Tag: news

A marathon of Senate confirmation hearings gets kicked off today starting with Jeff Sessions (R – Alabama), Trump’s pick for Attorney General, beginning at 9:30AM EST.  Sessions is certain to face fierce opposition from liberals who will undoubtedly bring up his “racially insensitive” comments from the 1980s and grill him on his views regarding voter I.D. laws and immigration.

At this point it is relatively well known that Sessions was Reagan’s first judicial nominee to be defeated after the Senate Judiciary Committee heard charges back in the 80’s that he referred to the NAACP and the American Civil Liberties Union as un-American, communist-inspired organizations, and had agreed with a judge’s remark that a white civil rights lawyer was “a disgrace to his race” for representing black plaintiffs.  Sessions never officially admitted to making the comments but did acknowledge that, “I am loose with my tongue on occasion.”  While the comments are nearly 30 years old at this point they’re very likely to be rehashed in excruciating detail in today’s hearings.

Sessions’ stance on immigration is also likely to play a key role today given that Trump made immigration policy a cornerstone of his campaign.  Eager liberal Senators will be anxious to pepper Sessions with questions regarding his views on the Deferred Action for Childhood Arrivals (aka the DREAMERs), whether or not his Department of Justice will pursue mass deportations of illegal immigrants and the border wall.

Finally, Sessions will very likely come under attack for his past prosecution of voter fraud cases against three black civil rights activists in the 1980s.  Obviously, allegations of voter fraud and the need for voter ID laws came up frequently during the 2016 campaign with numerous instances discovered of dead people voting and state voter registration databases being riddled with errors.  This is a particular hot button for democrats who, with the help of George Soros, have vehemently opposed voter ID laws in several states across the country on the basis that they somehow seek to restrict the voting rights of minority and low-income voters.

Meanwhile, before we ever even get started, Sessions’ hearing is set to make history as Cory Booker of New Jersey will become the first sitting senator ever to testify against a colleague during a confirmation hearing.  Chris Collins (R – New York) appeared on CNN earlier to condemn Booker’s actions as nothing more than a “political stunt.” 

“Cory Booker’s all about the latest stunt.  If you remember what he did when he was mayor in New Jersey. The first thing he does is he tries to grab international headlines. What he’s doing today, never done before in the Senate. I mean it’s not surprising at all that Cory Booker’s the one pulling this off.”

“Cory Booker’s all about the latest stunt” — @RepChrisCollins on Booker testifying against Sessions https://t.co/hAdYK5dpsc

— New Day (@NewDay) January 10, 2017

 

And while all of this will make for fine political theater, given that Republicans control a 52-48 majority in the Senate and that Democrats eliminated the 60-vote threshold in 2013, all of the liberal grandstanding this week will ultimately amount to nothing more than an attempt to discredit and shame Trump’s appointees as they will all almost certainly be confirmed anyway.  As John Cornyn of Texas pointed out, “[Democrats] can delay the process, they can’t stop it.”  

With that, here is a live stream of Sessions’ hearing:

via http://ift.tt/2je8NgP Tyler Durden

Well that was $4 billion well spent…

Following an unexpected plunge in fixed capital investment  (-0.9% YoY vs +0.3% expectations), the peso has crashed to record lows…

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While in previous monthly letters and public statements, Bill Gross has expressed a negative view of Donald Trump, warning his tenure would be damaging, and urging investors to move to cash, culminating most recently in a Bloomberg interview in which he compared the president-elect’s policies to those of Italy’s fascist dictator Benito Mussolini, in his latest monthly investment outlook he takes a more practical view of what Trump’s policies would mean for markets, and specifically the one variable he believes is the key for market action going forward. Specifically, he is focusing on what he thinks is the critical resistance level of the 10Y yield, which will set the tone for virtually every other asset class, from stocks, to FX and, of course, to rates.

But before he goes into that, he points out a tangent on the difference betweeen secular stagnation and actual growth, which he notes is the difference between 2% growth and 3% growth and defines it as  “critical” namely that “3% growth rates historically have propelled corporate profits to a somewhat higher clip because of financial and operating leverage dependent on higher growth. 2% or less typically has smothered corporate profits”

How does this fit into markets? “The critical question of interest rates and the future level of the 10-year Treasury is challenging” noting that “It is the key to interest rate levels and perhaps stock price levels in 2017” and then segues into what he dubs his “only forecast for the 10-year in 2017.” To wit:

If 2.60% is broken on the upside – if yields move higher than 2.60% – a secular bear bond market has begun. Watch the 2.6% level. Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important that the Dollar/Euro parity at 1.00. It is the key to interest rate levels and perhaps stock price levels in 2017.

Which, incidentally reminds us of an article we wrote back in November asking “How Far Can Bond Yields Rise Before Hurting Equities“, and the answer, not surprisingly was just around 2.60%

That said he remains skeptical: “Trump’s policies may grant a temporary acceleration over the next few years, but a 2% longer term standard is likely in place that will stunt corporate profit growth and slow down risk asset appreciation.”

* * *

His latest investment outlook is below.

Echoes from Africa

If I sang a song about Africa
Of the spotted giraffe, the hyena’s laugh
Of the fiery sun rising to meet the day
With a stillness belying the lion’s evening meal;
Would Africa sing a song about me?

If I remembered a time once in Africa,
Bride at my shoulder, chasing a leopard’s shadow
With human eyes and Nikon shutters wide apart
Invading the solitude of blackened ancestors;
Would Africa remember a time once with me?

If I knew a story of Africa
Capturing a disappearing continent for a moment in time
Fleeting – far briefer than the earth’s reign;
At least until its dusty death,
Would Africa know a story of me?

Bill Gross

– With appreciation for Isak Dinesen

* * *

I traveled once to Africa, as you might have guessed by now, and it’s been a part of me ever since. Being perhaps the cradle of civilization, if not life itself, Africa casts an eerie glow over the entire history and, indeed, meaning of existence. There’s a strange beauty to it – this eat and be eaten land – brutal, yet fair and loving underneath its violent surface. I think it’s how I view my own life. I saw myself in Africa and, of course, through my own eyes I saw you there, too. The question however, that ends every stanza of my poem is whether Africa saw and will remember me. Are we just passing through without a trace following our dusty deaths? Will anyone, or anything, at the end of the line be the better for our time on earth? I,myself, know nothing of a grand scheme of existence, but I wish there to be one – if only to give meaning to our precious moments of happiness and frequent hours of despair.

Happiness has dominated risk markets since early November and despair has characterized global bond markets. Hope for stronger growth via Republican fiscal progress/reduced regulation/and tax reform have encouraged risk. The potential for higher inflation and a more hawkish Federal Reserve lie behind the 100 basis point move in the 10-year Treasury from 1.40% to 2.40% over the same time period. Are risk markets overpriced and Treasuries overyielded? That is a critical question for 2017.

The assessment of future growth and associated risk spreads is still uncertain of course. President-elect Trump tweets and markets listen for now, but ultimately their value is dependent on a jump step move from the 2% real GDP growth rate of the past 10 years to a 3%-plus annual advance. 3% growth rates historically have propelled corporate profits to a somewhat higher clip because of financial and operating leverage dependent on higher growth. 2% or less typically has smothered corporate profits. The 1% difference between 2 and 3 is therefore critical. We shall see whether Republican/Trumpian orthodoxy can stimulate an economy that in some ways is at full capacity already. To do so would require a significant advance in investment spending which up until now has taken a backseat to corporate stock buybacks and merger/acquisition related uses of cash flow.

I, for one, am skeptical of the 3 and more confident of the 2. The longer term negatives of my “New Normal” and Larry Summer’s “Secular Stagnation” may have disappeared from the business front pages of the FT and the NYT, but they have never really gone away – Trump or no Trump. Demographic negatives associated with an aging population, high debt/GDP now more at risk due to rising interest rates, technology displacement of human labor, and finally the deceleration/retreat of globalization pose negative ongoing threats to productivity and therefore GDP growth. Trump’s policies may grant a temporary acceleration over the next few years, but a 2% longer term standard is likely in place that will stunt corporate profit growth and slow down risk asset appreciation.

The critical question of interest rates and the future level of the 10-year Treasury is equally challenging. While the Fed has begun to tighten policy after abandoning Quantitative Easing several years ago, other major central banks continue to stoke the fire with as much as $150 billion of monthly buybacks. With the pinning of Japanese JGB 10-year yields at near 0% and the ongoing dovishness of Draghi’s ECB, global arbitrage effectively caps the 10-year at 2.4% to 2.6% levels. Currency adjusted yield pickups of 70 basis points by selling 10-year JGB’s or German Bunds and buying U.S. Treasuries, outline the artificial pricing of our 10-year, even as inflation moves higher and short term yields are raised by the Fed once, twice, or three times in the next 12 months.

So for 10-year Treasuries, a multiple of influences obscure a rational conclusion that yields must inevitably move higher during Trump’s first year in office. When the fundamentals are confusing, however, technical indicators may come to the rescue and it’s there where a super three decade downward sloping trend line for 10-year yields could be critical. Shown in the chart below, it’s obvious to most observers that 10-year yields have been moving downward since their secular peak in the early 1980s, and at a rather linear rate. 30 basis point declines on average for the past 30 years have lowered the 10-year from 10% in 1987 to the current 2.40%.

Source: Bloomberg.

Now, however this super strong, frequently tested downward trend line is at risk of being broken. 2.55% to 2.60% is the current “top” of this trend line, and over the past few weeks it has held and reversed lower by 15 basis points or so. BUT———-. And this is my only forecast for the 10-year in 2017. If 2.60% is broken on the upside – if yields move higher than 2.60% – a secular bear bond market has begun. Watch the 2.6% level. Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important that the Dollar/Euro parity at 1.00. It is the key to interest rate levels and perhaps stock price levels in 2017.

via http://ift.tt/2j3Jb92 Tyler Durden

Since Donald Trump won the US election, small business optimism has exploded higher (from 94.9 in Oct to 105.8 in Dec). At the most optimistic since 2004, the last 2 months have seen the biggest spike in hope since 1980's Reagan era spike.

Notably, as @SentimentTrader notes, extreme small business optimism preceded: the '87 crash, '95 rally, '97 crash, '98 crash, '00 crash, and the '03-'06 rally.

With 50% expecting a better economy – the third highest number in history – we do however note that expectations for earnings remain negative.

Put differently, as far as sentiment goes, it doesn't get much better than this.

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Submitted by Charles Hugh-Smith via OfTwoMinds blog,

Sorry, pal, you're evil. Self-righteous indignation counts for nothing in the strict accounting of real progressivism.

Dear Self-Proclaimed "Progressive": I love you, man, but it has become necessary to intervene in your self-destruction. Your ideological blinders and apologies for the Establishment's Neocon-Neoliberal Empire are not just destroying your credibility, they're destroying the nation and everywhere the Empire intervenes.

While you squandered your political capital defending zero-cost causes like "safe spaces on college campuses," the Empire was busy killing, maiming and making refugees of women and children in Syria. President Obama and his Neocon crew (former Secretary Hillary Clinton included) aren't fools; they rely on drones and proxy armies to do their dirty work.

Neoliberalism is the Establishment's core ideology, and by supporting Bill Clinton and Barack Obama, you furthered, defended and rationalized the Empire's neoliberal expansion and exploitation. Neoliberalism's Big Lie is transforming everything into a market makes everyone richer.

The dirty little secret of Neoliberalism is that the markets it creates are rigged in favor of Elitist cronies. If you can set aside your "progressive" blinders for a moment (Bill and Barack could do no wrong for 16 long years of neoliberal exploitation), you might learn that the Presidents and party you supported ushered in the era of neoliberal pillage as public-private partnerships, Philanthro-Capitalism, and rigged markets that enriched the elitist Establishment you defend at the expense of the bottom 95% non-elites.

You defended "higher education," which was simply a code word for stripmining the bottom 95% via student loans to pay outrageous salaries for under-assistant deans of student affairs and fund lavish expansion projects.

You embraced the Corporate Media's absurd "fake news" witch-hunt, when the biggest purveyors of fake news/Imperial Propaganda are the "liberal" media you unhesitatingly believe with all your heart because it reinforces your sense of moral superiority. Never mind that the mainstream "liberal" media is owned by corporations that are in bed with the Establishment and the Empire.

You were silent when your "progressive" president engaged in a global Murder, Inc., and your former secretary of state bragged "we came, we saw, he died." Your sputtering excuses for Imperial over-reach, extra-judicial murder and the destruction and displacement of entire populations is a travesty of a mockery of a sham of real Progressivism.

Wake up, Self-Proclaimed "Progressives": you're apologists for an Evil Empire. Your devotion to the Democratic Establishment that has mastered the art of bleating politically correct speech acts while destroying entire nations renders you the classic useful idiots, on par with those who defended Stalinism and the Soviet Gulag because "it was the right thing to do."

While you devote your energy to "resisting" Trump in completely empty gestures, you did nothing to resist the imprisonment of tens of thousands of young men of all ethnicities in America's War on Drugs Gulag.

While you championed your fake-Progressive presidents and party, wealth and wage inequality soared. Did you not mind because you and your household benefited from neoliberal skimming and scamming?

How many of your self-proclaimed "progressive" peers are in the 5% who came to do good and stayed to do well?

You have the luxury of supporting ObamaCare because somebody else is paying the bills. It may be a corporation, the state, a government agency, a university, a foundation or the taxpayer, but your support of neoliberal skims and scams doesn't cost you anything.

You are a hypocrite because you only engage in causes that don't cost you anything. Prove to us that you've been questioned or arrested by the F.B.I. for political action against the Empire, and you will have earned credibility. If you don't have any skin in real resistance, then your support of politically correct speech acts is cost-free and therefore meaningless.

I am sorry to be the one to tell you, but your unquestioning support of a neoliberal- neocon president, party and candidate makes you as evil as the empire you support, via your silence, rationalizations and absurdly empty gestures in favor of cost-free political correctness.

You have surrendered principled action in favor of a self-righteous belief that indignation makes you better then everyone else. Sorry, pal, you're evil. Self-righteous indignation counts for nothing in the strict accounting of real progressivism.

Your claim to moral superiority based on indignation makes you the moral equivalent of the "conservative" married preacher who is sleeping with the church secretary and skimming church funds. His claim to moral superiority is based on indignation, too.

By supporting a corrupt, self-serving elitist Empire of privilege and power, you are an enemy, witting or unwitting, of truth, justice, self-determination and liberty.

If you want to become a real Progressive, it has to cost you. You will have to abandon the Establishment you belong to, the party you support and the cheap veneer of self-congratulatory fake-progressivism you project.

You will have to throw yourself on the gears of the stripmining, protecting-the-privileged autocratic war machine you have supported by your silence and your rationalizations. To quote Mario Savio's famous extemporaneous speech during Berkeley's Free Speech Movement:

"There's a time when the operation of the machine becomes so odious, makes you so sick at heart that you can't take part! You can't even passively take part! And you've got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus — and you've got to make it stop! And you've got to indicate to the people who run it, to the people who own it — that unless you're free the machine will be prevented from working at all!"

Memo to Self-Proclaimed "Progressives": "safe places" on campus don't count.

The truth is, you are an embarrassment to real progressives. You should be ashamed of your empty claims to the high moral ground. If you are incapable of feeling ashamed for your self-congratulatory self-righteousness, then you are truly lost.

Look, I know you want to "do the right thing." You want to encourage and support truth, justice, self-determination and liberty. To follow your better instincts, you're going to have to admit that you've been conned, and that you've been a loyal passive puppet of an Evil Empire.

The "right thing to do" is to recognize the Neocon-Neoliberal Empire as the enemy of truth, justice, self-determination and liberty and withdraw your consent. If you still don't get it, maybe these essays will help:

Moral panic over fake news hides the real enemy – the digital giants

America was a 'stan' long before Trump Paul Krugman et al conveniently forget that corruption, cronyism and contempt for the rule of law long predated Trump.

Authoritarian Neoliberalism and the Myth of Free Markets

We need to pull together, not self-divide into ever more fractious camps. The oldest and most successful Imperial strategy is divide and conquer. Don't fall for it.

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At least 70 were killed or injured after a suicide bomber blew himself up in the Afghan capital of Kabul, quickly followed by a car bomb nearby in what appears to be have been a coordinated operation, authorities said. The Afghan Taliban claimed responsibility for the attack, according to Reuters.

The attack targeted a minibus carrying staff from the NDS, Afghanistan’s main intelligence agency, and as many as 70 people were killed or wounded, the insurgents said.

Just received the first footage from today`s #KabulAttack http://pic.twitter.com/EwHdIdjohE

— Zakarya Hassani (@ZakariaHassani4) January 10, 2017

At least 21 people had died and 45 more wounded were taken to hospital, public health ministry spokesperson Imail Kawasi said, although the numbers were likely to grow.

#BREAKING: Twin explosion (suicide bomber and car bomb) hit outside parliament offices in #Kabul #Afghanistan; Gunfire heard in the area http://pic.twitter.com/P5Sf5DsVji

— Amichai Stein (@AmichaiStein1) January 10, 2017

The attack, which ended a period of relative calm in the Afghan capital, occurred in a crowded area during the afternoon rush hour as workers were returning home. Officials said a suicide bomber blew himself up in the Darul Aman area of the city near the new Indian-financed parliament building and was followed immediately by a car bomber in an apparently coordinated operation.

Security forces blocked the road and ambulances are shifting the injuries.#KabulBlast #Afghanistan http://pic.twitter.com/1sZwWu83Cb

— Zakarya Hassani (@ZakariaHassani4) January 10, 2017

Earlier on Tuesday, a suicide bomber killed at least seven people in southern Helmand province, according to provincial police chief Gen. Agha Noor Kemtoz. He said the target of that attack was a guesthouse used by a provincial intelligence official, and both military personnel and civilians were among the dead, the local police chief said.

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