Hong Kong Is Still Blowing Billions To Defend Its Currency Peg

It has now been 28 days since the Hong Kong Dollar tumbled to the lower limit of its currency peg band and HKMA is still blowing billions every day to defend the currency…

So far HKMA has spent over US$8 billion buying Hong Kong Dollars and achieved nothing…

Having briefly achieved some lift of the pressure in mid-April, HKMA’s intervention has begun again this week…

The Hong Kong Monetary Authority bought HK$1.963b to support the local currency overnight, according to the de facto central bank’s page on Bloomberg, decreasing its aggregate balance to HK$115.47 billion (US$14 billion).

As Bloomberg points out, the HKMA’s actions have the effect of tightening liquidity in a city that’s grown fat on ultra-low borrowing costs.

“The HKMA may need to mop up more liquidity and push the aggregate balance toward HK$100 billion this week,” said Carie Li, a Hong Kong-based economist at OCBC Wing Hang Bank Ltd.

“But the Hong Kong dollar will rebound starting next week, as funding needs to increase at month-end. Liquidity will tighten further in June due to an expected interest rate hike in the U.S. and potential funding demand fueled by Xiaomi and China Tower IPOs.”

Li said Hong Kong lenders will lift deposit rates as liquidity conditions tighten.

“Banks are likely to increase the prime rate around mid-year, which will hurt property market sentiment, especially for mortgage borrowers. The home market may see a correction and slower growth this year.”

And sure enough, as Bloomberg reports, rising short-term funding costs (3-month borrowing rate is 1.75% – near the highest since December 2008 – and up from 0.8% a year ago) have prompted banks to offer deposit rates of as much as 3%.

For now, the rising HKD Hibor is undoing some of the huge positive carry trade, but as the chart below shows, that carry advantage is still pressuring HKD…

In other words, rates will have to go higher and liquidity tighter before HKD really lifts off the lower peg band limit.

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America’s long-term challenge #2: the looming retirement crisis

Last week, the financial services giant Northwestern Mutual released new data showing that 1 in 3 Americans has less than $5,000 in retirement savings.

It’s an unfortunately familiar story. And Northwestern Mutual’s data is entirely aligned with other research we’ve seen in the past, including our own.

The Federal Reserve’s most recent Survey of Consumer Finances, for example, shows that the median bank balance among US consumers is just $2,900.

And Bank of America’s annual report from last year showed that the average balance per HOUSEHOLD (i.e. -not- per person) was $12,870… which was actually LESS than the average account balance that Bank of America reported in 1997!

On average, the typical US household has less savings today than they did 20 years ago… and almost nothing put away for retirement.

In fact 21% of Americans (based on Northwestern Mutual’s data) have absolutely nothing saved for retirement.

And 33% of Baby Boomers, the generation closest to retirement, have between $0 and $25,000 saved for retirement.

That’s hardly enough savings to last more than a few years… and a major reason why most retirees currently rely on Social Security to meet their monthly living expenses.

According to a Gallup poll from last May, 58% of US retirees said that they rely on Social Security as their major source of income. They simply don’t have enough of their own personal savings stashed away.

But as we’ve discussed many times before, Social Security is rapidly running out of money.

The most recent report from Social Security’s Board of Trustees (which includes the US Secretaries of the Treasury, Labor, and Health & Human Services) tells us that the program’s cost has exceeded its tax revenue since 2010.

Last year this shortfall was $59 billion, 11% worse than in 2016.

And in order to make up the difference and cover this deficit, Social Security has to dip into its trust fund, effectively burning through the program’s savings.

The problem with this approach is that, eventually, these annual deficits will burn through ALL of the program’s savings.

The government knows this; the Board of Trustees even state this in their annual report, projecting that the Social Security trust funds will become fully depleted in 2034.

Sixteen years may seem like a long way off. But we’re talking about retirement here. You’re supposed to think long-term about retirement. And the math simply doesn’t add up.

The Trustee Report states explicitly that, once the trust funds run out of cash, the program will have to, at a minimum, reduce the monthly benefit that’s paid to its recipients.

So if you’re planning on being retired at any point past 2034, the government is LITERALLY TELLING YOU that they won’t be able to pay the retirement benefit that’s been promised to you.

Longer term (pay attention to this if you’re under 40), the numbers get even worse.

The way Social Security works is that retiree benefits are essentially paid for by people who are currently in the work force.

If you have a job, a portion of your paycheck each month goes to Social Security and ends up in the pockets of people who are currently retired.

In order for Social Security to function, there has to be a certain number of workers paying into the program for each retiree.

Social Security tracks this worker-to-retiree ratio VERY closely. The higher the ratio, the better.

In 1995, for example, there were 4.9 workers paying into the program for every retiree receiving benefits.

By 2020, Social Security projects the ratio will be down to 3.7 workers per retiree. And by 2040, just 2.75.

That’s simply not enough workers.

Do the math– at 2.75 workers per retiree, you’d have to pay nearly 40% of your salary just in Social Security tax (i.e. NOT including Medicare, federal, or state income tax) to keep the program running.

It’s also noteworthy that, just this morning, the US government released data showing that the birthrate in the United States is at a 30-year low.

If you project this alarming trend forward by a few decades, you can see how the worker-to-retiree ratio could easily fall below Social Security’s already dismal forecast.

It’s not just Social Security either. State and local pension funds, and even a lot of union and corporate pension funds, are also terminally insolvent.

A report issued a few months ago by the American Legislative Exchange Council estimates that the total amount of unfunded liabilities for state and local government pensions now exceeds $6 TRILLION.

Bottom line, Social Security is broken. State and local pensions are broken. And the federal government is far too broke to be able to bail any of them out.

Even the Social Security trustees admit this– they’re practically giving us a date to circle on our calendars for when the program will run out of money.

Yet a disturbing number of Americans has little to nothing set aside for retirement… and they’re expecting to be able to rely on Social Security.

Something is obviously wrong with this picture, and it would be utterly ludicrous to expect this won’t have a substantial impact.

Either future workers and businesses are going to be hammered with all sorts of new taxes to bail out Social Security–

— or retirees who have no savings and rely exclusively on the program to survive are going to have their benefits drastically slashed.

Either way, retirement is a nuclear problem set to explode in the Land of the Free.

One way or another, tens of millions of people are going to have their lives turned upside down.

And it is beyond the powers of the government to do anything to stop it.

Source

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Highest Mortgage Rates In 8 Years Unleash Bidding Wars, Home Buying Frenzy

Yesterday when looking at the latest MBA Mortgage Application data, we found that, as mortgage rates jumped to the highest level since 2011, mortgage refi applications, not unexpectedly tumbled to the lowest level since the financial crisis, choking off a key revenue item for banks, and resulting in even more pain for the likes of Wells Fargo.

Today, according to the latest Freddie Mac mortgage rates report, after plateauing in recent weeks, mortgage rates reversed course and reached a new high last seen eight years ago as the 30-year fixed mortgage rate edged up to 4.61% matching the highest level since May 19, 2011.

But while the highest mortgage rates in 8 years are predictably crushing mortgage refinance activity, they appears to be having the opposite effect on home purchases, where there is a sheer scramble to buy, and sell, houses. As Bloomberg notes, citing brokerage Redfin, the average home across the US that sold last month went into contract after a median of 36 only days on the market – a record speed in data going back to 2010.

To Sam Khater, chief economist of Freddie Mac, this was a sign of an economy firing on all cylinders: “This is what happens when the economy is strong,” Khater told Bloomberg in a phone interview. “All the higher-rate environment does is it either causes them to try and rush or look at different properties that are more affordable.”

Of course, one can simply counter that what rising rates rally do is make housing – for those who need a mortgage – increasingly more unaffordable, as a result of the higher monthly mortgage payments. Case in point: with this week’s jump, the monthly payment on a $300,000, 30-year loan has climbed to $1,540, up over $100 from $1,424 in the beginning of the year, when the average rate was 3.95%.

As such, surging rates merely pulls home demand from the future, as potential homebuyers hope to lock in “lower” rates today instead of risking tomorrow’s rates. It also means that after today’s surge in activity, a vacuum in transactions will follow, especially if rates stabilize or happen to drop. Think “cash for clunkers”, only in this case it’s houses.

Meanwhile, the short supply of home listings for sale and increased competition is only making their purchases harder to afford: according to Redfin, this spike in demand and subdued supply means that home prices soared 7.6% in April from a year earlier to a median of $302,200, and sellers got a record 98.8% of what they asked on average.

Call it the sellers market.

Furthermore, bidding wars are increasingly breaking out: Minneapolis realtor Mary Sommerfeld said a family she works with offered $33,000 more than the $430,000 list price for a home in St. Paul. The listing agent gave her the bad news: There were nine offers and the family’s was second from the bottom.

For Sommerfeld’s clients, the lack of inventory is a bigger problem than rising mortgage rates. If anything, they want to close quickly before they get priced out of the market — and have to pay more interest.

“I don’t think it’s hurting the buyer demand at all,” she said. “My buyers say they better get busy and buy before the interest rates go up any further.”

Then again, in the grand scheme of things, 4.61% is still low. Kristin Wilson, a loan officer with Envoy Mortgage in Edina, Minnesota, tells customers to keep things in perspective. When she bought a house in the early 1980s, the interest on her adjustable-rate mortgage was 12 percent, she said.

“One woman actually used the phrase: ‘Rates shot up,’” Wilson said. “We’ve been spoiled after a number of years with rates hovering around 4 percent or lower.”

Of course, if the average mortgage rate in the America is ever 12% again, look for a real life recreation of Mad Max the movie in a neighborhood near you…

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More Wind and Solar Power Perversely Locks In Fossil Fuel Generation

NuclearPowerLightBulbVaclavVolrabDreamstimeEmissions of carbon dioxide from burning fossil fuels is contributing to the rise of average global temperatures. Assuming that man-made climate change could become a significant problem for humanity during this century, switching to zero-carbon energy technologies to generate electricity would help prevent some of the harms stemming from addtional warming.

Based on this chain of argument, many folks concerned about climate change are seeking to mandate the deployment of solar and wind power as replacements for the coal and natural gas currently used to generate most of the world’s electricity. Will this work? No, argues Michael Shellenberger, President of Environmental Progress, over at Forbes. Contrariwise, he explains that the inherent variability of solar and wind will perversely “lock-in” fossil fuels making it harder and more expensive to “save the climate.”

Why? Basically because power generators will have to build and maintain a parallel set of fossil fuel plants to supply energy to make up for shortfalls in renewable energy when the wind falters and the sun goes down. It’s not quite the same thing as having to pay for and build two separate power generation systems, but it’s closer than most advocates for renewable energy would like to acknowledge.

There is one exception to this necessary fossil fuel lock-in: carbon-free nuclear power. Like conventional fossil fuel generators, nuclear power plants could step in when renewables go dark, but without emitting the carbon dioxide that is contributing to man-made climate change. Shellenberger then makes what should be the next exquisitely obvious point: Since nuclear power is zero-carbon and can supply all the electricity as needed, why build any wind and solar electric power generation at all?

The case of Germany illustrates the point. While pursuing its famous Energiewende (energy transformation) the country has spent $222 billion deploying wind and solar power while simultaneously closing its nuclear power plants. The result is that its carbon dioxide emissions in recent years have been rising instead of falling.

But aren’t nuclear power plants much more expensive than renewable sources of electricity? While it is true that the costs for wind and solar generation have been falling, it bears noting that even as renewable generation vastly expanded in Germany, consumers in that country are now paying twice what they did for electricity in 2000.

In contrast, China is building a number of new nuclear power plants at about one-third the cost of what can be done in over-regulated Europe or the U.S. Had ideological environmentalism not turned against nuclear energy in the 1970s, Australian economist Peter Lang calculates that nuclear power would likely have outcompeted most fossil fuel generation at one-tenth nuclear’s current cost.

Given the technological and fiscal realities pointed out by Shellenberger, one can hope that the folks concerned about climate change will eventually give up their reactionary insistence on wind and solar power generation and instead support the deployment of new safer nuclear power generation technologies, such as molten salt thorium reactors, small modular reactors, and traveling wave reactors.

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2 in 5 Top-Ranking Liberal Arts Schools Have No Full-Time Republican Professors: New at Reason

In late April, Mitchell Langbert, an associate professor at Brooklyn College, published a study on ideological homogeneity at liberal arts colleges in the journal Academic Questions. His findings confirm what many right-wingers have been whispering—and shouting—about for a while now: nearly 39 percent of the colleges sampled are Republican-free, in terms of faculty ideological makeup, writes Liz Wolfe.

View this article.

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Ecuador’s Ex-President Correa Decries Treatment Of Julian Assange As “Torture”

Excerpted from Glenn Greenwald’s excellent article at The Intercept…

FORMER ECUADORIAN PRESIDENT Rafael Correa, in an exclusive interview with The Intercept on Wednesday morning, denounced his country’s current government for blocking Julian Assange from receiving visitors in its embassy in London as a form of “torture” and a violation of Ecuador’s duties to protect Assange’s safety and well-being.

Correa said this took place in the context of Ecuador no longer maintaining “normal sovereign relations with the American government — just submission.”

…

The danger for Assange thus remains high if were to leave the embassy, particularly in light of a highly threatening speech given last year by Mike Pompeo, then U.S. President Donald Trump’s CIA director and now his secretary of state, in which he labeled WikiLeaks a “non-state hostile intelligence service,” denied that its publication of documents is protected by the First Amendment, and vowed that “to give them the space to crush us with misappropriated secrets is a perversion of what our great Constitution stands for. It ends now.”

In January, doctors who examined Assange inside the embassy warned that continued confinement posed grave threats to both his physical and mental health. Assange’s mother said earlier this week that his health was “rapidly deteriorating” and had become “extremely dangerous.”

CORREA CITED those facts, as well as Ecuador’s legal obligations under international law to asylees, to denounce Ecuador’s denial of visitors to Assange as “basically torture.” Denial of visitors is, Correa said, “a clear violation of his rights. Once we give asylum to someone, we are responsible for his safety, for ensuring humane living conditions.” But “without communications to the outside world and visits from anyone, the government is basically attacking Julian’s mental health.”

The ex-president said he believed it could be appropriate to limit Assange’s communications if he were acting “irresponsibly” by interfering in another country’s politics. During the 2016 U.S. election, Correa said, his own government told Assange that it thought his attacks on Hillary Clinton were becoming excessive and briefly suspended his internet connection to underline its concerns.

“But that was just temporary,” said Correa. “We never intended to take away his internet for an extended period of time. That is going way too far.” Correa’s Foreign Affairs Minister Guillaume Long similarly said in an interview with The Guardian earlier this morning that he, too, believed that the denial of visitors to Assange and the blocking of his internet access for this long — believed to be due to Assange’s frequent tweeting over the Catalan independence movement in Spain — was unjust.

As for reports that Ecuador is negotiating with the U.K. government to turn over Assange, Correa said that he had no knowledge of those discussions, but said it would be “unthinkable” for Ecuador to do so without first obtaining enforceable protections for Assange’s rights, including not having the U.K. government use the bail violations as a pretext to hand over Assange to the U.S.

Emphasizing that the U.S. government has made clear that it wants to prosecute Assange for publishing newsworthy material under statutes that allow for the death penalty, Correa said any such deal that did not include protections against extradition to the U.S. would be “a terrible betrayal, a violation of the rules of asylum, and a breach of Ecuador’s responsibility to protect the safety and welfare of Julian Assange.”

…

Correa continues to believe that asylum for Assange is not only legally valid, but also obligatory. “We don’t agree with everything Assange has done or what he says,” Correa said. “And we never wanted to impede the Swedish investigation. We said all along that he would go to Sweden immediately in exchange for a promise not to extradite him to the U.S., but they would never give that. And we knew they could have questioned him in our embassy, but they refused for years to do so.” The fault for the investigation not proceeding lies, he insists, with the Swedish and British governments.

But now that Assange has asylum, Correa is adamant that the current government is bound by domestic and international law to protect his well-being and safety. Correa was scathing in his denunciation of the treatment Assange is currently receiving, viewing it as a byproduct of Moreno’s inability or unwillingness to have Ecuador act like a sovereign and independent country.

…Read more here.

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Steve Wozniak: Bitcoin And Blockchain Will Achieve Full Potential In A Decade

Authored by Veronika Rinecker via CoinTelegraph.com,

Apple’s co-founder Steve “Woz” Wozniak has commented positively about cryptocurrencies and blockchain technology in his opening speech at the WeAreDevelopers World Congress 2018 in Vienna, Austria.

image courtesy of CoinTelegraph

According to a report by Cointelegraph auf Deutsch Wednesday, May 16, Wozniak considers blockchain to be a “great idea.” He further said:

“[Blockchain] is the next major IT revolution that is about to happen.”

Wozniak explained his positive outlook on blockchain by the fact that there are many useful applications for the technology in a number of areas.

The blockchain and cryptocurrencies will achieve their full potential in a decade, according to Wozniak. Apple’s co-founder quoted CEO of Twitter Jack Dorsey, who had said in March that Bitcoin will become the world’s “single currency.”

This is not the first time that Steve Wozniak has made positive comments about cryptocurrencies and blockchain. At the “Money 20/20” conference in Las Vegas, back in October last year, he saidthat Bitcoin is better than gold and the US dollar.

According to Wozniak, Bitcoin’s big advantage is that there is only a limited amount of coins, while fiat money, like the US dollar or euro, can simply be printed by banks.

Nonetheless, Wozniak sold all his bitcoins except one, as he said at the WeAreDevelopers Conference in Vienna, because “[he] does not want to be an investor and constantly watch the prices.”

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EU Launches Rebellion Against Trump’s Iran Sanctions, Bans European Companies From Complying

Following our discussion of Europe’s angry response to Trump’s unilateral Iran sanctions, in which European Union budget commissioner, Guenther Oettinger made it clear that Europe will not be viewed as a vassal state of the US, stating that “Trump despises weaklings. If we back down step by step, if we acquiesce, if we become a kind of junior partner of the US then we are lost”, moments ago Reuters reported that the European Commission is set to launch tomorrow the process of activating a law that bans European companies from complying with U.S. sanctions against Iran and does not recognise any court rulings that enforce American penalties.

“As the European Commission we have the duty to protect European companies. We now need to act and this is why we are launching the process of to activate the ‘blocking statute’ from 1996. We will do that tomorrow morning at 1030,” European Commission President Jean-Claude Juncker said.

Speaking at news conference after a meeting of EU leaders in Bulgaria, Juncker added that he “also decided to allow the European Investment Bank to facilitate European companies’ investment in Iran. The Commission itself will maintain its cooperation will Iran.”

Europe’s hardline position will infuriate Trump, as Brussels effectively nullifying US sanctions will prompt a violent outburst from Trump, who needs Europe on his side for US sanctions of Iran to have any chance of succeeding.

Perhaps sensing what is coming, French President Emmanuel Macron took a slightly softer tone, and said that the nuclear deal with Iran should be supplemented and it is necessary to continue negotiations, including on missile program.

The French president said that “the European Union decided to preserve nuclear deal and defend EU companies” adding that “our main interest in Iran is not in trade, but in ensuring stability in the region, at the same time, we will not become an ally of Iran against the US.“

“We’ve had a vibrant discussion on Iran. The 2015 nuclear agreement is a crucial element of peace and security in the region. We have opted to support it whatever the US decides to do,” said the French president on arrival at the Sofia summit. “We have pledged to take necessary political steps for our companies to stay in Iran.”

Macron also said that the nuclear deal with Iran must not only be preserved, but also supplemented and expanded to include ways to solve the missile problem and questions about Iran’s role in the region.

“International companies with interests in many countries make their own choices according to their own interests. They should continue to have this freedom,” he added, making it clear that European companies will not be subject to US sanctions, even if that decision is ultimately up to the US.

But the most accurate observations by Macron was that Trump’s Iran decision strengthens both Russia and China in the region, something we pointed out weeks ago, begging the question whose interests is Trump representing.

And now that Europe has openly rebelled against Trump’s sanctions, one wonders how long before the selling in oil resumes, as it is becoming increasingly clear that unlike 2012, Europe – and most of Asia – will continue buying Iranian oil, suggesting that the decline, if any, in Iranian exports will be a few hundred thousands barrels at most, a number which we expect will shrink to 0 as Iran offers increasingly preferential prices to its non-USD paying clients, especially now that Asian oil demand is soaring. 

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The Madness Of (Investing) Crowds

Authored by Doug Kass via RealInvestmentAdvice.com,

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” – Charles Mackay, Extraordinary Popular Delusions and The Madness of Crowds

The Bull Market in Complacency has resurfaced. Reject it and consider derisking, now.

I find myself, after a period of being long of equities, back in the bearish minority again – and I moved back into a net short exposure late in the day on Friday.

And, I observe, that many of the same investors who were bearish at the February lows are now bullish at the recent mid-May highs.

Fear of a large drawdown seems to have been all but eliminated in the eyes and thoughts of market participants as the Bull Market of Complacency seems to have reappeared.

2017 was a year of hope and anticipation (in large measure because of the optimism surrounding lower corporate tax rates) as price earnings ratios expanded by almost three multiple points. Interest rates were still suppressed and volatility was at historic lows. Last year was one in which Wall Street recovered and prospered better than Main Street.

In 2018, markets are more or less unchanged as the reality of instability and inconsistency of policy and economic uncertainty have reemerged. This year, unlike last year, Main Street has thrived and Wall Street has stagnated. And a new regime of volatility has emerged, coincident with a general rise in interest rates – particularly in maturities of ten years or less.

Let me summarize my top ten, current market concerns:

1. A tug of war between fiscal expansion and monetary contraction seems likely to be won by Central Bankers in the year ahead. History proves that the monetary typically wins out of the fiscal particularly since there are legitimate concerns whether the tax cuts will “trickle down” to the consumer. Moreover, we are at a tipping point towards higher rates (in the U.S. and elsewhere) after nine years of interest rate repression in which the accumulation of debt in both the private and public sectors are at record levels. Not only has the Fed turned, but each day gets us a day closer to the end of ECB QE. (The Italian 2 year yield went from -.265% to -.10% in one day). So, risk happens fast when a massive bubble has been created.

2. There is a growing ambiguity in domestic and non US high frequency economic data. Citigroup’s Global Surprise Economic Index has turned down and Citigroup’s EU Surprise Index is at a two year low. U.S. data (ISM, PMI and others) have often failed to meet expectations. Reports are that retail started the quarter weakly and, this morning, retailer Home Depot (HD) missed consensus comp views.

A flattening yield curve is endorsing the notion of late cycle economic growth. And, according to my calculus, the yield on the ten year U.S. note (given current inflation breakevens) implies U.S. Real GDP growth below +1.70%/year.

3 . The rise in global interest rates may continue – providing a reduced value to equities (on a discounted dividend model) and serving as a governor to global economic and US corporate profit growth. C.I.T.A. (“cash is the alternative) is getting busy while T.I.N.A. (“there is no alternative”) seems to be without a date to the prom this spring.

For the first time in 12 years the yield on the three month U.S. Treasury note now exceeds the dividend yield of the S&P Index:

Source: Zero Hedge

Meanwhile, the six month Treasury bill yields over 2% (2.09% this morning) and the two year Treasury bill’s yield is over 2.55%.

Inflation, too, is likely at a multi-year infection point.

I continue to view June/July 2016 as The Generational Low In Yields. Non US yields are at even more unjustified levels and will lead to large mark to market losses over the next few years – imperiling retail and institutional investors and banks in Europe that have leveraged positions in over-priced fixed income. (Just look at Argentina, a country that has defaulted on its sovereign debt on eight separate occasions – most recently in 2001. As a measure of lameness, investors scooped up 100-year Argentina bonds last June).

Bonds are in year two of a major Bear Market – fixed income (of all types) are overvalued.

4 . The Orange Swan represents clear risks for the equity markets and for the real economy. As I have written in my Diary and stated on Fox News yesterday afternoon, hastily crafted tweets by the White House are dangerous in a flat, networked and interconnected world. The inconsistency of policy (which seems to be designed and conflated with politics as we approach the mid-term elections) seems to be weighing on business fixed investment plans which, I have learned through many of my corporate contacts, are being deferred (and even derailed) in the face of uncertainty and lack of orthodoxy and inconsistency of the delivering policy by “The Supreme Tweeter” who resides in Washington, D.C.

5 . Investor sentiment has grown more optimistic and fears of a large drop in stocks has been all but disappeared.

6 . Technicals and resistance points mark a short term threat to stocks. Not only has the market risen for eight consecutive days but an important Fibonacci point has been been met (from the January highs). As well, the S&P Index is now at the 2725-2750 resistance level – the upper end of the recent trading range. Yesterday, the lynx-eyed David Rosenberg remarked, on CNBC, that on breadth and volume the rally has been less powerful than recent rallies.

7 . The dominance of passive and price momentum based strategies are exaggerating short term market runs –contributing to a false sense of investor security. Though our investment world exists as buyers live buyer and sellers live lower, beware of a change in momentum that can turn the market’s tide.

8 . After nearly a decade, both the market advance and a sustained period of domestic economic growth have grown long in the tooth.

9. Though market valuations are high they are not too stretched – but other classical market metrics (equity capitalization to GDP, price to book, price to sales) are very stretched.

10. A new regime of volatility, seen recently, might signal a change in market complexion.

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In Win For Fathers’ Rights, Kentucky Says Judges Must Presume Shared Parenting In Child Custody Battles

In June, Kentucky will become the first state to require a presumption of equally shared parenting in child-custody cases even when one or more parents is opposed. While it’s common for states to prefer joint custody when both parents are amenable, Kentucky’s presumption will apply even without divorcing parents on board.

Kentucky Gov. Matt Bevin signed the measure in April, declaring that judges must presume “that joint custody and equally shared parenting time is in the best interest of the child” in almost all divorce cases. Last year, Kentucky required the same presumption for temporary child-custody cases while divorce is pending.

Exceptions exist for situations “involving an incident of domestic violence within the preceding three years” or where “there has been a domestic violence order entered” or being entered.

A Slow Shift

As of 2012, nearly half of American states stipulated a presumption or preference for joint custody in cases where parents agreed to it, according to “The Roller Coaster of Child Custody Law over the Last Half Century,” published in the Journal of the American Academy of Matrimonial Law.

“A gender-neutral standard for custody was promoted by both feminists and fathers’ rights groups,” writes author Mary Ann Mason.

But even in states with such guidelines, old ideas about the superiority of mothers as caregivers have led to courts favoring maternal custody. Fighting for a presumption of joint custody in law and practice has been a primary goal of the fathers’ rights movement.

More than 20 state legislatures in 2017 considered bills “that would encourage shared parenting or make it a legal presumption,” notes The Washington Post Almost 20 related bills cropped up in 2015, too.

Despite all this attention, however, few of these bills have fared well, and those that did advanced more incremental changes (such as an Oregon law expanding the number of weekend days a non-custodial parent could visit their children) rather than creating a complete presumption of shared custody.

A ‘Radical’ Step?

“A presumption is a pretty radical step,” Maritza Karmely of Suffolk University Law School told the Pew Research Center (PRC) in 2016. “That assumes that shared parenting works for most families, and I think that is an enormous assumption.”

Pew points out that most child custody cases won’t go before a judge: only about 10 percent are actually settled in court. “Cases that judges do hear are more likely to be ones in which parents can’t communicate or cooperate to make decisions,” it says, and “in those high-conflict situations, some researchers have warned that joint custody may be harmful to a child’s well-being.”

But fathers’ rights activist and National Parents Organization founder Ned Holstein has repeatedly dismissed fears that joint custody laws will lead to unfit fathers raising kids.

Under the new Kentucky law, judges are still allowed to use their discretion and can decide against joint custody in cases where it’s impractical or against the best interest of a child.

In other words, the shift doesn’t mean that judges necessarily will grant shared custody to parents in all or most custody cases. It simply says that the state shouldn’t automatically consider mothers more fit to raise children (as it did for much of the 20th century) or that fathers have more “ownership” right in children than mothers do (as was common in the era prior to supposed maternal supremacy).

America’s current child custody laws “were based on the sexist belief that mothers are better than fathers at raising children,” Wake Forest University psychology professor Linda Nielsen told the Post last year. “Well, the research does not support that.”

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