President Trump’s decision to jettison the largest proposed free trade deal in history leaves the door open for Beijing to push its own brand of trade. …read more
Source: Trump’s decision to kill TPP leaves door open for China
Carl Icahn, a vocal supporter of Donald Trump, congratulated the president for his inauguration speech and said that the ‘dangerous slide towards socialism is over.’ But some noted that the stock market did just fine under Obama. …read more
Source: Carl Icahn declares end to ‘socialism’ in U.S
By Tyler Durden
Authored by Robert Schiller, originally posted op-ed at The Guardian,
Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
In the US, two illusions have been important recently in financial markets.
One is the carefully nurtured perception that President-elect Donald Trump is a business genius who can apply his deal-making skills to make America great again.
The other is a naturally occurring illusion: the proximity of Dow 20,000. The Dow Jones Industrial Average has been above 19,000 since November, and countless news stories have focused on its flirtation with the 20,000 barrier – which might be crossed by the time this commentary is published. Whatever happens, Dow 20,000 will still have a psychological impact on markets.
Trump has never been clear and consistent about what he will do as president. Tax cuts are clearly on his agenda, and the stimulus could lead to higher asset prices. Lower corporate taxes are naturally supposed to lead to higher share prices, while cuts in personal income tax might lead to higher home prices (though possibly offset by other changes in the tax system).
But it is not just Trump’s proposed tax changes that plausibly affect market psychology. The US has never had a president like him. Not only is he an actor, like Ronald Reagan; he is also a motivational writer and speaker, a brand name in real estate, and a tough deal maker. If he ever reveals his financial information, or if his family is able to use his influence as president to improve its bottom line, he might even prove to be successful in business.
The closest we can come to Trump among former US presidents might be Calvin Coolidge, an extremely pro-business tax cutter. “The chief business of the American people is business,” Coolidge famously declared, while his treasury secretary, Andrew Mellon – one of America’s wealthiest men – advocated tax cuts for the rich, which would “trickle down” in benefits to the less fortunate.
The US economy during the Coolidge administration was very successful, but the boom ended badly in 1929, just after Coolidge stepped down, with the stock-market crash and the beginning of the Great Depression. During the 1930s, the 1920s were looked upon wistfully, but also as a time of fakery and cheating.
Of course, history is never destiny, and Coolidge is only one observation – hardly a solid basis for a forecast. Moreover, unlike Trump, both Coolidge and Mellon were levelheaded and temperate in their manner.
But add to the Trump effect all the attention paid to Dow 20,000, and we have the makings of a powerful illusion. On 10 November 2016, two days after Trump was elected, the Dow Jones average hit a new record high – and has since set 16 more daily records, all trumpeted by news media.
That sounds like important news for Trump. In fact, the Dow had already hit nine record highs …read more
Source: Schiller Warns US Stock Market ‘Trump Effect’ "Is Based On Illusion"
Foxconn chairman Terry Gou told reporters that the company is contemplating building a U.S. factory that could create 30,000 to 50,000 jobs. …read more
Source: Apple supplier Foxconn could create 50,000 U.S. jobs
By Tyler Durden
Back in late 2015, when the Chinese stock bubble had violently burst and was suffering daily moves of 10% in either direction as retail traders scrambled to get out of what until recently was a “sure thing”, Beijing did what it does best, and found a convenient scapegoat on which to blame the market crash – which was function of the country’s relentless debt bubble and lack of trading regulations – in late 2015 it arrested one of the most prominent hedge fund traders, Xu Xiang, also known as “hedge fund brother No. 1” and “China’s Carl Icahn” for his phenomenal, and rigged, winning record in the stock market, who ran the Shanghai-based Zexi Investment.
Which is not to say that Xu wasn’t engaged in shady activites: while the country’s stock prices plummeted in 2015, Zexi’s investments earned an average 218%, far more than the second-most profitable player, Shen Zhou Mu Fund, which reported a 94% yield, according to market analysis website Licai.com.
Xu was detained by police in November 2015 on the highway between Shanghai and Ningbo, in an arrest that was captured in photographs and widely circulated on social media. Police later froze over $1 billion of shares in listed companies with connections to Xu’s investments, according to exchange filings by those firms. Xu, born in 1976, started investing at high school in the eastern city of Ningbo, according to the official People’s Daily. Skipping university, he instead became a professional investor, accumulating over 4 billion yuan in personal wealth and managing tens of billions of yuan, the People’s Daily reported in 2015.
Fast forward to today, when China sentenced the former billionaire hedge fund manager to five and a half years in prison for stock-price manipulation, in one of the country’s most high-profile cases following the 2015 market rout. Xu Xiang, founder of Shanghai-based asset management firm Zexi Investment, and two associates were convicted of driving up share prices, the Qingdao Intermediate People’s Court in Shandong province said on Monday. Xu was also fined 11 billion yuan ($1.6 billion), sources who attended the court hearing said. It is the highest-ever fine for an individual committing a financial crime in China.
Wang Wei, owner of three asset-management companies, received a three-year prison term and was slapped with a 1 billion yuan fine. And Zhu Yong, the third defendant, was sentenced to two years behind bars with a three-year reprieve. He was told to pay 50 million yuan in penalties. The three men shared insider tips and connections to high-ranking executives, people with knowledge of the matter told Caixin.
Demonstrating he has learned from the most successful US hedge funds, Xu and the two investment firm managers were accused of colluding with senior executives of 13 listed companies from 2010 to 2015 to issue positive news about companies and even purchasing stocks in large quantities — all in a bid to boost prices and lure retail investors. The fund managers and executives then dumped their stock at the higher prices.
Between 2010 …read more
Source: "China’s Carl Icahn" Hedge Fund Billionaire Sentenced To Five And A Half Years In Prison
After the drama of the past few months, Julian Assange could be forgiven for wishing that the world still communicated via passenger pigeon.
Seattle-based email provider Riseup’s “canary” expiration baffled the public for months and led to emotional, nonfactual accusations that Wikileaks had been “compromised” by state actors. But what is Riseup’s canary and how did an anomaly related to it cause so much concern? To explain that, it is necessary to outline the legal processes that made canaries necessary, how they work in relation to the law and what a canary is exactly.
Historically, canaries have been famously used in mines as a way to warn miners when oxygen levels are dangerously low. In the modern world, a “canary” is a method that programmers have devised as a way to get around legislation that allows intelligence and regulatory agencies to legally silence private individuals and organizations. Programmers and IT workers love metaphors. The main screen of one’s computer is called a “desktop” when it is clearly not, the device one uses as a pointer on a computer is known as a “mouse” when it is clearly not a rodent. A “canary” is no different and merely serves as a metaphoric way to describe how the entity functions.
I. The Laws And Secret Courts Which Made Canaries Necessary
Before explaining exactly how a canary works, it is necessary to explain why they are needed at all. In the United States, the canary was developed in response to the actions of the Foreign Intelligence Surveillance Court (FISC), which was founded under the Foreign Intelligence Surveillance Act of 1978 (FISA). The Court has greatly expanded the power and control of U.S. intelligence agencies and has been accused by the New York Times of becoming “a parallel Supreme Court.” The FISC is generally what activists and whistleblowers refer to when talking about “secret courts” in the United States.
The FISC (and courts like it in other countries) are authorized to issue gag orders to individuals and organizations which can legally forbid them to talk about certain topics under the Electronic Communications Privacy Act of 1986. The gag orders can also obligate individuals to surrender electronic devices to authorities or allow the devices’ programming to be altered by the state for various purposes (uploading malware to allow the state to spy on all customers for example). Any company or individual who refuses to cooperate and comply with these orders risks being sent to jail and having their business interests destroyed by the state. Even talking publicly about the fact that one has received a gag order is a violation of the law. In 2013, Edward Snowden’s email provider Lavabit shut down its operations to avoid having to comply with a gag order which they believed would force them to become complicit in crimes against the American people.
II. How Canaries Allow Private Parties To Subvert Gag Orders
So how does an individual or business tell their collaborators and the world …read more
Source: Julian Assange Addresses Public Concerns Regarding Riseup Canary Statement
By Tyler Durden
“May you live in interesting times,” really is a curse; and as Bloomberg's Richard Breslow warns, “I doubt things are going to get any less gripping… Whatever else markets are pricing in, risk premiums appear to be too low.”
Last week fell into three memorable parts…
The Trump trades were given a severe test, declared dead and held. A trend isn’t broken until it actually breaks. But nothing lasts forever.
More Fed speeches than you could shake a stick at, including two from Chair Yellen, told us little. They went for unity and upbeat assessments. Debate raged about whether she was more hawkish or dovish than expected. Even one day to the next. Take that as over analyzing. At the end of the day, no one is going to fully internalize a hawkish message nor remotely price three 2017 hikes unless they hear March is at least being debated. Until then, it’s a lot of noise. Thankfully, no speeches are scheduled this week.
And, of course, there was the inauguration. It really was a tale of two cities. While the Dow rose 100 points, you could hear jaws hitting pavements around the rest of the world.
What this week brings, no one knows.
I suspect trading is going to be time-zone specific in the near term as perception of policies, intent and outcomes are going to vary widely by locale. You could easily get into a pattern of risk-off mornings only to be followed by benign closes.
We’ll see more of the hundred-day plan. U.K.’s Theresa May, a vocal critic of campaigner Donald Trump, will fly to Washington on Friday to woo President Trump. Or as it’s been reported, for the two to recreate the Reagan/Thatcher mystique. Where’s Lloyd Bentsen when you need him? Chancellor Merkel is said to be poring over film and speeches to try to figure out just what makes this guy tick.
What To Watch..
<a target=_blank rel="nofollow" …read more
Source: Trader Warns "Trump’s First Week Could Keep Markets Busy" – What To Watch
One day after President Trump was sworn in, ‘Saturday Night Live’ opened its show with Beck Bennett’s Vladimir Putin speaking directly to the American people. …read more
Source: ‘SNL:’ Shirtless Putin addresses America
By Tyler Durden
Submitted by Mike Shedlock via MishTalk.com,
France24 reports Benoît Hamon and Manuel Valls take top spots in first round of left-wing primary in a field of seven candidates.
Let’s take a look at other reports, then we will look at Hamon’s amazing platform.
Bloomberg notes Valls, Hamon Qualify for French Socialist Primary Run-Off.
In the first round of voting Sunday night, Hamon was first with 35.2 percent with Valls on 31.6 percent, with about one-third of voting stations reporting, the primary authority said. Former Industry Minister Arnaud Montebourg, who was third with 18.7 percent, endorsed Hamon saying that the primary shows that Socialist voters want more leftist policies.
The voters “have massively and seriously condemned” the government’s policies, Montebourg said. They “want the left to return to the path of the left.”
Benoît Hamon’s Platform
Benoît Hamon is a 49-year-old former education minister. Here is his platform.
That reads like it came from The Onion. However, it’s translated from Benoît Hamon, favorite of the primary: his very left program.
According to the Financial Times, “Mr Hamon’s proposals have been criticized as unrealistic and costly by rivals including Arnaud Montebourg”.
Now, Montebourg backs Hamon because voters “want the left to return to the path of the left.”
Amazing Twitter Performance
In a field of seven candidates, that platform got Hamon 35% of the vote. Amazing.
How did he get there? The new-fashioned way. Hamon has a huge following on Twitter.
Looking Ahead
Don’t rule out le Pen.
Should Hamon square off against Marine le Pen, I believe le Pen would win. Le Pen might also win in the widely-expected final match-up against François Fillon, the Republican winner and former Prime Minister of France.
Recent political events are such that anything could happen.
Welcome to Esh Carmel Blog.
