Archive for the ‘Uncategorized’ Category
Fracking fallout: High risk of man-made quakes
People in parts of fracking-dominant Texas and Oklahoma now face the same earthquake risk as those in California, according to a new report from the U.S. Geological Survey. These quakes are mostly triggered by human activity, primarily the disposal of waste water as part of oil and gas drilling.
Source: Fracking fallout: High risk of man-made quakes
Lego unveils new Disney minifigures
Lego announced Tuesday it is teaming up with Disney to release a new collection of minifugures.
Source: Lego unveils new Disney minifigures
Why Yellen’s Speech Will Likely "Underwhelm" The Market: Deutsche Bank’s Take
By Tyler Durden
The most important event of the day, if not week now that the monthly payrolls report has become meaningless in steering the Fed’s no-longer-US-but-Chinese-data-dependent-path, will be Yellen’s speech at the NY Economic Club shortly after noon local time.
As DB’s Alan Ruskin previews, this is an “an event that many hope will provide clarity on whether the market’s original interpretation of the FOMC dots/balance of risks/forecasts and Q&A in all its entirety, was as dovish as originally assumed; or, whether the subsequent more hawkish comments from various Fed officials was more in keeping with what the FOMC was trying to convey.”
Ruskin adds that, in the aftermath of yesterday’s sharp downward revision to the Atlanta Fed Q1 GDP Nowcast from 1.4% to just 0.6%, “just to complicate the message the most recent data (corporate profits, core PCE deflator and revisions to PCE) work in favor of a more dovish conclusion. While Yellen has already said the April FOMC is ‘live’, and she will probably reaffirm this, we do not expect her to emphasize or belabor the point.”
Some more problems Yellen will face when communicating with the market:
One difficulty she faces in saying anything fresh is that she will be ‘flying blind’ when it comes to the major March payrolls and ISM numbers ahead, which is a difficult position for a data dependent Fed. Even if this week’s data is stronger than expected, the Fed is going to have a very tough time lifting expectations of an April hike to an acceptable level to hike without shocking the market, given current probabilities of an April hike at 8%! The communication problem the Fed faced in their March FOMC messaging was that apropos the dots, most members were comfortable with the Fed signaling two rate hikes this year, but there are few signs that they wished to reduce the probability of a Q2 hike, most obviously in June.
It would not be surprising if Yellen’s view is that before hiking rates, the burden of proof is on i) employment in the next few months showing it is resilient to the recent shock in financial conditions, and, ii) that payrolls remains solid in the face of weakening profitability and poor productivity – see Figure 1 below).
This fits with watching and waiting out the March, April and May payrolls before acting next; unless the coming March data is extremely strong, and they want to seize any opportunity afforded by quieter international markets to tighten in April – which still seems unlikely.
* * *
However, while Yellen’s speech will at best confirm how confused the Fed is, the real question is how the market will react during and following the Chairwoman’s speech. This is what Deutsche Bank thinks will happen:
Probably remaining very reluctant to price in an April hike, and therefore still working with a …read more
Source: Why Yellen’s Speech Will Likely "Underwhelm" The Market: Deutsche Bank’s Take
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Peter King signs multi-year contract extension
Peter King is extending his contract with Sports Illustrated. He’ll continue to run MMQB, which is adding staffers and expanding into video.
Source: Peter King signs multi-year contract extension
Prominent Hedge Fund Luxor Capital Warns Redeeming Investors Will Be "Gated" After Sharp Losses
By Tyler Durden
About a decade ago, Christian Leone’s Luxor Capital was one of the biggest brand names in the industry, and alongside Harbinger and DB Zwirn, every trader and analyst on Wall Street wanted to work there. Since then things have changed. According to Reuters, Luxor, which had $3.8 billion under management at last check, “has been losing money for months” and on Monday it surprised investors when it announced it would “not be returning exiting investors cash in full, keeping a portion locked up until some illiquid investments can be sold.”
Call it the latest hedge fund “gate”, only unlike some prominent debt focused names, this one is only partial: “instead of returning all exiting clients’ assets in cash, investors will receive 88 percent of their money back while 12 percent of the investments will be held in a so-called special purpose vehicle, Luxor’s founder, Christian Leone, wrote in a letter.”
The announcement comes before a critical March 31 redemption deadline and aims to treat all investors “fairly,” the letter said.
“For those investors in the Fund that have submitted withdrawal requests for March 31, 2016 and for subsequent withdrawal dates, we will transfer a pro rata share of the applicable assets into a special purpose vehicle (SPV),” Leone wrote.
Client subject to the partial gate will be those who asked to get their money out on April 1 and July 1 and as a result; instead of getting all cash they will see a portion of their money put into the SPV and the fund will not charge any fees on these assets.
As Reuters reminds us (for those who have forgotten the gating junk bond funds of late 2015), “special purpose vehicles and side pockets are permitted at hedge funds but they are often viewed as a last resort that sour investors, and they have not been widely used since the 2008 financial crisis when many hedge funds posted heavy losses. But consultants have said that if illiquid positions become large, then it is prudent to segregate them and not charge fees until gains are realized.”
More form Reuters:
After sending the letter, Leone held a brief conference call with investors where he identified the four illiquid securities being put into the special purpose vehicle. Together they make up 12 percent of the portfolio, he said.
They include food delivery service Delivery Hero, which Leone said makes up more than half of the exposure and has seen a “multifold appreciation since we initially made the investment.” Additionally private equity investments in online food ordering service Foodpanda and drilling company Ascent Resources are in the SPV as well as preferred stock of Altisource Asset Management.
And while we are happy that these investments appear to have appreciated, they are rather useless if they are completely illiquid.
Leone told investors that clients have redeemed roughly 10 percent of their money in the first quarter and that …read more
Source: Prominent Hedge Fund Luxor Capital Warns Redeeming Investors Will Be "Gated" After Sharp Losses
Gold, the Misery Index and Insanity
By Sprott Money
Hold your real assets outside of the banking system in one of many private international facilities –>
In 1980 Ronald Reagan spoke about the Misery Index. An economist had added the inflation rate to the unemployment rate, called it the Misery Index, and used it to indicate the social costs and economic difficulty for the middle class.
Today the Misery Index is much smaller than in 1980, thanks to … intelligent fiscal management, economically beneficial monetary policy from the Federal Reserve, and wise political policy from the White House. If you believe any of those, read no further.
Most people will agree that the Misery Index is much smaller today because the numbers have been gimmicked. Does anyone believe a few percent for inflation or around 5% unemployment? Massage(torture) the numbers and the Misery Index declines, incumbent politicians are re-elected, while far too many people remain out of work, earning practically nothing on their savings, and paying too much for food, clothing, drugs, medical care, college, transportation and so on.
What we need for this decade, instead of a Misery Index, is an Insanity Index based on measures than indicate how out of balance, crazy, unsustainable, and dangerous our current fiscal and monetary world has become. Consider a few examples:
- Wall Street bonuses (in excess of base pay) average around $150,000 per person per year. Obviously some receive significantly more than average. Finance, trading, and “paper pushing” have become incredibly profitable. Compare the average Wall Street bonus to the base annual wage for an E-5 U.S. military soldier. See graph below.
- The SNAP (food stamps) program has escalated from a cost of $15 billion in 1990 to about $74 billion in 2015. Measure the program costs in ounces of gold each year and then try to convince yourself that 60 million ounces of gold each year do not matter. See graph below. Gold is real and can’t be printed like most currencies. The program would “eat up” all the gold in Fort Knox about every three years. Insane!
- Student loan debt is approaching $1.4 trillion, climbing rapidly, and has increased about 11.5% per year, ever year, since 2006. The student loan debt, measured in gold, is over 1.1 billion ounces – about 8 times the gold supposedly stored in Fort Knox. See graph below of student loan debt measured in Fort Knox Gold Units – the 147,300,000 ounces of gold that supposedly are vaulted in Fort Knox.
- National Debt (official only – not including unfunded liabilities) currently …read more
Source: Gold, the Misery Index and Insanity
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