Tag: finance

Naysayer Reality Check: Waymo’s Self-Driving Taxi Debuts In Phoenix, For Free

Authored by Mike Shedlock via MishTalk.com,

Every time I do a post on self-driving vehicles, readers respond that it cannot happen and won’t happen for a decade, if ever.

It’s time for a reality check.

A quick check of my calendar shows we are not quite halfway through 2017. And a quick check of headline news shows Waymo’s Self-Driving Minivans Now Offer Rides to Real People in Arizona.

Starting today, residents of the greater Phoenix metropolitan area can sign up to go for a ride in a self-driving minivan. As often as they want. For free.

 

Waymo, the self-driving car startup spun off from Google late last year, announced today that it’s offering its services to members of the public for the first time. Waymo is calling it an “early rider program,” intent on cataloging how on-demand, driverless cars will factor into people’s everyday lives. Interested participants can sign up on the company’s website, and Waymo will select riders depending on the the types of trips they want to take and their willingness to use the self-driving service as their primary mode of transportation.

 

A Waymo test driver will be behind the wheel at all times, but the company insists that the vehicle will drive without human intervention as much as possible. Rides will only be available to residents of Phoenix and the surrounding towns, like Gilbert, Tempe, and Chandler. Waymo describes the service areas as twice the size of San Francisco.

 

In order to accommodate what it hopes will be “hundreds” of riders, Waymo is ordering an additional 500 Chrysler Pacifica minivans from its automaker partner, Fiat Chrysler, which it will then outfit with the laser sensors it manufactures in-house. Waymo already has 100 self-driving minivans that have been driving the streets of Phoenix and Mountain View, California, since earlier this year.

 

“We want as many people as possible to experience our technology, and we want to bring self-driving cars to more communities sooner,” said John Krafcik, CEO of Waymo, in a Medium post published today.

Early Rider Program

What better way is there to create demand by giving away free services. That’s just what the Google spin-off did with its Early Rider Program.

 

Safe Predictions

Numerous readers emailed various links to this story. My favorite comes from reader Wade who wrote …

Hi Mish,

I enjoy your back-and-forth with the unbelieving Luddites about self-driving cars.

 

I’ll make three predictions:

  1. Self-driving cars will work
  2. They will be hugely popular
  3. Nobody will admit they were wrong in being a skeptic

 

Wade

If you think Google, Amazon, Ford, Toyota, Nikola, GM, Tesla, Apple, etc, etc, etc, will all fail with driverless and electric, you need a serious reality check.

 

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Macron Booed, Jeered By Factory Workers In His Hometown After Le Pen “Ambush”

Chaotic scenes broke out during a visit by French presidential frontrunner Emmanuel Macron to striking factory workers in his hometown of Amiens.

Macron was greeted Wednesday with jeers, boos and chants in favour of his far-right rival Marine Le Pen as he made a chaotic visit to the factory in northern France, after what Bloomberg said was “an ambush” by his nationalist rival Marine Le Pen forced him into a confrontation with some of her hardcore supporters.

Earlier on Wednesday, Le Pen had made a surprise visit to the Whirlpool plant on the edge of Amiens while election front-runner Macron was meeting with union leaders from the plant in the center of town. Le Pen told reporters on the picket line that Macron’s decision to meet the workers’ representatives behind closed doors showed his “contempt” for their plight, forcing her rival to change his plans and engage with the demonstrators live on television.

During the hastily arranged visit, some in the crowd shouted “President Marine!” and booed as the 39-year-old former banker stood outside the appliance factory in the rustbelt city of Amiens.

“I am here to speak to you,” said the pro-business former economy minister, ringed by a horde of cameramen and journalists.

The Whirlpool factory has become a focus of the free-trade debate at the heart of the French election campaign because 280 jobs will be cut next year when the company shifts production to Poland.

As Bloomberg describes the scene, “with the black smoke of burning tires whipped up by a cold wind and cries of “Marine! President!” punctuating his remarks, Macron tried to mount a defense of the European trade regime in the factory parking lot as angry demonstrators crowded round.”

“When she tells you the solution is to turn back globalization, she’s lying,” Macron told the workers, his comments picked by the microphones of more than 100 reporters witnessing the clash. “We cannot outlaw firing. We must fight to find a buyer.”

Judging by the response, the local workers did not find Macron very convincing.

Earlier, Macron was in his hometown of Amiens to try to counter accusations that he had made a complacent start to campaigning for the presidential runoff on May 7 after he finished ahead of Le Pen in the first round on Sunday. But his trip to the city was upstaged when Le Pen made an unannounced visit to the factory earlier in the day, arriving while he was meeting with workers’ representatives elsewhere. She posed for selfies with workers and waved to supporters, AFP reported.

“Everyone knows what side Emmanuel Macron is on — he is on the side of the corporations,” Le Pen said. “I am on the workers’ side, here in the car park, not in restaurants in Amiens.”

Macron said after Le Pen’s stop that he would also visit the site. He told angry workers at the factory that the only reason she had come was “because I’m here.” As the following clip shows, it was not a good idea.

Macron spoke to the strikers for almost an hour, some still booing throughout, but many engaging with him, while France 2 television’s special correspondent broadcast behind the candidate from a temporary set they’d erected.

Patrice Sinoquet from the CFDT union, who met with Macron earlier in the day, said 90 percent of his members will be voting for Le Pen. “Macron is the worst of free-market politics,” said Clement Pons, a 32-year-old unemployed man waiting outside the town-center meeting. “He’s a globalist who will kill the working class. He makes me want to throw up. I don’t understand his ideas.”

Chantal Flahaut, a 57-year-old assembly line worker on the Whirlpool picket line, said she’s been striking on and off all week and she’s so sick of the situation in France that she didn’t even register to vote on Sunday. Her T-shirt said “Whirlpool Manufactures Unemployment.”

 

“I am so disgusted,” she said. “Macron is in favor of big companies like ours. Stop giving aid to multinational billionaires and give us our money.”

The theatrics continued on Twitter, where  Macron said that Le Pen had spent “10 minutes with her supporters in a car park in front of the cameras” whereas he had spent “an hour and a half with union representatives and no media”.

“Come May 7, everyone will make their choice,” he added.

Benjamin Griveaux, an aide on the Macron campaign, said Le Pen was focusing on political stunts rather than trying to address voters’ problems. “If this is about tweets and selfies, then she hasn’t understood what’s at stake,” Griveaux said. “She’s fueling her political ambitions with misery and suffering. What has she proposed? Nothing. We are trying to deal with the issues.”

Macron, who created his own centrist movement, was to hold a rally later in nearby Arras, a city in the northern rustbelt where Le Pen topped the first round of voting. On Monday, Macron drew criticism for what some saw as a triumphalist speech and then a celebratory dinner at a Paris bistro on Sunday.

Socialist Party boss Jean-Christophe Cambadelis told French radio: “He was smug. He wrongly thought that it was a done deal.”

Macron served as economy minister in the Socialist government, after working as an M&A banker at Rothschild, before quitting in August to launch his presidential bid.

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Iraq War Architect, Paul Wolfowitz, is Becoming Optimistic on Trump

So we tried that thing called regime change in Iraq, and failed miserably. We tried it in Libya, and now there are now active slave markets in the place. But we satisfied the objective of “removing a dictator”. By the exact same reasoning, a doctor would inject a patient with “moderate” cancer cells “to improve his cholesterol numbers”, and claim victory after the patient is dead, particularly if the post-mortem shows remarkable cholesterol readings. But we know that doctors don’t do that, or, don’t do it in such a crude format, and that there is a clear reason for it. Doctors usually have some skin in the game.

And when a blow up happens, they invoke uncertainty, something called a Black Swan, after some book by a (very) stubborn fellow, not realizing that one should not mess with a system if the results are fraught with uncertainty, or, more generally, avoid engaging in an action if you have no idea of the outcomes. Imagine people with similar mental handicaps, who don’t understand asymmetry, piloting planes. Incompetent pilots, those who cannot learn from experience, or don’t mind taking risks they don’t understand, may kill many, but they will themselves end up at the bottom of, say, the Atlantic, and cease to represent a threat to others and mankind.

So we end up populating what we call the intelligentsia with people who are delusional, literally mentally deranged, simply because they never have to pay for the consequences of their actions, repeating modernist slogans stripped of all depth. In general, when you hear someone invoking abstract modernistic notions, you can assume that they got some education (but not enough, or in the wrong discipline) and too little accountability.

From Nassim Taleb’s recent post: On Interventionistas and their Mental Defects

I spent the last 50 minutes listening to an interview of neocon Iraq war architect Paul Wolfowitz, a truly unfortunate experience which felt like a tomahawk missile attack against my cerebrum. Regrettably, we still live in a world where you have to listen to the musings of such war criminals, as they continue to have considerable influence in certain circles of American power, and quite possibly within the Trump administration itself.

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Mnuchin/Cohn Unveil Trump’s “Biggest Tax Cut Ever” Tax Reform Plan – Live Feed

Having promised "the biggest tax cut in history," and seemingly desperate for a win (given his folding on the funding of the wall), one wonders why President Trump has delegated the announcement of his Tax Reform plan to Treasury Secretaty Steven Mnuchin and Chief Economic Advisor Gary Cohn. Reduction, repatriation, simplification, and de-itemization appear to be the cornerstones.

What we think we know so far: (via CNN's Jim Acosta)

Personal Tax Reform

– Provide Tax Relief for Middle Income Families
– Simplify the Tax Code by Moving from 7 to 3 brackets (35, 25, 10)
– Modernize Tax Code to Help Families Struggling with Child and Dependent Care Costs
– Repeal 3.8% Obamacare Tax on Investment Income
– End Alternative Minimum Tax
– Eliminate Itemized Deductions Except Mortgage Interest and Charitable Contributions
– End the Death Tax

Business Tax Reform

– 15% Corporate Rate
– Small Business Owner/ Operators Eligible for Business Rate
– Territorial Tax System to End Penalty on Companies Headquartered in the U.S.
– Onetime Tax for Repatriation to bring back Trillions of Dollars from Overseas
– Eliminate Tax Breaks for Special Interests

Who also asks a very important question – With The White House targeting deductions to help pay for tax plan (but mortgage/charitable are protected), how does this not blow up deficit?

We look forward to Steve Mnuchin and Gary Cohn explaining it all (with as many superlatives as possible we are sure).

Perhaps the most concerning aspect is the apparent expectations management that is being undertaken this morning:

The White House's presentation will be "pretty broad in the principles," said Marc Short, Trump's director of legislative affairs.

 

In the coming weeks, Trump will solicit more ideas on how to improve it, Short said. The specifics should start to come this summer.

 

Short said the administration did not want to set a firm timeline, after demanding a quick House vote on a health care bill and watching it fail.

 

But, Short added, "I don't see this sliding into 2018."

Live Feed (due to begin at 1330ET)

The biggest question is – will this be enough to satisfy the market?

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Freedom Caucus Confirms Support For Revised Obamacare Replacement Bill

Moments ago the House Freedom Caucus announced their support for a revised version of an Obamacare replacement bill that includes the so-called “MacArthur Amendment.”  Here is the official statement from Freedom Caucus Chair Mark Meadows:

“Over the past couple of months, House conservatives have worked tirelessly to improve the American Health Care Act (AHCA) to make it better for the American people. Due to improvements to the AHCA and the addition of Rep. Tom MacArthur’s proposed amendment, the House Freedom Caucus has taken an official position in support of the current proposal.

 

The MacArthur amendment will grant states the ability to repeal cost driving aspects of Obamacare left in place under the original AHCA.  While the revised version still does not fully repeal Obamacare, we are prepared to support it to keep our promise to the American people to lower healthcare costs. We look forward to working with our Senate colleagues to improve the bill. Our work will continue until we fully repeal Obamacare.”

 

Mission statement of the House Freedom Caucus:

 

“The House Freedom Caucus gives a voice to countless Americans who feel that Washington does not represent them. We support open, accountable and limited government, the Constitution and the rule of law, and policies that promote the liberty, safety, and prosperity of all Americans.”

 

As we noted previously, the “MacArthur Amendment” (summarized here) effectively allows individual states to ‘opt out’ of certain Obamacare regulations which require minimum coverage and restrict the ability to insurers to charge varying rates based on an individual’s health.

Of course, only time will tell if appealing to the more conservative wing of the Republican party will now result in defections of more centrist votes.  As John Boehnor said best, “Republicans have never, ever, not once agreed on what a healthcare bill should look like.”

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Treasury Sells $34 Billion In 5Y Paper In Ugly, Tailing Auction At Lowest Yield Since November

After yesterday’s stellar 2Y auction, moments ago the Treasury sold $34 billion in 5 Year paper in what can only be described as a quite ugly auction.

The high yield printed at 1.875%, which maybe because it was the lowest stop since November’s 1.76%, drew far less bidside interest than yesterday’s auction. It also tailed by 0.7bps to the 1.875 When Issued.

The internals were just as ugly, with the Bid To Cover slumping to 2.34 from last month’s 2.37 and the 6 month average of 2.45.

Indirects took down 57.3%, well below the 6 month average of 63.5%, and the lowest since July 2016. With Directs expressing little interest too, it meant Dealers were stuck taking down 37.4% of the final allotment, the highest since last July.

It is unclear what changed so notably in the past 24 hours, but whatever it was it appears to have spooked bidders and certainly foreign buyers.

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A Rising (Central Bank) Tide Turns Everyone Into A Genius

Authored by Charles Hugh-Smith via OfTwoMinds blog,

Until the system implodes–you're a genius.

So you've ridden the markets higher–stocks, housing, commercial real estate, bat guano, quatloos, you name it–everything you touch turns to gold. What can we say, bucko, other than you're a genius!

It's a market truism that rising tides lift all boats. But that's not the really important effect; what really matters is rising tides turn everyone into a genius–at least in their own minds.

Those of us who have been seduced by the Sirens' songs of hubris know from bitter experience how easy it is to confuse a rising tide with speculative genius. When everything you touch keeps going higher, the only possible cause is…. your hot hand, of course!

Stocks–I'm a genius! Housing–I'm a genius! Commercial real estate–yes, well, I suppose the evidence is overwhelming–it does seem I'm a genius.

The only thing better than buy and hold is buy the dips and hold–and use margin or whatever leverage you have to buy more before the price goes even higher.

What can we say other than: this is the strategy of geniuses. The proof is in the charts:

The S&P 500: margin to the hilt and buy every dip: genius!

Housing in Sweden, Toronto, Brooklyn, West L.A., San Francisco, Seattle, Portland, Shanghai and every other blazing-hot market: borrow more from the shadow banking system, mortgage your house to the hilt, do whatever you have to do to get the down payment and buy another flat: pure genius!

Commercial real estate: everyone who jumped in with all four feet in mid-2009 forward: geniuses!

The source of our collective genius isn't an act of Nature–it's that good old pump inflating every asset bubble on the planet, central banks creating credit-money out of thin air and buying assets hand over fist: stocks, ETFs, bonds, mortgages, and so on.

Central banks have collectively purchased $1 trillion in assets year to date:

The Federal Reserve and the other central banks are playing the role of financial gods, intervening in the interactions of mere mortals to create the illusion of stability.

To this end, the Fed has created trillions of dollars and used this money to prop up delusional asset values (high) and destabilizing interest rates (low).

If we look at a decentralized financial system as a self-organizing ecosystem, we find that the strength of the system lies in the adaptability of the myriad organisms in its many micro-climates. The key strength of a decentralized financial ecosystem, i.e. one not organized as a top-down command economy, is the "genetic diversity" of its many participants. There is not just one dominant species in the ecosystem, but many interdependent species.

In a financial ecosystem, there is not one lender and one class of borrowers, but a huge diversity of lenders, borrowers, creditors and savers, and a wealth of interacting, inter-dependent enterprises.

A centrally planned financial ecosystem is a doomed system. The Fed is the equivalent of an ignorant, hubris-infused agency that seeks to "restore" an ecosystem by flooding it with water and unleashing a single predatory species raised in an unnatural, contrived "factory."

The Fed is wiping out diversity and thus the adaptability of the enterprises that survive its crude flooding and replication of a single predatory species.

The Fed is creating a sickly, vulnerable mono-culture of an economy, one dominated by financial predators which are themselves lacking in genetic diversity.

Just as agencies playing god further degrade the natural systems they claim to be "restoring" with ever-grander interventions, so too is the Fed destroying the U.S. economy with equivalent god-like meddling and ever-more grandiose, ever-more delusional interventions in what were once decentralized, self-organizing systems that naturally sought harmony and stability through the low-level churn of bad bets being written off and over-leveraged speculators going bankrupt.

Put another way: the Fed has taken the risks generated by predatory institutions and policies, and distributed it throughout the entire financial system. This distribution of risk in service of maintaining asset bubbles creates the illusion of stability, low risk and "sure thing" speculation.

Rather than let over-leveraged speculators and institutions reap the consequences of their excesses, the Fed (and other central banks) have loaded the entire system with risk.

Until the system implodes–you're a genius.

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Trump Individual Tax Plan To Have 3 Brackets: 35%, 25%, & 10%

As the minutes tick by ahead of the announcement of "the greatest tax cut in human history," we are getting more information on the personal tax rates (something Treasury Secretary Mnuchin failed to mention earlier). As Fox News reports, in addition to raising deductions, the Trump administration will collapse the current seven-tier bracket system into just three tax brackets under the new plan, taxed at rates of 35 percent, 25 percent and 10 percent.

As Fox News reports, President Donald Trump’s tax plan, which will be unveiled Wednesday, calls for a sizable increase to the standard deduction Americans can take when filing taxes, potentially allowing taxpayers to keep more of their income – to the tune of a couple thousand dollars, White House sources told Fox News.

A piece of the proposed tax overhaul would nearly double the standard deductions that both individuals and families can claim on their returns, Fox News reported. Under the proposal, the tax cuts for individuals and married couples filing separately will increase from $6,300 to $12,600. The standard deduction for a married couple filing jointly will jump from $12,700 to approximately $24,000.

 

White House sources also said the plan would eliminate the marriage penalty.

 

In addition to raising deductions, the Trump administration will collapse the current seven-tier bracket system into just three tax brackets under the new plan, taxed at rates of 35 percent, 25 percent and 10 percent… this is slighlty different than Trump’s previously proposed tax rates were 33 percent, 25 percent and 12 percent.

We look forward to hearing from Mnuchin and Cohn in an hour on the details… and of course any guesstimate at whether this will pass.

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Canada Housing Regulator Warns Of “Strong Evidence Of Housing-Market Problems”

In an perculiar coincidence, just hours after Home Capital Group imploded in what we dubbed Canada’s “New Century” moment, Canada’s housing regulator, the Canada Mortgage And Housing Corporation, which describes itself as “contributing to the stability of the housing market and financial system” moments ago the CMHC issued a report, warning that there is “strong evidence of overall problematic conditions.“

In the report, the Housing regulator again warns that while conditions in Canada’s housing markets are showing some signs of improvement, the official overall rating from the Canada Mortgage and Housing Corporation (CMHC) will be held at “strong evidence of problematic conditions”.

Every quarter, the CMHC issues its Housing Market Assessment (HMA) “to provide Canadians with both expert and impartial insight and analysis, based on the best data available in Canada.” The report is meant to serve as an “early warning system” for the country’s housing markets “an important tool supporting financial and housing market stability.” Or lack thereof because as the CMHC said while “conditions in Canada’s housing markets are showing some signs of improvement” the official overall rating from the Canada Mortgage and Housing Corporation (CMHC) will be held at “strong evidence of problematic conditions”.

As noted in the press release, some of the report highlights are the following:

  • Overall rating to be held at “strong evidence of problematic conditions”.
  • Evidence of overvaluation at the national level has been downgraded from strong to moderate. It is now present in six centers instead of eight.
  • Evidence of overvaluation has increased from moderate to strong in Victoria, as fundamentals are not keeping up with higher prices. There is also moderate evidence of price acceleration and overheating, leading to strong overall evidence of problematic conditions.
  • Conditions have improved in Regina, Montreal and Quebec relative to home prices.
  • Overbuilding has gone down from eight centers to six.
  • In Moncton and St John’s, the supply of homes is adjusting to the demand.
  • Toronto and Hamilton continue to face price acceleration, overvaluation and overheating. Price growth has intensified and demand is outpacing supply in the rental, resale and new home markets.
  • Vancouver’s housing market continues to show strong evidence of problematic conditions due to moderate evidence of price acceleration and strong evidence of overvaluation.
  • Markets in the Prairies continue to show moderate to strong evidence of overbuilding.

CMHC defines “problematic conditions” as imbalances in the housing market. Imbalances occur when overbuilding, overvaluation, overheating and price acceleration – or combinations thereof – depart significantly from historical averages.

While previously the general public may have ignored the CMHC’s conclusions, instead focusing on the tremendous housing gains in both Vancouver and Toronto, in light of today’s developments with Home Capital Group, we urge Canadians to at least familiarize themselves with the report, which can be found here.

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Bubble Alert: We’ve Passed 2007 and Are On Our Way to 1999

The US stock market is officially in a massive bubble based on the one valuation metric that cannot be faked.

Corporations can engage any number of accounting gimmicks to juice their earnings, cash flow, and dividends… for this reason P/E, P/CF and P/DY ratios are all suspect when it comes time to value a corporations.

Sales cannot be gimmicked. Either money comes in the door, or it doesn’t. And if a company is caught messing around with its sales numbers, someone is going to jail.

For this reason, Price to Sales is perhaps the single most objective and clear means of measuring stock valuations.

This metric, above all others, you can point to and say, “this is definitively accurate and has not been messed with.”

On that note, as Bill King recently noted, today the S&P 500 is sporting a P/S ratio that is massively higher than it was in 2007 and is only marginally lower than it was during the Tech Bubble (the single largest stock bubble of all time for most measures).

(Source: The King Report)

There is simply no way to look at this and not call it a bubble. It is well above the 2007 bubble and only slightly smaller than the Tech Bubble (which everyone now looks

This bubble, like all bubbles, will burst. And when it does, the market will crash, just as it did in 2000 and 2008.

To pick up a FREE investment report outlining three investments that you could make you a ton of money when the bubble bursts…  

CLICK HERE!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

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