Tag: news

European Stocks Plunge Most In 16 Months As Draghi Disappoints

Broad European stocks plunged into the red for 2014 today as a rattled Mario Draghi disappointed a hungry-for-more risk market. Bloomberg’s BE500 index dropped its most since June 2013 to 2-month lows led by weakness in Italian banks. UK stocks underperformed (-3.6%) but Spain, Italy, and Portugal all tumbled 2-3%. The selling pressure interestingly stayed in stocks as bond spreads rose only modestly and EURUSD roundtripped to only a small rise from pre-ECB. Notably, US equities are cratering as they are so used to the pre-EU-close pump that did not happen.

 

European Stocks are back in the red year-to-date with the biggest drop in 16 months…

 

Broad-based decline…

 

and used to its daily EU close ramp, US stopcks are dumping…

 

Charts: Bloomberg




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High-Flying REIT Lodging Sector Crashes: Ebola Concerns Or Profit Taking?

Hotel REIT shares dove into a veritable sea of red ink during trading on Wednesday October 1 — kicking off a weak Q4 for one of the strongest REIT sectors during 2014.

During the Great Recession hotel stocks languished as companies cut business travel expenses, while job losses and weakened consumer confidence devastated popular resort and vacation destinations. However, during 2013 and YTD, the lodging REIT sector came back from the Great Recession with a vengeance.

The performance set the stage for several hotel REIT IPOs, including Blackstone’s huge Hilton Worldwide Holdings Inc.’s record-breaking debut.

So why did shares plunge on Wednesday?

The decline followed reports of one confirmed ebola case in Texas. That case has started to make people nervous; additional reports of Ebola cases could create an environment where the travel and hospitality industries would once again see weaker performance.

Big Picture Has Been Positive

Three of the strongest performers in the lodging REIT sector YTD have been the Ashford Hospitality Trust, Inc., Strategic Hotels and Resorts Inc, and Pebblebrook Hotel Trust.

Read More here




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Doctor Boards Atlanta Flight In HazMat Suit To Protest “Lying CDC”

“If they’re not lying, they are grossly incompetent,” said Dr. Gil Mobley, a microbiologist and emergency trauma physician from Springfield, Mo. as he checked in and cleared Atlanta airport security wearing a mask, goggles, gloves, boots and a hooded white jumpsuit emblazoned on the back with the words, “CDC is lying!” As The Atlanta Journal-Constitution reports, Mobley says the CDC is “sugar-coating” the risk of the virus spreading in the United States.

 

 

As The Atlanta Journal Constitution reports,

A Missouri doctor Thursday morning boarded a plane at Atlanta’s Hartsfield-Jackson International Airport dressed in full protection gear to protest what he called mismanagement of the crisis by the federal Centers for Disease Control and Prevention.

 

Dr. Gil Mobley checked in and cleared airport security wearing a mask, goggles, gloves, boots and a hooded white jumpsuit emblazoned on the back with the words, “CDC is lying!”

 

“If they’re not lying, they are grossly incompetent,” said Mobley, a microbiologist and emergency trauma physician from Springfield, Mo.

 

Mobley said the CDC is “sugar-coating” the risk of the virus spreading in the United States.

 

“For them to say last week that the likelihood of importing an Ebola case was extremely small was a real bad call,” he said.

 

“Once this disease consumes every third world country, as surely it will, because they lack the same basic infrastructure as Sierra Leone and Liberia, at that point, we will be importing clusters of Ebola on a daily basis,” Mobley predicted. “That will overwhelm any advanced country’s ability to contain the clusters in isolation and quarantine. That spells bad news.”

 

…

 

Mobley, a Medical College of Georgia graduate who had an overnight layover after flying to Atlanta from Guatemala on Wednesday…

 

“Yesterday, I came through international customs at the Atlanta airport,” the doctor told The Atlanta Journal-Constitution. “The only question they asked arriving passengers is if they had tobacco or alcohol.”

*  *  *
It seems CDC Director Frieden agrees…




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How Bad Could It Get? US Government Order Of 160,000 HazMat Suits Gives A Clue

Now that Ebola is officially in the US on an uncontrolled basis, the two questions on everyone’s lips are i) who will get sick next and ii) how bad could it get?

We don’t know the answer to question #1 just yet, but when it comes to the second one, a press release three weeks ago from Lakeland Industries, a manufacturer and seller of a “comprehensive line of safety garments and accessories for the industrial protective clothing market” may provide some insight into just how bad the US State Department thinks it may get. Because when the US government buys 160,000 hazmat suits specifically designed against Ebola, just ahead of the worst Ebola epidemic in history making US landfall, one wonders: what do they know the we don’t?

From Lakeland Industries:

Lakeland Industries, Inc. (LAKE), a leading global manufacturer of industrial protective clothing for industry, municipalities, healthcare and to first responders on the federal, state and local levels, today announced the global availability of its protective apparel for use in handling the Ebola virus.  In response to the increasing demand for specialty protective suits to be worm by healthcare workers and others being exposed to Ebola, Lakeland is increasing its manufacturing capacity for these garments and includes proprietary processes for specialized seam sealing, a far superior technology for protecting against viral hazards than non-sealed products.

 

“Lakeland stands ready to join the fight against the spread of Ebola,” said Christopher J. Ryan, President and Chief Executive Officer of Lakeland Industries.  “We understand the difficulty of getting appropriate products through a procurement system that in times of crisis favors availability over specification, and we hope our added capacity will help alleviate that problem.  With the U.S. State Department alone putting out a bid for 160,000 suits, we encourage all protective apparel companies to increase their manufacturing capacity for sealed seam garments so that our industry can do its part in addressing this threat to global health.

Of course, purchases by the US government are bought and paid for by taxpayers. For everyone else there’s $1200 mail-order delivery:

 

That said… 160,000 HazMats for a disease that is supposedly not airborne? Mmmk.




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Art Cashin Warns “Stay Wary” As S&P Sits At Critical Support

It “all depends on Draghi,” warned UBS’ Art Cashin early this morning… and Draghi disappointed. Historically October 2nd, Cashin notes, usually sees a rebound but payrolls may complicate that pattern (and rumors that ISIS is consolidating west of Baghdad). Stick with the drill, he advises – “stay wary, alert and very, very nimble,” as the 120-day moving average (1945 on Cash S&P) is critical…

 

 

Charts: Bloomberg




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“I Lied To Get A Loan, And Now It Is Forgiven” – UK’s Largest Payday Lender Just Wrote Off 330,000 Loans

While the Obama administration is furiously scratching its head how to write off the debt of a few hundred million Americans, so they can once again load up on debt from scratch, spend like drunken sailors, and blow up the system once more, others are already a few steps ahead, such as UK’s largest payday lender, the Wonga Group Ltd., which we learn today has written off the debt of 330,000 customers after British regulators introduced tougher rules to “protect consumers” such as Master Elliot Gomme, 20, who admits he lied to get a loan: “the 20-year-old admitted lying on his application and told Newsbeat it was “too easy” to be accepted.”

This is how wholesale debt forgiveness is done: as Bloomberg explains the Wonga agreement applies to loans that wouldn’t have been made under new tightened lending criteria and that have been in arrears for more than 30 days, the London-based company said in a statement today. The company is writing off 220 million pounds ($356 million) in loans, according to a person with knowledge of the matter, who asked not to be identified because the information in private.

“The need for change at Wonga is real and urgent,” Wonga Chairman Andy Haste said in the statement. “Our regulator is determined to improve standards in consumer credit, and I share that determination. There is much to do in order to make Wonga a sustainable and accepted business, and today’s announcement is a significant step forward in that process.”

 

The U.K. payday loan market is being reviewed by the Financial Conduct Authority after a government survey found providers weren’t fully compliant with standards designed to protect consumers. Wonga, CashEuroNet UK LLC and Dollar Financial U.K. Ltd. are the three largest U.K. payday lenders, according to Bloomberg Intelligence.

 

Wonga also said today that about 45,000 customers who are less than 30 days in arrears are being given as much as four months to repay their loans without interest and charges.

Which is great news for Master Elliot Gomme, who admits he lied to get a loan. The best news: he now doesn’t even have to repay it! Here is his story:

When Elliot Gomme needed money for a holiday, like many people he turned to payday lender Wonga.

He needed £120 and says he didn’t have a problem convincing them to lend him cash saying he was in full-time work.

But the 20-year-old admitted lying on his application and told Newsbeat it was “too easy” to be accepted.

He’s now likely to be one of 330,000 people whose debts will be written off after a ruling that Wonga lent money to people who couldn’t repay it.

“My bank couldn’t give me an overdraft or anything, and so I went to them [Wonga],” he says.

He received his money and went on holiday, but a few weeks later he says the firm started calling him and he says they were “constant”. “They were ringing me every day,” he says. “They were telling me how much I owe and that there was added interest.”

Elliot says that a few months later he was being told his debt had risen to more then £800 and it began to affect his day-to-day life. The longer it went on, the more he says he worried he would get about his situation getting out of control.

 

* * *

 

Elliot is likely to be one of those to have his loan cancelled and says it’s come as a relief. He says the amount of the debt was making him feel depressed and that he had “no idea” what he would have done if this ruling hadn’t come.

Or, as the New Normal Dostoyevsky would say: crime, and no punishment.

In short, great job Elliot: you too have now joined the endless line of banks, corporate executives, deadbeats, Obamaphone-addicts and so on, who have managed to “lie” your way to some cash, and gotten away with it with zeroh punishment.

In the meantime, all those other taxpayers, who diligently, and idiotically keep paying their taxes to afford the crony bailout funding of the entire gamut from welfare queens to bailout recipients, are (and if they aren’t they should be) wondering: “why the hell do we still keep paying the government?”




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The Real Bubble Isn’t Stocks… and It Will Make 2008 Look Like a Picnic

The 2008 crisis was just a warm-up.

 

The 2008 crisis was a banking and equities crisis. In the simplest terms, investment banks, leveraged to the hilt with garbage mortgage derivatives, became insolvent and began to collapse.

 

This collapse triggered a selling panic throughout the financial system as every financial entity questioned the quality of the assets backstopping its derivatives trades. The derivative market was over $700 trillion at the time. So just about every major global bank had broad exposure to this market.

 

The Federal Reserve and other Central Banks dealt with this issue by cutting interest rates to zero, opening emergency lending windows to needy banks, and engaging in Quantitative Easing.

 

The goal was of these strategies was to instill confidence in the banking system once again. However, by trying to prop up the big banks, the Fed has created an even bigger bubble than that which existed in 2007.

 

I’m talking about the BOND bubble.

 

With interest rates at zero, banks, financial institutions, and investors began to chase yields. This meant hundreds of billions of dollars worth of capital flowing into bonds of all different levels of risk.

 

When money poured into bonds, the bonds rallied, pushing their yields lower. This in turn meant more capital flowing into even riskier bonds as investors, still seeking yield, had to turn to riskier investments to obtain a significant return.

 

The end result? The bond bubble is so massive that it’s even hard to wrap one’s head around. Consider that:

 

1)   Bond yields for many European countries are at multi-CENTURY lows.

2)   US Treasury yields have only been lower TWICE going back to 1790.

3)   Japan’s Government bonds now have negative yields.

 

We all know that most sovereign nations are bankrupt. But the “flight to yield” is so powerful in the system today that yields are negative in real terms. This is absolutely extraordinary.

 

When this bubble bursts, the REAL crisis, the crisis to which 2008 was just a warm-up, will begin. The global bond market is $100 TRILLION in size. That’s nearly TWO TIMES larger than the global stock market. And bear in mind that the only reason stocks are so high is because investors are piling into them to seek out returns.

 

So when this bubble bursts, it’s going to make the 2008 crisis look like a picnic.

If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.

 

You can pick up a FREE copy at:

 

http://ift.tt/1rPiWR3

 

 

Best Regards

 

Graham Summers

 

Phoenix Capital Research




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Calif. Employee Pensions Are Not Sacred Cows, Judge Rules. But Don’t Call the Slaughterhouse Just Yet.

Underwater figuratively, not literally (so far)Public sector unions in
California have used their enormous clout to protect their plum
pensions, making it nearly impossible for municipal governments to
scale back benefits in any way shape or form (even for employees
they hadn’t even hired yet). Even as California cities file for
bankruptcy, unable to pay off various debtors, the California
Public Employees’ Retirement System (CalPERS) has argued that debts
owed to them are special and off the table. They cannot be reduced
or severed, even in the case of bankruptcy.

And then yesterday U.S. Bankruptcy Judge Christopher Klein’s
told CalPERS
it was wrong. In the case of a bankrupt city, pensions can be
cut just like any other debt. That’s what the bankruptcy process is
for. As The Sacramento Bee explains, the ruling came
because a debtor in the bankruptcy of the city of Stockton,
Franklin Templeton Investments, is upset that it’s only going to
get a ninth of what it’s due and wants a better deal, and that
might come from money going to pensions.

It’s important to note that this ruling doesn’t require Stockton
to cut pensions. Their current bankruptcy reorganization plan
maintains the status quo there, to the tune of $29 million a year.
Klein will rule on this plan at the end of the month. Certainly,
though, Klein’s ruling should be seen as a warning to Stockton that
he might not allow the city to favor some debtors over the others
to the extent that it’s doing with CalPERS.

Reason contributor Steven Greenhut has written extensively about
Stockton’s financial woes, both
here and at the San Diego Union-Tribune. He looked
over Stockton’s plan and noted that a failure to rein in pension
costs as part of its recovery could put the city back into
insolvency within four years. Read more
here.

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