another site
Seriously…
For the 10th day of the last 11, the minutes before the NYMEX close (1430ET) have seen a remarkable sudden panic-buying spree…
We note yesterday was exciting as crude crashed right as NYMEX closed… are the pattern-fitting algos starting to recognize their own self-reinforcing patterns and front-running each other?
As always – buying is easy, it’s when to sell that’s hard.
Trade accordingly.
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Submitted by Claire Bernish via TheAntiMedia.org,
In what has become a presidential race based almost solely on scorn for the candidates, the establishment, fraud at the polls — and, hell, the entirely stale and wholly rigged electoral process — it’s clear no one will win in the traditional meaning of the word.
While third party candidates have experienced growing success in the dearth of acceptable duopoly offerings, a dark horse has emerged.
According to Public Policy Polling, ‘Giant Meteor for President’ now ranks as a serious contender — garnering “far more support than the third party candidates actually on the ballot.”
No, this most certainly is not the Onion.
“[W]e find that the Meteor would poll at 13% … with Clinton at 43% and Trump at 38%,” with the Libertarian Party’s Gary Johnson the favorite among just 5 percent and Green Party candidate Dr. Jill Stein winning just 2 percent of votes.
Yes, seriously.
In fact, the PPP notes, “The Meteor is particularly appealing to independent voters, functionally in a three way tie at 27% to 35% for Clinton and 31% for Trump.”
A previous, albeit fictitious candidate who found enormous success at the polls, Deez Nuts, managed only to garner a 9 percent support rating — making Giant Meteor officially the most popular non-Democrat/Republican duopoly ‘candidate’ in the running yet.
Both Hillary Clinton and Donald Trump owe their so-called success almost solely to contempt for the other — with unfavorability in the latest poll running 54 and 58, respectively — as voters align behind either to prevent the former secretary of state or the demagogic billionaire from being the next leader of the no-longer Free World.
But the Meteor — whose wildly popular bumper sticker reads, “Giant Meteor 2016: Just end it already” — might be the most representative of voter disenfranchisement and frustration with the politics-as-usual and wall-building candidates the two negligibly different parties coughed up as presumptive nominees.
Meteor’s, well, meteoric rise in popularity isn’t difficult to understand, given the circumstances. After all, another poll today revealed a whopping 67 percent of Democratic voters would rather see President Obama stay in office for another term than endure a Hillary Clinton administration.
In addition to aversion to Clinton, Trump’s success could be attributed to the xenophobic vitriol and ‘fearanoid’ negativity common during similar periods of economic stratification that gave rise to such stunners as Adolf Hitler.
And while the Libertarian Party has made gains in popularity, grumblings among party diehards indicate a preference for candidates other than Johnson.
Perhaps Giant Meteor’s astronomical rise in the polls could be easily brushed off with a laugh — or maybe, just maybe, the idea that a heavenly body careening to Earth to kill us all having more appeal than actual candidates for president of the United States proves the people know the jig is up.
Maybe now — in a year pockmarked by political turmoil, typically ruinous scandal, and blatantly fraudulent electoral dealings — the people will slam down their collective foot to say they’ve finally had enough of the ‘lesser of two evils’ bullshit so ingrained in the American electoral mindset.
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While we await the latest weekly update from a crushed Pershing Square, to see how far the latest collapse in Valeant stock has slammed the P&L of Bill Ackman’s hedge fund, we know that the picture is not pretty: as of a week ago, the fund was down 21% for the year.
But the biggest mystery is how has this hedge fund, arguably one of the worst performers of the past two years, managed to continue operating without suffering dramatic withdrawals. Are its LPs, especially the recent ones, massochists or are they merely hoping for some miraculous turnaround in Bill Ackman’s fortune?
We don’t know the answer, and Ackman will certainly not divulge his fund’s inbound redemptions requests: there is no more sure way to assure a hedge fund’s demise than to hint to LPs that some other LPs have lost faith. What we do know is that things are starting to crack, and not just for Pershing Square’s LPs ,but for its employees too.
According to the WSJ, Pershing Square has laid off eight lower-level employees this week. The cuts, which largely involve back-office employees in technology and investor services, amount to more than 10% of the activist hedge fund’s staff. They are also just a start as every hedge fund operator knows.
Amusingly, Ackman told his staff this week that the moves have nothing to do with the poor performance of the hedge fund. Instead, he said, the firm has gotten better in technology and automating tasks like filling out new-investor forms, reducing the need for employees.
Oh the irony in needing less people to fill out “new investor forms.” What about the manpower needed to go through all of the redemption requests? Or is there a robot for that?
Just as amusingly, Ackman said “he doesn’t anticipate any other big cuts.”
We expect to follow up on this “timestamp” in a few months. Meanwhile, Pershing Square had $12.3 billion in assets, down roughly 40% from $20.2 billion at the end of July 2015, just before Valeant’s stock started falling.
Ironically, there may be worse news for Ackman’s employees: since Pershing Square is far below its high-water mark, it would need to get back to before employees would receive much of their pay. This means that unlike Starbucks, Ackman won’t even need to cut back on worker hours: the upside here is capped for years if not ever.
Then again, Ackman may be right: Pershing Square may not have to cut any more workers – the workers will just quit on their own, now that any chance of a juicy year-end bonus is gone for good.
The better news: according to the administration, the US economy is in the midst of a strong recovery and anyone who claims otherwise is peddling fiction. Which means all those highly paid (maybe not anymore) workers will be able to transfer their socially valuable skills to other industries where they will be compensated just as richly without having to worry about watermarks, P&L and redemption requests.
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Over the past few months we have witnessed massive cost cutting efforts (ie: firing of bankers) by many firms, Goldman, BAML, Nomura and RBS to name a few. Now it’s time to add Commerzbank to the list of firms that need to fire people in order to try and cut enough costs to maintain earnings.
Germany’s Commerzbank announced that it is cutting more than 100 investment banking related jobs in its New York office as part of its efforts to streamline its operations and boos profitability the WSJ reports, as a sluggish trading environment continues to weigh on profits. The bank announced last year that it was going to bundle investment banking activities in certain locations.
“We are now consequently following this strategy with the realignments of our organizational setup in North America.” said Michael Reuther, head of investment banking operations.
From the WSJ
The current cuts, which were reported earlier by German daily Handelsblatt, affect about 100 back-office and roughly 10 front-office jobs, according to Mr. Reuther’s memo.
As consequence of the cutbacks, Germany’s second-largest lender by market capitalization will outsource the clearing of “non-U.S. commercial payments to” U.S. banks and stop its securities lending as well as structured finance business in the U.S.
Mr. Reuther stressed however that “North America is and will remain an important international hub for Commerzbank” with the New York office being critical for services for U.S. corporate and institutional clients. “We will continue to provide products such as [U.S. dollar] loans and [U.S. dollar] bonds, foreign exchange and other risk-management solutions, as well as equity markets access to our clients,” he said.
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As we say each time more layoffs are announced, the pain is not over and companies will continue to cut labor to the bone in order to try and mask slumping revenues.
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The bruised and bloodied Biotech sector is testing a trendline that may determine whether it has one more bull bounce – or if its bubble has burst.
Today’s Trendline Week feature takes us back to the U.S. to look at one of the, er, trendiest indices in the stock market. After covering Europe on Monday, Japan on Tuesday and back to Europe (specifically, Germany) on Wednesday, today we look at the oft-debated and controversial Biotechnology sector. Bear in mind that we are not picking these markets because of their prominence or popularity, but because they currently offer the most compelling trendline events in the market, in our view. That includes the Biotechs where we see the sector’s premier index testing a crucial level of support.
Like several of the other trendlines we’ve looked at this week, the NYSE Arca Biotechnology Index (BTK) is presently testing the key trendline supporting its post-2008 cyclical bull market.
As the chart illustrates, the trendline in question (drawn on a log scale) originates in November 2008 and connects the lows in March 2009, November/December 2011 and this past February. Again, we have mentioned on several occasions that the increased frequency (i.e., decreased time lapse) of trendline touches is often a harbinger of a forthcoming trendline break. If that is the case here, we can expect to see the trendline give way sooner than later.
On the other hand, we suppose it could be argued that the drop down to the trendline this week was merely a “re-test” of the BTK’s February low. That seems like a stretch to us, but anything is possible. Even if this is a re-test, however, one would expect prices to at least approach the February lows in a closer fashion than they have thus far. That February low sits at around 2575. The recent low in the BTK was 2807, a good 9% above February’s levels. The problem is, the trendline sits right at 2800 today, so a true test of the February low would necessarily violate the trendline, Even if such a breach was temporary, it will still serve to weaken the uptrend.
We mentioned Biotech’s status as “controversial”. By that, we are just referring to the much debated discussion about whether the sector is characterized by a “bubble”. Our thought, based on the parabolic price appreciation and frenzied inflows of investor money it attracted in recent years, was that it was indeed a bubble. The next question is whether the July 2015 peak marked the bubble’s bursting or whether the sector’s got another run to new highs left in it.
Considering it would take a 30%+ rally to get to all-time highs, the sector has its work cut out. Thus, we are guessing that the top is in. However, another leg up can never be ruled out. Some would argue that the post-February action in the sector is a base-building phase that will serve as the launch for that next leg up. That too is possible. However, our view is that cycle patterns would suggest one more wave lower (the third following July-October and December-February) before any substantial rally transpires. Even then, the rally would likely be a counter-trend move that would fall well short of all-time highs.
All that is conjecture at this point, though. If one is looking to play the Biotech sector, long or short, we view the post-2008 Up trendline as an important demarcating line. Hold the line (as it has since its touch on Monday) and immediate upside is more likely. Break below the Up trendline, and another wave lower is probably in the cards.
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More from Dana Lyons, JLFMI and My401kPro.
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One year ago, when the political push to raise the minimum wage hit a crescendo, the CEO of Starbucks had some words of caution. Howard Schultz told CNN that minimum wage “should go up across the country”, however he warned that “it will be very difficult for small business in the country at a $15 level to pay those kinds of wages.” What about for his own company? “For Starbucks come January 1 we are taking wages up across the country and we will pay above the minimum wage in every state we operate. Starbucks is way above the minimum wage. I have always looked at total compensation.”
His conclusion: “I have always believed that our success as a company is best shared.“
One year later, something “unexpected” has happened as a result of the Schultz’ all too eager push to “share” his company’s success by hiking minimum wages, namely the realization by the company’s employees (if not so much the CEO, management and certainly shareholders) that total compensation is a function of two things: hourly wages and number of hours worked.
As Reuters reports, an online petition accusing Starbucks of “extreme” cutbacks in work hours at its U.S. cafes, hurting both employee morale and customer service, has been signed by more than 9,000 people. Suddenly Starbucks’ eagerness to raise its wages becomes all too clear: after all, it would merely have to reduce work hours, to keep profitability humming.
The world’s biggest coffee chain, trying to address cooling growth at its U.S. shops, recently introduced technology that allows customers to order and pay from mobile devices. That service aims to boost sales and reduce bottlenecks in stores; it also aims to reduce work hours.
In short: Starbucks is finding itself in a sales and profit squeeze (its shares have gone nowhere for the past year), and having been such a fervent supporter of minimum wage hikes, is now far less willing to “share” its success as a company, especially if it means a stagnant stock price for the foreseeable future.
Starbucks CEO Howard Schultz and other top brass have spoken with Jaime Prater, a Southern California barista and the online petition’s creator, the Seattle-based company said. It declined to give details but Starbucks spokeswoman Jaime Riley said it is not uncommon for Schultz to reach out to members of its 160,000-strong U.S. workforce. She said that Starbucks has a software system that determines labor needs based on business trends.
In which case, one wonders what the company’s attempt to squeeze out every last penny from the bottom line by implementing “extreme” cutbacks to work hours says about business trends in the US, and the economy in general.
But back to the disgruntled employees who don’t share Schultz’ optimism that this is all merely orindary course of business. Comments on the petition painted a picture of broad discontent at the company known for offering better wages and benefits than other chains, including healthcare coverage, retirement account contributions and paid vacation days.
Prater and many signers say they noticed cutbacks in U.S. staffing hours after Starbucks in April reported a deceleration in quarterly cafe sales growth. Several of them said store managers were under pressure to comply with the dictates of Starbucks’ software system.
Translated: boost profits by reducing overall pay.
Almost 7,000 signers of the petition described themselves as employees, according to Prater. They did not give their full names and Reuters was not immediately able to confirm that signers worked for Starbucks.
“The labor situation has gone from tight to infuriating,” Prater said.
One central California store has seen its labor allotment shrunk by about 10 percent, even though sales are up, its manager, who asked not to be identified for fear or reprisal, told Reuters. Similar complaints were heard from many signers of the online petition.
“No matter what we do to save on labor at my store, the system tells us EVERY SINGLE DAY that we are at least 8 hours over in labor for the day and have to cut even more,” wrote signer Aaron I. “We’re suffering, & so are our customers. It’s not working,” wrote Leslie S, a self-described shift manager.
But… just one year ago an euphoric Howard Schultz said he was so eager to raise minimum wages. What he forgot to add is that he is just as eager to cut work hours if it means preserving profitability.
“Mobile orders have increased sales and created more need for labor, yet the company is cutting labor,” wrote Makenna S, a shift supervisor.
And the punchline: like other restaurants and retail companies, Starbucks is wrestling with the effects of local minimum wage increases. Some petitioners said Starbucks had not boosted pay for existing workers in areas where minimum wages have increased – creating a situation where new hires are paid about the same wage as more experienced peers.
The longer we look at it, the more it appears that the CEO was not exactly genuine in his enthusiastic support for minimum wages.
As for the cherry on top: some employees said take-home pay had also taken a hit because tipping has fallen substantially amid broad customer adoption of the “Starbucks Rewards” program, which allows customers to pay with a loyalty card or mobile phones.
* * *
And just like that, the grim picture of the “minimum wage hike effect” is starting to be appreciated by all, and explains why over the past few months even the BLS has reported that average work hours have been shrinking, incidentally something we warned about over a year ago when the topic of minimum wage increases first emerged. Because as was obvious all along, the simple math is that as mandatory wages rise, there is far less “success” to be shared.
To be sure Starbucks is neither the first nor the last corporation to show its true colors. One year ago we reported that “Economics 102: WalMart Cuts Worker Hours After Hiking Minimum Wages“, and just four weeks ago we followed up that “Half Of Washington DC Employers Have Cut Jobs, Hours Due To Minimum Wage Increases – And It’s Going To Get Worse.”
The Starbucks news confirms just that; expect much more.
Meanwhile, we can only hope that more realize that politicians pandering to populism by conducting a phony “war on inequality” via minimum wage propaganda is merely serving their corporate overlords. Because as Starbucks employees are the latest to learn the hard way, as wages go up, all in comp is rapidly dropping while layoffs are rising. Maybe next time Obama mandates a minimum wage to show how much he cares about the “little worker”, he should also issue an executive order requiring minimum hours too. Naturally, that would merely unleash even more central-planning hell, but in a world in which the central banks already control everything, why the hell not?
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Meet retired U.S. Air Force General Philip Breedlove. A man who back in 2014 relentlessly tried to get Obama to start what would have been World War 3 with Russia.
The Intercept reports:
Retired U.S. Air Force Gen. Philip Breedlove, until recently the supreme commander of NATO forces in Europe, plotted in private to overcome President Barack Obama’s reluctance to escalate military tensions with Russia over the war in Ukraine in 2014, according to apparently hacked emails from Breedlove’s Gmail account that were posted on a new website called DC Leaks.
Obama defied political pressure from hawks in Congress and the military to provide lethal assistance to the Ukrainian government, fearing that doing so would increase the bloodshed and provide Russian President Vladimir Putin with the justification for deeper incursions into the country.
But the leaked emails provide an even more dramatic picture of the intense back-channel lobbying for the Obama administration to begin a proxy war with Russia in Ukraine.
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The Baltimore Police Department unveiled a new use of force policy, crafted, the department said, with the help of the American Civil Liberties Union of Maryland, the NAACP of Baltimore, and local attorneys, both prosecutors and public defenders.
The new document represents the first major revision of the use of force policy since 2003. Among the more important changes, all types of the use of force (including flashing a weapon at a suspect) now requires notifying a supervisor. The policy also stresses de-escalation, a “duty to intercede” by officers who see other cops use excessive force, and a duty to provide medical assistance when necessary or when requested by the suspect.
“Recognizing that mental illness, post-traumatic stress disorder, alcohol and/or drug addictions, or other health issues can cause individuals to behave erratically,” the policy reads, “members must try to de-escalate situations and minimize or avoid using force altogether, when possible, to prevent injuries to the subject, the public and the member.”
The document is available via the Baltimore Sun but does not yet appear to be on the Baltimore Police Department’s website. The BPD has not had an update on its news site since November 2015.
The policy outlines four types of aggression targets of police action could exhibit—passive resistance, active resistance, active aggression, and aggravated aggression. Lunging toward a police officer counts as “active aggression.”
As usual, “reasonableness of a particular use of force is based on the totality of the circumstances known by the officer at the time of the use of force,” according to the policy, which refers to the reasonable judgment of police officers (or “members” in the document’s vernacular) so often as to render itself worthless. “Reasonable must be judged from the perspective of a reasonable officer on the scene,” the use of force policy document declares, insisting the “reasonableness standard is an objective one… without regard to the member’s underlying intent or motivation.” Later: “Reasonableness is not capable of precise definition or mechanical application” and “must allow for the fact that members are often forced to make split-second decisions-in circumstances that are tense, uncertain, dynamic and rapidly evolving.”
Were Baltimore police officers all reasonable people, a simpler use of force policy would suffice. But Baltimore’s hiring policies, informed by the police union and cop-friendly big city politicians and hardly unique, don’t guarantee reasonable officers. Coupled with privileges extended to cops outside of the deference of the use of force policy—things like the 10-day waiting period to talk about a deadly use of force incident—this contributes to much of the problem of excessive police violence. Baltimore’s new use of force policy describes three levels of force. All require notifying a supervisor, but documentation is required only in the two lower levels, a function of the privileges within the Law Enforcement Officers’ Bill of Rights that police reformers in Maryland have been unable to reform or repeal.
The use of force policy permits the use of deadly force when “immediately necessary to protect a member or another person from imminent danger of death or serious physical injury.” Deadly force can also be used on fleeing suspects, provided that the officer believes “it is necessary,” that the suspect has committed or is committing a felony involving physical injury or death, that the suspect’s escape would threaten the cop or another person, and that, when possible, the officer “has given verbal warning to the suspect.”
“When practical, a member should identify himself/herself as a law enforcement officer and state his/her intention to use deadly force before using a friearm or employing deadly force,” the policy reads.
The policy prohibits deadly force to “subdue persons whose actions are a threat only to property” or “against persons whose conduct is a threat only to themselves.” Choke holds are prohibited “unless deadly force is authorized.” The policy prohibits warning shots and cops from shooting from or at moving vehicles except “to counter an imminent threat” or when a cop is “unavoidably in the path of the vehicle and cannot move safely.”
The new policy also deals with “dangerous animals,” permitting the use of deadly force against animals when “alternative options are not available or would likely be ineffective,” directing cops to look for dangerous animals in pre-raid surveillance as well as to develop “reasonably contingency plans” for dealing with dangerous animals.
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By EconMatters
We are starting to price back in a December Rate hike by the Federal Reserve, slowly but surely we are coming off the zero bound for this market event. We now stand at 22% and rising for a December Fed Funds Rate Hike of 25 basis points to (50-75 basis points).
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Submitted by Michael Shedlock via MishTalk.com,
Deutsche Bank shares have collapsed to lows deep under crisis lows and collapse of Lehman in the Great Financial Crisis…
What’s going on?
An investigation of Deutsche Bank’s “Passion to Perform” balance sheet provides the clues.
The above clip from Deutsche Bank’s First Quarter 2016 Statement.
Details in red from page 61 (PDF page 63) of the 126 page report.
Key Liabilities
World’s Most Systemically Dangerous Bank
Zero Hedge commented on the World’s Most Systemically Dangerous Bank.
Here’s the key chart.
Deutsche Bank Share Price
What Went Wrong?
Deutsche Bank’s price to book value is 0.251.
Effectively the market suggests Deutsche Bank is worth 75% less than book value. Why?
Brexit is the easiest explanation to throw out. Share prices started collapsing a second time starting at the beginning of 2014.
The bank has always been heavy in derivatives. Although recent activity may have led to losses or more scrutiny, it’s relatively easily to discard that as the primary answer.
Banking Sector Malaise
Instead of pondering the obvious problems, what about other things?
My best guess is that Deutsche Bank share prices reflect all of the above but something in the second set of reasons, or something we still do not fully understand is the primary reason behind the collapse.
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