Silver as an investment

Key Test Developing For Global Equity Rally

Via Dana Lyons’ Tumblr,

A key barometer of the global equity rally is facing an important test.

One of the interesting trendlines in this week’s edition of our regular #TrendlineWednesday feature on Twitter comes from the chart of the MSCI EAFE Index (EAFE). As a reminder, the EAFE Index represents developed countries in Europe, Australasia and the Far East. Like most equity markets around the globe, the EAFE has enjoyed a strong up-move of late, particularly over the past 2 years. The index did hit a snag, though, along with most stocks, early this year in the form of a post-January correction. And the resulting action has the EAFE testing an important line of bull market support.

Specifically, the EAFE is testing the Up trendline stemming from its Brexit lows and connecting the post-U.S. election lows and the lows from this past March-April.

As the chart indicates, the “test” level – near 2023 – also happens to signify the approximate convergence level of both the 50 and 200-Day Simple Moving Averages.

Obviously, if the EAFE wants to maintain the direction and pace of its current advance, it would behoove the index to hold this key cluster of support.

So keep an eye on the approximate 2023 level on the EAFE for a “tell” on the future direction of the global developed market equity rally. (more…)

Proposed Israeli Law Criminalizes Filming Soldiers’ Human Rights Violations

A controversial new bill set to go before Israel’s Ministerial Committee for Legislation in the Knesset on Sunday would ban taking videos or photos of Israeli soldiers in the process of arresting or subduing Palestinians. 

It’s a move that advocacy groups are decrying as an aggressive censorship measure aimed at banning the documentation Israeli soldiers’ human rights violations, especially as the U.N. Human Rights Council has opened a formal investigation into accusations that Israeli security forces recently gunned down scores of Palestinian civilians protesting along the Gaza-Israeli border fence. 

The legislation, if passed, could result in a punishment of 5 to up to 10 years in prison for merely recording encounters between Israeli soldiers and Palestinians.

The bill reads, “anyone who shoots a video or a photo, or records soldiers while they are doing their job, with the aim of disturbing the morale of soldiers and citizens, will be sentenced to five years imprisonment. In case this is done with the aim of destabilizing the state’s security, the perpetrator will be sentenced to ten years imprisonment.”

A photographed 2014 arrest of a youth after clashes published in Turkish and Lebanese media. Image source: Al-Akhbar via Anadolu news

Even so much as an individual sharing such content on social media could fall under purview of the proposed law, as Middle East Monitor reports, “the bill prohibits the sharing of photographs or recorded content on social media or in the media.”

The proposal originated via the right wing Yisrael Beiteinu bloc , significantly with support from the party’s leader Defense Minister Avigdor Lieberman. The bloc chairman, MP Robert Ilatov, identified mostly left-wing groups responsible for hindering Israeli security efforts, notably among them BDS organizations (the boycott, divestment and sanctions movement, which seeks to halt West Bank settlement expansion by exerting economic pressure on Israel).

In comments carried by Middle East Monitor, MP Ilatov explained:

Israel has long been facing a disturbing phenomenon; that of the documentation of Israeli army soldiers, by video shooting or audio recordings by organizations that are hostile to Israel and supportive of the Palestinians, such as B’Tselem, Machsom Watch, Breaking the Silence, BDS and other organisations.

(more…)

Elon Musk, Crony Capitalist

Authored by Lee Enochs via The Mises Institute,

Elon Musk is at it again. The billionaire tech magnate continues to get richer and richer on the American taxpayer’s dime, highlighting the need to do as Murray Rothbard advised of reassessing the “partnership” of government and business.

At first glance, Elon Musk appears to be a quintessential capitalist success story. The South African born-American technology magnet, lead designer of SpaceX, and product architect of Tesla, Inc. is now ranked 25th on Forbes Magazine’s list of the World’s Most Powerful People, and as of February 2018, Forbes has Musk listed as the 53 rd richest person in the world.

One might conclude that Musk’s staggering wealth was produced via faithful adherence to the timeless and inexorable principles of laissez-faire capitalism, where personal wealth is accrued through the federal government leaving commerce alone and staying outside the affairs of private industry. However, this perception of Elon Musk’s economic independence from government interventionism is largely a fabrication and carefully manufactured distortion since Musk has personally enriched himself through a whole lot of government favoritism and statist interference in the private sector economy.

At this point, Musk has received well over $5 billion in government support. Previous reports have shown over 80 percent of SpaceX’s contracts come right from Uncle Sam. Given that the government is most space contractors’ top customer, this may not seem like a big deal. In fact, last July one Mises Wire columnist arguedthat Musk is a “mixed hero” because, although living largely off government largesse, he has “successfully [executed]” big ideas that benefit consumers in the “‘really existing’ world.”

To be fair, this characterization may have seemed to be the case last summer, but like all creatures of government, Musk’s so-called successfully executed ideas are already starting to come crashing down.

(more…)

Erdogan Urges Turks To Stick With Collapsing Lira, Warns Financial Speculators “Will Pay A Heavy Price”

Since Recep Tayyip Erdogan’s election to Prime Minister of Turkey in 2002 (and even more so since his ‘election’ to President for life in 2014), the Turkish Lira has been on a one-way street to hyperinflation.

The ailing currency has lost over 20% of its value against the U.S. dollar this year as The FT points out that a volatile mix of electoral populism and a rising dollar have pushed the country to the brink of a currency crisis. At the helm is a leader obsessed with growth, who has long dismissed higher rates as a way to make “the rich richer and the poor poorer” and often feuded with the country’s central bank.

 

So when he doubled-down again this morning on his demands that the Turkish people to convert their dollar and euro savings into lira, Turks could be forgiven for being reluctant to do as they are told.

“My brothers who have dollars or euros under their pillow. Go and convert your money into lira. We will thwart this game together,” Erdogan said at a rally in the eastern city of Erzurum ahead of parliamentary and presidential elections on June 24.

This follows his demanding the same of them on Friday and comes after the Turkish Central Bank did what many expected it would do long ago: it hiked rates in an emergency meeting, pushing the Late Liquidity Window rate higher by 3% to 16.5%, in a desperate attempt to prevent a currency crisis dragging Turkish bonds and the broader economy with it.

(more…)

EU: How To Stop Mass-Migration From Africa? Bring Everyone To Europe!

Authored by Judith Bergman via The Gatestone Institute,

  • While the focus on illegal migration remains, the original goal of stopping African citizens from migrating into Europe appears to have been lost entirely. Instead, the declaration pronounces African legal migration to be a positive thing, even stressing the beneficial idea of migration of certain groups, such as researchers and business people.

  • No one seems to ask how draining Africa of skilled labor, such as businessmen and researchers, is going to help the continent develop and thus stem the trend of migration?

  • The Hungarian government appears to be the only government that considers whether the citizens it was elected to serve would support the declaration. Other European governments appear to think that asking their electorates what they think about African migration into Europe is irrelevant.

“Migration is a priority for all of us here” said EU Commissioner for Migration, Home Affairs and Citizenship, Dimitris Avramopoulos, at the recent Fifth Euro-African Ministerial Conference on Migration and Development in Marrakesh at the beginning of May. The conference is a part of the Euro-African Ministerial Dialogue on Migration and Development (also known as the Rabat Process[1]).

The Euro-African Ministerial Dialogue on Migration and Development was founded in 2006 to contain migration from Africa into Europe, specifically, at the time, the increase of migrants crossing the Strait of Gibraltar from Morocco into Spain and from there into the rest of Europe.

Dimitris Avramopoulos (center), the EU Commissioner for Migration, Home Affairs and Citizenship, at the Fifth Euro-African Ministerial Conference on Migration and Development in Marrakesh on May 2, 2018. (Image source: EU)

(more…)

There Are 101 Americans With Over $1 Million In Student Loans

Astronomically high college tuition facilitated by a bottomless ocean of student loans has saddled Americans with a record $1.48 trillion in non-dischargeable debt – an amount which has more than doubled since the 2009 lows.

As we reported in January, nearly 40% of student loans taken out in 2004 are projected to default by 2023 according to the Brookings institute.

While in March we noted that debt-laden millennials were set back an average of $140,000 vs. their parents – a problem compounded by the fact that students aren’t just borrowing money for tuition; their student loans cover rent, food and other bills, leaving them with massive interest payments and in many cases, little prospect of getting ahead – much less saving for retirement. 

Enter the million-dollar-debtors

While millions of Americans are drowning in student loans – 101 people have the ultimate albatross around their necks; student loan balances exceeding $1 million, according to the Wall St. Journal. Five years ago, there were just 14 people with loans that large. 

Utah orthodontist Mike Meru, 37, is one of them. After graduating from Brigham Young University with no debt and a new marriage, Meru borrowed $601,506 debt to attend USC’s orthodontics program – while his new wife Melissa finding work as a USC administrative assistant to save on tuition. After a few years, his student loan had swelled to $1,060,94. 

(more…)

The End Of Stimulus? (And The Start Of The Crash?)

Authored by Chris Martenson via PeakProsperity.com,

Back in January of 2016 we saw what appeared to be, and in my opinion should have been, the end of the Everything Bubble blown by the word’s central banking cartel.

The carnage started in the emerging markets. Highly-leveraged positions and carry trades began to unwind. That’s a fancy way of saying that all the big, sophisticated investors — who were busy borrowing heavily in countries with cheap money (the US, Japan, and Europe) and using that debt to speculate in markets offering higher yields (junk debt, emerging markets, stocks, etc.) — began to reverse their trades.

It quickly devolved into a “Sell everything!” scramble. We saw the dollar spike and stocks fall — with emerging markets taking the full brunt of the carnage as their stock markets rapidly fell into bear territory, their currencies fell, and their bonds were destroyed.

Until…

Very early one morning in February of 2016 everything U-turned and rocketed higher. Suddenly and magically, the panic was over. This wasn’t the invisible hand of the market at work; it was the very-visible hand of central bank intervention. 

With the benefit of hindsight, we now have a clear picture of what happened. (more…)

Inside The “New” Starbucks: Blood-Spattered Walls, Workers Pricked By Needles And More

Starbucks is having a terrible time adapting to its new “inclusive” public restroom policy, as employees contend with blood spattered walls, used drug needles, and face-melting waftings from deuce-dropping vagrants filling the store. 

Oh, and all that was happening before the new homeless shelter bathroom policy

One current barista in New York City said drug use in the bathrooms is a frequent occurrence.

employees often found small drops of blood splattered across the toilet and walls WSJ

As the Wall Street Journal notes, “Managers and baristas regularly deal with a range of problems in the restrooms, from drug use to defecation outside the toilets, according to some current and former employees.”

“Drug use wasn’t happening in the bathroom every day, but it was definitely something that was happening once a week. The cops were called a lot,” said 21-year-old Darrion Sjoquist, a former Seattle Starbucks barista.

Once, when he was taking out the bathroom trash, he said he was pricked by a hypodermic needle. He said he and other Seattle baristas asked Starbucks to install Sharps containers—the kind of locked boxes found in doctors’ offices—in the bathrooms, to encourage drug users to properly dispose of their needles. –WSJ

As Starbucks transitions to their all-inclusive bathroom policy following an embarrassing incident in which the police were called on two black customers who asked to use the bathroom without purchasing anything, the company faces sagging sales and unhappy customers.

(more…)

Top Restructuring Banker: “We’re All Feeling Like Where We Were Back In 2007”

There is a group of bankers for whom “better” means “worse” for everyone else: we are talking, of course, about restructuring bankers who advising companies with massive debt veering toward bankruptcy, or once in it, how to exit from the clutches of Chapter 11, and who – like the IMF, whose chief Christine Lagarde recently said “When The World Goes Downhill, We Thrive” – flourish during financial chaos and mass defaults.

Which is to say that the past decade has not been exactly friendly to the world’s restructuring bankers, who with the exception of two bursts of activity, the oil collapse-driven E&P bust in 2015 and the bursting of the retail “bricks and mortar” bubble in 2017, have been generally far less busy than usual, largely as a result of abnormally low rates which have allowed most companies to survive as “zombies”, thriving on the ultra low interest expense.

However, as Moody’s warned yesterday, and as the IMF cautioned a year ago, this period of artificial peace and stability is ending, as rates rise and as a avalanche of junk bond debt defaults. And judging by their recent public comments, restructuring bankers have rarely been more exited about the future.

Take Ken Moelis, who last month was pressed about his rosy outlook for his firm’s restructuring business, describing “meaningful activity” for the bank’s restructuring group.

“Your comments were surprisingly positive,” said JPMorgan’s Ken Worthington, quoted by Business Insider. “Is this sort of steady state for you in a lousy environment? Can things only get better from here?”

Moelis’ response: “Look, it could get worse. I guess nobody could default. But I think between 1% and 0% defaults and 1% and 5% defaults, I would bet we hit 5% before we hit 0%.”

He is right, because as we showed yesterday in this chart from Credit Suisse, after languishing around 1%-2% for years, default rates have jumped the most in 5 years, and are now “ticking higher”

Moelis wasn’t alone in his pessimism: in March, JPMorgan investment-banking head Daniel Pinto said that a 40% correction, triggered by inflation and rising interest rates, could be looming on the horizon. (more…)

Kim Jong-Un Holds Surprise Second Summit With South Korea President Moon

North Korea’s president Kim Jong Un held a surprise two-hour second summit with South Korean President Moon Jae-in at the truce village of Panmunjom on Saturday afternoon to pave way for a summit between North Korea and the United States.

The South Korean presidential office said the two leaders met at the DPRK side of the border village of Panmunjom from 3:00 pm to 5:00 pm local time on Saturday, where they “candidly discussed the potential Trump-Kim summit”, and exchanged their opinions on implementing the April 27 Panmunjom Declaration.

South Korean President Moon Jae-in bids fairwell to North Korean leader Kim Jong Un as he leaves after their summit at the truce village of Panmunjom, North Korea, May 26, 2018. [Photo: VCG]

Moon will release the result of the summit at 10:00 a.m. local time on Sunday, South Korea’s Blue House said, without elaborating further.

The two leaders previously met on the South Korean side of Panmunjom on April 27, reaching a historic agreement on the complete denuclearization of the Korean Peninsula and the change of the current armistice agreement into a peace treaty.

Their second summit came after U.S. President Donald Trump said on Friday that the United States will possibly reinstate the meeting with Kim. Late on Friday Trump said that “we are having very productive talks with North Korea about reinstating the Summit which, if it does happen, will likely remain in Singapore on the same date, June 12th., and, if necessary, will be extended beyond that date.”