Is Gundlach Still Bearish? Ask Him In His Latest DoubleLine Webcast – Live Feed

The higher the market goes, the more bearish DoubleLine’s “bond king” Jeff Gundlach seems to get. Case in point, just yesterday we showed why according to Gundlach’s most recent interview with Barrons, things will get worse in the future, not better. And yet stocks keep going higher (thanks to central banks). So have the new S&P500 all time highs dented Gundlach’s skepticism? Ask him yourself during the Q&A in his latest “asset allocation webcast” set to start momentarily.

Register after the jump (link)

 

Gundlach’s full slides:

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“Greatest Short Squeeze Ever” Sends Stocks To Record Highs

Seemed appropriate…

The Dow Industrials joined The S&P 500 at all-time intrday highs today..along with S&P SmallCap 600.

Note The Dow lost the Intraday high in the close BUT ended at a closing high…

 

Everything is now green year-to-date…

As JPMorgan noted ironically, on Fri stocks rallied because of low bond yields and this week they are extending those gains because yields are higher.

Post-Brexit, Gold and Bonds still lead…

 

Post-Brexit, Trannies, Small Caps, and Nasdaq are all tightly grouped outperforming S&P and Dow (who are glued togather)…

 

As the Short-Squeeze continues… 9 days of the last 10!!

 

This is the biggest short-squeeze in history… Up over 15% in 10 days is a bigger squeeze thanb QE1 and QE2 announcements

(Most Shorted stocks are at their highest since Nov 2015)

Additionally note that today saw Negative Momentum stocks soar back into the green post-Brexit…

 

Financials gapped higher once again at the open and have scrambled back to pre-Brexit close levels…

 

But remain decoupled from the curve once again…

 

Trannies and Small Caps outperformed again today (squeeze)

 

But VIX was higher for the 2nd day as it seems not everyone is buying the breakout exuberance…

 

Rate-Hike odds have risen for September and Decmber but remain neglibile for this month…

 

10Y Yields are up 21bps from last week's lows (and up 16bps from yesterday's lows), as the entire curve surges back towards pre-Brexit levels

 

This has been the biggest 2-day surge in yields since 2011…

 

Here's some context for the move in bonds…

 

The massive weakness in JPY and strngth in GBP is clear in today's FX moves…

 

making this the biggest single-day move in GBPJPY since Lehman…

 

Commodity land was absolute chaos today with copper and crude soaring and PMs dumping…

 

Gold and Silver were sold this afternoon…

 

Oil started to catch up to stocks (after OPEC chatter of tighter H2) ahead of tonght's API data…

 

Finally, we note for those who appreciate irony that a CNBC anchor asked a guest today, given 2 days of bond weakness and equity strength "is this the start of the great rotation?" You're welcome.

 

Charts: Bloomberg

Bonus Chart: March-June correlation breaks down… then accelerates lower…

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Spot The Year Of The Tax Inversion

Here – in one simple chart –  is why Ireland is keeping very quite in the international debate over tax inversions.

The Irish economy grew over 26% in 2015, officials from the Central Statistics Office told a stunned room full of economists and reporters in Dublin on Tuesday. Previously, they had estimated growth of 7.8%…

 

“I’m not going to stand up and say the economy grew by 26 percent,” Power, an independent economist, said after the release. “It’s meaningless — we would be laughing” if these numbers came out of China, he said.

As Bloomberg reports, the figure is mostly explained by the open nature of Ireland’s economy and its attraction to U.S. companies seeking access to a 12.5 percent tax rate. Among firms that have inverted to Ireland, mostly through acquisitions, are Perrigo Co. and Jazz Pharmaceuticals Plc. Corporations with assets overseas of 523 billion euros ($580 billion) were headquartered in Ireland in 2014, up from 391 billion euros in 2013, according to the statistics office.

“We are a very small economy, and if we get a big increase in assets, this is what happens,” Michael Connolly, an official at the CSO, said on Tuesday. Once explained the numbers are “believable,” he said.

 

In an statement, Finance Minister Michael Noonan pointed out that growth numbers cut Ireland’s debt and deficit ratios. Trouble is, they carry downsides too.

 

For one, tax inversions artificially inflate the size of Ireland’s economy. When the headquarters of a group of companies becomes resident in Ireland, all of its global profits may be counted as part of the nation’s gross national income, according to the ministry.

 

Since 2008, that gauge has been boosted by about 7 billion euros thanks to corporate relocations, without accompanying substance or employment, the ministry has said. This in turn drives up the country’s contribution to the European Union budget, which is based on the size of the economy.

 

For a second thing, it leaves self-described “baffled” analysts like Power at a loss to explain the state of the Irish economy. Power says he’ll look at indicators like employment growth and tax revenue for a better gauge, and guesses Ireland’s underlying economic growth was 5.5 percent last year.

 

“To me, it looks like Ireland is growing at a reasonable, not dramatic rate,” said Power. “There are so many transactions going on that nobody understands.”

And finally, GE Capital Aviation Services moving their balance sheet onshore may have helped boost Ireland's GDP growth to 26%, Mint Partners says, leaving the Irish growth numbers "meaningless," and say nothing about state of domestic economy.

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Will Hillary Ditch Black Lives Matter?

Submitted by Patrick Buchanan via Buchanan.org,

After the massacre of five Dallas cops, during a protest of police shootings of black men in Louisiana and Minnesota, President Obama said, “America is not as divided as some have suggested.”

Former D.C. Police Chief Charles Ramsey, an African-American, says we are “sitting on a powder keg.”

Put me down as agreeing with the president. For when a real powder keg blew in the ’60s, I was there. And this is not it.

In 1965, the Watts area of Los Angeles exploded in the worst racial violence since the New York draft riot of 1863 when Lincoln had to send in veterans of Gettysburg. After six days of looting, shooting and arson in LA, there were 34 dead, 1,000 injured, 4,000 arrested.

In 1967, Newark, New Jersey, and Detroit exploded, bringing out not only the Guard but the 82nd Airborne. After Dr. King was assassinated on April 4, 1968, a hundred American cities burst into flame.

Troops defended the White House. Marines mounted machine guns on the Capitol steps. Thousands of soldiers patrolled the city. The 7th and 14th street corridors of my hometown, D.C., were gutted and would not be rebuilt for years. That was a powder keg — that went off.

But only crazed cop-haters applaud that Dallas atrocity by the delusional anti-white racist Micah X. Johnson. As for the shootings of Philando Castile in Minnesota and Alton Sterling in Baton Rouge, almost all agree they must be investigated, and justice done.

Chief Ramsey says he expects trouble at the conventions. But if Black Lives Matter shows up to raise hell in Cleveland, then that is going to be a problem for Hillary Clinton.

This writer was on the 19th floor of the “Comrade Hilton” in August 1968, looking down as Mayor Daley’s finest marched up Balbo to Michigan Avenue, then stormed into Grant Park to deliver street justice to the radicals calling them “pigs.”

“A police riot” liberals raged. The cops beat “our children” up.

Richard Nixon came down on the side of the cops, carried Illinois and won the election. Liberals were still calling “law and order” code words for racism. Most Americans had come to recognize they were the indispensable elements of a decent and civilized society.

“Richard Nixon,” lamented Hunter S. Thompson, “is living in the White House today because of what happened that night in Chicago.”

This weekend, Rudy Giuliani called Black Lives Matter “inherently racist.” Does he not have a point?

After the death of Eric Garner in a police takedown, Black Lives Matter led mobs onto the streets and highways of Manhattan chanting, “What do we Want? Dead Cops! When do we want them? Now!”

In anti-police demonstrations since, another chant has been, “Pigs in a blanket, fry ’em like bacon.”

This is pure hatred, and as it is directed against white cops, racist.

Obama should tell Black Lives Matter to stop the hate. But though he has shown no reluctance to lecture white America, he has rarely shown the same stern judgment with black America.

Now there is no denying that urban black communities are among the most heavily policed. Why? As Heather Mac Donald, author of “The War on Cops,” writes of a city she knows well:

“Black people make up 23 percent of New York’s population, but they commit 75 percent of all shootings. … Whites are 33 percent of the city’s population, but they commit fewer than 2 percent of all shootings…

 

“These disparities mean that virtually every time that police in New York are called out after a shooting, they are being summoned into minority neighborhoods looking for minority suspects.”

As these percentages are unlikely to change, we are going to have more collisions between black males and white cops. Some will end in the shooting of black criminals and suspects and, on occasion, innocent black men. Some are going to result in the death of cops.

Mistakes are going to be made, and tragedies occur, as with the shooting of 12-year-old Tamir Rice, killed in Cleveland while waving a toy pistol.

But if there is to be a social explosion every time an incident occurs, like the deaths of Trayvon Martin, shot while beating a neighborhood watch coordinator, and Michael Brown, shot in Ferguson after trying to grab a cop’s gun, America is going to be permanently polarized.

And there is no doubt where the majority will come down, and who will be the near-term beneficiary.

Monday, Donald Trump declared himself “the law and order candidate,” and added: “America’s police … are what separates civilization from total chaos and destruction of our country as we know it.”

And Clinton? On Friday, she said, “I’m going to be talking to white people. I think we’re the ones who have to start listening.”

Prediction: If Black Lives Matter does not clean up its act, Obama and Clinton will have to throw this crowd over the side, or the BLM will take her down.

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Stock Panic-Buyers Reach “Extreme Greed”… But…

Forget "greed," US equity market investors are now in "extreme greed" according to CNN's Fear and Greed meter.

Does this go to '11'?

 

Soaring to 2-year highs…

 

With every subcomponent screaming exuberance…

 

*  *  *

There's just one problem with all this exuberant greed-mongering…  

Someone is hedging the breakout to record highs in size…

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Daily Pokemon Go Use Hits 43 Minutes, On Pace To Surpass Facebook

As we noted two months ago, the US became an unsustainable service sector-based economy starting in the 1970s onward when service sector employment diverged from manufacturing without a corresponding boost in productivity. 

Even Alan Greenspan warned that America is “in trouble basically because productivity is dead in the water.” There are numerous reasons for this plunge in worker-productivity, from perverted inventives not to work to unintended consequences of monetary policy enabling zombies, but perhaps the most critical driver of recent productivity losses is captured by the following data point: 51% of total time spent on the Internet is on mobile devices – in 2015, first time ever mobile is #1 – to make a total of 5.6 hours per day snapchatting, face-booking, and selfying. 

So, while every effort can be made by Ivory Tower academics to solve the problem of American worker productivity, perhaps it can be summed up simply as “Put The Smart-Phone Down!”

However, instead of putting away productivity-draining tools, Americans are about to lose several billion more in productive hours.

The reason? This.

As we reported yesterday, since Pokemon Go launched last Thursday, has taken America – and the world – by storm. In fact, the app briefly surpassed “Porn” as the most popular search term on Google.

Furthermore, while we await the first fatality from the game’s zombification of its players, MacRumors reports a couple of incidents related to the game have already begun sprouting up over the past few days, bringing to light a few cautionary tales for everyone delving into the game. According to media reports, people are getting hurt seeking out Pikachu and fellow Pokémon. They’re also getting a ton of exercise, and occasionally running into trouble.

So how hooked are smartphone owners to Pokémon? Research firm SimilarWeb found some stunning details: for one, Pokemon appears to have already surpassed Tinder in terms of Android Installs.

It’s not just on installs where Pokémon GO is killing it, on app engagement as well, the app’s usage has been unbelievably high. Over 60% of those who have downloaded the app in the US are using it daily, meaning around 3% of the entire US Android population are users of the app. This metric, which we refer to as Daily Active Users has put Pokémon GO neck and neck with Twitter, and in a few more days, Pokémon GO will likely have more Daily Active Users than the well-established social network.

But the most stunning detail is that in terms of Usage Time, Pokemon GO is already taking up an unprecedented amount of time. As of July 8th, the app was being used for an average of 43 minutes, 23 seconds a day, higher than Whatsapp, Instagram, Snapchat, and Messenger!

 

At this rate, Pokemon could soon surpass the undisputed attention hog – Facebook. Recall that according to the NYT, the average amount of time a user spends on Mark Zuckerberg’s social creation is a whopping 50 minutes.

The average time that users spend on Facebook is nearing an hour. That’s more than any other leisure activity surveyed by the Bureau of Labor Statistics, with the exception of watching television programs and movies (an average per day of 2.8 hours). It’s more time than people spend reading (19 minutes); participating in sports or exercise (17 minutes); or social events (four minutes). It’s almost as much time as people spend eating and drinking (1.07 hours).

 

“When you really think about it, 50 minutes is a tremendous amount of time — it’s huge,” said Ken Sena, a managing director and analyst at Evercore who covers consumer Internet companies. “Usually, when a platform expands its user base, the average time spent goes down, because a lot of new people aren’t that active.”

Pokemon is about to surpass this.

Which begs the question: will all those minutes eat away from Facebook use (clearly a negative for FB stock), or will US worker productivity, already abysmally low, decline even further as far less time and effort is dedicated to productive efforts. The answer: probably a mixture of both, although we eagerly await to see what “seasonally adjusted” excuses tenured economists come up to justify away that US GDP output continues to decline even more in the coming months and years, and nobody can figure out the reasons why.

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If You Like the War on Drugs, You’ll Love the War on Guns!

A new argument has taken hold among gun control advocates, that gun control could reduce police violence. It’s a shameless attachment of a sectarian agenda to an issue that’s been in the mainstream for about two years now. The argument goes all the way up to President Obama. “Part of what’s creating tensions between the communities and the police is the fact that police have a difficult time in communities where they know guns are everywhere,” the president said over the weekend.

Obama’s argument, and that of other gun control advocates, callously dismisses the racialized aspect of police violence that the Black Lives Matter movement has pushed the forefront. People have been killed by for all kinds of objects mistaken for guns, from boxer shorts to wallets and other objects.. Sometimes objects aren’t necessary, just “furtive movements”. Many of the communities to which Obama makes reference, like Chicago and New York City, already have strict gun control laws.

No law will rid such communities of guns in one step. Disarming such communities, as with disarming any population, would require a significant amount of police force—the very issue that animated police reform advocates in the first place. Gun buybacks are popular but ineffective. (Australia’s buyback program and gun crackdown created a violent black market in guns—but anti-gun advocates who point to the ‘Australian model,’ as Obama and Hillary Clinton have, won’t mention that.) Lowering the number of firearms in circulation would require confiscation. It would mean no-knock raids, flashbang grenades, and other techniques popularized by the drug war, and more. You can’t use drugs to shoot back.

There is an argument that gun prohibition would work better than drug prohibition because guns are more difficult to manufacture and harder to conceal. 3-D printing is closing the manufacturing gap, and while guns may be harder to conceal than drugs they are also harder to confiscate. Police already use a significant amount of force in the war on drugs, based on the argument that an attempt to confiscate drugs could face violent resistance. A primary function of firearms is to offer resistance. Police in the United States became militarized largely on the strength of the drug war (and not widespread gun ownership as some anti-gun revisionists argue).

Confiscation is the logical conclusion from the premise offered by Obama and other gun control advocates in the wake of the re-emergence of police violence as a national issue that fewer guns in circulation would reduce police brutality. More than half the people shot by cops this year so far were reported to be armed with a gun. By and large, these are already illegal weapons. Further gun control measures will have even more diminished returns. In general, only the most law-abiding of citizens are likely to abide by gun control laws. There is a substantive difference between legal access to weapons and availability of weapons, as places like Chicago and Newark show. Reducing the number of weapons in circulation in the United States—estimated at 350 million—would require substantive police action, placing yet more police officers and civilians, disproportionately the poor and minorities, in danger.

In addition confiscation, a reduction in the availability of weapons would also have to deal with the illegal import of weapons. Some of the weapons found on inner city streets, as Ras Baraka, now the mayor of Newark, mentioned a few years ago, come illegally from out of the country. As with the war on drugs, any effective measure to constrict the availability of supply will only incentivize black market operators to refill the gap. Plenty of drugs cross the U.S.-Mexico border, fueling rhetoric like Trump’s about building a giant wall. An attempt at effective gun control that reduced the number of weapons in circulation in the U.S. would inevitably involve securing the border. Gun control advocates are offering one more reason for restrictionists to demand closed borders. While gun control advocates point to gun homicide rates in Europe as to what is achievable, they ought to consider gun homicide rates in the Americas, which tend to be higher than in the U.S., as what they are working against. While the U.S. government is the largest arms dealer in the world, the guns the Americas are awash with are hardly all U.S.-made.

Gun control advocates argue in favor of “doing something,” but rarely offer solutions beyond those, like background checks, that have already been largely ineffective. Yet even repeal of the Second Amendment and a total ban on firearms is hardly a guarantee of success. It does, however, guarantee a lot more police violence and violence against police in order to satiate the “democratic” desires of the electorate. Ignorance of the effects of a preferred policy is not an excuse for pushing policies that are dangerous to people, especially those already in marginalized communities.

Twenty years ago, the 1994 crime bill passed with bipartisan support. The bill contributed to the problem of hyper-incarceration and aggressive policing, as noted by activists over the last year. As his wife sought to secure the Democratic presidential nomination, former president Bill Clinton even apologized for supporting the bill. Many black politicians excused their support for the bill by insisting they had to “do something” about drug use and high crime rates in the inner city. These politicians claim they understand the role of racism in American society yet then support laws that would be hard to enforce equitably even in the absence of racism. The same thing is happening with gun control. Advocates argue they need to “do something,” and rarely engage substantive criticism of specific gun control proposals, insofar as such proposals exist. They wish to unleash even more police violence onto the American people, and disproportionately onto marginalized communities. Ignorance is not an excuse for violent or racist outcomes.

h/t to Thaddeus Russell for the headline.

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WTF Headline Of The Day: “Racist” Window Edition

This is getting bloody ridiculous!! A (black) Yale University cafeteria worker has resigned after smashing a historic stained glass window (which depicted two slaves picking cotton) exclaiming that the dining hall window was "racist" and "very degrading."

The 'racist' stained-glass window in question…

“Everybody has something to say about them,” the worker said. “[Menafee] was the one who took action and busted that shit out.” As HeatStreet.com reports,

The worker, Corey Menafee, is black. He told the New Haven Independent that the dining hall window was “racist” and “very degrading” and that last month, while working an event for the college, he decided to use a broomstick to smash the window.

 

 

“I took a broomstick, and it was kind of high, and I climbed up and reached up and broke it,” he told the Independent. “It’s 2016, I shouldn’t have to come to work and see things like that.

 

“I just said, ‘That thing’s coming down today. I’m tired of it,’” he added. “I put myself in a position to do it, and did it.”

 

“I just went to the bathroom and shaved,” Menafee said, “to make sure I was clean-shaven for the authorities.”

 

City police arrested Menafee, who now faces a felony charge.

After this story was originally published, Yale Vice President for Communications Eileen O’Connor sent a statement to the NewHaven Independent.

“An incident occurred at Calhoun College, a residential college on the campus of Yale University, in which a stained glass window was broken by an employee of Yale, resulting in glass falling onto the street and onto a passerby, endangering [her] safety. The employee apologized for his actions and subsequently resigned from the University.  The University will not advocate that the employee be prosecuted in connection with this incident and is not seeking restitution.”

In an interview with the Independent, O’Connor said glass fell on the passerby but that the woman was not injured. O’Connor claimed that Menafee’s resignation was not a condition of Yale declining to pursue the charges. Menafee himself declined to comment on that same question.

*  *  *

We're gonna need some more safe spaces…

The Only Safe Space Is Your Home

111315-RickMcKee2

No matter where you go in life, someone will be there to offend you. Maybe it’s a joke you overheard on vacation, a spat at the office, or a difference of opinion with someone in line at the grocery store. Inevitably, someone will offend you and your values. If you cannot handle that without losing control of your emotions and reverting back to your “safe space” away from the harmful words of others, then you’re best to just stay put at home. Remember, though: if people in the outside world scare you, people on the internet will downright terrify you. It’s probably best to just accept these harsh realities of life and go out into the world prepared to confront them wherever they may be waiting.

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6 Regional Feds Voted To Hike The Discount Rate In Early June, Up From 4 In April

Back in April, when the world was still reeling from the China devaluation inflicted market slump, the Fed’s discount rate minutes for the months of March/April showed that 4 regional Feds wanted a 25 bps rate hike, up from just two  – the Richmond Fed and Kansas City – in the Feb/March meeting. Moments ago the Fed released its latest May/June Discount Rate Minutes which revealed that both the (Jim Bullard’s) St. Louis and Boston Feds joined four other regional Feds, Cleveland, Richmond, Kansas City and San Francisco, in seeking a quarter point increase in Fed discount rate to 1.25 percent prior to the June 14-15 FOMC meeting.

Obviously, there was no rate hike, as the Fed chose to maintain its primary credit rate at 1%. What is more surprising is that Bullard’s St. Louis Fed was among the “hawks”, even though just a few weeks later, the same James Bullard infamously flipflopped and now predicts just one rate hike until 2019.

The regional directors who supported a rate hike increase did so “in light of actual and expected strengthening in economic activity and their expectations for inflation to gradually move toward the 2 percent objective.”

However, it is worth noting that Boston, Richmond, St. Louis, New York, Philadelphia, and Minneapolis voted on June 2, just a day ahead of June 3 report which revealed the abysmal May U.S. payrolls report and which ground the Fed’s rate hike cycle to a halt.

From the minutes:

Subject to review and determination by the Board of Governors, the directors of the Federal Reserve Banks of New York, Philadelphia, and Minneapolis had voted on June 2, 2016, and the directors of the Federal Reserve Banks of Atlanta, Chicago, and Dallas had voted on June 9, to reestablish the existing rate for discounts and advances (1 percent) under the primary credit program (primary credit rate). The directors of the Federal Reserve Banks of Boston, Richmond, and St. Louis had voted on June 2, and the directors of the Federal Reserve Banks of Cleveland, Kansas City, and San Francisco had voted on June 9, to establish a rate of 1-1/4 percent (an increase from 1 percent). At its meeting on May 23, the Board had taken no action on requests by the Cleveland, Richmond, Kansas City, and San Francisco Reserve Banks to increase the primary credit rate.

 

Federal Reserve Bank directors generally indicated that economic activity was expanding at a moderate pace, though their reports were somewhat mixed across different sectors and Districts. Several directors noted improvements in consumer spending and a high level of auto sales. They also reported further progress in the housing sector, along with rising prices for single-family homes. Reports on commercial real estate generally pointed to continued strength. However, directors also cited ongoing weakness in manufacturing, agriculture, and export-related industries. Labor market indicators were improving, but several directors reported that companies were being cautious about adding staff. Some directors also noted that businesses were still having difficulty hiring and retaining workers for particular occupations and in certain regions. Inflation remained below the Federal Reserve’s 2 percent objective.

 

Against this backdrop, directors at several Federal Reserve Banks recommended that the current primary credit rate be maintained. In general, they judged that labor market conditions and below-target inflation supported maintaining the current accommodative stance of monetary policy. Other Federal Reserve Bank directors recommended increasing the primary credit rate to 1-1/4 percent, in light of actual and expected strengthening in economic activity and their expectations for inflation to gradually move toward the 2 percent objective.

So is 6 sufficient to push Yellen to move with a rate hike in September? Hardly: recall that on November 24, one month before the Fed did hike rates by 25 bps, a whopping 9 regional Fed requested a Discount Rate hike. With only six regional Feds on the same page as of this moment, and before the recent volatility in job numbers not to mention Brexit, it is very unlikely that the Fed will be hiking any time soon.

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