Frustrated’ Trump Sours On Venezuela Regime Change After Bolton ‘Got Played’ 

President Trump has reportedly cooled on regime change in Venezuela, and thinks national security adviser John Bolton “got played” along with the director for Latin American Policy, Mauricio Claver-Carone, following an unsuccessful attempt at a coup by opposition leader Juan Guaidó, according to the Washington Post (citing their ever-anonymous sources). 

A frustrated Trump believed that national security adviser John Bolton and his director for Latin American policy, Mauricio Claver-Carone, “got played” by both the opposition and key Maduro officials, two senior administration officials said. As the president “chewed out the staff” in a meeting shortly after the April 30 failure, in the words of one former Trump official involved in Venezuela policy, he mused that he might need to get on the phone himself to get something done. –WaPo

The Post‘s report was vigorously disputed by National Security Council spokesman Garrett Marquis, who said “Not only is this patently false, but once more the Washington Post traffics in fairy tales rather than the truth.”

Another senior official told the Post: “The United States never said that its effort in Venezuela would be limited to one round,” adding “The administration’s maximum-pressure policy relies upon consistency and discipline to achieve the ultimate goal.”

With sanctions strangling the Venezuelan economy, both Maduro and his opponents are becoming fatigued, which the Post suggests will “theoretically encourage negotiations over elections in which Maduro does not participate, although it may not ensure his immediate departure, as the United States has advocated.”

According to the former official, Trump has thought of Venezuela “as low-hanging fruit” on which he could “get a win and tout it as a major foreign policy victory.”

“Five or six months later . . . it’s not coming together,” said the Post‘s alleged source. 

Trump has gone all but quiet

According to the report, Trump has barely mentioned Venezuela lately – ignoring it during a closed-door meeting on Wednesday with campaign donors at his Doral golf club in Florida. 

Trump’s Twitter account, which once provided regular saber-rattling on Venezuela, has largely gone silent on the subject.

In one exception, Trump tweeted early this month that “Russia has informed us that they have removed most of their people from Venezuela.” After Russia denied it, saying there had been no such action or communication with the administration, it was never mentioned again.

…

Early last week, responding to shouted questions as he prepared to board Marine One on the White House South Lawn, Trump blamed the ongoing Venezuela crisis on his predecessor and threw in a dig at his 2020 electoral competition. “It’s been brewing for many years,” he said. “It really started, in the worst form, during the Biden-Obama administration.” –WaPo

Bolton, meanwhile, keeps harping on Venezuela over Twitter – writing on Tuesday “The United States will continue to stand firmly in support of ending Maduro’s repression.” 

Imagine our shock. 

via ZeroHedge News http://bit.ly/2x3tB2w Tyler Durden

Schiff: The Fed’s ‘Insurance Cut’ Pretense “Is Just Wishful Thinking”

Via SchiffGold.com,

It looks they’ve run out of patience at the Eccles Building.

The Federal Reserve Open Market Committee wrapped up its June meeting yesterday leaving interest rates unchanged. But the talk coming from the central bankers was decidedly dovish. Patience was not in the Fed’s vocabulary. Instead, Powell and company talked about “uncertainty” and said they would “act as appropriate to sustain the expansion.”

As Peter Schiff said in his podcast, the table is now set for a rate cut in July.

As you’ll recall, the word “patient” was a key word in the Fed’s pivot to the “Powell Pause.” Most analysts believe that by dropping that verbiage, the Fed is signaling another pivot. In fact. Powell didn’t mince words. He flat out said there is rising rate cut sentiment among the Fed bankers. Powell said, “Overall, our policy discussion focused on the appropriate response to the uncertain environment.”

Many participants now see the case for somewhat more accommodative policy has strengthened.”

Peter said this meeting was in keeping with its tradition of incrementalism.

Before delivering an official rate cut, what the Fed wanted to do was prepare the markets in advance and take one step in that direction, which was to tweak its language to officially adopt a bias toward easing, which is exactly what the Fed did.”

Going into the FOMC meeting, the Fed Funds Futures pointed to about an 80% chance for a July rate cut. After the meeting, it projected a 100% chance of monetary policy easing in July.

The markets are convinced that whatever data the Fed sees between now and the July meeting is going to be bad.”

Peter reiterated that we’re heading for recession, although the central bankers will never admit it out loud. The data has been weakening for months. Peter noted that historically, within six months of the first rate cut in an easing cycle, the economy is in recession.

Now, a lot of people are in denial right now because they want to pretend that the cut is just for insurance. We just want to make sure we don’t have an economic downturn. So, we’re cutting rates just in case. That is just wishful thinking.”

As far as Powell’s desire to “keep the expansion going,” Peter said the problem is the expansion is a bubble.

The only thing keeping it going is the Fed. It’s an expansion that was created by the Fed, created by cheap money, and it needs more cheap money to survive longer. But the problem is all of this is destructive for the US economy. That’s what no one wants to admit. Keeping this expansion going is like sustaining a drug habit. Maybe you feel good while you’re high on drugs, but ultimately you are undermining your health and the best thing to do would be to kick the habit and go through withdrawal. But we’re not going to do that.”

Peter said there is one thing that could derail the rate cut train – a trade deal with China that eliminates a lot of the tariffs. But Peter said even if that were to happen (and he doesn’t think it will) it would only be a temporary delay.

The rates are going to be cut anyway, because even if we get a BS trade deal that causes the market to rally and people to be more optimistic, it’s not going to stop the recession from coming. That’s inevitable. We’re going to have a recession.”

Gold climbed on the Fed news. The yellow metal surged 2% Thursday and hit its highest level in more than five years.

via ZeroHedge News http://bit.ly/2Iu1BMb Tyler Durden

Markets Turmoil On Downed-Drone, Powell-Promises, & Trump-Tweets

Stocks up to record highs (Fed and Energy stocks), Bonds (price) up (Fed and Iran safe-haven), Gold up (Fed and Iran safe-haven), VIX up (hedging melt-up gains or levered longs), Dollar down hard (Fed uber-easy and no safe-haven bid?), and Rate-Cut Expectations soared…

 

Chinese stocks exploded higher overnight  in the morning session (as policymakers hinted at more potential easing) but were flat in the afternoon session…

Notably, China’s bond yields are the only ones that are not making new cycle lows…

 

European markets opened exuberantly but faded for most of the day (Spain was red on the day)…

German bund yields fell back to record lows (-32bps) and most of Europe is now in a negative yield…

And as yields tumbled, so did European bank stocks…

 

US Equities surged overnight, opened at record highs (S&P), but were sold from the cash open, accelerating close to unchanged when Trump warned Iran “made a very bid mistake”… then after he seemed to walk back the event, stocks recovered some of their gains…

NOTE – remember tomorrow is a quad witch

“We are inclined to believe it has more to do with tomorrow’s quadruple expiry in futures and options markets than a true shift in investor sentiment,” said Russ Visch, a technical analyst with BMO Capital Markets.

“The quality of the rally since late May (narrow participation, extremely light volume) suggest it’s nothing more than a relief rally within an ongoing medium-term downtrend,” he said.

The S&P 500 hit a new all-time intraday high at the open…

NOTE – Previous S&P intra high 2954.13, close high 2945.8)

Late-day buying panic was sparked by all that pre-expiration gamma again…

 

Cylicals were bid today, catching up to yesterday’s defensive-driven outperformance…

 

US Bank stocks continue to notably underperform as yields collapsed…

 

Slack slumped…

 

TSLA stalled at key downtrend despite market strength…

 

Despite the equity gains, VIX ended the day higher…

 

The jaws of death widen…

 

Treasury yields tumbled…

 

With 10Y Yields plunging below 2.00%…

 

And 2Y yields failed to bounce at all today…

 

The dollar was dumped – the biggest two-day drop since Feb 2018…and DXY back below the 97.00 level…

 

Yuan has strengthened notably, trading stronger than the CNY fix for the first time since April

 

Cryptos were mixed with Bitcoin gains, Litecoin and Ripple fading…

 

Bitcoin surged back up toward $9500 (highest since May 2018)

 

Commodities were all higher on the day but Iran dowing a US drone sparked a huge spike in oil…

 

Gold soared up near $1400 overnight, fell back, then accelerated higher once again as US-Iran headlines hit…

This was Gold’s biggest day since Oct 2018, spiking to its highest since 2013…

Gold in Yuan is at its highest since April 2013…

 

Oil prices exploded higher (biggest day since 2018) on the US-Iran headlines… (this is the biggest 3-day spike since Dec 2016)

 

Finally, US (and Europe) markets’ expectations for central bank rate-cuts have collapsed to cycle lows (52bps of cuts in 2019 and 86bps of cuts by the end of 2020)…

Since The S&P 500 record high in September 2018, gold is up 15% and 10Y bonds total return is almost 11% (with stocks unch)…

And in case you’re wondering what’s driving stocks back to record highs… Simple – global money supply has surged once again to rescue markets…

via ZeroHedge News http://bit.ly/2XXwZYI Tyler Durden

1,000 Quakes In 3 Weeks In Key SoCal Seismic Zone: “We’re Watching This Actvity Closely”

Authored by Michael Snyder via The End of The American Dream blog,

In a key seismic zone approximately 40 miles east of downtown Los Angeles, there have been more than 1,000 earthquakes since May 25th. 

Needless to say, it would be quite alarming for the entire state of California to experience more than 1,000 significant earthquakes in just 3 weeks, but in this case we are talking about an area that is “less than a square mile” in size. 

And what makes this even more concerning is that all of these earthquakes are happening in a location that is very close to the San Andreas Fault.  Could it be possible that the San Andreas Fault is about to wake up in a major way?  I don’t know about you, but if I was living in southern California right now I would find this sort of news to be extremely unsettling…

A flurry of more than 1,000 small earthquakes has rattled Southern California over the past three weeks.

The quakes have occurred in an area covering less than a square mile in San Bernardino and Riverside counties roughly 40 miles east of downtown Los Angeles.

The United States Geological Survey map depicting the uptick in seismic activity shows a thick collection of dots, a rather unsettling sight.

Of course it is perfectly normal for California to experience earthquakes.  They happen on a daily basis, and normally they aren’t anything to be too concerned about.

But to have this many earthquakes concentrated in an extremely limited area is definitely unusual.  According to USGS science advisor Ken Hudnut, this current earthquake swarm is “a little different than what we’ve seen before”…

“In detail, if you zoom in on it and look at the pattern and how it’s evolving in time, it’s a little different than what we’ve seen before,” he says. “We get these swarms, but we don’t see exact repeats. Obviously, it’s very disruptive to the people who are feeling these earthquakes. We’re watching this activity closely.”

Normally, earthquake swarms subside after a certain period of time.  But so far there are no signs that this swarm is going to end.  Instead, we just keep seeing quake after quake.

That doesn’t mean that a major event is imminent, but without a doubt there are good reasons to be concerned about what is happening.  As geophysicist Andrea Llenos recently explained, every small earthquake increases the likelihood that there will be more seismic activity, and she stressed that we “do know a big earthquake is going to happen” someday…

But “any time you have an increase in the number of small earthquakes,” according to Andrea Llenos, a research geophysicist with the US Geological Survey, “you’re likely to increase the likelihood of a slightly larger earthquake happening.”

“I would redefine normal as: You should still be prepared for a large earthquake,” Llenos told the paper. “We do know a big earthquake is going to happen.”

Californians have been hearing that the “Big One” is going to hit the San Andreas Fault for a very long time.

We even had a major Hollywood movie starring the Rock made about such a quake, but it still hasn’t happened yet.

But one day it will.  In fact, the chair of UCLA’s Civil and Environmental Engineering department insists that such a quake is “an existential threat to our economy, our ability to live here”…

“There is no fault that is more likely to break [in California] than the San Andreas Fault,” says Jonathan P. Stewart, professor and chair of UCLA’s Civil and Environmental Engineering department and an expert in earthquakes. “Small local earthquakes—the Northridge earthquake, the San Fernando earthquake—they can kill people in the dozens, they can have freeways coming down, they can affect dams, and all of that is bad,” he says.

“But it doesn’t really pose an existential threat to our economy, our ability to live here.” A large earthquake on the San Andreas Fault, on the other hand, he says, could create a devastating threat to humanity, infrastructure, and the economy, with implications that extend nationally and even globally.

As ominous as that sounds, the truth is that Stewart may actually be understating the threat that Californians are facing.

A few years ago, a team of scientists conducted a major study which found that major quakes in the distant past had caused “part of the coastline south of Long Beach to drop by one-and-a-half to three feet”…

Scientists from California State University Fullerton and the United States Geological Survey found evidence the older quakes caused part of the coastline south of Long Beach to drop by one-and-a-half to three feet.

Today that could result in the area ending up at or below sea level, said Cal State Fullerton professor Matt Kirby, who worked with the paper’s lead author, graduate student Robert Leeper.

“It’s something that would happen relatively instantaneously,” Kirby said. “Probably today if it happened, you would see seawater rushing in.”

In other words, scientists are telling us that if such a quake happened today we could see areas along the California coastline go into the ocean permanently.

I don’t know how much clearer I can make it.

We have entered a time when dramatic changes are happening to our planet, and this is something that I have been writing about for a long time.  And even though much of the rest of the Ring of Fire is shaking like a leaf right now, most of those living along the California coastline have been lulled into a false sense of security because there has not been a massive quake on the west coast for many, many years.

But scientists assure us that the San Andreas Fault is loaded and ready to spring at any moment, and they have also warned us that the entire fault zone “could unzip all at once”.

Let’s hope that day is delayed for as long as possible, but if the hundreds of earthquakes that have happened in recent weeks are any indication, time could be running out a lot faster than most of us had anticipated.

via ZeroHedge News http://bit.ly/2IXZdfx Tyler Durden

Russian Warship Passes Through Panama Canal Now Transits Caribbean Sea

The Admiral Gorshkov-class frigate, dubbed Project 22350, is one of Russia’s most advanced warship built by Severnaya Verf in Saint Petersburg for the Russian Navy, has passed through the Panama Canal and is currently transiting the Caribbean Sea, a Russian Northern Fleet’s press release said on Tuesday, first reported by TASS News.

The Project 22350 transited from the Eastern Pacific Ocean into the Caribbean through the Panama Canal on June 17.

“The Northern Fleet’s frigate Admiral of the Fleet of the Soviet Union Gorshkov has passed through the Panama Canal and entered the Caribbean Sea. The other ships of the Northern Fleet’s naval group will pass through the Panama Canal during 24 hours,” the release says.

Russian Navy’s Northern Fleet says support vessels were also transiting the Caribbean with Project 22350.

The flotilla started the journey in February, has traveled some 26,000 miles since leaving Severomorsk in Russia’s far north. Along the way, the ships stopped in Djibouti in the Horn of Africa and Sri Lanka in the India Ocean before visiting China. Project 22350 participated in the 70th anniversary of the creation of the People’s Liberation Army Navy, said The Drive. After the Eastern Hemisphere, the ships made a port call in Ecuador before sailing to the Panama Canal.

While it’s not clear on the next port call, Russia could send the frigate to Venezuela and or Cuba, where Moscow maintains support with both countries.

Moscow, for the better part of a decade, has had the utmost desire to increase military assets in the Western Hemisphere.

Increased Russian activity in the Carribean has triggered the US Navy to reactivate the 2nd fleet to conduct more surveillance operations along the East Coast of the US.

Russia’s ability to project naval power in the Carribean shows Moscow is ready to defend its national interest in the Western Hemisphere.

via ZeroHedge News http://bit.ly/2ZvRMmg Tyler Durden

BMO: Everything Will Change After Tomorrow’s “Quad Witching”

Don’t look to the Fed to explain today’s torrid, global rally: according to a controversial take by BMO’s bearish technical analyst, Russ Visch, yesterday’s FOMC announcement was a non-event “as markets shrugged off the interest rate decision and follow-up presser with Chairman Powell”, and today’s action has an entirely different catalyst, resulting in “no change” to Visch’s short-term outlook.

And in another contrarian take, Visch claims that “the quality of the rally since late May (narrow participation, extremely light volume) suggest it’s nothing more than a relief rally within an ongoing medium-term downtrend” as shown in the chart below.

So if not the Fed, what is behind today’s buying panic which sent the S&P to new all time highs? As Visch writes, “we are inclined to believe it has more to do with tomorrow’s quadruple expiry in futures and options markets than a true shift in investor sentiment.” His conclusion:

As of today, the major averages are very near to overhead resistance levels while at the same time short-term momentum gauges are now at/near overbought extremes, all of which suggests upside is likely limited from here.

Whether or not Visch is right may be secondary to the technical is in the market which, due to shrinking liquidity has become especially sensitive to reversals and headline risk: indeed, as Bloomberg writes, “a minor technical adjustment could spark a big upside move when liquidity is thin.” such as right now, when according to Goldman the top-of-depth for the S&P is weaker than it is in low-vol periods despite the record high level of spot.

Meanwhile, although the S&P 500 has advanced every week this month, daily trading on exchanges has stayed below the 2019 average in 10 out of 11 days. Add to this the results from the latest BofA Fund Manager Survey which found that investors are the most bearish they have been since the financial crisis…

… and even a small bullish catalyst could unleash a giant rally.

Separately, Nomura’s Charlie McElligott also attributed today’s rally to a technicality, and the result of another local gamma maximum, as “as options overwriters roll their in-the-money calls out and thus create big notional Delta to buy” around the S&P strike price of 2,950.

While it is unclear what the result of tomorrow’s option expiration will be on stocks, one can be certain that it will be a monster: the last time a “quadruple witching” and an S&P 500 rebalancing took place, on March 15, almost 11 billion shares changed hands, 39% above the 3 month average, and according to Bloomberg this time, the rebalancing alone could force about $24 billion of trades, compared with $26 billion a year ago, S&P Dow Jones estimated on June 14.

So what happens after Friday? One scenario, that sees the S&P slide next week only to spike even higher, was laid out by McElligott, who predicted that near-term moves may head-fake sentiment in the coming days. As the Nomura strategist writes, “it is worth nothing that there is a ‘sequencing risk’ set-up with this week’s trade into next week and thereafter which could head-fake sentiment”:

  1. Witness this type of “force-in grab” into Stocks on account of the powerfully dovish CB moves this week, on top of the remarkable Equities “under-positioning” I’ve been highlighting the past few months
  2. This then corresponds with the already VERY bullish analog / seasonality for SPX into the June serial Op-Ex (tomorrow), as options overwriters roll their in-the-money calls out and thus create big notional Delta to buy
  3. But then dangerous the week AFTER Op-Ex (next week), you lose this overwriter “Delta buying” impulse (1w after June Op-Ex SPX perf -1.4% median and 87% of time LOWER, contingent on rallying the 1m into Op-Ex) and 37% of the Gamma expires tomorrow ($4.2 of the $9.4B at this monster 2950 SPX strike)
  4. Additionally you then too see the downgrade to the corporate buyback “bid,” as we are now deeply embedded within the “Buyback Blackout” window (over 75% of SPX companies within their blackout now)
  5. The market then risks “mis-reads” this potential FLOW-CENTRIC weakness in Equities next week as some sort of “fading the Fed”—when in fact it’s almost entirely mechanical in nature
  6. This type of head-fake could in fact see more shorts added and sentiment purge, which then perversely is the fodder for a melt-up into SPX 3000s

via ZeroHedge News http://bit.ly/2Zzpojf Tyler Durden

‘Good Morning America’ Slams Biden For Dodging Nepotism Questions Over Ukraine, China Dealings

Joe Biden is looking more and more like damaged goods, after Good Morning America couldn’t get a straight answer out of the beleaguered former Vice President regarding accusations of rampant nepotism with his son Hunter in both Ukraine and China. 

Hunter – who is now being sued by an Arkansas woman claiming he fathered her child while also plowing his late brother’s widow, and who recently returned a rental car to an Arizona Hertz location with a used crack pipe and two DC driver’s licenses – was given a sweetheart seat on the board of Ukrainian gas giant Burisma, despite having zero experience in Ukraine or the energy industry. During this time, his father Joe Biden used his position as Vice President to pressure Ukraine into firing its top prosecutor who was investigating the company. 

Questionable dealings were also uncovered in China after journalist and Clinton Cash author Peter Schweizer revealed that in 2013, the father-son duo flew to China on Air Force Two. Two weeks later, Hunter’s firm inked a private equity deal for $1 billion with a subsidiary of the Chinese government’s Bank of China, which expanded to $1.5 billion, according to an article by Schweizer in the New York Post.

And while these allegations had remained largely in the realm of conservative news outlets, Good Morning America just amplified it to their diverse audience of more than 3.7 million viewers (according to Nielsen). 

Watch:

via ZeroHedge News http://bit.ly/2IScaYg Tyler Durden