Monday, February 18, 2019

Dividends Are What Matter Now

Many investors turn to high-yielding shares as interest rates slide, but risk could increase. Dividends are playing an unusually large role in the stock market’s run to record highs, adding to investors’ concerns about stretched valuations and soft corporate earnings. The five-year rolling correlation between S&P 500 companies’ dividend yield and...

Venezuela’s Inflation Is Set to Top 1,600% Next Year

Food shortages, weak oil prices and economic mismanagement has forced the government to declare a state of emergency. While most advanced economies struggle to lift inflation, none would want Venezuela‘s situation: Consumer-price inflation is forecast to hit 480% this year and top 1,640% in 2017, according to the International Monetary Fund. A shortage of medical...

This Is The Longest Uninterrupted Selling Streak In History – Smart Money Sells Stocks...

One week ago we were surprised to learn that no matter what the market was doing, whether it was going up, down or sideways, Bank of America's "smart money" (institutional, private and hedge funds) clients, simply refused to buy anything, and in fact had continued to sell stocks for...

Paying Taxes Is a Lot Better Than Phony Corporate Courage, Apple

Every fall the internet and its resident tech mumblers congregate for The Apple Event, a quasi-pagan streaming-video rite in which Tim Cook boasts of just how much money his company is making (a lot) and just how much good it’s introducing to the world (this typically involves a new...

Bank of Japan surprises with negative interest rate

The Bank of Japan on Friday introduced a negative interest rate policy, a move aimed at boosting a stumbling economic recovery and warding off deflation. Markets jumped on the intervention. Tokyo's central bank hopes that by imposing a 0.1% fee on selected current account deposits — effectively a negative interest...

Euro house of cards to collapse, warns ECB prophet

The European Central Bank is becoming dangerously over-extended and the whole euro project is unworkable in its current form, the founding architect of the monetary union has warned. "One day, the house of cards will collapse,” said Professor Otmar Issing, the ECB's first chief economist and a towering figure in...

Why is Deutsche Bank now the biggest worry in the financial world?

What’s going on with the banking industry? Since the credit crunch in 2008, banks have been struggling to adapt to their new environment. Low interest rates coupled with meagre yields in the financial markets mean banks can generate fewer profits from the deposits they collect, the loans they dole out,...

As Some Hedge Funds Sink, the Challenge Buoys Others

It has been a bad stretch for hedge funds that make bold bets on big economic trends. Two prominent multibillion-dollar macro hedge funds have shut down in the last week after double-digit losses. The Bain Capital Absolute Return Capital fund blamed a “challenging environment” for its shutdown. And Michael Novogratz,...

Billionaire Soros Cuts U.S. Stocks by 37%, Buys Gold Miner

Billionaire George Soros prepared last quarter for gloomy times, dialing back his U.S. stock investments by more than a third, betting against the equities while banking on gold. The value of Soros Fund Management’s publicly disclosed holdings dropped by 37 percent to $3.5 billion as of the end of March,...

Bank industry profits hit record high in 2015, despite record low in loan yields

The U.S. banking industry earned net income of $163.63 billion in 2015, the highest net income of any year in the SNL bank regulatory database, which dates back to 1991. The profit increase was driven by loan growth and expense reduction, offsetting a record low in interest income earned...

Adam Smith Was Right about Corporate CEOs Incentives absent Effective Regulation

Our different views prove that hindsight is often myopic. Larry White’s take is that Clintonian regulations perverted private incentives. The boom and bust happened in a system with ... extensive legal restrictions on financial intermediation. Nor have we had banking and financial deregulation since ... 1999. (One can’t explain an unusual...

Two of Fed’s Own Primary Dealers Warn Shock Hike Awaits Markets

There’s uncommon dissent in the ranks of the Federal Reserve's primary dealers over the central bank’s interest-rate decision this week. Two of the Fed's 23 preferred bond-trading partners -- Barclays Plc and BNP Paribas SA -- are betting against their peers and the bond market by forecasting officials will raise...

Bayer Clinches Monsanto Deal for $66 Billion With Fourth Bid

Bayer AG agreed to buy Monsanto Co. in a deal valued at $66 billion, winding up four months of talks to create the world’s biggest supplier of seeds and pesticides. Bayer will pay $128 a share in cash, the company said in a statement Wednesday. The bid -- this year’s...

$2.5 Trillion in Wealth Has Vanished since Monday

The financial markets are in chaos... Chinese stocks crashed again last night, dropping 7% in less than an hour. The Shanghai Composite Index is now down 11.7% this week, and 40% since peaking last June. For the second time this week, China’s stock exchange completely shut down. As Dispatch readers know,...

Investigating Deutsche Bank’s €21 Trillion Derivative Casino In Wake Of Admission It Rigged Gold...

Deutsche Bank Admits Rigging, Will Expose Other Riggers Deutsche Bank has admitted it rigged both the Gold market and the Silver market. ZeroHedge has the details in his report Deutsche Bank Agrees To Expose Other Manipulators. Many asked me to comment. I am shocked? No. In the wake of admissions of...

BlackRock’s $1.9 Billion Credit Hedge Fund Suffers Worst January

BlackRock Inc.’s global credit hedge fund is off to its worst start in its 19-year history amid a selloff in bonds as oil prices fell and concerns over a recession rose. The flagship $1.9 billion Obsidian fund fell 4 percent in January after failing to anticipate “the extent to which...

Africa’s $700 Billion Problem Waiting to Happen

The Horn of Africa region is central to the world’s maritime trade. It’s also beginning to fall apart. Back in 2002, Meles Zenawi, then prime minister of Ethiopia, drafted a foreign policy and national security white paper for his country. Before finalizing it, he confided to me a “nightmare scenario”...

Stock Buybacks Are Driving Companies Into Debt

The bond market should be concerned about stock buybacks, but not because of their bullish effect on share prices. Instead, bondholders should be anxious about where the cash to pay for them comes from. It isn’t widely appreciated that the money has been borrowed in the credit markets, and...

The Effects Of Money On Trade

There can be little doubt now outside of orthodox economics that the global economy is actually slowing, not accelerating as has been predicted. Economists themselves, however, continue to claim that things are getting better when the data strongly suggests otherwise. The latest depressing figures are from a pair of...

Has a Currency Collapse Already Started?

Yesterday, oil plummeted to its lowest level in nearly seven years... The price of oil fell 6.2% to $37.65, its lowest level since February 2009. Oil has now fallen an incredible 65% since peaking at $106 in June 2014. The world has a massive oil surplus right now. The oil stockpiles...

Dow Sinks 390 Points in Global Selloff, Crude Falls Nears $29

Stocks tumbled around the world, with U.S. equities sinking to their lowest levels since August, and bonds and gold jumped as oil’s plunge below $30 sent markets reeling. Treasuries extended gains as economic data and earnings added to concern that global growth is faltering. The Dow Jones Industrial Average sank 391...

IMF’s Executive Board Completes Review of SDR Basket, Includes Chinese Renminbi

The Executive Board of the International Monetary Fund (IMF) today completed the regular five-yearly review of the basket of currencies that make up the Special Drawing Right (SDR). A key focus of the Board review was whether the Chinese renminbi (RMB) met the existing criteria to be included in...

Silver Up 44.7% in First Half of 2016

While investors have primarily focused on gold’s bull run, silver has quietly outperformed the yellow metal. Between Jan. 1 and July 11, the price of silver increased 44.7%, according to the Silver Institute. The price of gold increased 27.7% in that same time period. The Silver Institute said the surge in...

Forget December. Forget Next Year. The Fed’s Done Hiking Until 2018

Circle Jan. 31, 2018, on the calendar. That’s the soonest the Federal Reserve hikes next. At least if money market derivatives are to be believed. Traders, who have consistently been better at projecting the path of interest rates than the Fed itself, are now pricing in a greater probability that policy...

Death, drugs, and HSBC

Fraudulent blood money makes the world go round. Recent reporting on illegal tax evasion by the world’s second largest bank, HSBC, opens a window onto the pivotal role of Western banks in facilitating organised crime, drug-trafficking and Islamist terrorism. Governments know this, but they are powerless to act, not just...

The War on Savings: The Panama Papers, Bail-Ins, and the Push to Go Cashless

Exposing tax dodgers is a worthy endeavor, but the “limited hangout” of the Panama Papers may have less noble ends, dovetailing with the War on Cash and the imminent threat of massive bail-ins of depositor funds. The bombshell publication of the “Panama Papers,” leaked from a Panama law firm specializing...

Uneasy calm gives way to turbulence

The Federal Reserve's interest rate lift-off in December did little to disturb the uneasy calm that had reigned in financial markets in late 2015. But the new year had a turbulent start, featuring one of the worst stock market sell-offs since the financial crisis of 2008. At first, markets focused...

Why gold investors should look at silver too

Silver prices hit a two-year high above $21 per ounce on Monday, as precious metals continue to gain from the safe-haven rally following the U.K. referendum. Some investors say silver has further to run and may be a better bet than gold. "Silver is a metal that most people don't really...

Estonian, Latvian and Lithuanian Baltic Sea ports face historic lull

The ports of Estonia, Latvia and Lithuania are facing a lull in activity, with cargoes from the east into Europe and from the West into Russia finding new routes to circumvent Baltic ports. This according to Russian news journal PolitRussia, which suggests it could also have catastrophic consequences for the...

McKinsey Study Shows 81% of US Worse off Than in 2005, France 63%, Italy...

The McKinsey study Poorer than Their Parents? offers a new perspective on income inequality over the period 2005-2014. Based on market income from wages and capital, the study shows 81% of US citizens are worse off now than a decade ago. In France the figure is 63%, Italy 97%, and...

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