Belarus Prostitute Admits She Fabricated Trump-Russia Evidence Claim

A prostitute from Belarus who claimed to be the “missing link” that can provide secret evidence of a Trump-Russia connection now says that she fabricated her story in order to attract media attention, in an attempt to save her life while she was detained in Thailand.

27-year-old Anastasia Vashukevich, best known by the self-described “seductress” and “sex coach” Nasta Rybka, claimed to have recordings of Russian billionaire (and former FBI asset) Oleg Deripaska that would reveal a connection between Trump and Russia. 

I am the only witness and the missing link in the connection between Russia and the U.S. elections – the long chain of Oleg Deripaska, Prikhodko, Manafort, and Trump,” said Vashukevich in an Instagram broadcast last February while riding in the back of a thai police vehicle after her $600/head five-day sex training seminar was raided by authorities

After spending nearly a year in Thai prison freezing her kidneys off, Vashukevich was arrested by Russian police in mid-January after arriving in Moscow for a connecting flight to Minsk, Belarus. The Kremlin let her go her last week after she promised not to release further audio or video recordings of Deripaska. 

In an exclusive interview with CNN on Tuesday, Vashukevich said she was instructed by Russian security services not to talk about Deripaska, an ex-business associate of former Trump campaign chairman Paul Manafort.

“I had some talk when I was in Russian jail,” she said. “And they explained to me very clear(ly) what should I do, what should I say and what I shouldn’t say.”

    Asked who explained that to her, Vashukevich said “Russian agents,” adding, “They said to me, ‘Don’t touch Oleg Deripaska anymore.'” –CNN

    Now that she’s free, perhaps in an effort to remain breathing, Vashukevih now says she fabricated the story about a Trump-Russia connection. 

    She told CNN from a Thai detention center last year that she witnessed meetings between Deripaska and at least three unnamed Americans. Now back in Moscow, she says the claims she made to the media were an attempt to get media attention to save her life. –CNN

    “I think it saved my life, how can I regret it? If journalists had not come at that time and that story had not come to the newspapers, maybe I would die [be dead by] now,” she told CNN. Russian authorities have suggested that Vashukevich has forced women into prostitution, which could land her in jail for up to three years. 

     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

    A post shared by Настя Рыбка (@nastya_rybka.ru) on

    Vashukevich made headlines in January 2018 after Russian opposition leader Alexi Navalny broadcast footage from her Instagram account from an August 2016 yacht trip with Russian deputy Prime Minister Sergei Prikhodko and Deripaska. Navalny alleged that Deripaska had bribed Prikhodko, who is one of Russia’s most influential senior officials.

    In a 25-minute Youtube video (Russian with subtitles), Navalny shows footage of Deripaska with Russian deputy prime minister Sergei Prikhodko on his yacht in Norway in August 2016. Based on that footage, he alleges that information about the Trump campaign must have passed between the two. Quartz

    Navalny also asserted – with no proof – that Prikhodko and Deripaska may have been conduits between the Kremlin and the Trump campaign in 2016; a link which has proven elusive despite more than 18 months of counterintelligence operations, including surveillance of members of the Trump team. 

    It is suspected that Deripaska, thought to be a “backchannel” top Putin, brought Manafort’s briefings with him. After a report by the Washington Post asserted Manafort’s offer to provide the documents, Deripaska told CNN it was “fake news,” while his spokesman told AP in an email “These scandalous and mendacious assumptions are driven by sensationalism and we totally refute these outrageous false allegations in the strongest possible way.”

    Manafort allegedly offered Deripaska the private briefings on Jul. 7, 2016. The yacht trip allegedly took place over three days from Aug. 6. Less than two weeks later, Manafort resigned from the campaign under heavy scrutiny of his ties to pro-Russian Ukrainian oligarchs. Manafort has since been charged by special counsel Robert Mueller with twelve crimes, including a conspiracy against the United States. –Quartz

    Of note, after slapping Deripaska and three of his companies with harsh sanctions over 2016 Russian election meddling, the Trump administration said on Sunday lifted sanctions on two of the companies after Deripaska agreed to partially divest from them. 

    Under the agreement to lift sanctions, Deripaska has agreed to cut his direct and indirect share ownership below 50% in each company in a move designed to sever his control over the companies,  overhauling the boards of En+ and Rusal, and “committing to full transparency with Treasury by undertaking extensive, ongoing auditing, certification, and reporting requirements,” the department said in December when announcing its plans to remove the sanction. He will hold voting rights over just 35% of the company’s shares.

    “This action ensures that the majority of directors on the En+ and Rusal boards will be independent directors, including US and European persons, who have no business, professional, or family ties to Deripaska or any other specially designated individuals, and that independent US persons vote a significant bloc of the shares of En+,” the Treasury’s Office of Foreign Assets Control (OFAC) said in a statement.

    via ZeroHedge News http://bit.ly/2DL28qs Tyler Durden

    Jeff Gundlach Slams “Embarrassed” Fed’s Powell For “Caving To The Stock Market”

    Having earlier in the week indicated his grave  concern that a recession looms, signaled by Conference Board sentiment extremes…noting the spread between the Conference Board’s current sentiment and expectations is the widest since March 2001, the first month of the U.S. recession that year.

    Which DoubleLine’s CEO Jeff Gundlach warned…

    The bond guru told Reuters in an interview tonight that fragile equity markets forced Fed Chair Jerome Powell to pledge on Wednesday that the U.S. central bank will be patient with future interest rate hikes

    “He’s caving to the stock market. The stock market scared him,” in late 2018.

    And while Powell umm’d and agh’d through his press conference, truly unable to draw the line between optimistic economic outlooks and his unprecedented reversal of policy (which plunged market expectations from a 50bps hike in 2019 to a 25bps cut in a few weeks)…

    Gundlach explained that this is laying the ground work for QE4…

    “Even though they won’t say so, this shows that Quantitative Tightening will be slowed down,” Gundlach said.

    And if need be, the Fed will expand the balance sheet. QE (Quantitative Easing) is the ‘unnamed’ other policy tool he referenced in case lowering the Fed funds rate proves not to be enough to strengthen the economy/markets.”

    Which explains the plunge in the dollar and surge in stocks, bonds, and gold…

    The DoubleLine boss went on to warn, the consumer future expectations data is “flat-out bright red bells ringing.”

     

    One of the “morning binge-party after effects” from Wednesday’s strong stock-market rally is “not knowing what the plan really is,” Gundlach said.

    “Powell is basically saying, I am going back into a foxhole and then decide what the next move is. Powell said ‘I don’t want to say anything and I don’t want to get pinned down as I did before.’ Because it got embarrassing.”

    And in the meantime, macro data and earning expectations contonue to tumble against a Powell-Put levitated stock market…

    via ZeroHedge News http://bit.ly/2FXG1PT Tyler Durden

    Tyson Recalls 36,000 Pounds Of Chicken Nuggets Which May Contain Rubber

    Tyson Foods, Inc. has recalled 36,420 pounds of chicken nuggets that may contain rubber, according to the US Department of Agriculture

    The affected products are 5-pound bags of panko chicken nuggets produced on Nov. 26, 2018 with a “used by” date of Nov. 26, 2019. 

    The problem was discovered after reports of “extraneous material” in the nuggets reported on January 29, after which the USDA Food Safety and Inspection Service called for a “Class 1” recall – considered a high health risk situation in which “there is a reasonable probability that the use of the product will cause serious, adverse health consequences or death,” reports USA Today.

    The USDA says that they are “concerned” people may still have recalled products in their freezers, and have recommended throwing out or returning the affected products. 

    “There have been no confirmed reports of adverse reactions due to consumption of these products. Anyone concerned about an injury or illness should contact a healthcare provider,” reads the release, which also notes that the impacted products were shipped to retailers nationwide. 

    Affected products will have “P-13556” printed in black ink on the back of the package, according to a visual guide published by the USDA. They will also have a case code of “3308SDL03” printed in that same area, followed by a timestamp between 23:00 and 01:59 (inclusive). –USA Today

    The recall follows a different recall of more than 16,000 pounds of Perdue Foods chicken nuggets due to an undeclared allergen and an incorrect UPC code.  

    via ZeroHedge News http://bit.ly/2Ww3cpB Tyler Durden

    CNN Goes ‘Undercover’ To Manufacture Consent For Coup Attempt In Venezuela

    Authored by Kevin Gosztola via ShadowProof.com,

    A CNN “exclusive” report from inside Venezuela aired multiple times on the network on January 28. It is a prime example of how influential media outlets in the U.S. effectively create propaganda for the opposition, which now is receiving funds from President Donald Trump’s administration.

    For the four-minute report, CNN correspondent Nick Paton Walsh went “undercover” amidst what the network described as the “deepening crisis in Venezuela” in order “to capture the desperation gripping the nation.”

    The segment highlighted hyperinflation at grocery chains, Venezuelans lined up in queues for fuel and food, particularly in Caracas, and opposition demonstrations on January 23, when opposition leader Juan Guaido declared himself president of the country.

    “This was the day when change was meant to come,” Walsh stated.

    It suggested President Nicolas Maduro’s government has given “handouts” to Venezuelans for years to buy their loyalty, but now “handouts” are no longer enough. Opponents like to equate social programs to “handouts” because corporate elites favor de-nationalization and privatization of services.

    Walsh interviewed a rank-and-file officer in the Venezuela military and granted him anonymity. The officer stated, “I would say 80 percent of soldiers are against the government. Some even go to demonstrations. But the big fishes, the senior officers, are the ones eating, getting rich while the bottom we have it hard.”

    Video showed the opposition throwing stones at a military airfield in a standoff that apparently has lasted “for months.” One part of the barricade was on fire.

    Sitting with his back against what appeared to be a concrete barricade, like he was part of the opposition hurling objects, Walsh declared, “They may be throwing stones here, but what they really need is the army to switch sides.”

    Walsh offered no comment on what it would mean for democracy in Venezuela if the military played an instrumental role in helping Guaido and a U.S.-led group of countries oust Maduro.

    Another part of the report featured street children in Caracas. A 14 year-old boy recounted how his brother was killed in July by a member of a gang. He said he has to go through the garbage for food and beg so he does not go hungry.

    Walsh did not show a cause-and-effect relationship, yet the boy’s poverty was wryly attributed to a “socialist utopia that now leaves nearly every stomach empty.”

    On the surface, the report may have seemed balanced and neutral because CNN spoke to citizens caught in the middle of the political crisis. Yet, there was no clips of the tens of thousands of Maduro supporters who marched through Caracas the same day that Guaido claimed he was the country’s interim president.

    CNN also omitted the role of U.S. sanctions and other measures in making Venezuela’s economic recovery nearly impossible.

    According to Mark Weisbrot, co-director of the Center for Economic and Policy Research (CEPR), sanctions did not create hyperinflation in the country. However, they have made it incredibly difficult for the government to restructure their debt for a recovery.

    In 2017, weeks before the Trump administration imposed new sanctions, a former top State Department official predicted they would cause the government to “default on their bonds and a collapse of internal investment and oil production.” They would spur “civil unrest, refugee flows across their borders, and a cutoff of Venezuelan financial support to Cuba and Haiti that could lead to migration flows to the United States.” (Note: It was estimated in June 2018 that about 35,000 refugees were crossing from Venezuela to Colombia each day.)

    The same day that CNN aired their report the U.S. Treasury Department sanctioned the country’s state-owned oil company, Petroleos de Venezuela, S.A. (PdVSA). The company is a “primary source of Venezuela’s income and foreign currency,” including U.S. dollars and Euros, according to the Department.

    National security adviser John Bolton said the sanctions would block $7 billion in assets and result in the loss of $11 billion in proceeds from exports over the next year.

    Even after the Trump administration announced oil sanctions, CNN still largely ignored the potential effect of sanctions when it aired this “undercover” report another time.

    Oil sanctions are likely to intensify the suffering for Venezuelans, not make their lives better. In the 1990s, Iraq faced sanctions from the United Nations on their oil exports as well as restrictions on other foreign trade. To many, it was “one of the decade’s great crimes” because the sanctions contributed to the deaths of 500,000 Iraqi children.

    In Iran, the poor bear the brunt of sanctions on oil that were re-imposed by the Trump administration. Financial Times reported in October on millions of Iranians, who were already stretched as “the value of the rial” had “plunged more than 70 per cent against the US dollar over the past year.”

    “The sharp drop has pushed up import costs and stoked inflation, eroding purchasing power and leaving the most impoverished struggling to pay for basic goods such as meat, dairy products, and fruit,” FT noted.

    As journalist Gregory Shupak previously highlighted for Fairness and Accuracy In Reporting (FAIR), “When Venezuelan President Nicolas Maduro in November 2017 proposed a meeting with creditors to discuss a restructuring of the country’s public debt, the Trump administration warned U.S. bondholders that attending this meeting could put them in violation of U.S. economic sanctions against Venezuela, which can be punished with 30 years in jail and as much as $10 million dollars in fines for businesses.”

    “That same month, the U.S. government added further sanctions that prevent Venezuela from doing what governments routinely do with much of their debt, which is ‘roll it over’ by borrowing again when a bond matures. The sanctions also made it difficult if not impossible for Venezuela to undertake debt restructuring, a process wherein interest and principal payments are postponed and creditors receive new bonds, which the sanctions explicitly prohibit.”

    Additionally, Francisco Rodriguez noted for Foreign Policy in 2018, “Ninety-five percent of Venezuela’s export revenue comes from oil sold by the state-owned oil company. Cutting off the government’s access to dollars will leave the economy without the hard currency needed to pay for imports of food and medicine. Starving the Venezuelan economy of its foreign currency earnings risks turning the country’s current humanitarian crisis into a full-blown humanitarian catastrophe.”

    This is not the first time that the opposition in Venezuela has destroyed the economy to help it win power. Back in 2002, the same year that President Hugo Chavez faced a coup backed by the U.S. government, his opponents “called for a massive strike in the country’s oil sector.”

    “The strike brought oil production to a standstill and caused a double-digit recession in an attempt to get Chavez to resign,” Rodriguez recalled. “This event single-handedly convinced Venezuelans that they could not trust a political movement that was willing to destroy the economy in order to attain power. In a recall referendum held two years later, voters resoundingly backed Chavez.”

    None of this history seems to matter to CNN anchors, who subscribe to the Washington bipartisan foreign policy consensus on Venezuela. Nor do they mention that it is not only Maduro’s security forces that commit violence. The opposition was involved in lynchings, burning people alive, and erecting barricades that cause deadly accidents in 2017. Some opposition leaders, including exiles like Lorent Saleh, have ties to neo-fascists.

    When CNN anchor Jim Sciutto introduced the report, he mentioned Guaido had again urged the people of Venezuela to “hit the streets to demand new elections” in an effort to oust Maduro. It is easy to see how playing the report after this statement might help gin up sympathy for Guaido’s calls to action.

    But apparently there is reason to believe the opposition may have the support of leaders from several Latin American and Western countries but still be struggling to win over the people.

    Walsh noted the country is not seeing daily mass street protests. Guaido’s message may be resonating with some of the middle class, but it is not a message that inspires those in the slums, who have their own “poverty-based fight.”

    In other words, it is likely that lower classes in Venezuela remain skeptical of the opposition because they fear it will mean inviting outside corporate interests to raid government assets and natural resources so they may enrich themselves. This would potentially lead to cuts or an end to social welfare programs that they utilize to help them survive.

    This skepticism toward the opposition among Venezuelans is not something CNN wants to feature in its limited coverage of the attempted coup. But it should be viewed as a key reason to doubt the consensus around support for the opposition, which news networks are working to manufacture.

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

    Chinese Manufacturing Remains In Contraction To Start 2019

    With the first official data of 2019, China’s Manufacturing PMI printed below 50 – signaling a contraction – for the second month in a row in January as employment slumped to a multi-year low.

    We note that January economic data may be subject to distortion due to the Spring Festival holiday, which starts on Feb 5 this year, 11 days earlier than last year.

    Catching down to retail sales inglorious slowdown, China’s official manufacturing PMI printed 49.5 in January… near the lowest since Feb 2016

    Employment contracted to multi-year lows, Purchase Quantities slipped as did inventories and backlogs as it appears the record-breaking surge in easing did nothing to rejuvenate a struggling manufacturing sector.

    Worse still, with Yuan surging to six-month highs, which will do nothing to prompt a renaissance in Chinese exports…

    There is a silver lining to the data though as non-manufacturing rebounded from 53.8 to 54.7.

    However, both manufacturing and non-manufacturing both saw future expectations notably weaken.

    But economists remain hopeful:

    “As domestic policy easing bears more fruit, especially as infrastructure investment picks up in the spring, we expect growth momentum to rebound sequentially in the second quarter,” Wang Tao, head of China Economic Research at UBS AG in Hong Kong, wrote in a recent note

     

    via ZeroHedge News http://bit.ly/2sY9Uae Tyler Durden

    China’s Foxconn Reconsidering Plan To Hire 13,000 Wisconsin Workers

    One day after Apple reported a disappointing 15% drop in iPhone sales, and just hours before Chinese Vice Premier Liu He was set to kick off high level trade talks in Washington, Taiwan-based Foxconn, one of the consumer-tech giant’s largest suppliers, told Reuters that it is shelving plans to hire thousands of workers at its new plant in Wisconsin as it reconsiders plans to build LCD displays (Apple’s most recent crop of iPhones uses these displays).

    Instead of the manufacturing workforce FoxConn promised when it received billions of dollars in tax breaks and state aide to build the $10 billion campus – the company, which has extensive operations in the PRC – said it instead plans to hire engineers and researchers. When Foxconn’s investment was announced in 2017, President Trump praised it as evidence that manufacturing jobs would return to the US under his administration. The investment marked the largest greenfield investment by a foreign company in US history, according to Reuters. The company had initially planned to build LCD screens for TVs and other larger gadgets, but had more recently pivoting to building screens for “smaller products” like smartphones. While it’s unclear whether these smartphone screens would have been used for Apple products, Foxconn is one of Apple’s largest suppliers, and has been cutting back iPhone-related production at facilities in China because sales of the latest batch of iPhones has been slower than Apple had initially anticipated.

    Wis

    A company spokesman blamed the change of plans on competition from Chinese and Japanese producers,

    Now, those plans may be scaled back or even shelved, Louis Woo, special assistant to Foxconn Chief Executive Terry Gou, told Reuters. He said the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high.

    “In terms of TV, we have no place in the U.S.,” he said in an interview. “We can’t compete.”

    When it comes to manufacturing advanced screens for TVs, he added: “If a certain size of display has more supply, whether from China or Japan or Taiwan, we have to change, too.”

    Instead of building a “factory”, Foxconn wants to instead focus on building a “technology hub”. But suddenly, plans to hire as many as 13,000 workers are now in jeopardy. The company told Reuters that rather than manufacturing the LCD panels in the US, it would make more sense to produce them in greater China or Japan, ship them to Mexico for the finishing touches, then bring them into the US for assembly of the final product.

    Rather than a focus on LCD manufacturing, Foxconn wants to create a “technology hub” in Wisconsin that would largely consist of research facilities along with packaging and assembly operations, Woo said. It would also produce specialized tech products for industrial, healthcare, and professional applications, he added.

    “In Wisconsin we’re not building a factory. You can’t use a factory to view our Wisconsin investment,” Woo said.

    Earlier this month, Foxconn, a major supplier to Apple Inc., reiterated its intention to create 13,000 jobs in Wisconsin, but said it had slowed its pace of hiring.

    The company initially said it expected to employ about 5,200 people by the end of 2020; a company source said that figure now looks likely to be closer to 1,000 workers.

    It is unclear when the full 13,000 workers will be hired.

    And in another blow to former Gov Scott Walker, who negotiated the $4 billion in incentives provided to Foxconn, Democrats who had decried the giveaways as a bad deal for the state of Wisconsin can now say “I told you so.”

    Foxconn had reiterated its commitment to hiring the workers as recently as earlier this month. But according to Reuters, its scaled-back plans could involve hiring as few as 1,000 workers.

    Earlier this month, Foxconn, a major supplier to Apple Inc., reiterated its intention to create 13,000 jobs in Wisconsin, but said it had slowed its pace of hiring. The company initially said it expected to employ about 5,200 people by the end of 2020; a company source said that figure now looks likely to be closer to 1,000 workers.

    Foxconn Chief Executive Terry Gou plans to meet with Wisconsin’s new Democratic Gov. Tony Evers to discuss “modifications” to the original deal (to qualify for its tax credits, Foxconn must meet certain hiring and investment goals).

    The timing of the reports certainly seems interesting, as Chinese companies pull money out of Silicon Valley and US real estate. And with trade talks with China entering there must critical stage, is this one more nudge to the Trump Administration that, if it doesn’t play ball, Beijing won’t hesitate to put the screws to companies that have a large presence in China?

    Or is it simply another sign that Apple – which has blamed slowing sales in part on the trade war – needs to cut prices?

    via ZeroHedge News http://bit.ly/2Gce06D Tyler Durden

    The Fallacy Of Price To ‘Forecasted Hope’

    Authored by Michael Lebowitz via RealInvestmentAdvice.com,

    There are countless ways to evaluate equities, and they all have glaring flaws. Equity valuation is not a science with predictive formulas. It is subjective, and the formulas themselves and the interpretation of the results rely on an estimate of what the future holds.

    Some models use historical data under the assumption that the current trend will be predictive of the future while others use forecasts that differ from the past. It is a rare occasion that the past neatly maps out the future or, for that matter, that anyone accurately predicts the future. No model represents the holy grail of investing, but understanding their inputs and outputs can reveal a lot about relative valuations and the sentiment of a market. As investors, we need to take into account all types of valuation techniques and their assumptions, especially those that may not confirm our current investment thesis.

    Differences between various valuation models allows one to construct a bearish or bullish outlook simply by choosing the model that produces the appropriate outcome. Recently, Price to Forward Earnings (P/fE) has been flashing a buy signal and has been used by many investors as evidence that stocks are cheap. At the same time, as shown below, most other traditional valuation models are pointing to a market that is anywhere from 65% to 95% overvalued. What gives?

    Choosing E?

    Price to earnings is one of the most popular forms of equity valuation. It is a logical approach given that earnings, the profits available after all expenses, are ultimately what investors are buying. The basic price to earnings ratio (P/E) simply tells us what multiple the market is paying for profits. For instance, a P/E of 20 means investors are willing to pay 20 times the current level of earnings to own shares of the company. Theoretically, in this case, if a company’s earnings are flat for eternity, the investor will earn a 5% (1/20) annual return. If future earnings exceed current earnings, the return will be greater than 5%, and the return will be less than 5% if the opposite is true about earnings..

    To provide a framework allowing for the comparison of current P/E valuations to prior valuations or valuations between other stocks or indexes, the E (earnings) in the ratio can be historical, recent or forecasted.  

    Our preferred method, Cyclically Adjusted Price to Earnings (CAPE), compares today’s price versus inflation-adjusted earnings over the preceding ten year period. If you believe that future earnings growth will follow the longer term trend of years past, this valuation tool provides a dependable relative valuation metric. 

    The most commonly used P/E is based on earnings from the trailing twelve months (TTM). The reason we are not as comfortable with this approach is that, at times, one year earnings periods can differ markedly from prior periods due to one-off events. For instance, earnings over the last 12 months are considerably higher than the previous few years due to the corporate tax cut. As a result, TTM P/E is lower, but does that make stocks cheaper? That is not a trick question and can be answered yes or no depending on other factors. Regardless of your preference, both TTM and CAPE P/E ratios use earnings data that has occurred in the past.

    Another popular way to calculate P/E uses estimates of forward earnings for the next 12 months. Theoretically, this approach is the best of the three methods. When you are buying a stock or an index, it is the earnings in the future that matter, not those in the past.

    While the price to forward earnings (P/fE) ratio seems like the smartest approach, it is much harder to use as predicting earnings can be very difficult. In fact, the point at which one needs to be most vigilant about avoiding overpriced equities often is the time when misplaced confidence is highest in equities. Of greater concern, most investors rely on forward earnings forecasts from Wall Street. While Wall Street banks may employ the best analysts and have access to knowledge that you and I do not, they are biased. To put it bluntly, Wall Street banks and brokers make money by selling stocks.

    This opinion is not cynical, this is how the world works. McDonald’s, for instance, is always quick to point out the health benefits of their salads, but have they ever tried to dissuade customers from ordering a Big Mac, jumbo fries and a large Coke? In fact, they entice customers to order that exact “super-size” combination through pricing deals.

    Data Supporting our Cynicism

    Given that Wall Street is in the business of selling stocks, they tend to be optimistic. The graph below points this out by showing the difference between forecasted earnings and the true earnings that were released 12 months after the forecasts. The gray-shaded area plots the percentage difference.

    Note the following:

    • On average, forward earnings expectations are 16.5% higher than actual earnings

    • During the last three recessions, forward earnings were 50% greater than actual earnings

    • Forward earnings are greater than actual earnings 85% of the time

    The ebbs and flows of earnings from quarter to quarter and year to year graphically hide some of the perpetual optimism. The next graph uses the historical earnings trend line (dotted blue) from the graph above to compare to forward estimates. This modification of the first graph allows us to compare more reliable earnings trends to forecasts.

    As shown, forward forecasts have been consistently overly optimistic since 1994 except for the 2008/09 recession. While the reliability of optimism is worth stressing, the level of current optimism, represented by the gray shaded area showing the percentage difference, indicates that current forward earnings estimates are the highest they have been compared to the longer term earnings trend over this 25-year period.

    Current P/fE

    The graph below charts P/fE. As shown, the current P/fE level is below the average of the last 28 years and, dare we say, cheap.

    Given this set of information, stating that stocks are cheap on the basis of forward earnings and P/fE alone is foolish. The graph below contrasts current P/fE with various one-year earnings forecasts. To help pick one of the horizontal lines associated with different annual earnings growth rates consider:

    • 2012-2017 earnings grew at 4.67%

    • 2018 grew at 21.77%

    • 2019 expected to grow at 20% (1.56 vs 1.30)

    We should also note that growth associated with the tax cuts have a one-year shelf life. While earnings may be higher as companies pay fewer taxes, the growth rate of those earnings should revert towards trend levels as they are married to economic activity.

    As shown, forward P/fE is only as good as the forecast. Even if earnings grow at 15% in 2019, which would be impressive, the ratio goes from below to above average. In more pessimistic scenarios, such as a reversion to the longer-term trend growth or a mild recession, the ratio becomes very expensive. Traditionally, this is what happens as the economy moves in to a recession but Wall Street analysts are slow to react.

    Summary

    • The growth benefits of the tax cut are not recurring

    • Will buybacks continue to boost EPS?

    • Revenue growth has been running 4%, can corporate profit margins keep expanding?

    • Forecasted earnings are overly optimistic 85% of the time

    • Forecasted earnings have never predicted a recession or a big drop in earnings

    • In the event no recession emerges, then wage pressures are likely to negatively impact earnings and margins

    Instead of restating our thoughts on the current “value” exposed by P/fE, we leave you with a simple thought and graph. At current levels, price to forecasted earnings are as “cheap” as they were in November 2007. 

    Oddly enough, the National Bureau of Economic Research (NBER), which is responsible for identifying the dates when U.S. recessions begin and end, mark December 2007 as the beginning of the Great Recession. That was not a good time to own “cheap” stocks.

    via ZeroHedge News http://bit.ly/2TuJF6Q Tyler Durden

    150,000 Miles: Elon Musk’s 2018 Private Jet Log Defines The Renewable Energy Savior’s Hypocrisy

    It was just days ago that we brought you  the latest story of liberal hypocrisy in which a billionaire, who was urging the world to eat less meat for global warming purposes, also happened to be jet-setting around the globe in her private jet, leaving a sizable carbon footprint behind.

    The “save the Earth hypocrisy” torch continues its journey today, passing from her hand directly to the left’s favorite poster child for all causes environmental, Elon Musk. The Washington Post reported today that Musk’s corporate jet flew more than 150,000 miles in 2018, equal to six times around the Earth and dwarfing numbers put up by other (consistently profitable) CEOs like Tim Cook and Jeff Bezos.

    That’s bad, but this is worse: when the Washington Post starts calling out your green energy hypocrisy, you can be assured that there’s a problem. 

    Musk’s private plane

    Not only that, Tesla shareholders – the ones with an ideological crusade to save the Earth – were said to “largely pay” for Musk’s travel. Elon logged more than 250 flights for work, projects and vacations across Asia, Europe, Latin America and the Middle East during 2018, the same year Tesla was losing up to $100 million a week at one point. That equates to nearly one flight per day.

    After all of the hemming and hawing about Musk’s breakneck schedule and 120 hour work weeks, it was a clear reminder that the billionaire still has the luxury to travel at any time to any place in the world. In addition to traveling for work, some of the flights were getaways for Elon or his family.

    This story breaks at a time when Tesla is almost assuredly going to face questions about its spending after revealing earnings this week and eventually filing its annual report.

    The idea of global jet-setting on a private plane can’t help but be viewed as hypocritical for a man often heralded as a “crusader for renewable energy”. The Washington Post dryly notes that a few days after Musk called fossil fuels “the dumbest experiment in human history,” his plane burned through thousands of pounds of jet fuel flying 300 miles from Los Angeles to Oakland on its way to take him to a competitive video gaming event.

    Musk also tweeted “We know we’ll run out of dead dinosaurs to mine for fuel & have to use sustainable energy eventually. So why not go renewable now & avoid increasing risk of climate catastrophe?” – on the same day his jet flew over Mexico for a personal trip.

    And surprise: Tesla doesn’t have any problems making excuses for Musk. The company told WaPo “Until we can teleport, there’s unfortunately no alternative that would allow him to do his job as effectively.”

    While the company claims that it doesn’t cover the costs for Musk’s personal trips, it was also unable to provide to the Washington Post how it designates which trips are personal and which are for business. The company also didn’t provide an estimate for the bill for how much all of these trips cost. Musk’s travel also stands out versus other CEOs like Jeff Bezos, who flew 100 less flights than Musk last year and Tim Cook, who paid $93,000 in 2017 for private flights when Tesla spent $700,000 the same year.

    Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware commented: “Do the rank and file get to use the company plane for vacations? Do the rank and file get to use company property for personal purposes? Of course not. They’re Tesla, as much as he is. This company has some real financial issues, and (he’s) spending other people’s money.”

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

    Now, Refrigerators Are Watching Us Too: “Smart” Coolers Are Coming To A Store Near You

    Authored by ‘Dagny Taggart’ via Daisy Luther’s Organic Prepper blog,

    If you’ve been feeling like you just don’t have enough “smart” devices spying on you every day, I have great news. “Smart coolers” may be coming to a store near you.

    Years ago, you would have sounded like a lunatic if you said that a refrigerator was watching you. But, like other new technology, yesterday’s serious mental health symptom is today’s reality.

    Walgreens is piloting a new line of “smart coolers”, which are refrigerators equipped with cameras that scan shoppers’ faces and make inferences on their age and gender. On January 14, the company announced its first trial at a store in Chicago. The drugstore chain plans to put the coolers in stores in New York, Seattle, and San Francisco by the end of January.

    Walgreens is getting paid to install smart coolers.

    So far, 15 large advertisers have signed up to test the Cooler Screens platform, including Nestlé SA, MillerCoors LLC, and Conagra Brands Inc.  While Cooler Screens is currently only in Walgreens stores, the company is looking to get their product in additional chains as well.

    The technology embeds cameras, sensors, and digital screens in cooler doors, creating a network of “smart” displays that marketers intend to use to target ads to specific types of shoppers, explains The Wall Street Journal:

    The refrigerator and freezer doors act as a digital merchandising platform that depicts the food and drinks inside in their best light, but also as an in-store billboard that can serve ads to consumers who approach, based on variables such as the approximate age the technology believes they are, their gender and the weather.

    This new technology could provide brick-and-mortar stores with a marketplace similar to online advertising. Ice cream brands could duke it out to get the most prominent placement when it is 97 degrees outside; an older man could see ads for different products than a younger woman. (source)

    Here’s what the screens look like:

    But don’t worry. It’s not facial recognition.

    In Now Your Groceries See You, Too, Sidney Fussell writes of the technology:

    Crucially, the “Cooler Screens” system does not use facial recognition. Shoppers aren’t identified when the fridge cameras scan their face. Instead, the cameras analyze faces to make inferences about shoppers’ age and gender. First, the camera takes their picture, which an AI system will measure and analyze, say, the width of someone’s eyes, the distance between their lips and nose, and other micro measurements. From there, the system can estimate if the person who opened the door is, say, a woman in her early 20s or a male in his late 50s. It’s analysis, not recognition. (source)

    So, wait a second here – the camera takes photos of people and analyses them, but because this isn’t actual “facial recognition” there isn’t anything to worry about?

    I’m not buying it.

    Here are the minute details that smart coolers record.

    Cooler Screens also has “iris tracking” capabilities, meaning the company can collect data on which displayed items are the most looked at.

    Most the reporting on this technology is downplaying another detail that should be raising eyebrows: The Cooler Screens website states “We believe brands should be able to measure the performance of media buys in real-time.”

    It sounds like what they really mean is “brands should be able to spy on shoppers.” Advertisers think nothing of invading our privacy if it means they’ll make more money. Remember when we showed you how your smart device was tracking every move you made in real time?

    Arsen Avakian, Cooler Screens co-founder and CEO, wants us to know that our data is safe:

    “The business model is not built on selling consumer data. The business model is built on providing intelligence to brands and to the retailers to craft a much better shopping experience.” (source)

    Haven’t we heard this line before?

    Walgreens has made another unsavory alliance.

    This isn’t the first questionable alliance Walgreens has recently formed. As pointed out by MassPrivateI, the chain has allowed Microsoft access to patient information. On January 15, the Associated Press reported:

    The drugstore chain Walgreens is working with Microsoft to improve care, as more companies seek ways to manage patient health, cut costs and improve quality.

    The companies said Tuesday that they will work to improve care in part by using patient information and the Walgreens store network. The companies will aim to boost prescription adherence, cut down on emergency room visits and decrease hospital admissions. (source)

    The report makes no mention of HOW Microsoft will be accessing private data, other than saying it will be done via the “Walgreens store network.” It seems like customers would have to give permission for their personal information to be shared in such a way, but who knows?

    By the way, Microsoft is a Cooler Screens investor.

    Do we need yet another invasion of privacy?

    Do we really need to be barraged with MORE advertising and more invasion of our privacy? How long until every aisle of every store is equipped with mind-reading technology?

    Will commercialism and corporate branding eventually take over every aspect of our lives, as it did in the dystopian comedy Idiocracy?

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

    A Markets Game Plan For US-China Trade Talks

    Authored by Garfield Reynolds, Bloomberg markets live commentator

    For markets, trade talks dominate everything else this week, so here’s a simplified game plan for how it might play out.

    China’s cooling economy, soggy earnings from the likes of Caterpillar, Nvidia, Harley Davidson, plus a slew of weak export data prints have helped create a consensus that what the markets need more than anything else is trade peace.

    Such a view may be naïve. China deleveraging, Brexit, Italy, the U.S. shutdown have all done plenty of harm too. Plus, repairing the already-seen trade war damage will be a gradual and difficult process.

    But that’s mostly beside the point — the talks are highly likely to set off extreme, sustained market moves because sentiment has become so sensitive to the trade war. Considering that, the potential scenarios could be roughly delineated as follows:

    1. Trade talks break down and the trade war escalates
    2. No concrete steps, but positive sounds and more talks planned
    3. Agreement on tariffs announced, but IP/tech issues go onto a separate track for longer-term talks
    4. Agreement announced on both tariffs and IP

    The first scenario will be the easiest for traders to react to. JPY would surge and Treasury yields would drop. EM FX and AUD would slump, while global equity markets would be a sea of red.

    The second and third may prove sufficient to see January’s risk-asset rebound turn into a sustained rally. Outcome 2, in particular, would represent the sort of can-kicking that markets often welcomed during the euro and Brexit crises.

    The fourth should be the purest risk-on scenario in theory, but the devil could be in the details. A Trump-Kim summit redux – declare peace now and worry about the fine print later – could set off a similar fade-the-win moment for risk assets, after the initial euphoria.

    Going into the talks, there seems to be too much complacency that Trump and Xi will decide they have to make a deal to end the damage already inflicted. Neither of them has a strong-enough track record of subordinating political aims to economic needs to make that an ironclad proposition.

    The bar for success may not be too high this week, but there may be a stumble when the U.S. and China try to hurdle it in tandem.

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