JAN 12 17 SIT EC
y POL
ZERO HEDGE, BLOOMBERG & WS-J
ECONOMICS
"In
our estimation the investment climate for risk assets after the election
looks a lot like the environment before the election: risky. And while
there are many valid reasons to cheer a change in tax policy, saving the U.S.
and global economy from its past excesses is not one of them."
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Is this a fear of investors or a request for more QEs and
free money?
For those tapping the fixed
income markets, the borrowing binge fest is
conspicuous in its constancy. Not only did global bond issuance top $6.6 trillion last year, a fresh
record, sales are off to a galloping start
thus far in January.
…
Jesse Felder, president of Felder
Investment Research, recently put pen to paper to quantify the value
investors get today. What sets Felder apart from the crowd, in a good way, is
that he factors in the backdrop of record bond issuance feeding what had, until
very recently, been a record pace of share buybacks.
“When
you look at corporate valuations more comprehensively, including both debt and
equity, we have now matched that prior period,” Felder wrote in a recent report, referring back
to peak dotcom bubble valuations. To arrive at this conclusion, he compares the
value of nonfinancial corporate debt and equity relative to gross value added,
an effective gauge of enterprise value-to-sales.
In the lead are corporate bond sales, which accounted for
$3.6 trillion of last year’s super sales. To not be outdone, investors
ran a full out sprint in the new year’s first trading week,
“shattering,” not breaking records, in the words of New
Albion Partners’ Brian Reynolds. In the first three trading days of the
year alone, investors bought $56 billion of new corporate bonds. Some
context in the context of what’s been one record-breaking year after another in
issuance:
“An
average month in recent years would see investors buy about $130 billion of
corporate bonds,” noted Reynolds. “Investors just bought more than 40 percent
of that monthly average in just three trading days!”
But wait!
What are the odds share
repurchases reaccelerate under the new administration? In one word
‘growing,’ fed by two springs. The first is mathematically
driven. Calpers, the country’s largest pension, recently announced it
would be “gradually” lowering its rate of return target to 7.0 percent from 7.5
percent.
The funny thing is
California governor Jerry Brown just announced he anticipates the state will
run a $1.6 billion deficit by next summer as the tax base continues to atrophy
driven by – wait for it – rising taxes. And where are a lot of those tax
dollars going? You guessed right again – backfilling that yawning pension gap.
Will the exodus out of the Golden State continue, leaving only the uber-wealthy
and economically immobile behind? You tell me.
As we
have hopefully learned, the
credit machine feeds the buyback machine, and away we go. Tack
on the prospects of a Republican Congress facilitating the repatriation of all
that offshore cash and you’ve got the makings of a true buyback renaissance. Oh, and by the way, a seriously overvalued bond market.
Jesse Felder, president of Felder
Investment Research, recently put pen to paper to quantify the value
investors get today. “When you look at corporate
valuations more comprehensively, including both debt and equity, we have now
matched that prior period,” Felder
wrote in a recent report, referring back to peak dotcom bubble valuations. To
arrive at this conclusion, he compares the value of nonfinancial corporate debt
and equity relative to gross value added, an effective gauge of enterprise
value-to-sales. See image at: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/01/11/20170112_binge2_0.jpg
How does Felder
calculate such a clever metric? With the help of some Federal Reserve data,
no less, he incorporates the buyback bout to create a holistic valuation
methodology to capture comprehensive corporate valuations. Because one
frenzy, bond sales, has fed the other, the stock market’s
historic run by way of share count reduction, it’s simply
disingenuous to not marry the two.
“This
has essentially been a massive debt for equity swap that serves to reduce the
value of equity outstanding while greatly expanding the amount of debt
outstanding,” added Felder. “Equity-only valuation measures fail to account for
this phenomenon. This measure incorporates it.”
The point, though, is not that the current rally will
necessarily buckle under the weight of bloated valuations. To the contrary,
pensions’ sheer buying power, their trillions upon trillions of dollars of
monies to be allocated, can indeed make it appear that we are now in 1999, or
better yet, 1996. But don’t be fooled – you’re still paying a dear price to
play with fire.
So stop yourself the next time you hear some talking head
reassuring you that the price-to-earnings ratio on a trailing 12-month basis is
dirt cheap.
If you need inspiration, look to
some of the greatest lines ever penned in Politics
and the English Language by
George Orwell: “The great enemy
of clear language is insincerity. When there is a gap between one’s real and
one’s declared aims, one turns as it were instinctively to long words and
exhausted idioms, like a cuttlefish spurting out ink.” And yes,
Orwell was English. You can safely read his words aloud, with a British accent.
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Continuing
jobless claims are up over 100,000 since Donald Trump's election victory and
stand at 4-month highs. This is the biggest percentage rise in claims since May 2009,
all happening as small business optimism, consumer confidence, and stocks soar
to cyclical highs.
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Despite the latest Small Business Optimism
explosion of confidence (in December), the most up-to-date surveys of US consumer confidence appear to be crumbling
after the 'Trump Bump'...
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The stock market has been on quite a roll in
recent weeks, but signs of trouble
continue to plague the real economy. Even though economic conditions
appeared fairly stable throughout 2016,our
long-term problems just continued to get even worse. So the truth
is that we are more primed for a major crisis today than we have been at any
point since the last recession.
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Given that most predictions end up being wrong,
why not just take a look at what
passes for conventional wisdom and do the opposite?
…
Warning: many of these involve Trump.
1. Trump is going to nuke somebody in 2017 (and tit-for-tat
comes) .. What if the opposite happens—what if peace breaks out all
over in 2017? And what if it is because of Trump?
2. Trump’s billionaire
cabinet is going to turn the United States into a vast plutocracy .. what
if the opposite happens? What if inequality decreases?
3. We are due for a recession .. There’s
no reason the expansion can’t continue. The only way we get a recession is if
the Fed causes one by ripping rates.
4. The Fed is full of crap and will never raise rates There is
a big blind spot here. It’s
the classic boy-who-cried-wolf fable.
5. International trade is going to collapse under Trump 5. International trade is going to collapse
under Trump What if the opposite happens? What
if there is actually more trade? What
if Trump doesn’t simply tear up existing treaties but renegotiates them?
6. The BOJ is out of tools People
have been predicting endless deflation in Japan as long as I can remember. They
missed .. and if inflation comes, it’s not likely anyone will get that right,
either.
7. The ECB will continue to do whatever it takes What
if they don’t? The Eurozone might be
breaking out in growth—which might mean the end of radical monetary policy.
8. Healthcare and education costs will continue to
skyrocket well into the future People is used to healthcare and education
costs going up 15-odd percent a year, so market reform could come n ends
subsidies (in the case of education)… problem solved, or at least improved.
9, Global temperatures will continue to skyrocket What if they don’t? science behind it n when
everyone believes something, it is almost always wrong.
10. France, Italy, etc., will never grow Wealth
is the direct result of work. I think Europe is getting closer to figuring this
out.
11. Mexico screwed, because of Trump Probably not. Perhaps the reverse: taxes
to US imports
12. China is going to blow up the world Everything
you read about China is probably false.
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POLITICS
Los neoconservadores pretenden
paralizar Washington
Washington NO representa la NACION, representa la burocracia que manipula el poder.
Paralizaron el país desde 1985 (Washington Consensus)
que instalo el modelo neoliberal.
Sus
fanáticos tienen derecho al zapateo .. es parte de la libertad y “democ” en
America. Eso no significa que los perdedores de las
elecciones tengan la razón consigo. Solo significa que los neocons de
ambos Pdos (demos y repus) están cavando su tumba. Siempre representaron el fraude,
la compra de votos, la especulación y caos neoliberal. Eso enriqueció las oligarquías
en el poder. ESO SE ACABÓ. Ambos partidos no
presentan ni 1/3 del electorado nacional. La Olig juega su última carta con
Trump.
…
With
just 8 days left until President Trump's inauguration ceremony in Washington
D.C., a massive security force, including 7,500 Guardsmen and 3,000 police
officers, is preparing for the worst as the event is expected to attract up to 750,000
protesters, some of whom have vowed to "paralyze the city."
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"Anyone the collective NEOCON TRIO of
McCain, Graham, and Rubio is displeased with, is assuredly a better choice than someone they like."
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The
Justice Department Inspector General has launched a review of the actions of
the Federal Bureau of Investigations and Department of Justice leading up to
the 2016 presidential election.
…
Attorney General
Loretta Lynch and other senior department officials told Comey at the time not
to send his letter to lawmakers on Oct. 28 announcing that the Clinton
investigation was being reopened. They argued that doing so violated
long-standing policy to not undertake anything significant with a major
investigation so close to an election if, by doing so, it could affect the
results.
Comey proceeded
anyway, writing to lawmakers about a fresh trove of e-mails possibly tied to
Clinton that needed to be reviewed. But handling of the probe had already
been assailed by that point, after Lynch met privately with Bill Clinton on an
airport tarmac in late June. Lynch said she and the former president discussed
only personal issues, such as their grandchildren, but the private meeting
quickly became a pivotal, controversial event in the investigation’s timeline.
Brian Fallon,
Clinton's spokesman, told MSNBC on Thursday that Comey's actions "cried out for an independent review." The internal review was at the
hands of Justice Department Inspector General (IG) Michael Horowit. He recommended that the Clinton case be closed without
charges.
The case is that Mr Horowitz is an Obama appointee who has been a consistent Democratic donor over the years, including
donations to Clinton's Senate bid, as well as longtime Clinton ally Richard Blumenthal (D-Conn.) and current
Senate Minority Leader Chuck Schumer (D-N.Y.).
…
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Unfortunately the people of this country are not educated, by their
schools, press or even their favorite websites to realize what has been done, how truly horrible it is, and how
based it all is on lies. Fake news is the order
of the day. Up is down, black
is white, Russia is the aggressor, the U.S. is the victim. The new president
must be a team-player, and for God’s sake, understand that Putin is today’s
Hitler... or else.
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Special Inspector General for Afghanistan Reconstruction (SIGAR) John Sopko is once again warning about the long-standing
problems of corruption in Afghanistan, and the amount of US
“reconstruction aid” disappearing down black holes over the course of the years.
As always, the discussion came around to “ghost
soldiers.”
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Just hours after NSA Whistleblower Edward Snowden urged President Obama to "save [Chelsea Manning's]
life by granting her clemency,"Wikileaks' founder Julian
Assange says he will agree to be extradited to the United States if
the president grants clemency to the former US soldier Chelsea Manning,
who is currently serving a 35-year sentence for leaking documents.
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WORLD ISSUES and ME
China
Daily: Tillerson's "Disastrous" Actions Would Set The Course For A
"Devastating Confrontation"
"Tillerson's statements regarding the
islands in the South China Sea are far from professional. If Trump's diplomatic
team shapes future Sino-US ties as it is doing now, the two sides had better
prepare for a military clash... Should he act on them in the real world, it
would be disastrous... and would
set a course for devastating confrontation between China and the US."
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DEMOCRACY NOW [
on Soros view? ]
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GLOBAL RESEARCH
Six
Years Ago in the Aftermath of the Earthquake: The Militarization of “Emergency
Aid” to Haiti. Is it a Humanitarian Operation or an Invasion? By Prof Michel
Chossudovsky
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The
Obama Legacy: “Dying Democracy”, Extrajudicial Assassinations, Wars, Terrorism,
Refugee Crisis… By Rev. Richard Skaff
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The
Real Purpose of the U.S. National Intelligence Report on Alleged Hacking by
Russia By Chris Hedges
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INFORMATION CLEARING HOUSE
Cheering for the CIA
and its shadowy allies to unilaterally subvert the U.S. election - is both
warped and self-destructive
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This was indeed a
dirty trick set in motion by US intelligence.
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With the US carrier
task forces inoperative, this is a prime time for Russia to seize Ukraine.
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The darker story
might be the CIA’s intervention in U.S. politics.
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The two-state
solution was never devised for implementation to begin with.
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COUNTER PUNCH
David Macaray Could
Trump Have Been Caught in a Classic “Honey Trap”?
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Allan G. Johnson Bringing
Trump Nation Down to Size More
votes than previous election
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Russell Mokhiber Obamacare
and Single Payer
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Hiroyuki Hamada Who’s
Afraid of a Naked Emperor?
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Gerald Sussman America’s
Russian Dybbuk on fake news
on RU
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SPUTNIK and RT SHOWS
Israeli Airstrikes Target Military Airport in Damascus -
Syrian State TV nato allied: no war-dec
https://sputniknews.com/news/201701131049544022-israel-jets-depot-damascus-report/
https://sputniknews.com/news/201701131049544022-israel-jets-depot-damascus-report/
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Obama Ends ‘Wet Foot, Dry Foot’ Policy Toward Cuba Cuban
immigrants legal US? Not anymore
https://sputniknews.com/us/201701131049543991-obama-ends-cuban-immirgrant-policy/
https://sputniknews.com/us/201701131049543991-obama-ends-cuban-immirgrant-policy/
Related
Cuba Calls End of Wet-Foot, Dry-Foot Policy ‘Important Step’
for Ties With US
https://sputniknews.com/politics/201701131049546522-cuba-usa-immigration-dry-foot/
https://sputniknews.com/politics/201701131049546522-cuba-usa-immigration-dry-foot/
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Informal Meeting of 7 OPEC Energy Ministers to Take Place in
Abu Dhabi on Friday
https://sputniknews.com/world/201701131049547104-opec-informal-meeting/
https://sputniknews.com/world/201701131049547104-opec-informal-meeting/
Related
OPEC Oil Output Freeze Compliance May Be Checked Via Shipping
Logs
https://sputniknews.com/world/201701111049476245-opec-kuwait-oil-output/
https://sputniknews.com/world/201701111049476245-opec-kuwait-oil-output/
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RT SHOWS
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WASHINGTON BLOG
Posted on January 12, 2017 by Carl Herman
“First they ignore you. Then they laugh at you. Then they fight you.
And then you win.” ~ unsourced, and attributed to Gandhi’s analysis of British empire response
to having their hypocrisy exposed: claiming to bring Christian
love and progress while looting resources with forced local labor.
“When we now know that all
claims for war with Iraq were known lies as they were told (and verbally explained here),
and CNN provides similar innuendo for war
by an unsourced alleged report
with concerns of what might occur in the future allegedly stated by an unnamed
US source reporting on an unnamed foreign source, this is propaganda and
not news.” ~ My 2010 analysis of “fake
news” reporting from CBS, ABC, CNN to lie Americans into illegal war
on Iran.
The Washington Post added
to President Obama’s rhetoric for
Americans to be aware of “fake news”: easily refuted lies of omission and
commission in media. This
article series reveals the inversion of those claims: .01% “official” news by corporate media (six conglomerates) is easily
documented as fake in our most important reporting.
‘Fake news’? Time to choose article series (links
added as series progresses):
- Corporate media fakes us into wars that aren’t even close to lawful, are Orwellian illegal Wars of Aggression (1 of 15)
- Corporate media fakes us into Orwellian illegal Wars of Aggression with lies known to be lies as they were told (2 of 15)
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NOTICIAS IN SPANISH
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El
diario The New York Times difundió falacias
Abby Martin
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Estado-Nación y religión judía No a Estado-Nación ateo, gay, blanco, negro,
cristiano, musulmán, judío
Susana Khalil
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Trump: gabinete de magnates y ultras Ángel Guerra
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Obama: Una despedida con más pena
que gloria Pablo
Jofré
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Keiser
report 1018 La alianza Rusia-EE.UU.: ¿Infierno o
paraíso?
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PRESS TV
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