finance – Page 18814

Winning The Hillary Way

Submitted by Jim Quinn via The Burning Platform blog,

The corporate MSM pundits are ignoring the YUUGE upset yesterday in Michigan. Bernie Sanders pulled off an epic upset and it barely gets a mention by the in-the-bag-for-Clinton corporate media. If you ever needed more proof that polls conducted by these morons are as worthless as an Obama promise, see the polls below regarding Michigan. Clinton can’t beat a died in red socialist when she has more money than the Vatican supporting her.

In a general election between Clinton and Trump, many disaffected, poor, jobless, and even union workers will vote for Trump. His anti-immigration and anti-NAFTA, anti-TPP stances will resonate with these people.

Clinton is the establishment candidate.

The”experts” on MSNBC and CNN are flabbergasted. They have no clue what is happening in this country. They live in their little NYC and DC bubbles and wonder why the plebs are so angry. Don’t we know the stock market is up 200% and corporations are rolling in dough?

The linear thinking ruling class are about to get the surprise of their lives. Fourth Turnings wipe away the existing social order. They won’t go without a fight, but they will be wiped away. Book it Dano.

As we noted last night, while the Trump victory is making headlines, the yuuge news of the night is Bernie Sanders beating Hillary Clinton in Michigan – against all poll expectations (with the Clinton campaign explaining “they misunderstood the electorate.” This was such a shock that CNN still wouldn’t admit it until well over 90% of the vote was in despite Sanders’ 4pt lead… Clinton had a 21pt lead in Michigan before today…

via Zero Hedge http://ift.tt/1pgwVli Tyler Durden

Tailing 10 Year Auction A Dud As Foreign Central Banks Step Back

Having documented the unprecedented shortage of underlying 10Y paper as a result of record low repo rates which have been at “fails” for the past week, everyone was anxiously awaiting today’s 10Y auction to see just how the market would soak up today’s $20 billion in 10 year paper. And the answer, somewhat surprisingly, was lousy because traditionally when there is a massive, and in this case record, short overhang, the auction tends to price through the when issued. Not this time, because moments ago the 10Y printed at 1.895%, tailing by 0.6bps to the 1.889% When Issued.

The internals were outright ugly, with the Bid To Cover dropping to 2.49 from 2.56 a month ago, the lowest since August 2015. The Indirects – aka foreign official accounts such as central banks and reserve managers – stepped away and received just 56.5% of the final allotment, the lowest since January 2015, and with Directs also dropping to just 11.1%, or the lowest since October 2015, this meant that Dealers ended up holding 32.4% of the auction, the highest since January 2015.

Bottom line, whether the result of the overnight fireworks in the Japanese bond market, or some still unknown reason, today’s auction was a dud.

Which brings up the next question: now that the 10Y is over, will the issue drop back to 0% in repo, or will the shortage persists with ongoing near-fails rates, and if so, just who is it that continues to press for higher yields?

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Famed Short Seller Muddy Waters Says It’s Just A “Dead Cat Bounce”

Echoing the less than exuberant credit market and confirming Jeff Gundlach’s (and former Fed President Dick Fisher), infamous short-seller Muddy Waters’ Carson Block told Reuters that the recent rally in the U.S. stock market feels like a “dead cat bounce.”

“I would say that this does feel like it is a dead cat bounce because how much more ammunition really do policymakers have?”

It seems the market was listening…

Will 1980 hold up again?

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Chevron Protects Dividend, Slashes Another 36% Off Spending

Submitted by Nick Cuningham via OilPrice.com,

The largest oil companies are struggling to balance competing objectives with dramatically lower revenues compared to previous years.

Nearly all have taken the axe to their spending levels, although to varying degrees. New exploration projects have been scrapped, suppliers have been squeezed, and workers have been laid off. But the top tier companies are fighting to protect their dividend policies above all else, an increasingly expensive priority that is forcing deeper cuts to spending.

But the strategies differ depending on the company. Chevron, for example, continues to cut spending in order to keep its dividend. The California-based multinational just announced that it would cut its capex in 2017 and 2018 by another 36 percent, bringing annual spending down to between $17 and $22 billion. That is down from an October 2015 estimate, when Chevron said that it expected to spend $20 to $24 billion each year in 2017 and 2018. It is also sharply lower than the $26.6 billion Chevron is spending this year, which itself is a 25 percent reduction from last year’s levels.

The severe cuts come as Chevron has had to take on debt in order to afford shareholder dividends, as the company has not generated enough cash flow to cover the payouts with oil prices as low as they are. Dividends cost the company $8 billion in 2015 alone. Chevron would need oil trading at $50 in order to cover the dividend with cash flow.

This week is also notable for Chevron because the giant Gorgon LNG project in Australia is finally beginning operations. The $54 billion export facility has absorbed much of Chevron’s capital and attention, a project that has suffered from repeated delays and cost inflation. The total price tag is 45 percent higher than the original estimate.

The bad news for Chevron is that the facility is set to export LNG into a market that is already oversupplied. Spot LNG cargoes have plunged by two-thirds over the past two years. For April delivery, LNG cargoes in East Asia have dropped to just $4.25 per million Btu (MMBtu). In early 2014, the same cargoes sold for over $17/MMBtu. Chevron will be insulated somewhat from these forces with contracts lined up for delivery under fixed prices. The long-term picture, the company believes, still looks strong. LNG export terminals can operate for decades. Nevertheless, the massive project is squeezing Chevron in the short-term, a time when it can least afford it. And with dividends untouchable, spending on exploration and production must be cut deeper.

Meanwhile, other companies have instead opted to cut their dividends so as not to hollow out spending too much. They lack the financial heft of ExxonMobil, Shell, or Chevron. Companies like ConocoPhillips, Noble Energy, Anadarko, and Eni have trimmed shareholder payouts over the past year.

Eni, in particular, offers an interesting window into the downturn. Eni is a large oil company, but smaller than Chevron. Eni decided to cut its dividend once oil prices collapsed, and announced a cut to the payout one year ago. That helped provide some breathing room. Although it wasn’t enough for Eni to cover its spending obligations with cash flow – the company needs $50 oil to do that – it still allowed the Italian oil company to cut 2016 spending by a lower proportion than its larger competitors. While Chevron cut spending by a third, Eni is only cutting spending by 20 percent.

With that said, Eni’s oil and gas production will remain flat this year after seeing gains in 2015. New fields starting up in Norway, Egypt, Angola, and Kazakhstan won’t be enough to offset its decline rate from mature fields. On the plus side for Eni though is the fact that last year it announced the largest natural gas discovery ever recorded in the Eastern Mediterranean. Eni is already working to develop the natural gas field off the coast of Egypt. Eni was able to replace more than 148 percent of the reserves it produced in 2015, a metric known as reserve-replacement ratio.

The supermajors might be protecting their dividends, but they are also risking lower long-term oil production. For now, that is a problem for another day. Referring to his company’s first negative reserve-replacement ratio in 12 years, Shell’s CFO said in February: "While we're not entirely comfortable with a negative number, it's not the most important thing today.”

via Zero Hedge http://ift.tt/1nwNKqh Tyler Durden

Former Fed President: “We Injected Cocaine And Heroin Into The System To Create A Wealth Effect”

Just two months ago, former Fed President Dick Fisher admitted that "The Fed front-loaded an enormous market rally in order to create a wealth effect." Today he is back, taking a victory lap onthe 7th anniversary of the crisis lows by explaining, rather stunningly, to CNBC that "we injected cocaine and heroin into the system" to enable a wealth effect (that he admits did not work, despite its success in raising asset prices), and "now we are maintaining it with ritalin." Fisher also confirmed his previous warning that "The Fed is a giant weapon that has no ammunition left."

Fisher explains how The Fed achieved its goals… but admits that didn't really fix anything…

And here is CNBC's higher quality (edited) version where the blame for everything is pinned on "feckless fiscal authorities…"

Once again, Fisher appears to be undertaking a major "cover-your-ass" episosde, proclaiming that he was against QE3 which is what has forced "valuations to be very richly priced."

via Zero Hedge http://ift.tt/1QHkaKj Tyler Durden

DNC Head Threatened To Kick Michigan Mayor Out Of Debate For Cheering Bernie Sanders

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Hillary is the candidate of the corrupt establishment. The status quo wants Hillary in the White House so the parasitic gravy train can roll on. DNC head and Florida Congresswoman Debbie Wasserman-Schultz is one of these people. She isn’t interested in reform, because reform wouldn’t advance her personal interests. She wants things to stay the way they are, because it’s working great for her.

Genuine liberals are finally starting to see these people for the frauds they are, which is why the Democratic Party is currently splitting in two. On one side there are those who understand United States policy doesn’t need a tweak here or there — it needs to be hauled off to the emergency room immediately. The so-called “elites” in the Democratic Party are just as disconnected and clueless as their Republican counterparts. Instead of accepting that paradigm level reform is required, they merely double down on their support of cronyism and rent-seeking.

– From the post: The Democratic Party’s Civil War Escalates – DNC Chair Attacks Elizabeth Warren’s Reform Efforts

Just in case you still harbored any doubt as to how the DNC, under the crony “leadership” of Debbie Wasserman-Schultz rolls, let me introduce you to the following article published at The Hill:

Warren Mayor Jim Fouts, who was sitting behind Democratic National Committee (DNC) Chairwoman Debbie Wasserman Schultz, said he was complimenting Sen. Bernie Sanders (I-Vt.). But staffers for the DNC said Fouts was “being very disruptive,” according to BuzzFeed.

The mayor said he and his assistant were pulled aside by security during a commercial break and were told that people had asked for him to be removed.

“The sergeant-at-arms said, ‘The people that run this want you ejected, they don’t want you here,’” Fouts said.

When asked if it was Wasserman Schultz making the request, Fouts said, “The security guy said, ‘Don’t say I said it.’”

Fouts, an Independent mayor who attended both the Republican and Democratic debates in his home state, commented on the noticeable differences between the two events.

“The Democratic debate is totally controlled by Hillary’s good friend DNC Chair Debbie Wasserman Schultz,” Fouts wrote in a Facebook post. “No commentary is allowed by the audience. Particularly if you are cheering Bernie Sanders. Persons who do not adhere to Hillary’s rules are threatened with expulsion.”

He also said the Democratic Party’s debate process “borders on totalitarian control” and, in an interview on Monday, he said Wasserman Schultz should resign.

How liberal.

For related articles on the civil war within the Democratic Party, see:

The Democratic Party’s Civil War Escalates – DNC Chair Attacks Elizabeth Warren’s Reform Efforts

The DNC is “Feeling the Bern” – Debbie Wasserman Schultz Faces Serious Primary Challenge

It’s Not Just the GOP – The Democratic Party is Also Imploding

“Bernie or Bust” – Over 50,000 Sanders Supporters Pledge to Never Vote for Hillary

via Zero Hedge http://ift.tt/1W9gnpl Tyler Durden

Where Have We Seen This Before: Hungary Central Bank Will Prop Up Economy By Boosting Stock Market

While most western central bankers are slowly, if grudgingly, admitting that everything they have done since the start of the “most hated rally in history” has been to create precisely this rally (also explaining why it remains so deeply “hated” as none of it is in any remote way natural) at least in Hungary they are dead honest from the onset, that when it comes to propping up the economy it all starts (and ends) with the stock market.

According to Reuters, the Budapest stock exchange, now majority-owned by the central bank – just a few conflict of interest there – approved a new strategy on Wednesday to boost new listings and attract new investors, helping the government’s efforts to buoy the economy.

The National Bank of Hungary, run by Prime Minister Viktor Orban’s close ally Gyorgy Matolcsy, bought a majority stake in the stock exchange in November, in a move seen as another state attempt to help prop up the economy. Actually, what the move does is provide the implicit guarantee of the central bank to risk assets, something that has been explicitly or implicitly the norm across most other countries for the past 7 years.

The symbiosis between the central bank and the government – as is the norm around the globe – is not new: Matolcsy has helped Orban’s economic policies with interest rate cuts and a massive funding for lending programme in the past three years.

As Reuters adds, the Budapest Stock Exchange’s new strategy for 2016 through 2020 aims to end a dearth of listings and reverse a fall in turnover seen over the past years, just as the central bank starts to trim back its massive cheap loans programme.

In turn, the central bank has now turned its attention to stocks: Hungary’s stock market index surged almost 44 percent last year, and is currently trading at six-year highs, but its capitalisation is lower than regional peers, new listings are scarce and volumes remain below pre-crisis levels.

This is how the central bank-controlled exchange plans to do it: “Right now the most pressing task is to help successful listings by having companies go public that meet the high quality standards required to strengthen investor confidence,” the bourse said in a statement. “It is also important that listings take place at pricing levels that provide room for future price increases.”

Basically Hungary is taking a piece of US monetary policy, where it will pump up the entire market, and also from China, where it hopes to force investors into “sure thing” IPOs, generating an overnight “wealth effect” for those who are allocated shares, if not for the bagholders who end up buying said shares in the open market.

Among the central bank’s other intentions, is that it wants to boost the number of large liquid shares to at least five from a current three to four, and use European Union funds to develop the capital market in close cooperation with the government, it said. It said new issuance could come primarily from state-owned companies, and the government would examine the possibility of listing some companies. It did not name specific companies.

But most importantly, the bourse will aim for five share or corporate bond listings per year and boost stock market capitalisation to about 30 percent of gross domestic product from less than 20 percent today.

In other words, the central banks hopes to boost the economy, by artificially pumping up the market.

Reuters concludes by saying that Hungary, whose debt has been rated “junk” since 2011 due to Orban’s unpredictable policies and the country’s high debt, is expected to regain investment grade status this year thanks to its improved fundamentals.

By which it means, of course, another stock market bubble.

via Zero Hedge http://ift.tt/1M6OdWt Tyler Durden

Peter Schiff: The Establishment Is Peddling Fiction, Ignoring Fact

Submitted by Peter Schiff via Euro Pacific Capital,

In his seventh, and final, State of the Union address this January, President Obama, clearly looking to bolster his legacy as the president who vanquished the Great Recession, boldly asserted that “Anyone claiming that America’s economy is in decline is peddling fiction.” Unfortunately for the President, more and more Americans seem to believe (with an adequate basis in proof) that the fiction is emanating from the White House.

It’s hard to imagine how anyone can really assert with a straight face that the economy is currently “strong.” The most recent Gross Domestic Product (GDP), from 4th Quarter 2015, shows us barely inching along at a 1% annualized growth rate (Bureau of Economic Analysis, 2/26/16). Given that moderate growth used to be measured in the 3%-4% range, and that recent declines in the trade balance could further subtract from both 4th (2015) and 1st quarter GDP, we could be forgiven for raising an eyebrow or two in reaction to Obama’s boast.

For the President and his boosters, last week’s February non-farm payroll report, which showed 242,000 new jobs created and an unemployment rate below the crucial 5% level (Bureau of Labor Statistics, 3/4/16), provided proof that the Administration's economic policies, whatever they may actually be, are working. By beating the 190,000 consensus forecast for February of economists surveyed by Reuters, and revising upward the low 151,000 jobs previously reported in January to 172,000 (BLS, 3/4/16), the government was able to point to two months that averaged north of 200,000 new jobs.

The good news prompted Obama to invite reporters into a Cabinet meeting to crow about the results and to shame those who somehow remain skeptical, saying (to paraphrase) “America’s businesses are creating jobs at the fastest pace since the 1990s…and I don’t expect…this evidence to convince some…to change their doomsday rhetoric.”(The White House, Office of the Press Secretary, 3/4/16) He’s right on that point, the gloom should remain. Yes, the economy is creating jobs, but they are not the kind that can bring us back to the days of solid growth. The more important fact, which Obama did not mention, was that the report showed one of the largest drops in weekly earnings ever reported. It’s too bad that our media seems to be incapable of noticing such a tremendous problem right below the surface.

One month ago, the January jobs report was enlivened by a healthy .5% jump in average hourly earnings. At the time, I argued that such good news would be a one-time event as it resulted from the increases in minimum wages that kicked in at the start of the year in many states across the country. As predicted, the momentum was fleeting. In February, average hourly earnings did not increase the .2% that was expected, but fell .1%. The drop may not seem like much, but it is the first decline since December 2014, and one of only six declines in the past ten years, according to BLS data. Making matters worse, average hours worked declined from 34.6 hours to 34.4. Combining falling wages and falling hours translated into a .7% decline in weekly earnings, the biggest drop ever measured in that statistic. (BLS, 3/4/16) For some reason Obama let that one slide.

The truth is that the big numbers in job creation do not reflect healthy economic growth but a fundamental shift in the labor force away from high-paying, full-time jobs to low-paying, part-time jobs. The February “household” survey of job creation shows that 78% of the jobs created were part-time, and 82% of those were in the low-paying service industries such as food service and retail. This partially explains February’s data that shows exports at the lowest level in almost five years. It’s hard to export the things created by bartenders and waiters. Meanwhile, we lost much higher-paying full time jobs in manufacturing, mining, and logging that would have produced things capable of being exported. Yes jobs are being created, but only at the expense of higher-paying jobs that are being destroyed. (BLS, 3/4/16)

Most observers assumed that the February Challenger Job Cut Report (released the day before non-farm payrolls) would be a big improvement over the very large 75,000 layoff figure posted in January. And while the 61,000 layoffs announced in February was an improvement, it was not nearly as much as observers had hoped. Averaging the two months puts the current pace for announced layoffs at 32% higher than the same period last year. Also, last week, the PMI Service Index, which came in at 53.2 in January, came in at 49.7 in February, showing actual contraction (below 50), (joining the smaller manufacturing sector, which has been contracting for months).

Companies have been incentivized to cut their full-time work force by a variety of costly and burdensome regulations that are largely the result of the Obama Administration. If a company replaces a full-time worker with two part-time workers, the statistics count that as a job gain. But this only holds up if you count quantity while ignoring quality. The view from the street looks quite different, as workers prefer one good job to several bad ones. This is why rallies for Donald Trump and Bernie Sanders are so well-attended. The underemployed are fed up with platitudes from the elites and they flock to these outsider candidates, who seem to understand their pain.

It appears that investors are no longer signing up for the optimism either. Normally, a much stronger than expected non-farm payroll report would have ignited a market rally, but this one ignited a rally in gold, which at one point neared a high of $1,280 per ounce (gold was up 3% for the week). The strong jobs report should have convinced investors that the Fed would raise rates, which would hurt gold. But that didn’t happen. The markets have started to figure out that the jobs numbers are meaningless and that soon they will roll over to mirror all the bad data emanating from other sources.

I don’t expect that the President will ever officially acknowledge that the economy has weakened, let alone relapsed into recession. He has walked out too far on his rhetorical branch to walk it back. As a lame duck, he really has no incentive to do so. Such admissions would also undercut the campaign of Hillary Clinton,who is running as the logical successor to carry his torch.

But Janet Yellen is in a very difficult spot. If she continues to ignore the growing signs of recession, she runs the risk of letting one develop prior to the election.

This would favor the Republican challenger, whether that is Donald Trump or Ted Cruz, neither of whom would be inclined to reappoint her as Fed Chairwoman, if elected. Allowing the Greenspan bubble to bust on Bush’s watch sealed John McCain’s fate, allowing Obama to ride a wave of voter outrage into the White House in 2008. Yellen does not want Trump to catch a similar wave in 2016.

As a result, I expect the Fed to soften its rhetoric in the very near future. They will promise that the punch bowl is going to remain on the table for the foreseeable future. This means that market movements that have defined 2016 thus far may accelerate in the months ahead, and may provide relief for investors in commodities and foreign currencies who have had the patience to wait out the nonsense.

via Zero Hedge http://ift.tt/1USL1oz Tyler Durden

“At This Point” It’s Over: Establishment’s Last Hope Fades As Trump Leads Rubio By 23 Points In Florida

It just keeps getting worse for the GOP establishment.

The harder the Republican aristocracy tries to derail Trump, the more convincing his victories become, in a kind of self-fulfilling, status quo-destroying loop, and now that Michigan has proven just how divided the Democratic vote truly is, it seems even more likely that the brazen billionaire may indeed end up taking the oath of office.

The GOP’s preferred candidate was obviously Jeb Bush. The last name says it all. But that crashed and burned in dramatic fashion and so, the establishment shifted its support to Marco Rubio.

That worked out for all of one caucus. After a strong showing in Iowa, Rubio’s star was shot down by New Jersey Governor Chris Christie, who at the time was still a candidate. Here’s where it all fell apart:

On Tuesday, the upstart senator didn’t even show up. Michigan was a disaster for Rubio and now, the latest poll from Quinnipiac University shows Trump beating him in his home state by 23 points.

As Politico notes, “Rubio’s campaign is working nonstop to try and win the state. The Florida senator has essentially camped out in Florida, doing back to back events throughout the state.”

But it won’t matter. Just like it didn’t matter in New Hampshire. Or South Carolina. Or Alabama. Or Massachusetts. Or Michigan. Or anywhere else.

It’s over. The only way to stop Trump now is for the deep state to literally step in and nullify the electorate’s decision on the excuse that Americans have simply lost their minds in a (hopefully) temporary bout of nationalistic, frustrated insanity.

Which brings us to a rather disturbing conclusion: democracy in America is going to be hijacked either way. Either Trump capitalizes on the country’s deep-seated frustrations and fears to capture an office he probably isn’t prepared to hold (and we honestly don’t mean that in a pejorative way), or else the political and business establishment simply denies the will of the people and refuses to allow him to become commander-in-chief.

Anyway, that’s another discussion. The point for now is this: Marco Rubio is about to get “schlonged” in his home state by 20+ points. And that, in and of itself, says a lot about the mood of the American electorate.

Trump himself summed it up best: “At this point it’s pretty tough for anybody to do anything.”

Yes Mr. Trump, “at this point”, it sure is.

Florida Poll

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Despite Record Cushing Inventory, Oil Jumps To $38 On Biggest Gasoline Draw In A Year

DOE's 3.88mm inventory build confirms API's print and is the 8th weekly rise in the last 9 for overall crude levels. Cushing also saw a build (690k) — the 17th week of the last 18. But the market – for now – is focused on the 4.5mm barrel draw in gasoline inventories – the biggest in a year, as the seasonals pickup. Crude jumped on the news, seemingly ignoring the fact that Cushing inventories now stand at a record high 66.9mm barrels. Also notably, US production rose for the first time in 7 weeks.

DOE: