Month: May 2019

Authored by Tom Luongo,

This weekend’s European Parliamentary elections sent a lot of messages around the continent. The Euroskeptics gained while at the same time, their threat was met with a similar show of support for the European project.

The message was clear. The European Union isn’t working for many of the people in specific countries around Europe. From the U.K. to Hungary, Italy to Poland, there is a hardening of the dissatisfaction with the direction Brussels is going.

But is anyone there listening? No. They are all so committed to their planned future Europe and their smarmy version of cheap communism that all they can do is see the positives.

By gaming the outcomes through tying local elections to the European vote, for the first time in over 20 years voter turnout in Europhile countries was high enough to beat back the threat of the Euroskeptics and create the illusion of greater support than there actually is.

Winning through tilting the table is what Brussels does. The EU has been built, inch by inch, over the past 70+ years on lie after lie after lie. Vote after re-vote until they got the desired outcome.

When I call them cheap communists I mean it. Power is all they care about and the end, no matter what, justify the means. That the whole affair is covered in the thickest layer of smarm and virtue signaling makes it only that much more nauseating to watch.

The votes were barely counted when chief smarm-master himself, Donald Tusk, came out and told the world that Brexit was the vaccine for euroskepticism.

As if these election results, with inflated numbers for ALDE and the Greens, were a refutation of Euroskeptics; that the EU’s scare tactics in strong-arming the U.K. into submission actually worked.

But it didn’t. Brexit is more popular now than ever before. And no amount of spin will change that. The same thing goes for Hungary where Viktor Orban no longer needed a coalition to take 56% of the vote and 13 seats in parliament. His Fidesz party did that on their own.

The same goes for Italy. Matteo Salvini is on a roll, taking 34%.His Prime Minister Giuseppe Conti then cucks out asking what the agenda will be because he may not be able to support it.

Yet another example of the political casualties of Brussels’ scorched earth policy. Count him alongside Silvio Berlusconi, David Cameron, Theresa May, Francois Hollande, Alexis Tsipras in Greece and possibly Salvini’s coalition partner Luigi Di Maio who is calling for a confidence vote in his leadership of M5S.

At the same time, the markets are sending Donald Trump, the Federal Reserve and the rest of the monetary cranks the sternest message possible with inverting sovereign bond curves across developed markets.

The U.S. Yield Curve is collapsing into a complete joke as FOMC Chair Jerome “Deer in Headlights” Powell seems stunned by this turn of events. He can’t control Trump or the State or Treasury departments who are hellbent on isolating the U.S. on every front economically and diplomatically.

Bond auctions this week gave us the clearest picture of what’s going on. A blistering 2 year auction, followed by an unspectacular 5 year and a downright ugly 7 year.

Short duration is in higher demand than longer. Iceberg Dead Ahead.

So while the markets are screaming for a rate cut, Powell is worried that he’ll be blamed for blowing an equity bubble if he cuts rates. The dollar is busting out of its trading range while the euro and pound grind their way lower.

Trump looks willing to blow up the world economy in order to get his crappy Israeli/Palestinian ‘Deal of the Century’ passed. He’s been given warning after warning by everyone — Russia, China, Iran, Germany, the GCC nations — that this deal is a non-starter but he’s intent on getting it done so he can claim to have achieved something none of his predecessors have.

He’s unleashed the worst people in his administration to threaten and cajole the world into accepting their version of geopolitical reality. In his quest to make the world safe for Israel through forcing deals there and in North Korea, Trump is blackmailing the world with his reckless behavior.

We have military intelligence accusing Russia without evidence of violating the Comprehensive Test Ban Treaty. Presumably this is a preamble to John Bolton convincing Trump to ditch this agreement as well before it expires like the INF Treaty.

Meanwhile Fat Ass Mike Pompeo is threatening Europe with sanctions for using the EU’s flawed but available INSTEX vehicle for evading U.S. prohibitions on trading with Iran.

The message is clear, sell blue jeans to Iran and we’ll steal your money.

The time has come for Europe to decide if it is an independent actor or not. Is the EU ready to actually defend its members from the depredations of outside actors or does it just exist to leech off of them preferentially.

Because the message from Trump is clear. Everyone seems to want to just wait out Trump’s bullying in the vain hope it will end. But it won’t. Bullies don’t stop until they get their nose bloodied.

The only ones who have told Trump to go scratch at this point are Russia and Iran.

The Iranians refuse to talk to Trump because he’s an asshole and Putin won’t accept any unilateral demands made on him or his people, though he’ll take Trump’s phone calls. Putin just continues building relationships built on trust rather than tearing that trust down.

The Eurasian Economic Union (EAEU) held a summit in Nur-Sultan, Kazakhstan where Serbia and Tajikistan observed and the members hammered out details for free trade agreements with India, Egypt and Israel. Iran already has a free trade deal with the EAEU.

Next week the St. Petersburg International Economic Forum begins. The U.S. won’t be sending anyone over there. The same number we sent to China’s Belt and Road Forum last month. Meanwhile everyone else will be.

Putin will meet with Xi Jinping for the third time in four months while billions in deals settled without the U.S. dollar and therefore the purview of Trump’s threats will get done.

The message is clear. People are increasingly unwilling to buy what the West’s leadership is selling. In both Brussels and D.C., however, no one is listening.

Even if Trump isn’t down with where things are headed, even if he wants to do a deal with North Korea, climb down off the clock tower and put away the rifle he’s pointed at Iran his advisors won’t let him.

The bureaucracy around him refuses to implement his directives. Fingers stuck firmly in ears with agendas tucked under their arms whistling past their graveyards.

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

Speaking at a press conference after meeting Canadian Prime Minister Justin Trudeau, US VP Mike Pence warned China that US “could more than double tariffs if needed.”

His words sent stocks lower modestly but tumbled yields back to yesterday’s lows…

 

And crashed the yield curve to new cycle lows…

 

Additionally, Pence is expected to stir things even further, as CNBC reports that Pence is planning a speech around the 30th anniversary of the Tiananmen Square massacre, according to two sources familiar with the matter.

The remarks are expected to be a censure of China’s religious freedom and human rights record from one of the Trump administration’s highest ranking China hawks. They are set to come amid rising trade tensions between the world’s two largest economies.

A White House official confirmed a Pence speech is in the works – potentially in mid-June, following the anniversary – but declined to comment on its contents.

via ZeroHedge News http://bit.ly/2wwc4j7 Tyler Durden

iPhones are surprisingly active in the middle of the night, according to a report by Washington Post Technology writer, Geoffrey Fowler.

 

Fowler tracked his iPhone’s activity recently, finding that dozens of companies were receiving information at all hours. 

On a recent Monday night, a dozen marketing companies, research firms and other personal data guzzlers got reports from my iPhone. At 11:43 p.m., a company called Amplitude learned my phone number, email and exact location. At 3:58 a.m., another called Appboy got a digital fingerprint of my phone. At 6:25 a.m., a tracker called Demdex received a way to identify my phone and sent back a list of other trackers to pair up with.

And all night long, there was some startling behavior by a household name: Yelp. It was receiving a message that included my IP address -— once every five minutes. –WaPo

Also not lost on Fowler was the irony of a January Apple advertisement which claimed “What happens on your iPhone stays on your iPhone.”

iPhone apps passing information in the middle of the night include Microsoft OneDrive, Intuit’s Mint, Nike, Spotify, The Washington Post and IBM’s the Weather Channel. “One app, the crime-alert service Citizen, shared personally identifiable information in violation of its published privacy policy,” Fowler notes. 

With the help of privacy firm Disconnect, Fowler encountered over 5,400 trackers in just one week – mostly within apps, that send his information to third party companies. Over the course of a month, the unwanted trackers were on track to upload 1.5 gigabytes of data. 

“This is your data. Why should it even leave your phone? Why should it be collected by someone when you don’t know what they’re going to do with it?” said former NSA researcher Patrick Jackson who is currently Disconnect’s chief technology officer. Jackson used special software to analyze Fowler’s iPhone. 

“I know the value of data, and I don’t want mine in any hands where it doesn’t need to be,” he said. 

In a world of data brokers, Jackson is the data breaker. He developed an app called Privacy Pro that identifies and blocks many trackers. If you’re a little bit techie, I recommend trying the free iOS version to glimpse the secret life of your iPhone.

Yes, trackers are a problem on phones running Google’s Android, too. Google won’t even let Disconnect’s tracker-protection software into its Play Store. (Google’s rules prohibit apps that might interfere with another app displaying ads.)

Part of Jackson’s objection to trackers is that many feed the personal data economy, used to target us for marketing and political messaging. Facebook’s fiascos have made us all more aware of how our data can be passed along, stolen and misused — but Cambridge Analytica was just the beginning.

Jackson’s biggest concern is transparency: If we don’t know where our data is going, how can we ever hope to keep it private? –WaPo

App Trackers are akin to the cookies used on websites that monitor and report your activity around the internet. In apps, however, there’s virtually no notice that this is happening, and they’re difficult to block. 

So why do the trackers activate in the middle of the night? Some appmakers set them to harvest data whenever the phone is plugged in, or they think it won’t interfere with other functions. According to Fowler, “These late-night encounters happen on the iPhone if you have allowed “background app refresh,” which is Apple’s default.” 

In the case of Yelp, the company said their app’s behavior wasn’t actually a tracker, rather, an “unintended issue” that’s been mimicking a tracker. According to the company, Fowler’s discovery only affects 1% of its iOS users, especially those who have made reservations through Apple Maps. “At best, it is shoddy software that sent Yelp data it didn’t need. At worst, Yelp was amassing a data trove that could be used to map people’s travels, even when they weren’t using its app,” notes Fowler. 

Popular food delivery app DoorDash is another harvesting offender – which uses a tracker called Sift Science to get a ‘fingerprint’ of your phone – including device name, model, ad identifier and memory size, as well as an accelerometer motion reading to help identify fraud (so they say). Three other trackers used by DoorDash monitor the app’s performance, including one called Segment which routes data such as the delivery address, name, email and cell carrier of the phone’s owner. 

DoorDash’s other five trackers, including Facebook and Google Ad Services, help it understand the effectiveness of its marketing. Their presence means Facebook and Google know every time you open DoorDash.

The delivery company tells me it doesn’t allow trackers to sell or share our data, which is great. But its privacy policy throws its hands up in the air: “DoorDash is not responsible for the privacy practices of these entities,” it says.

All but one of DoorDash’s nine trackers made Jackson’s naughty list for Disconnect, which also powers the Firefox browser’s private browsing mode. To him, any third party that collects and retains our data is suspect unless it also has pro-consumer privacy policies like limiting data retention time and anonymizing data. –WaPo

Some of the other companies mentioned, including Microsoft, Nike and the Weather Channel, insist that their trackers are to improve performance. The Intuit-owned Mint, says it uses Adobe’s marketing tracker to better advertise to Mint users. The Washington Post (awkward) told their employee that the trackers “were used to make sure ads worked.” Spotify simply directed Fowler to their privacy policy. 

Citizen, the app for location-based crime reporting, said in their privacy policy that they wouldn’t share “your name or other personally identifying information.” When Fowler ran his test, however, he found that “it repeatedly sent my phone number, email and exact GPS coordinates to the tracker Amplitude.” 

It was only after Citizen was contacted about this that they removed the Amplitude tracker. 

“We will do a better job of making sure our privacy policy is clear about the specific types of data we share with providers like these,” said Citizen spokesman J. Peter Donald, who added “We do not sell user data. We never have and never will.” 

What does Apple have to say about all of this?

Fowler was disappointed at the orgy of data harvesting happening at all hours, and asked “isn’t Apple supposed to be better at privacy?” 

“At Apple we do a great deal to help users keep their data private,” Apple said in a statement. “Apple hardware and software are designed to provide advanced security and privacy at every level of the system.”

“For the data and services that apps create on their own, our App Store Guidelines require developers to have clearly posted privacy policies and to ask users for permission to collect data before doing so. When we learn that apps have not followed our Guidelines in these areas, we either make apps change their practice or keep those apps from being on the store,” said Apple. 

Except that Fowler found that very few apps using third-party trackers were actually disclosing the names of those companies, or how they protect his data. 

Getting more deeply involved in app data practices is complicated for Apple. Today’s technology frequently is built on third-party services, so Apple couldn’t simply ban all connections to outside servers. And some companies are so big they don’t even need the help of outsiders to track us.

The result shouldn’t be to increase Apple’s power. “I would like to make sure they’re not stifling innovation,” says Andrés Arrieta, the director of consumer privacy engineering at the Electronic Frontier Foundation. If Apple becomes the Internet’s privacy police, it could shut down rivals. –WaPo

Disconnect’s Jackson suggested that Apple might consider adding controls built into the iOS which would give people more visibility, or require apps to clearly disclose when they’re using third-party trackers. 

” If I opened the DoorDash app and saw nine tracker notices, it might make me think twice about using it,” concludes Fowler. Indeed. 

via ZeroHedge News http://bit.ly/30UOb2S Tyler Durden

Authored by Tim Daiss via OilPrice.com,

Oil markets remain under pressure amid economic downturn worries due to the U.S.-China trade war that shows no sign of ending. Ongoing trade war tensions are causing concern across financial markets as well. The S&P 500 has dropped over 5 percent from its recent record highs, while some analysts claim that there is even more downside potential as markets have barely priced the effects of China’s potential response in the trade war.

Some possible retaliatory moves by China, in addition to its recent tariff increase on $60 bn worth of U.S. goods, include restricting rare earth exports to the U.S., a move that would hurt many U.S. manufacturers since China holds roughly 71 percent of the global market share. Anop-ed in the Beijing-based Global Times newspaper, which often expresses the views of the Chinese Communist Party (CCP), said on Wednesday that the U.S. will rue forcing China’s hand on rare earth materials. An official of China’s National Development and Reform Commission (NDRC) said the day before that China will not tolerate foreign high-tech products made from rare earths produced in China being used to contain and suppress China’s development.

“If anyone wants to use the products made from rare earths exported by China to contain and suppress the development of China, I think the people of the old revolutionary base area in the south of Jiangxi Province and the people of China will not be happy,” said the official.

According to the Global Times, he made the remarks when asked by reporters if China will use rare earths as a countermeasure against U.S. trade moves to contain China. Obviously, the report added, the response is a strong signal from China to the U.S.

Who will blink first?

Despite Beijing’s increasingly defiant tone over the trade war, the question at the end of the day is who will blink first? Trump is hoping that he can outlast China since the U.S. imports around five times more Chinese goods than China imports from the U.S. Some analysts agree with this assertion, while others debunk it as an oversimplification. Yet, noted economist Gary Shilling predicts that not only will President Trump win the seemingly endless trade war with China, but in the long run, the U.S. will be better off.

“People say nobody wins trade wars. Yeah, in the short-run you don’t, but in the long-run…the U.S. will be better off,” Shilling recently said.

“When you’ve got plenty of supply in the world, and I think you do. It’s the buyer that has the upper hand not the seller. The buyer has the ultimate power and who’s the buyer? The U.S. is the buyer, China is the seller,” he said. Other agree, claiming that without the vast U.S. market, China will have trouble finding buyers for many of its consumer products.

China creates gas pain for the U.S.

While China could try to inflict pain on the U.S. by withholding rare earth materials, it is already creating a negative impact on U.S. LNG project development. China’s move to hike tariffs on U.S. LNG from 10 percent to 25 percent will cause a number of greenfield LNG project proposals to not go forward. These projects, unlike their project proposal counterparts that are funded by oil and gas majors with deep pockets, will not be able to strike long term off-take agreements needed to reach the all-important final investment decision (FID) before a project can be built. Moreover, many of these smaller projects which are often being promulgated by a patchwork of various companies and energy players will also need Chinese financing to go forward. The reality that China is now the second largest LNG buyer in the world and will likely pass Japan, the top current LNG buyer, in a number of years is a hard reality for the U.S. LNG sector to deal with as it seeks to compete with both Australia and Qatar as the top LNG export leader by the mid part of the next decade.

The U.S., even without a 25 percent tariff on its LNG exports to China, would struggle to vie with Qatar as the top global LNG producer. The tiny, gas-rich kingdom caught the energy world by surprise in late 2017 when it announced that it would increase its liquefaction capacity from 77 million tons per annum (mtpa) to a staggering 110 mtpa by late 2023 or early 2024 by developing more gas at its North Field, an increase in production of some 43 percent. The move will also increase Qatar’s total production capacity from 4.8 to 6.2 million barrels of oil equivalent (boe) per day.

For the U.S. to compete with Qatar on a liquefaction-to-liquefaction capacity basis it will need to see a large percentage of current LNG project proposals come to fruition. For the time being, the pain from increased Chinese tariffs on U.S. LNG has been minimized. The U.S. will soon become the world’s third-largest LNG exporter. In December, the U.S. Energy Information Administration (EIA) projected that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world behind Australia and Qatar.

via ZeroHedge News http://bit.ly/2Kd6H0t Tyler Durden

Disney CEO Bob Iger said on Wednesday that if Georgia carries out the state’s strict new abortion laws, telling Reuters that it would be “very difficult” for the company to continue filming in the state because “many people who work for us will not want to work there, and we will have to heed their wishes in that regard.” 

On May 7th, Georgia governor Brian Kemp (R) signed into law banning abortion after a doctor can detect a fetal heratbeat, which occurs at approximately six weeks into pregnancy. If it survives court challenges, it will take effect on January 1st. 

If that happens, “I don’t see how it’s practical for us to continue to shoot there,” said Iger. Of note, Disney filmed “Black Panther” and “Captain America: Civil War” in Georgia. 

Georgia is one of eight states to pass anti-abortion legislation this year for the purpose of inducing the U.S. Supreme Court to overturn Roe v. Wade, the 1973 landmark case that established a woman’s right to terminate her pregnancy.

The state offers a tax credit that has lured many film and TV productions. The industry is responsible for more than 92,000 jobs in Georgia, according to the Motion Picture Association of America (MPAA), and some 455 productions were shot in Georgia in 2018, according to the state. –Reuters

In 2016, Disney and other major studies threatened to boycott the state if they were to strengthen protections for same-sex marriage opponents – a bill which passed through the state legislature, only to be vetoed by then Republican governor, Nathan Deal. 

Dozens of celebrities and producers have already committed to no longer working in Georgia over the abortion law, while others such as JJ Abrams’ and Jordan Peele’s production companies have said that they would remain in the state, but donate “100% of our respective episodic fees” from the current season of “Lovecraft Country” to the ACLU of Georgia. 

On Tuesday, Netflix said that they would have to “rethink our entire investment in Georgia” if the new law is enacted – however they will continue production there for now while working with groups opposing the legislation. The company films shows such as “Stranger Think” and “Ozark” in Georgia – the latter of which star Jason Batemen told The Hollywood Reporter he would no longer work in the state if the legislation survives court challenges. 

“We have many women working on productions in Georgia, whose rights, along with millions of others, will be severely restricted by this law,” said Netflix chief content officer Ted Sarandos. “It’s why we will work with the A.C.L.U. and others to fight it in court. Given the legislation has not yet been implemented, we’ll continue to film there — while also supporting partners and artists who choose not to.”

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

Authored by Sven Henrich via NorthmanTrader.com,

The May correction was technically well advertised in April, even before that, but the run in April stretching to new highs on $SPX and $NDX was a tricky exercise to navigate through. Extremes become more extremes as I outlined in my 2018 market lessons.

The wedge patterns I outlined in advance finally met their end with downside breaks bringing us the May correction highlighting again that technicals matter. The wedge mattered. The weekly hanging man mattered. The trend breaks mattered.

And yes historic technical extensions mattered:

$NDX:
101.988 – highest weekly MACD upside deviation ever.
Ever is a long time.
You can choose to believe this is sustainable, or you may not. pic.twitter.com/a3O7BKPixm

— Sven Henrich (@NorthmanTrader) April 23, 2019

That deviation having gone from most positive ever to now negative:

Also mattering: The negative divergences highlighted in Lying Highs II.

All of these factors have now resulted in a technical reaction that produced a retrace to not only the daily 200MA yesterday, but also the critically important weekly 50MA, another key support pivot:

$ES has reached a key support level, the weekly 50MA.
Bulls will want to defend and rally from here.
Close the week below risks further downside. pic.twitter.com/2yK90Kcqwe

— Sven Henrich (@NorthmanTrader) May 29, 2019

See a sustained close below these MAs and bears may be devouring bulls.

After all this H&S pattern is triggered and it has a 2640 target and bulls need to step it up here today & tomorrow into the end of May and invalidate this pattern now that we’ve seen a break of the neckline:

So let’s be very clear there are numerous critical technical concerns that very much suggest markets may be engaged in major topping patterns, the Wyckoff pattern I outlined on May 1 right near the top is still fully valid at this stage, and the ghost chart is casting a long shadow here as well. With the combined backdrop of an escalating trade war, yield curve inversions, slowing growth, trapped central banks and a toxic political climate there’s a lot that can seriously wrong for bulls here, a macro and technicals backdrop that is paving the path to intervention.

But navigating markets is a complex exercise that requires an open mind to the other side of any argument and now that May has brought the first correction of 2019 it may be worthwhile to take a look at the bull case from here.

Keep in mind that ,in context of the larger 2019 rally, the May correction has been run of the mill. A near 8.5% correction in $NDX a 6% correction on $SPX. Nothing super dramatic has happened yet and we remain inside the larger 2018 price range.

What is the bullish case then? Well, take out all the noise and all the headlines and let me highlight here a couple of interesting considerations.

As corrections unfold it’s always important to watch for potential signs of turns. I outlined one of these yesterday:

$NDX: potential bullish falling wedge in the making. pic.twitter.com/vGeeWYQVxp

— Sven Henrich (@NorthmanTrader) May 29, 2019

This potential pattern is by no means confirmed at this stage, but it leaves room for a bullish interpretation, at least short term if the pattern triggers.

But let’s look at 2019 from a broader seasonal perspective:

Massive ramp up for 4 months straight, then a correction in May which may or may not be over yet as mentioned above.

But guess what year it is? Yea, I know, 2019, but what is 2019? It’s a pre-election year with 2020 being the next presidential election.

Now check this out this chart on pre-election year seasonality:

Look familiar? 4 month ramp out of the gate and then a correction into the end of May. Oops.

See it’s the what happens next on that seasonality chart that should scare the hell out of bears as it implies new highs to come if it plays out this year again.

Also keep in mind the megaphone structure I first outlined in Combustion is still out there as well:

Without a fast close above 2800 this week into next this scenario may be quite moot as the H&S pattern may trigger, but it’s best to keep an open mind and an eye on a broad range of possible outcomes. Levels, patterns and signals will keep us appraised as to the next big move.

A more in depth analysis of the technical factors/signals weighing the bull versus the bear case can be read in Fire Hazard.

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via ZeroHedge News http://bit.ly/2Z1OeZ1 Tyler Durden