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Archive for the ‘Uncategorized’ Category

Philadelphia Becomes First Major City To Pass A Soda Tax

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By Tyler Durden

While not quite as draconian as the soda ban which former NYC billionaire mayor Michael Bloomberg tried (and failed) to pass in New York in 2014, moments ago the the Philadelphia City Council approved a 1.5-cent-per-ounce tax on sugar-sweetened and diet beverages, the first such tax imposed in a major U.S. city. The reason? The Council is looking to raise about $91 million for an expansion of early childhood education. Instead, the money will most likely be siphoned off into various underground ventures (and bank accounts) or outright embezzled.

.@CouncilwomanBRB‘s healthy beverage tax credit has also passed. 17-0 #PHLbudget #PHLCouncil

— PHLCouncil (@PHLCouncil) June 16, 2016

As a reminder, three years ago Michael Bloomberg pushed to ban oversize sodas in New York, a campaign which was ultimately rejected by the New York Court of appeals. The Philadelphia approach was less terminal, and ultimately promised revenues to the city, which is why it passed in a 13-4 vote this afternoon. The vote put to bed months of speculation and at-times tense negotiations, but also ensured the national spotlight will stay turned to Philadelphia for months, if not years, to come.

Philadelphia officials have been pushing for such measures for years,
pointing out that sugary drinks help fuel the epidemics of obesity,
diabetes and heart disease that affect more Americans every year. Yet oddly enough, any pretense that his tax is aimed the curbing the “dangers of sugar” or obesity dangers linked to soft drink evaporated when diet drinks were added to the mix.

The liberal bastion of Berkeley is the only other city that has such a tax, however Philly is the first major city to adopt a drink tax.

Critics – mostly the big soda companies – quickly vowed to fight it in court. And as Mayor Kenney rolls out the unprecedented levy -and its economic and public health impacts come into view – experts, advocates and legislators will surely be watching closely.

“Thanks to the tireless advocacy of educators, parents, rec center volunteers and so many others, Philadelphia made a historic investment in our neighborhoods and in our education system today,” Kenney said in a statement after the vote. “Today would not have been possible without everyone coming together in support of a fair future for every zipcode.”

Kennedy added that “all the times it was tried before for health reasons, we failed,” he said. “It failed in New York because of the health argument.” People resent the “nanny-state attitude,” he added.

Perhaps the people are right.

“We want to expand pre-K to 10,000 slots in the next four years, we want to create 25 community schools within our neighborhoods to that people can go to the schools and get the services they need for their kids, both medical , social, psychological and other types of job training and educational opportunities for adults,” Kenney told NBC News.

Not so fast: the tax will hit thousands of products, essentially anything bottled, canned or from a fountain with either …read more

Source: Philadelphia Becomes First Major City To Pass A Soda Tax

    

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Fed Finds "The End Of The Road"

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By Tyler Durden

LMCI-FedFunds-061616

Submitted by Lance Roberts via RealInvestmentAdvice.com,

Fed Finds “The End Of The Road”

The FOMC press conference yesterday made one thing abundantly clear; the Fed has lost control of the narrative and their credibility.

The problem stems from the Fed’s ongoing adherence to “data dependency.” Last December, when the Fed Funds rate was increased, the Fed discussed the potential for further rate hikes in 2016 as inflation and employment data strengthened.

However, in March, with employment and inflationary data improving combined with a strong rebound in the financial markets, the Fed opted to ignore their data and focus on “global risks” to hold rates steady.

The problem for Ms. Yellen is while she was waiting to find the “perfect balance” of domestic growth and global stability, global economic weakness has now begun to destabilize domestic growth and employment. As the Fed’s own Labor Market Conditions Index shows, the rise in interest rates in December marked the peak in employment growth. Not unlike initial rate hikes have done every time previously.

Despite the perennial hopes of stronger economic growth, a resumption of employment trends and stronger inflation, the FOMC’s own projections clearly showed why they did not increase rates.

Besides being absolutely the worst economic forecasters on the planet, the Fed’s real problem is contained within the table and chart above. Despite the rhetoric of stronger employment and economic growth – plunging imports and exports, falling corporate profits, collapsing manufacturing and falling wages all suggest the economy is in no shape to withstand tighter monetary policy at this juncture.

Of course, if the Fed openly suggested a “recession” could well be in the cards, the markets would sell off sharply, consumer confidence would drop and a recession would be pulled forward to the present. This is why “what the Fed says” is much less important than what they do.

The big risk for the Fed has always been the market would “call their bluff” be unwilling to buy into the “forward guidance.” It is currently too soon to know for certain but reactions following yesterday’s announcement are not promising.

SP500-MarketUpdate-061616-2

With the ECB and the Fed policy meetings behind us, for the moment, all eyes will turn back to economics and earnings.Unfortunately, neither one of those is particularly supportive at this juncture.

LMCI Pointing To Rise In Claims

One of the more regularly pointed to indicators the economy is “nowhere near a recession” is jobless claims which have been in a steady downtrend over the last few years.

Today’s release of the jobless claims saw an increase in claims to 277,000 in the most recent report up from 264,000 last month. Historically, when claims are below 300,000, the labor market should be running at or near capacity. The problem, this time, is while claims have fallen due to cost cutting, unemployment and underemployment remain problematic along with the suppression of wage growth.

This issue of “labor hoarding” explains the sharp drop in initial weekly …read more

Source: Fed Finds "The End Of The Road"

    

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From Entropy To Ecstasy – A Market In Chaos

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By Tyler Durden

So to recap – Fed dismal and no change – warns of Brexit, BoJ disappoints with no change – warns of Brexit, BoE does nothing – warns of Brexit, Brexit polls show “Leave” leading… but an England win in Euro2016 and the death of a British MP was enough to turn the entire day around…

The sad truth about today's massive roller-coaster roundtrip is that it was driven by the death of a British MP which sparked speculation about delays to the Brexit vote…

Bonds were once again panic-bid with Swiss 30Y yields going negative for the first time in history…

As rate-hike odds continue to tumble (with Dec just 20% now)…

Across asset-classes, Bonds remain in the green as gold caught down to stocks…

The Dow soared 290 points off the lows…

Only The Dow was (barely) able to get back to the pre-Fed levels…

Stocks decoupled from USDJPY and from Crude today as the correlation machines hooked up with Cable…

VIX almost touched 23 intraday before being dumped…It is OPEX tomorrow so something had to snap…all that gamma had to be sucked up somehow

Financials continue to catch down to the yield curve's reality…

The US Dollar Index ended the day unchanged after pumping and dumping around the Brexit news… (note Yen surged almost 2%)

Treasury yields ended the day unchanged – somehow – after plunging andf then ripping back. 30Y outperformed by the close, down 2bps… and 2Y +2bps (2s30s tumbled to 168bps – the lowest since Jan 08)

Despite the USD ending lower, commodities all ended the day in the red as the post-MP-Death reaction sent everything lower…

Perhaps most interesting is the plunge in the USD and Gold at the same time as Bitcoin surged over 760…(notice the surge in gold and bitcoin started when BoJ disappointed)

Most notably, crude fell through crucial technical levels at its 50- ($46.50) and 200-day ($46.10) moving average…

And Silver And Gold were completely attacked after Europe closed…

Chartts: Bloomberg

Bonus Chart: It appears the S&P is starting to catch back down to The Fed balance sheet-implied FV around 1950…

Meet the hacker fighting ISIS with porn

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Hacker WauchulaGhost breached 250 ISIS accounts and loaded them with gay porn and support for Orlando victims. …read more

Source: Meet the hacker fighting ISIS with porn

    

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The Fed Just Lost ALL Credibility

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By Phoenix Capital Research

Yesterday the Fed failed to raise rates… again.

It’s pretty incredible if you step back and think about it. Here were are, seven years into a supposed recovery, and the Fed’s actions tell us the economy cannot handle rates higher than 0.25%.

Rates of 0.25% and the word “recovery” do not belong together. The Fed is currently maintaining rates at levels usually reserved for dealing with Crises, NOT recoveries. Heck, the Fed kept rates higher than current levels during the recession following the TECH BUST.

Put another way, seven years into this “recovery” the Fed views the economy as weaker than it was after the Tech Bubble burst in 2002.

At this point, after seven years of ZIRP and $3.5 trillion in QE, shouldn’t we consider alternatives? Maybe we might want to let some other people try running the economy for a change?

After all, if you spent $3.5 trillion and the best you can garner is a recovery that is weaker than the 2001 recession… maybe you’re not cut out for the job of “fixing” the economy.

Moreover, at what point do we start questioning the Fed’s data?

Back in 2012, the Fed claimed it would start to raise rates when unemployment fell to 6.5%. We hit that target over two years ago in April 2014.

The Fed also claimed it would raise rates when inflation hit 2%. Core inflation has been above that level for five months now.

Now the Fed claims that it is concerned about Brexit or China or who knows what, as an excuse not to hike rates.

But the Fed didn’t just fail to hike rates. It also lowered its rate hike forecast to just one rate hike this year (down from two) and possibly three rate hikes next year (down from four).

Despite these dovish developments, stocks cratered. It if weren’t for the usual desperate PPT manipulation, we’d probably have had a mini-Crash.

We may have reached the point at which the Fed has lost all credibility.

The markets are in a massive bubble. The S&P 500 is sporting an EV/EBITDA of over 10. There is simply no way on earth this is not a bubble. Indeed, this reading is even higher than the S&P 500’s EV/EBITDA in 2007: a period that everyone agrees was a bubble.

Earnings are at levels not seen since 2012. Meanwhile stocks are 70% higher than they were during that time.

Meanwhile, bonds or the “smart money” are not buying this rally in stocks at all.

We are heading for a crisis that will be exponentially worse than 2008. The global Central Banks have literally bet the financial system that their theories will work. They haven’t. All they’ve done is set the stage for an even worse crisis in which entire countries will go bankrupt.

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.

In it, we outline the …read more

Source: The Fed Just Lost ALL Credibility

    

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Iran is the biggest source of new OPEC oil

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Just four months after sanctions were lifted, Iran has ramped up oil production to levels unseen since 2011. The OPEC country is hoping the show of strength will help attract much-needed investment from Western energy companies. …read more

Source: Iran is the biggest source of new OPEC oil

    

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How much does it take to get into the Top 1%?

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There’s a big difference in the income needed to get into the Top 1% depending on the state. …read more

Source: How much does it take to get into the Top 1%?

    

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The Notorious 120% LTV Mortgage Is Back

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By Tyler Durden

Back at the height of the US housing bubble, when various subprime mortgage originators were glad to hand out NINJA mortgages, some went so far to give the debtor more money than they needed for a house purchase, with the assumption that any residual may go to help fixing up the house in advance of a flip. These were the infamous 100%+ LTV loans, where the bank would hand over more cash than the value of the actual property. This worked for a few years – as long as the value of the property was rising fast enough, and could be flipped promptly to willing buyers it wasn’t a problem. However, once the housing bubble burst, this particular type of loans disappeared from the US landscape, and as a result of new mortgage guidelines it will unlikely be making a return any time soon.

However, with China desperate to reflate its once-burst housing bubble (as every other bubble including stocks, bonds, and yes – even rebar – has burst) and with no regulators to oversee the insanity in the local housing market, it means that the infamous 120% LTV mortgage has finally resurfaced. As SCMP reports, Sun Hung Kai Properties Ltd., Hong Kong’s largest developer surprised the market on Wednesday by offering an unprecedented home loan worth as much as 120% of the flat value without the need to submit income proof in order to woo buyers for its new project in Yuen Long.

Buyers of SHKP’s Park Yoho Venezia who opt for the “King’s Key 120” scheme will receive a three-year financing loan up to 120 per cent of the flat’s value, much higher than the standard bank mortgage ceiling of 60 per cent for flats below HK$10 million, and 50 per cent for those more than HK$10 million.

“Developers are basically lending money to buyers to purchase their units. It is an obvious sign that developers want to speed up sales. If they do not act fast now, they may have to sell at a price lower than today,” said Nicole Wong, CLSA regional head of property research. She said other developers with projects in nearby areas would be forced to follow suit to provide similar home loan packages in a fight to secure buyers.


A general view of Park Yoho Venezia at 18 Castle Peak Road, Yuen Long. Photo: Sam Tsang

“It is the most aggressive plan I’ve ever seen in the market,” said Sammy Po, chief executive at Midland Realty’s residential department. “During the last market doldrums more than 10 years ago, developers provided home loan of 110 per cent of the flat value, even to first home buyers.”

Now it is 120%. Do the math.

However, there is a small catch: the offer only applies to buyers who already own an apartment with value no less than 70% of the would-be purchase price of the Park Yoho Venezia flat. The loans would be provided by SHKP’s finance company which is not subject to regulatory supervision by the …read more

Source: The Notorious 120% LTV Mortgage Is Back

    

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Bond Yields Crash Below Feb ‘Flash-Crash’ Lows As US Stocks Lose 2016 Gains

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By Tyler Durden

10Y Treasury yields just broke below February’s flash-crash lows and ar enow trading back to their lowest since August 2012 with the yield curve also collapsing (2s30s down 6bps to 168bps – lowest since Jan 08). US equity markets are also tanking, led by banks – as contagion spreads – crashing back to unchanged year-to-date.

Bond yields are collapsing….

and the curve is flattest since Jan 2008…

and US equities have basically erased all their 2016 gains…

and Gold and The USD Index are surging…

…read more

Source: Bond Yields Crash Below Feb ‘Flash-Crash’ Lows As US Stocks Lose 2016 Gains

    

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DRoNe HiM!

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By williambanzai7

DRONE HIM!

…read more

Source: DRoNe HiM!

    

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