Month: August 2017

Authored by Lance Roberts via RealInvestmentAdvice.com,

I know…I know…

There seems to be absolutely nothing that can derail the current bull market.

• Geopolitical conflict – NOPE
• Political intrigue – NOPE
• Fed Reserve reducing liquidity to the markets – NOPE
• Lack of expected tax cuts, reform, and infrastructure spending – NOPE, NOPE, and NOPE.

With markets near records, investors seem to have very little to worry about.

But maybe, it is the very fact that everything seems so ebullient that we should take a bit of a contrarian position. As I wrote previously:

“First, “record levels” of anything are records for a reason. It is where the point where previous limits were reached. Therefore, when a ‘record level’ is reached, it is NOT THE BEGINNING, but rather an indication of the MATURITY of a cycle. While the media has focused on employment, record stock market levels, etc. as a sign of an ongoing economic recovery, history suggests caution.  The 4-panel chart below suggests that current levels should be a sign of caution rather than exuberance.”

However, while economic data suggests we may closer to the end of the current economic cycle than the beginning, data related specifically to the stock market may also be suggesting the same.

Let’s take a look:

1 – Confidence Levels at 107

The chart below a COMPOSITE confidence index consisting of both the University of Michigan and Conference Board indices. At 107, the index is currently at levels that have historically denoted the end of an economic cycle. (This should be expected as it is the point in the economic cycle where everything is now “as good as it gets.”)

2 – Bullish Sentiment Hits 126 – Greed Levels

The following chart is a composite sentiment index which includes the National Association Of Investment Managers Index, the American Association of Individual Investors and the VIX. Given the combined composite is pushing extreme levels, a bit more caution is likely well advised.

3 – Market Vane Bullish Sentiment: 64%

The Market Vane bullish sentiment index is a yardstick for traders as it measures the number of traders that are long a certain commodity. In this case the S&P 500 index. Currently, at 64%, as with the other indicators above, it is currently reflecting levels of bullishness that have historically been associated with corrective actions.

4 – CBOE’s equity volatility index (VIX) @ 9.79 — The S&P’s 65-day rolling volatility (inverted scale) is at levels which typically occur ahead of a corrective phase.

The volatility index shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward-looking, is calculated from both calls and puts, and is a widely used measure of market risk, often referred to as the “investor fear gauge.”  When the gauge is at extremely low levels it suggests that investors have little fear of a market reversion. From a contrarian standpoint, this is when corrections have tended to occur.

I noted last week the record levels of short positions currently outstanding on the Volatility Index.

“The extreme net-short positioning on the volatility index suggests there will be a rapid unwinding of positions given the right catalyst. As you will note, reversals of net-short VIX positioning has previously resulted in short to intermediate term declines.”

The chart below shows the 13-week moving average (65-day) of the volatility index versus the S&P 500. I have inverted the index to provide a clearer relationship between the two indices. From a contrarian viewpoint, the index currently suggests the risk of a correction outweighs the potential for a further advance.

5 – 2-Year Forward P/E multiples: 17.67x S&P 500, 17.81x S&P 400, 18.86x S&P S&P 600 and 24.01x for Russell 2000. All are above long-term means and forward estimates are subject to large downward revisions. 

Of course, valuations matter, even for Millennials:

“Over any 30-year period the beginning valuation levels, the price you pay for your investments has a spectacular impact on future returns. I have highlighted return levels at 7-12x earnings and 18-22x earnings. We will use the average of 10x and 20x earnings for our savings analysis.”

“As you will notice, 30-year forward returns are significantly higher on average when investing at 10x earnings as opposed to 20x earnings or where we are currently near 25x.

 

The point to be made here is simple and was precisely summed up by Warren Buffett:

 

‘Price is what you pay. Value is what you get.’” 

6 – NYSE Put/Call Ratio: 0.94

One way to interpret the put-call ratio is to say that a higher ratio means it’s time to sell and a lower ratio means it’s time to buy. When the ratio is above 1.00 it suggests the market is out of balance to the sell side and equity exposure can be increased. When the ratio is below 1.00 it suggests the market is out of balance to the buy side and investors should be more cautious. 

7 – The 14-week RSI (Relative Strength Index) has moved to 72.05, above the 70 level widely viewed as being an “overbought” threshold. 

As shown, on a weekly basis there are only a few points where the markets have been this overbought on a weekly basis. With the exception of the 2013-2014, during the $85-billion per month QE program, each previous occasion has triggered a short-term correction or worse. 

8 – The S&P 500 has now gapped up nearly 7% above its 200-day moving average, another sign of an overextended stock market.

As I have explained numerous times in the past, moving averages are like “gravity.” Prices can only move so far above the longer-term average before the gravitational force exerted causes prices to “revert to the mean.” 

Historically, we find that when price extensions have exceeded a 12% deviation from the 3-year average return of the index, the majority of the market cycle had been completed. While this analysis does NOT mean the market is set to crash, it does suggest that a reversion in returns is likely. Unfortunately, the historical reversion in returns has often coincided at some juncture with a rather sharp decline in prices.

9 – Earnings expectations have significantly lagged market price action — in fact, according to S&P data, analyst EPS projections for 2017 have declined sharply from $121.09 to $117.20/share since the beginning of the year. 

While there is much hope that earnings will eventually play “catch up” to stock prices, there is a significant risk to that outcome. As shown below, sales per share is roughly at the same level as it was in Q4-2012, but stock prices have risen by 65.7% during the same period. With stock prices already “priced to perfection,” any shortfall will likely be problematic.

10 – The S&P 500 has already climbed above year-end targets for well over half of the Wall Street strategists out there.

As I laid out at the beginning of this year in “The Problem With Forecasts”, even the most bullish analysts weren’t as optimistic as the market is now.

“Since optimism is what sells products, it is not surprising, as we head into 2017, to see Wall Street’s average expectation ratcheted up another 9.43% this year. Of course, comparing your portfolio to the market is a major mistake, to begin with.”

Conclusion

The problem is that since there is never an expectation the markets can go down, it is just that belief which eventually ensures an investor error.

I recently did a very thorough study showing that even dollar cost averaging from current valuation levels is likely to be disappointing over the next few years. To wit:

“So, with this understanding let me return once again to the young, Millennial saver, who is going to endeavor at saving their annual tax refund of $3000. The chart below shows $3000 invested annually into the S&P 500 inflation-adjusted, total return index at 10% compounded annually and both 10x and 20x valuation starting levels. I have also shown $3000 saved annually in a mattress.”

“I want you to take note of the point made that when investing your money when markets are above 20x earnings, it was 22-years before it grew more than money stuffed in a mattress.”

When I returned the study and my findings back to the media outlet, I immediately received a message back stating:

“This is not a message that we want to project.” 

In other words, they wanted an article suggesting that Millennials should just “buy everything.” 

Maybe that is an indicator within itself.

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

After last week's revised BLS data showed desperate Americans saving the least since the recession…

 

It is perhaps no surprise that personal income growth ended in June (0.0% MoM) missing expectations and falling to its lowest level since November. Spending growth also slumped (has not been weaker since August).

Income was disappointingly unchanged in June, weaker than expected, while nominal spending was up 0.1%, as expected. Adjusted for inflation, spending was unchanged in June. Consumer spending was up 2.8% in Q2, as reported in the advance GDP report last Friday. Looking ahead, we expect Q3 real PCE to be up around 2.4% and estimate a 2.6% gain in Q3 GDP. PCE Price indexes continue to be below the Fed's 2% target.

Overall, real personal spending growth stalled…

 

All this weakness probably explains why stocks are soaring to record highs and why The Fed wants to keep hiking rates?

via http://ift.tt/2hjY1sm Tyler Durden

As US equity markets push higher this morning, because that's what they do, WTI Crude prices are sliding back below $50 as Goldman poured cold water on the idea that sanctions of Venezuela will impact prices.

Goldman says U.S. oil sanctions on Venezuela would have little impact on prices.

• A U.S. ban on Venezuelan exports, or imports, would lead to reshuffling of oil trade flows with likely limited impact on prices
• Should ban on U.S. crude imports from Venezuela be implemented, South American country would see further declines in oil revenues by $1.5/bbl given higher freight costs to India and China
• Assuming both import, export bans are implemented and Venezuela further discounts its crude by $1/bbl to incentivize substitution, Brent would need to fall below $34/bbl to make Venezuela’s highest cost blended heavy oil production uneconomical

And traders seem to be listening.

Of course, stocks don't care…

Furthermore, Bloomberg's tanker tracking shows rising exports in Libya and Iran, while Venezuelan shipments decline.

We wil se what tonight's API print says about the 'rebalancing'.

via http://ift.tt/2u09LWR Tyler Durden

Presenting this morning’s best overnight wrap, which comes courtesy of Rabobank’s Michael Every, and whose title, “Is this the real life? Is this just fantasy?“, was inspired by obvious events.

Market comments

“I see a little silhouetto of a man; Scaramucci, Scaramucci, will you do the Fandango?”

I didn’t sleep well last night after watching the latest episode of Game of Thrones. While I enjoyed it, I couldn’t escape the feeling that major developments are happening too fast as the show tries to shoe-horn lots of developments into the remaining 4 hours of this series/season. Plots that took months of viewing to play out in the first four or five series now seem to happen on fast-forward, and colourful characters just disappear. As a result the whole world seems a little less believable somehow.

Then one wakes up to find out that the new White House Communications Director Anthony Scaramucci has been fired just 11 days into his tenure. (“Is this the real life? Is this just fantasy?”) Even more amazingly, this was not due to his recent profanity-strewn interviews, or character assassination of the now ex-Chief of Staff Priebus, but allegedly because Scaramucci told the new Chief of Staff, former general John Kelly, that he didn’t report to him but directly to the president…on which note he was then summarily dismissed.

Quite naturally, this news (and a weaker-than-expected Chicago PMI) have pushed the broad USD index lower yet again, and this morning in Asia we are trading at below 93 at the time of writing, the lowest point since May 2016. Indeed, EUR/USD tested over 1.1840 early this morning, the first time we’ve been there since early 2015. (Despite yesterday’s Eurozone unemployment printing at 9.1%, a tick better than expected, while core CPI for July was a tick higher at 1.2% y-o-y, one can almost hear “Thunderbolt and lightening, very, very fright’ning me” playing in the ECB.)

The biggest question now must surely be if this latest White House firing is indicative of an administration in total meltdown, in which case the USD seems unlikely to avoid being swept along with it. Or could the new Chief of Staff bring some much-needed discipline and order to the Trump administration? Considering how far the Greenback has already fallen at a time when the Fed is after-all raising rates and looking at reversing QE might an indication of that counter-trend prove a turning point in the other direction? It’s worth considering, even if for now the market seems to see that a slowing-raising Fed is massively out-gunned by a nowhere-near raising ECB.

In another market-related headline today I see that Alan ‘Never-met-a-bubble-I-didn’t-like’ Greenspan is arguing to equities are not in bubble territory despite their stratospheric P/E ratios and similar measures, but that the bond market is. He might know something about that having been the instigator of the delicate “just slash rates” policy stance that we have come to rely on for decades now. Then again, he’s been wrong on just about everything else for just as long, so it may be another counter-indicator (or, “No, no, no, no, no, no, no”). Robert Shiller certainly seems far less sanguine.

Meanwhile, we have finally seen an official Chinese response to President Trump’s tweets on North Korea: Beijing’s UN Ambassador has stated “No matter how capable China is, China’s efforts will not yield practical results because it depends on the two principal parties.” That doesn’t point to any kind of imminent de-escalation of tensions; neither does US officials proposing to supply Ukraine with “defensive weapons”, as the Wall Street Journal reports, though the White House has yet to sign off there. (“Sends shivers down my spine, body’s aching all the time.”)

And down in NZ –and just two months before the upcoming general election– opposition Labour Party Leader Andrew Little is stepping down because his party’s polling number have not been Large. (“Goodbye everybody, I’ve got to go.”)

via http://ift.tt/2vj8NnY Tyler Durden

What Investors Can Learn From the Japanese Art of Kintsukuroi

 – What investors can learn from the Japanese art of Kintsukuroi or Kintsugi – art of repairing broken pottery with gold
– Investors and savers can protect their savings with gold
– Savers and investors are being punished by negative to low interest rates
– Global debt levels, stock bubbles and reduced liquidity will lead to crisis
– Reinforce cracks with gold prior to money pot shatters

Source: Wikimedia

Editor: Mark O’Byrne

Kintsukuroi or Kintsugi is the Japanese art of repairing broken pottery with gold and silver.

The Japanese like to consider it a way of not only repairing the item but also transforming it into something new which is pristine and has a new potential.

For the philosphers in the art world they like to ask how can something of such beauty be created from a shattered vase or bowl?

Our politics, markets and economy are broken. With each passing day we see more evidence of a globalised, interconnected world that is also increasingly politically and financially fragmented.

In turn this is raising tensions between and within countries. Especially between the ‘haves’ and ‘have nots.’

We have seen this before, many times in history, when the greed of mankind and his belief in infallibility leads us to believe we can perform unprecedented financial experiments. The more we push on with the experiments, rather than learning from history, the bigger the cracks and damage.

Jim Rogers recently expressed his disgust at banks’s claims that had they not acted as they had in response to the financial crisis then things would be worse.

Rogers disagrees, all they have done is papered over and widened the cracks… “propping up zombie banks and dead companies is not the way the world is supposed to work. … It’s been nine years and we have nothing to show for it [economically] except staggering amounts of debt.”

In order for Kintsugi to transpire the artist must ‘see’ a cracked pot differently. A new perspective has to be taken. The pot is not broken, it is not useless instead it is something which has potential to become stronger and better.

We must begin to look at our economy in a similar light. Our savings are not useless, in the same way our economic system is not useless.

But they are weak in their current state, they should be made stronger rather than forced to take on more pressure.

The art of seeing differently

Last week, came the news that global debt levels were 327% of world gross domestic product (GDP), at $217 trillion in the first quarter of 2017. We have added over $120 trillion since the financial crisis.

In the weeks before the world’s top money managers had rung the warning bell that this pot was ready to crumble. Marc Faber told CNBC that ‘everything’ is in a bubble with the risk that:

“One day this bubble will end,”  and as a result people will lose 50% of their wealth.

Mohammed El Erian, part of the global financial elite but someone who we should all listen to, has also expressed similar concerns to Faber.

He wrote on Bloomberg that because of reduced liquidity resulting from simultaneous policy tightening by central banks, he has some serious doubts about the sustainability of the current overextended bull market in stocks.

Meanwhile Bill Gross believes markets in the US are at their highest risk levels post-2008 as investors are paying a high price for taking chances.

The low (and negative) interest rates of  central banks are artificially driving up asset prices. This is creating little growth in the real economy and as a result is punishing individual savers and businesses.

Even those who are generally more concerned with individual wellbeing rather than the health of the global economy are now getting involved in firing warning shots.

Life guru Tony Robbins has warned that ‘the crash is coming’ both in a book and on a regular podcast.

He recently pointed to the falsehoods that we are all being told about the system, “We are in a really artificial situation. There is a new high, on average, every month. Feds around the world have been printing money.”

But, this is the world we live in. Should we wait and see how it plays out? Bury our heads in the sand?

Or, should we instead think about what we can do differently. How we can look at his situation and take a new perspective, give it some potential and extended future?

Like the art of kintsukuroi we may be able to give it a second chance, with gold.

Gold is for everyone: Some are already filling the cracks with gold

“The world breaks everyone, then some become strong at the broken places.” Ernest Hemingway

Countries around the world (including large nations such as Russia and China) are acquiring gold at an accelerated rate in order to diversify their reserve positions. When you consider the already substantial reserves in the US, Germany and the IMF, we may already be moving quietly towards a default gold standard.

There is a reason these countries and organisations are accumulating and/or holding onto gold. They know that when things take the inevitable turn for the worst, gold will alleviate the financial and monetary damage.

They know this because whilst their economic policies might not reflect any knowledge of history, history including the recent crisis shows them that gold has survived history because of it’s ability to hold value and act as a safe haven.

Unfortunately the chances of the majority of the world’s leaders realising how they can fix the cracks before they become breaks, are low.

But that doesn’t mean investors can’t embrace gold to fix the cracks that their finances and investments are exposed to.

As with the broken pots, gold just needs to be a small part of your portfolio.

A small allocation confers stability and insurance. Jim Rickards argues that the solution to the risks we are all exposed to is to allocate 10% of your portfolio to physical gold or silver:
‘That will be your insurance when the time comes.’

Whether it is 5%, 10% or 50%, gold should play a part in your portfolio to give it strength in the tough times that are no doubt ahead. Just one look at the table below (from guru Tony Robbins) and you can see how little an amount needs to go in, in order to fill the cracks and reduce volatility and enhance returns in a portfolio.

All Seasons strategy via Ray Dalio via Tony Robbins

You might ask why isn’t there a rush to gold if it’s the way to secure our portfolios? Only the smart money is diversifying into gold now – as was the case before the first financial crisis. Martin Armstrong of Armstrong Economics recently said:

‘Gold and the stock market will take off when people realize that government is in trouble. When they lose confidence, that is when they will start to pour into tangible assets.’

Conclusion – Reinforce the financial cracks with gold

Really kintsukuroi is about highlighting imperfections. Many reading this might ask why on earth one would want to highlight the imperfections in the banking system and the global financial system rather than just starting from scratch.

We don’t need to go so far as to lose our wealth in order to realise how we can protect ourselves.

There is no changing the damage that has been done. We cannot erase the past, only learn from it.

How do you learn from things? By remembering what has happened and by incorporating those lessons into every day life.

We can do that with gold. We can learn from the past mistakes and bring gold into our portfolios to protect and grow our wealth.

Gold has consistently proven itself in times of economic distress. Those who have benefited the most from this are the ones who bought their insurance and reinforced the cracks prior to the shattering crash.

Source: Kate Ter Haar via Flickr

 

 

News and Commentary

Gold ends marginally lower but books solid +2.5% gain in July (MarketWatch.com)

U.S. Stocks Mixed, Dollar Gains as Treasuries Slip: Markets Wrap (Bloomberg.com)

LBMA shines a light on the gold in London’s vaults – 7,449 tonnes as of March 31 (Reuters.com)

Ex-NASA Agent Fears Gold Lunar Module Will Be Melted Down (Bloomberg.com)

Gold Logs Fourth Monthly Increase; US Mint Bullion Sales Bounce in July (CoinNews.net)

Revealed for the first time: How much gold is in London’s vaults? (Telegraph.co.uk)

Millennials’ wages devoured by their own beloved technologies (DavidMCWilliams.ie)

Peak Complacency as Recession Looms – Prepare (MauldinEconomics.com)

We Need Our $40 Trillion In Stolen Cash Back – Catherine Austin Fitts (Youtube.com)

Strategist Sees Gold Higher, Dollar Lower (video) (Bloomberg.com)

Gold Prices (LBMA AM)

01 Aug: USD 1,267.05, GBP 957.76 & EUR 1,072.30 per ounce
31 Jul: USD 1,266.35, GBP 965.59 & EUR 1,079.06 per ounce
28 Jul: USD 1,259.60, GBP 961.96 & EUR 1,075.45 per ounce
27 Jul: USD 1,262.05, GBP 960.29 & EUR 1,076.53 per ounce
26 Jul: USD 1,245.40, GBP 956.72 & EUR 1,071.29 per ounce
25 Jul: USD 1,252.00, GBP 960.78 & EUR 1,074.59 per ounce
24 Jul: USD 1,255.85, GBP 962.99 & EUR 1,077.64 per ounce

Silver Prices (LBMA)

01 Aug: USD 16.74, GBP 12.67 & EUR 14.17 per ounce
31 Jul: USD 16.76, GBP 12.77 & EUR 14.29 per ounce
28 Jul: USD 16.56, GBP 12.66 & EUR 14.15 per ounce
27 Jul: USD 16.79, GBP 12.77 & EUR 14.34 per ounce
26 Jul: USD 16.37, GBP 12.54 & EUR 14.06 per ounce
25 Jul: USD 16.31, GBP 12.52 & EUR 14.00 per ounce
24 Jul: USD 16.50, GBP 12.66 & EUR 14.17 per ounce

Recent Market Updates

– Bitcoin, ICO Risk Versus Immutable Gold and Silver
– This Is Why Shrinkflation Is Making You Poor
– Gold A Good Store Of Value – Protect From $217 Trillion Global Debt Bubble
– Why Surging UK Household Debt Will Cause The Next Crisis
– Gold Seasonal Sweet Spot – August and September – Coming
– Commercial Property Market In Dublin Is Inflated and May Burst Again
– Gold Hedges Against Currency Devaluation and Cost Of Fuel, Food, Beer and Housing
– Millennials Can Punt On Bitcoin, Own Gold and Silver For Long Term
– “Time To Position In Gold Is Right Now” says Jim Rickards
– Bloomberg Silver Price Survey – Median 12 Month Forecast Of $20
– “Bigger Systemic Risk” Now Than 2008 – Bank of England
– “Financial Crisis” Coming By End Of 2018 – Prepare Urgently
– Video – “Gold Should Probably Be $5000” – CME Chairman

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

via http://ift.tt/2ufwDNj GoldCore

Via The Daily Bell

I don’t know why the media has to come up with stupid terms for everything. Reading about sustainable living, every time I see the word “lifecycling” I feel like I am hearing nails on a chalkboard. Everything has to be trendy and new, so apparently, the word recycle is out. Now recycling is a lifestyle.

Lifecycling takes recycling to the next level; it’s a philosophy that embraces new, creative uses for products as a way extend their cycle, positively benefit your personal life and keep as much garbage out of landfills as possible.

Of course, I think recycling is great. I really love efficiency and hate waste, so reusing everything I can is pretty satisfying. But thriftiness is a big motivator. I take pride and find satisfaction in keeping my expenses a fraction of my overall income.

On the ten acre mini-farm I live and work on, there were a lot of random materials left when we moved in. We found a way to recycle almost everything.

One of our chicken coops is 90% wood that was left on the property, and the other 10% was leftover wood from building a shed. I removed an old concrete walkway in front of the house and made a berm as a backstop for shooting. Old buried bricks were turned into a patio under the live oaks. I also lined some garden beds with more salvaged bricks and cinder blocks.

We compost the insane amount of leaves which fall off the huge oak trees and use the compost in the gardens. We are expanding out rainwater collection, and one structure is getting solar panels next week!

We used pallets to make a gate and the floor of an outdoor kitchen. In fact, the counter and sink for the outdoor kitchen were snagged for free off craigslist when someone threw them out. Craiglist is a great resource to find cheap or free raw materials for any number of projects.

My brother-in-law, who owns the mini-farm with my sister, works for himself buying used items at yard sales, thrift stores, and estate sales, and selling them on eBay. His whole business is centered around reuse, finding good items a new home, not in a landfill.

So even though I hate the term “lifecycling” I do love the concept. It’s just funny to me that it is being sold as a cool new movement of youngsters! Actually, it was the norm back in the day. People sewed and patched holes in clothing. Composting veggie scraps was a no brainer. Fences were even sourced from backyard lumber.

Recycling has the potential to free up a lot of capital. Since we find so many free and cheap materials, it means the mini-farm can grow that much quicker. Even things like buying used chicken processing equipment instead of buying it new meant that money could instead be spent on building a fourth chicken coop.

Some of what keeps me from recycling more is the effort it takes when there is no cost saving incentive. I know it would be better to bring my own reusable jars and bags when buying food, but that means more planning, hassle, and weird looks from strangers. Okay, maybe I’ll get the weird looks no matter what I do.

That is why it is nice to see technology making it easier to make good choices.

Other green-minded advocates have focused on making environmentalism more accessible. Downloadable apps help you locate facilities for practically any kind of recyclable and discardable items (iRecycle) and find a new home for reusable goods (Freecycle). Beyond that, a little creative thinking goes a long way.

Again, words like “green-minded” and “environmentalism” make me cringe because it makes me think of power hungry EPA officials shutting down family farms and global warming fear mongers patting themselves on the back for driving a Prius.

But it really is unfortunate that those groups have taken ownership of sustainability buzzwords. There is nothing inherently anti-free-market about caring about nature and wanting to keep the world clean and beautiful. However the methods a lot of green environmentalists use are definitely wrong.

They advocate government force to combat global warming, or to harass farms for water runoff. They dump tax dollars into failing solar companies, all while the government subsidizes the oil industry. Many states have restrictive laws about collecting rainwater–a no brainer when it comes to reducing how much electricity is used to pump water onto your property and a huge cost saver when you need to water crops.

Even if the government had the best intentions, their tool is a hammer, and we all look like nails. They simply cannot solve environmental issues without becoming more powerful and harming individuals.

Luckily the power is already in the hands of the individuals to keep the Earth healthy. Voting for people who will force environmentalism on the world, with sometimes disastrous consequences for humans, is laziness. People think they do their part by forcing others to do their part.

But others lead by example, and encourage their neighbors rather than dictate. I give them credit for not advocating using the violence of the state in order to push their agenda, even if they do use stupid terms in the process.

As much as I poke fun at terms like “lifecycling,” maybe that trendy branding is what is needed in order to market recycling. I admit I don’t know much about Urban lifestyles. The homesteading self-sufficiency crowds I gravitate towards find reuse natural, and necessary.

Tell me about your favorite recycled product you have created or used. I always like to get new ideas.

via http://ift.tt/2tZFszI TDB

• Futures higher on strong earnings season; Apple in focus (Reuters)
• Kelly Sends Off Scaramucci, But Real Test Will Be Taming Trump (BBG)
• Senate Democrats offer Republicans help on tax reform – with conditions (Reuters)
• Banks May Need $50 Billion New Capital After Brexit (BBG)
• Goldman Sachs Finds Itself in Odd Spot: Last Place in Trading (WSJ)
• Trump dictated misleading statement on son’s meeting with Russian (Washington Post)
• Struggling Stock Pickers Eye Quant Tools to Gain an Edge (BBG)
• Trump’s Obsession With Leaks (BBG)
• BP Turns a Corner, but 2010 Oil Spill Keeps Biting (WSJ)
• The immigrant success story that led police to a Chinese banking giant (Reuters)
• Greenspan Sees No Stock Excess, Warns of Bond Market Bubble (BBG)
• Euro-Area Economy Steams Ahead as ECB Waits for Inflation (BBG)
• The energy patch: where rights offerings are ‘sexy’ again (Reuters)
• Rowling Apologizes for Claiming Trump Ignored Disabled Boy (BBG)
• President Xi says China loves peace but won’t compromise on sovereignty (Reuters)
• Greenspan Sees No Stock Excess, Warns of Bond Market Bubble (BBG)
• Rolls-Royce Recovery Revs Up, But CEO Wary of Production Hurdles (BBG)
• Snap, Blue Apron Shake Confidence in Startup Valuations (WSJ)
• Caterpillar CFO Brad Halverson to retire in early 2018 (Reuters)
• Under Armour to Cut About 280 Jobs (WSJ)

 

Overnight Media Digest

WSJ

– Discovery Communications Inc has agreed to buy Scripps Networks Interactive Inc for $11.9 billion, a bet that a bigger footprint in lifestyle programming will help it weather the upheaval in cable television. on.wsj.com/2vcde4A

– Anthony Scaramucci has been removed from his position as White House communications director, just 10 days after it was announced he would take it. He was ousted at the urging of the new Chief of Staff John Kelly. on.wsj.com/2vcKM2i

– The United States has frozen the assets of Venezuelan President Nicolas Maduro, citing human rights abuses. The Treasury Department took the action after the country held elections Sunday that the United States considers illegitimate. on.wsj.com/2vd7yaf

– The Pentagon and State Department have devised plans to supply Ukraine with antitank missiles and other weaponry and are seeking White House approval, as Kiev battles Russian-backed separatists. on.wsj.com/2vcLlJs

– Boeing Co is creating a new unit to develop and build aircraft avionics systems, expanding its strategy of insourcing key technology to cut costs. on.wsj.com/2vcUDFl

– Volkswagen AG faces fresh legal pressure over its emissions-cheating scandal after European Union authorities for the first time recommended fraud charges against two company officials. on.wsj.com/2vcIJLv

 

FT

Discovery Communications Inc is acquiring Scripps Networks Interactive Inc for $14.6 billion including debt in a deal that brings the channels TLC, Animal Planet, HGTV and the Food Network under the same umbrella.

Santee Cooper and South Carolina Electric & Gas Company ordered an immediate halt to construction of their jointly owned project in Jenkinsville. The power station is one of two nuclear plants being built by Westinghouse in the united States.

Music streaming company Spotify has reached 60 million paying subscribers as the Swedish start-up prepares for a public listing later this year.

Europe’s biggest bank HSBC Holdings Plc has announced a $2 billion share buyback, raising the amount of total stock it has pledged to buy during the past year to $5.5 billion.

 

NYT

– Time Warner -owned HBO confirmed that the network had been the target of a cyberattack, as an anonymous hacker boasted about leaking full episodes of upcoming shows along with written material from next week’s episode of “Game of Thrones”. nyti.ms/2vcbMza

– HSBC Holdings Plc said on Monday it would buy back as much as an additional $2 billion in shares as it reported better-than-expected earnings in the second quarter. The London-based bank announced $5.5 billion in share repurchases since the second half of last year as its prospects improved. nyti.ms/2vdlSQh

– Discovery Communications Inc unveiled its blueprint for a digital future, a $11.9 billion deal for Scripps Networks Interactive Inc to build a new force in cable television focused on nonscripted programs. nyti.ms/2vdadAV

– Two South Carolina utilities said they would abandon two unfinished nuclear reactors in the state, putting an end to a project that was once expected to showcase advanced nuclear technology but has since been plagued by delays and cost overruns. nyti.ms/2vcKyIu

 

Canada

The Globe and Mail

** Opposition parties and human-rights groups are calling on the Trudeau government to suspend arms exports to Saudi Arabia as federal officials probe the apparent use of Canadian-made armoured vehicles against Saudi civilians. (tgam.ca/2uQX4MJ)

** Calgary should not bid for the 2026 Winter Olympics unless a number of conditions are met to ensure the Games would not break the city financially, city staff have advised in a report delivered Monday to municipal politicians. In documents released prior to Monday’s council meeting, staff argued that Calgary faces “significant challenges” with respect to its debt. (tgam.ca/2vedC2u)

** The Canadian arm of scandal-plagued U.S. venture capital firm 500 Startups is suspending operations, the latest fallout of Silicon Valley’s ongoing reckoning with its systemic sexism and sexual harassment issues. (tgam.ca/2tUUUJd)

** NextBlock Global, an investment fund that buys cryptocurrencies and invests in companies built using blockchain technology, announced on Monday that it has raised C$20 million ($16.03 million) in its first round of fundraising. (tgam.ca/2viL7An)

National Post

** An activist investor has ramped up his calls for Hudson’s Bay Co to sell some real estate or explore other options to raise the value of its lagging shares. Jonathan Litt, chief executive of Land and Buildings Investment Management, threatened to launch a proxy fight on Monday if the company does not heed his public call in June for the company to monetize its real estate. (bit.ly/2uUf3R4)

Britain

The Times

Anti-fracking protesters face the threat of prison if they obstruct Ineos Holdings Ltd’s efforts to explore for shale gas after it secured wide-ranging injunctions to protect its operations. bit.ly/2vctT89

Children will soon have the chance to join the likes of Charlie Bucket, Augustus Gloop and Veruca Salt on a tour of Willy Wonka’s Chocolate Factory after one of Britain’s most promising independent publishing businesses secured a deal with Roald Dahl’s estate. bit.ly/2vh0N6Q

The Guardian

The financial watchdog has announced fresh measures to protect consumers from spiralling debt as official data showed that borrowing through credit cards, overdrafts and car loans has topped 200 billion pounds ($263.84 billion) for the first time since the global financial crisis. bit.ly/2vmLwm6

Booths, the family-owned upmarket grocer, has been forced to call in accountants to conduct a financial health check of the business after a difficult 18 months. bit.ly/2vmSyqP

The Telegraph

Stonegate Pub Company Ltd (IPO-SPC.L) has made a 100 million pounds takeover bid for Revolution Bars Group Plc, just over two months after the cocktail bar’s shares plummeted 46 percent in one week. bit.ly/2uP7NHx

RedX Pharma Plc, a biotech company specialising in developing cancer drugs, looks set to return to the London market after administrators agreed to sell the rights to a promising treatment for leukemia to a U.S. company for $40 million. bit.ly/2tYiysn

Sky News

Credit rating agency Moody’s has warned about soaring levels of household debt as Bank of England figures show unsecured borrowing is back above 200 billion pounds. bit.ly/2vgHxGS

A former boss of Marks & Spencer and an ex-Unilever Plc chief operating officer are being lined up to play key roles in the 6 billion pounds auction of Flora and I Can’t Believe It’s Not Butter. bit.ly/2vcoJJ1

The Independent

Maintenance, security and hospitality staff at the Bank of England are to go on a three-day strike after talks between the central bank and the Unite union over a pay offer broke down. ind.pn/2tWTQIS

via http://ift.tt/2venr0d Tyler Durden

The crackdown by Venezuela President Nicolas Maduro – now officially branded a dictator by the U.S. – on political opposition intensified Tuesday when intelligence agents detained opposition leaders Leopoldo Lopez and Antonio Ledezma at gunpoint in their homes and took them into custody.

The two politicians have been under house arrest for their involvement in anti-government protests and organizing, according to the BBC. Videos published online by family members of both men show them being led away in the middle of the night by agents from Sebin, the Venezuelan intelligence agency. Lopez’s wife Lilian Tintori said in a tweet: “They’ve just taken Leopoldo from the house. We don’t know where he is.” She published grainy footage from the home’s security cameras showing her handcuffed husband being placed in the back of a car.

Momentos en que @leopoldolopez see llevado por funcionarios del SEBIN. ( Sigue sin conocerse su pradero) http://pic.twitter.com/BrIURSa7q0

— #SOSVenezuela (@aura_rojas) August 1, 2017

“If something happens to him, Maduro will be held responsible,” Tintori said, according to Bloomberg.

Vanessa Ledezma, the daughter of the former Caracas mayor, posted video of her father being taken away by the Sebin, the Venezuelan intelligence agency, in his pajamas. In the video, a woman can be heard shouting: "They're taking Ledezma, they're taking Ledezma, dictatorship!"

Video apparently show arrest of Caracas, Venezuela Mayor Antonio Ledezma overnight @nbc6 https://t.co/AmFbB5YTsU

— Julia Bagg (@JuliaNBC6) August 1, 2017

According to the BBC, both men were key figures in protests that that led to 43 deaths, including anti- and pro-government demonstrators. Though their role in the opposition movement has been diminished by house arrest, video messages by both men are still shared widely on opposition websites. Ledezma published a video on Monday where he called the constituent assembly a "fraud" and denounced the "tyranny" of the Maduro regime.

In a Sunday vote that was boycotted by the opposition, Maduro’s government claimed overwhelming victory, saying their candidates had won all 545 seats in the assembly, which will replace the opposition dominated National Assembly, which was disbanded by the Maduro-aligned Supreme Court in March. At least 10 demonstrators died during the vote as protesters tried to disrupt the vote, erecting barricades around polling stations. The US, UK, European Union, Australia and Argentina have refused to recognize the vote.

According to Bloomberg, Lopez has become a symbol for human-rights groups and foreign governments, who’ve said his detention, including stints in solitary confinement, was clear evidence that Maduro was willing to trample basic rights to safeguard his power. Opposition leaders and family members of both say their whereabouts are unknown.

Maduro is seeking to rewrite the constitution after a referendum on Sunday that the opposition and many foreign governments refused to recognize. Opponents regard the push to overhaul the charter as a power grab by an increasingly autocratic leader.

On Monday, the Treasury's Office of Foreign Assets Control (OFAC) personally sanctioned Maduro, adding him to a list of 13 other senior government officials who have been shut out of the US financial system. There’s speculation that the US could press sanctions against the state-controlled energy industry, something that RBC’s top commodity analyst has speculated that Venezuela, which has the largest oil reserves of any country on Earth, could be the first major oil producer to see an all-out economic collapse. Government officials have said energy-industry sanctions would worsen the country’s economic crisis in a way that would disproportionately harm the country’s most vulnerable citizens.

Maduro's regime has remained defiant, according to Al Jazeera.

"They don't intimidate me. The threats and sanctions of the empire don't intimidate me for a moment," Maduro told a cheering audience. "I don't listen to orders from the empire, not now or ever. Bring on more sanctions," he told US President Donald Trump.

The country’s economy has been declining since shortly after Maduro, the hand-picked successor to deceased socialist icon Hugo Chavez, took office in 2013, as years of economic mismanagement and collapsing oil prices squeezed the government’s access to foreign currency, sparking a vicious cycle of hyperinflation. Presently, the country’s currency, the Venezuelan bolivar, is trading at more than 11,000 to the dollar in Caracas’s black markets, according to dolartoday.com. Meanwhile, the country’s foreign reserves have tumbled below $10 billion, sending yields on its dollar-denominated debt north of 36%, according to Bloomberg.

“The nation’s $3 billion bonds due 2022 plummeted, sending the yield soaring 86 basis points as of 9:43 a.m. in London to close to 40 percent, the highest level on a closing basis since February 2016. Bets on a Venezuelan default are climbing and the implied probability of a missed payment over the next year has risen to 64 percent, according to data compiled by Bloomberg on credit-default swaps.”

 

The country’s economic outlook looks increasingly dire by the day: by the end of this year, it’s expected that its economy will have shrunk by 32% compared to where it was at the end of 2013, according to the IMF. Of course, as at least one analyst has noted, the US’s attempts to pressure Maduro with sanctions will likely only push his regime further into "unfriendly" orbit, either that of China or Russia. In exchange for a loan from Russian oil giant Rosneft in December, Venezuela's state-owned oil company, Petroleos de Venezuela, put up a 49.9% in Citgo, its US arm, which could leave Russia in control of what Congress has labeled critical infrastructure.  Also, as reported previously, China has repeatedly provided loans to Venezuela in the past in exchange for oil, although its eagerness to do so in recent months has waned substantially.

via http://ift.tt/2w1pthT Tyler Durden

Yesterday it was Bank of America, today’s it’s SocGen’s turn.

As we’ve repeatedly stated in the past, not a day seems to pass without some broker, investor, sellside analyst or pundit (this website certainly included) opining on i) how low the Vix has fallen, ii) how much lower it will fall, and iii) how the inevitable surge will lead to unpleasant consequences.

Today, that distinction goes to one of our favorite SocGen analysts, Andrew Lapthorne, who observes the recent run up in global stocks (the MSCI World is now higher for 8 months in a row, its best run since 2003 and 4th longest monthly winning streak on record), and points out that “these long positive runs are not actually harbingers of impending doom; of the five winning runs over seven months or more for MSCI World since 1969, returns were still positive a year later. So there is little to fear from a run of gains per se.”

It’s not all rainbows and unicorns though, because as Lapthorne points out, such ‘winning’ streaks help suppress risks, while volatility, implied or realised – for whatever reason remains very low. As the chart below shows, realised 60-day volatility on both the index and at the individual stock level is bouncing around its historical lows. Realised volatility is 40% lower than its historical average, while volatility on average stocks is significantly lower than it has been historically. Asset price confidence, Lapthorne says, is therefore at record highs.

“So why does all this matter”, the SocGen strategist asks rhetorically, and answers:

Well again, low price volatility in itself does not predict much, but it can create mispricing. In particular, high confidence as to what an asset is worth can lead to underestimating the potential downside risks, which happens almost mechanically in high yield debt markets where asset volatility informs part of the pricing model. The implication is that high yield credit could be 30%+ mispriced as and when volatility moves back to average.

Meanwhile, headwinds are emerging, most notably in Europe where the common currency has continued its strong move upwards, rising a further 3.4% during July, leaving the currency 12% higher this year. This is good news for owners of euro-denominated assets but harder for euro-based investors who have seen the MSCI World decline 5% from its end-March high. According to SocGen, the strong euro is yet to really impact the latest earnings season, though it should be “manna from heaven” for US companies with overseas earnings.

Still, it is starting to be factored in price-wise – Germany was a notable decliner during July, with the DAX30 now down c. 6% from its recent peak 30 trading days ago.

In retrospect, if this is the most severe warning that one of the market’s most prominent skeptics can muster, it is perhaps not surprising why everyone is now officially rushing into stocks, and as Schwab reported on its latest conference call, “new accounts are at levels we have not seen since the Internet boom of the late 1990s, up 34% over the first half of last year… cash levels for our clients had fallen to about 11.5% of assets overall, now, that’s a level that we’ve only seen one time since the market began its recovery in the spring of 2009.”

Perhaps the old saying that it is only when nobody can see any risks, that the real risks emerge, will be proven true once again…

via http://ift.tt/2hj6H22 Tyler Durden