Find The Lowest Price HERE

By Tyler Durden

Less than a decade ago, the mere hint that the Fed was either propping up markets or actively pushing them higher was enough to get one branded a conspiracy theorist loon and never again invited to polite conversation. Since then first Bernanke, and then virtually all central bankers both domestic and foreign have admitted that the “wealth effect”, a polite way of saying pushing up asset prices, has been their primary goal and function.

And yet, despite this admission, the same central bankers would get strangely defensive any time it was suggested that it was they that also were the driving force for global inequality. That was understandable: if the broader public realized that the middle class was in jeopardy and living standards of the vast majority were collapsing as a result of a few career academics with their finger on the print button, those same academics would become an obvious – and very easy – target, when popular anger finally boiled over as it always has in history whenever the income inequality hit record levels.

Which is why we found it quite surprising to read a report by none other than the St. Louis Fed titled “Are Rising Stock Prices Related to Income Inequality?“, which if answered in the affirmative would be an accidental admission that the Fed itself has been instrumental in creating the widest wealth and income gap ever seen in US history (now even greater than the Great Depression).

To our great surprise the answer was “yes.“

The full note is below. To members of Congress questioning Janet Yellen the next time she is in the house – please ask her how she would rebut research from her own employees that confirms it is the result of the Fed’s policies why America has never had a greater chasm between rich and poor.

Are Rising Stock Prices Related to Income Inequality

Income inequality in the U.S. started to increase in the 1970s, and stock market gains accompanied this increase, according to a recent Economic Synopses essay.

Assistant Vice President and Economist Michael Owyang and Senior Research Associate Hannah Shell noted that increases in stock prices and capital returns may benefit the wealthy more than others, as they have better access to markets. They wrote: “Thus, as stock prices and capital returns increase, the wealthy might benefit more than other individuals earning income from labor.”

The figure below shows stock prices (as measured by the S&P 500 Index) along with the Gini coefficient, which represents a measure of income inequality. (A Gini coefficient of 0 means incomes are perfectly equal, and a coefficient of 1 means incomes are perfectly unequal.)

The authors pointed out that inequality began to rise in the 1970s. The Congressional Budget Office estimated that between 1979 and 2011:

• Market income grew an average of 16 percent in the bottom four quintiles.
• It grew 56 percent for the 81st through 99th percentiles.
• However, it grew 174 percent for the top 1 percent.1

Regarding stock returns, the S&P …read more

Source: Federal Reserve Accidentally Admits It Is Causing Inequality

    

100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps

Looking for something special ? Find The Lowest Price HERE

Find The Lowest Price HERE

By Tyler Durden

Now that all eyes have turned on China eager to find how it will react to a potential Fed rate hike in June or July, the question is whether the sharp Chinese devaluation unveiled overnight, which sent the Yuan to fresh 5 year lows, will be a one-off event, and whether the PBOC will intervene far more aggressively in the offshore CNY market to keep FX market turmoil to a minimum.

According to at least one person, the answer is no.

As Kevin Lai, HK-based chief economist of Asia ex-Japan at Daiwa Capital Markets writes in note released overnight, round two of China capital outflows is about to begin, if second half last year was considered the first round.

This is what he believes will happen next:

• China’s FX reserves may fall below $2t in about a year
• Downward pressure on FX reserves is most likely to be underestimated as short-term speculative flows are far more ready to leave than real flows
• Based on estimates, about 49% of PBOC’s FX reserves are made up of flows which are speculative and short-term in nature
• Expects decline in FX reserves to be more rapid in next 24 months at least
• Look for further $500b decline to $2.7t by end-2016 and a further $900b decline to $1.7t by end-2017
• If companies, especially SOEs, face trouble paying back creditors, central government would bail them out
• Massive bailouts would require government’s monetary policy to turn a lot more aggressive, putting more pressure on yuan
• Policymakers would have to seriously think about letting CNY slide gradually to a better equilibrium level

His conclusion: the USD/CNY will hit 7.50 by end-2016, some 15% higher than where it is now.

* * *

Others currency strategists were somewhat more sanguine on what happens in China next. Here are several sellside opinions, via Bloomberg:

HSBC (Wang Ju, senior FX strategist)

• PBOC has found a “good time window” to weaken yuan, with risk appetite supportive, volatility low and credit spread tight
• Momentum on EM is boosted by gains in equity markets in U.S. and Europe
• PBOC will stop CNY falling if see pressure spread across Asian assets
• Narrower CNH-CNY spread is policy-makers’ target; NOTE: Gap now only around 50 pips
• USD/CNY may rally near term, reaching 6.6 vs dollar end-2Q

Rabobank (Michael Every, head of financial markets research)

• Weaker fixing is a delayed catch-up by PBOC as other Asian currencies have dropped in recent days on increasingly hawkish Fed
• China pegging yuan to USD can’t last
• FX intervention may be going on to “convince” market not to worry despite weaker fixing
• Forecasts USD/CNY at 7.10 by yr-end

Mizuho Bank (Ken Cheung, Asian FX strategist)

• Weaker yuan fixing today shows PBOC is allowing currency to decline at gradual pace vs USD
• Fixing largely in line with expectations

Standard Chartered (Eddie Cheung, Asia FX strategist)

• CNY fixing is a natural reaction to dollar strength overnight
• Buoyant global equity markets indicate risk-on attitude
• Yuan reference rate could have been weakened even further

Saxo Capital Markets (Kay Van-Petersen, global macro strategist)

• Markets are calm now but there is serious risk of selloff with Fed rate hikes potentially on horizon
• Better for PBOC to …read more

  Source: Daiwa: "Round Two Of China Capital Outflows Is About To Begin"

      

  100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps
  Looking for something special ? Find The Lowest Price HERE

  
  

Find The Lowest Price HERE

“The Americans” had been renewed for two more seasons, which will mark the end of the critically acclaimed FX drama’s run. …read more

Source: ‘The Americans’ renewed through final season at FX

100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps

Find The Lowest Price HERE

China’s leaders are still worried about the country’s economy. The People’s Bank of China just cut the value of the yuan again. …read more

Source: Warning sign: China’s currency at 5-year low

100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps

Find The Lowest Price HERE

By Tyler Durden

Submitted by Aaron Chan via Medium.com,

Last week, we discussed the precarious state of the overstretched U.S. consumer and the spill-over effects of poor performance on the part of major retailers and other consumer discretionaries. In a nutshell, consumer credit growth appears to have reached its cycle-high and retail sales growth is beginning to flatline:

Credit conditions, for large and small companies, are also tightening which could be further exacerbated by a Fed rate-hike (unlikely). For an economy that is built on fractional-reserve banking and credit expansion, tightening lending standards would be akin to curbing life-support for a vegetative patient:

Understandably, retailers and other consumer discretionary stocks have sold-off, or are in the process or doing so. Last week, Target reported underwhelming top-line revenue and its stock price phase-shifted downward by over 7%. The company also admitted to inventory accumulation (among its competitors as well) which should necessitate discounted pricing and put pressure on future profitability:

If we zoom-out and look at the bigger picture, real estate investment trusts (REITs) could be the next domino to fall in this consumer slowdown. Retail chain closures have increased since 2013 (a large part of which is likely due to the ascension of online retailers such as Amazon and Net-A-Porter). At the current rate, 2016 closures could easily set a post-crisis watermark:

Since last May, mall REITs have underperformed the market and other categories might not be far behind. Interestingly, given the host of bad news coming from retailers, it appears the worsening fundamentals have yet to bleed-over to retail REITs. This might be due to the fact that investors are still fervently, or some might say blindly, chasing yield in a Fed-induced ZIRP environment:

A higher resolution picture of mall REIT performance gives us a sense of how quickly some of these names have fallen out of favor with the markets:

Another worrying trend is the rapid decline in net real estate investment by equity REITs. The last time we observed such low levels was in the midst of the Great Recession, and we know that official recession identification is retrospective, never concurrent. It’s also interesting to note how the real estate correction has magnified over the last two recessions. This makes sense because of the invention of mortgage securitization and record-low interest rates that encourages speculation in real estate:

Of the three mall REITs that posted positive performances in the past 12 months, let’s take a quick look at the technicals for Simon Property Group (SPG) and Tanger Factory Outlet (SKT).

Since 2009, SPG has appreciated over 300% and has held its long-term trend-line on numerous occasions. While it may be “the cleanest bed-sheet in the brothel”, the RSI and MACD indicators have diverged from the price action beginning …read more

Source: Myopic Markets & The Looming Mall REITs Massacre

100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps

Find The Lowest Price HERE

By Tyler Durden

Following yesterday’s surprisingly strong 2 Year auction, the US Treasury pulled off another blistering auction when moments ago it sold $34 billion in 5 year paper (Cusip R77), at a high yield of 1.395%, stopping through the when issued by 0.8 bps, a surprising outcome following two consecutive tailing auctions, with a Bid to Cover of 2.60, the highest since November 2014. Incidentally, the yield of 1.395% was lower than last month’s 1.41% when June rate hike odds were in the single digits.

But it was the internals where the surprise lay this time, as Indirects took down 66.6% of the final allotment, a jump from last month’s 58.5% and well above the 58.5% TTM average. It was also the third highest Indirect award on record as foreign central banks just can’t seem to get enough of US paper. And since Indirects stormed, and Directs also saw a pick up in their allotment, rising from 6.8% to 11.6%, the Dealer award of 21.8% ended up being not only over 10% below the recent average, but also the lower Dealer award on record.

With such dramatic demand for US Treasury paper just a month ahead of the putative Fed rate hike, one wonders just how much flatter the yield curve will end up if indeed the Fed does hike and pushes the ultra-short end higher by another 25 bps as the long end continues to grind lower.

…read more

Source: Another Blistering Auction: Foreign Central Banks Just Can’t Get Enough Of 5Y Paper

100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps

Find The Lowest Price HERE

These jobs require fingerprint background checks, the requirement at the center of Uber and Lyft’s current regulatory battles.

…read more

Source: Why funeral directors get fingerprinted

100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps

Find The Lowest Price HERE

By Tyler Durden

Just when the Greek debt deal appeared certain even if as we reported last night, virtually all the funds from the approved first tranche would go to repaying creditors, the IMF, which has been pushing for more debt relief since last summer, appears read to pull the plug again, following a report that the IMF isn’t officially endorsing the latest Greek debt deal until the board approves new loan program, and according to AFP, the IMF is not ready to add funds to the Greek bailout as it stands now.

#BREAKING IMF says not ready to add funds to Greece bailout as it stands now

— AFP news agency (@AFP) May 25, 2016

As Bloomberg adds, citing an IMF official says on conference call with reporters, that the IMF board should be able to consider new program by end of year.

IMF will be seeking more details on debt relief by European creditors and fund will analyze whether Greek debt is sustainable.

Most troubling is the warning that the IMF may come to a conclusion that latest debt-relief measures aren’t sufficient.

Jeroen Dijsselbloem, the Dutch politician leading the Eurogroup, claimed to have brokered a compromise between Germany and the IMF. He has he proposed a three-stage plan:

Short-term: Athens receives funds to reduce its debt and payment terms are adjusted.
Medium-term: Greece would receive longer grace and payment periods.
Long-term: There could be more far-reaching, though unspecified, measures.

And with Short- and Medium-term solutions now in doubt… again; Saxo Groups’s Stephen Pope asks, What about the long-term?

What I want to know is, what about the third leg of the agreement? What are the more far-reaching, though unspecified, measures?

Where are the discussions about what Greece will do in terms of further privatisation? This has been the most aggravating issue for the creditors as Greece has simply dragged its feet on this matter for the past six years.

Privatisation of public companies contributes to the reduction of public debt. It releases the state from paying subsidies, other transfers or state guarantees to state-owned enterprises. It is a key catalyst for increasing the efficiency of companies and the competitiveness of the economy as a whole, while attracting foreign direct investment.

It helps countries pay back their debt, improves efficiency and effectiveness, and therefore would boost economic growth.

This idea is often challenged by the left and one favoured argument is that sales of state-owned assets during recession have consistently failed to raise expected revenues.

It was Greece that predicted it could raise €50bn but has so far raised a paltry €3.5bn. This is not just a result of selling at a time of recession, but also comes down to the fact that Athens delayed the process of privatisation for too long and was eventually seen as a distressed seller.

An asset is only worth what a buyer will pay, not what a seller would like.

Greece has simply wasted time, opportunity and money just as the troika are showing their plan …read more

Source: IMF "Not Ready" To Add Funds To Greek Bailout As It Stands, Needs More Debt Relief Details

    

100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps

Looking for something special ? Find The Lowest Price HERE