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Trump: ‘There’s a Chance We Can Have a Major, Major Conflict with North Korea’

In a somber interview with Reuters this evening, Trump sounded a bit lonely, a bit taxed — conceding that we might be heading for a ‘major, major conflict’ with N. Korea.

“There is a chance that we could end up having a major, major conflict with North Korea. Absolutely.”

He did say, however, that he wasn’t going to do anything that might hurt the President of China now, as he considers Xi to be a great leader and a friend.

“I believe he is trying very hard. He certainly doesn’t want to see turmoil and death. He doesn’t want to see it. He is a good man. He is a very good man and I got to know him very well.”

Trump added, “We’d love to solve things diplomatically but it’s very difficult.”

He then went on to lament about how much work the Presidency is and how his privacy is non-existent — drolling on about being isolated by security. He bemoaned about not being able to head outside to dinner or drive a car.

Then back to foreign affairs, he said the Saudi’s were treating us very unfairly. Essentially, we’re their defense and they do nothing for us.

The path to defeating ISIS is via humiliation, said Trump.

“I have to say, there is an end. And it has to be humiliation.”

Trump said North Korea was his biggest global challenge. He lavished praise on Chinese President Xi Jinping for Chinese assistance in trying to rein in Pyongyang. The two leaders met in Florida earlier this month.

Summing up N. Korea, Trump noted how difficult it must’ve been for 27yr old Kim Jong Un to take over his Father’s role as leader.

“I’m not giving him credit or not giving him credit, I’m just saying that’s a very hard thing to do. As to whether or not he’s rational, I have no opinion on it. I hope he’s rational.”

DEVELOPING…

 

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Words of Wisdom from Uncle Fred

While pursuing the slums of Lindzon, I came across this lecture by none other than Uncle Fred Wilson. By accident, I clicked play and set my timer for 5 minutes to see if he possessed any words of wisdom that was worthwhile.

This is a classic lecture to consume for any investor, especially VCfags.

Enjoy.

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Nasdaq Futures Surge Thanks To After-Hours Earnings Bonanza

I posted earnings on my Twitter feed in real time as they came in. Big beats by GOOGL and AMZN — and a little disappointment from BIDU, INTC, KLAC and SBUX. But thanks to the heavy weighting of the former, Nasdaq futures are indicating +50 in the after hours.

Considering the number of misses reported tonight, I’d say the net result is slightly negative — especially thanks to INTC.

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Semis Rip Higher Again, Gains Now Approaching +30% for 2017

Remember just a few years ago when the semis were a dead sector, bedraggled by Apple margin squeezing tactics? I think the turning point came when Broadcom merged with Avago. Since about that time, the sector has been white hot — with monstrous gains found in NVDA, SWKS, TER, LRCX and many others.

Is the sector expensive?

The semiconductor equipment sector is trading at 27x earnings, on a media basis. On a price to sales basis, it’s trading just 2.11x. But the premium to the technology sector, according to Exodus, has shrunk from +47% in 2015 to just +8% now — thanks to a ramp up in earnings. In other words, the sector is appreciably cheaper now, on a p/s basis than it was in 2015.

To be fair, all of the other sub-sectors in the semis, such as broadline, memory, specialized and integrated, are trading at or near the high end of their historical ratios. Only the semi equipment sector is considered cheap. Even with that ‘cheapness’, the sector was appreciably cheaper, when compared to the overall tech sector, back in 2012.

Convoluted, isn’t it?

Ultimately, the tech sector is guided by the semis, whose market caps total more than $1.1t, matching the application software sector. Whenever the tech sector cascaded lower, it was led by either software or semis.

Here are is the tech sector performance, year to date, broken down by industry.

This is almost a useless shitpost. But I think it’s important to acknowledge how important the semis are to the market — as we head into earnings season. If they reaffirm expectations and impress, we’re likely going to enjoy another leg up in the Nasdaq. If they disappoint, a la 2014, things can unravel very fast — since these stocks are already owned by every cocaine addled money manager in America.

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Biased Bloomberg Reporter Pans Under Armour On Huge Up Day

Kim Bhasin, a reporter at Bloomberg, Huffpo, and Business Insider, has a bone to pick with President Trump — as evidenced by his recent reporting. Oh, you want me to prove it, faggot? Have a look at this ridiculousness.

Bhasin editorializes:

Meanwhile, Under Armour’s cool factor keeps getting hit. In February, Plank’s positive comments about the new U.S. president drew the ire of Curry, as well as of spokes-stars Dwayne Johnson and Misty Copeland. The company took out a full-page ad in its hometown newspaper to try to defuse the situation.

And here is today’s absurdity.

Notice a pattern?

Pray tell me, how did Under Armour lose ‘whatever swagger it had left’ after reporting better than expected results, sending the stock screaming higher by 10%? This brand of financial journalism is yellow — passive aggressive rubbish concocted inside of the mentally addled mind of a very sick person. Kim had this article written before the results came out — in an attempt to punish the CEO, Kevin Plank — because he once had the audacity to say a nice thing about President Trump.

Here was Mr. Plank’s mortal sin, for the freedom of speech hating far left.

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Steel Workers BTFO: In Spite of Trumpian Rhetoric, the Industry Performance Has Been Abysmal During 2017

Everything you thought you knew about the steel industry was a lie, apparently.

In spite of Trump’s tough talk on China, steel prices have re-engaged the downside in recent month — which is wreaking havoc on the underlying shares in the sector.

spot iron ore, beatdown

Let’s think about the psychology behind this trade. It went from milquetoast to red hot, to retraction, to prolonged underperformance to despondency. After yesterday’s drubbing in X and today’s cataclysm in CLF, I am warming to the sector.

Here are some of the ‘returns’ for some of the more popular names, during 2017.

AKS -38%
X -31%
SID -27%
SCHN -26%
CLF -24%
ZEUS -23%
NWPX -19%

Valuation wise, the sector isn’t especially cheap or expensive, leaving the fate of the sector to human emotion. Is this the flushout?

My favorites in the space are in zinc, the metal used to galvanize steel. The best in the sector are HBM, TECK and VEDL.

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Trump Agrees to Renegotiate NAFTA After Leaders of Both Mexico and Canada Call Him to Grovel

Good news Ameritards, you’re about to keep that high paying factory job that you’ve been clinging onto. President Trump just announced that the leaders of Mexico and Canada called and begged him to renegotiate the NAFTA trade deal, which has been a tremendous disaster for our country, believe me.

Also, he said that if he didn’t cut a good deal for the Ameritard people, he’d simply fire both the Canadian and Mexican leaders and cancel the agreement.

It’s important that you remember America is superior to all of its neighbors. These nations only exist to serve out interests. When they drift off outside of their natural borders, it is our job to correct them and place them back on track. By redoing the trade deal to our advantage, we can, once again, live long lives cutting off each other’s fingers inside hot, steamy, factories. Believe me.

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From the Desk of the Famous Stockbroker Vladimir Putin: “This Russian Business is Good, You Buy”

Hi, this is Vladimir Putin from Russia, how are you?

Listen, I know we’ve had difficult few months between our two countries. But maybe it’s time to put that on the side so that you can make a little money, no?

The name of the company is Yandex, ticker symbol is YNDX. Grab a pen, I’ll be brief.

The company makes lots of rubles in Russia. It’s like your Google, but much better and without all of the distractions of alternative businesses. Yandex will be bigger than Google, especially after we conquer your country and imprison all of the executive from Google and destroy its headquarters.

Look at how smoothly the search works, yes? I typed in a few questions and Yandex provided me with answers. Amazing.

Now you look at chart.

See how it goes up, like Russian spy inside your government? That’s good, very good.

Now look at quarterly numbers, which were just posted. Totally legit. Real numbers, no fakes like Google.

Reports Q1 (Mar) earnings of RUB11.41 per share, excluding non-recurring items, RUB2.18 better than the two analyst estimate of RUB9.23; revenues rose 25.4% year/year to RUB20.65 bln vs the RUB20.28 bln Capital IQ Consensus. Online ad rev +23%.

Based on the solid start of the year, we are increasing our revenue guidance, and currently expect our ruble-based revenue to grow in the range of 17% to 20% for the full year 2017.” This is a raise from +16-19%.

Now you buy, ok? The only question now is how much? Normally for my oligarch clients, I suggest purchase of 1 to 2 million shares, just to start out. I always like to say “Igor, if you want to facking make some money in the stock, take controlling interest, fire the board, and pay off government officials to make shares go higher. But if you just want to dip your toes, to give chance, buy 1-2 million shares. And don’t tell me you have to speak to Natasha. Who makes decision in your house to bake bread? Does Natasha ask you how long to bake bread, or does she just do it?”

So now you are familiar and very comfortable with Vlad. Now tell me my American friend, what is your social security numbers? I am going to fill out a new account form for you now — but it will need to be verified by a copy of your drivers license.

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Democrats Hone in on General Flynn; Announces Pentagon Investigation into Foreign Payments

The office of Elijah Cummings, ranking member on the House Committee on Oversight and Government reform, released the following statement, regarding General Flynn and his foreign dealings.

Cummings Releases Three New Docs on Flynn

Pentagon Explicitly Warned Flynn Not to Accept Foreign Government Payments; Newly Unclassified Letter Confirms Flynn Did Not Report Foreign Payments; Defense Department IG Launches Its Own Investigation

Washington, D.C. (Apr. 27, 2017)—Today, Rep. Elijah E. Cummings, the Ranking Member of the House Committee on Oversight and Government Reform, released new documents relating to Lt. General Michael Flynn, who was fired by President Trump from his position as National Security Advisor after concealing information about his communications with the Russian Ambassador to the United States.

“These documents raise grave questions about why General Flynn concealed the payments he received from foreign sources after he was warned explicitly by the Pentagon,” said Ranking Member Cummings. “Our next step is to get the documents we are seeking from the White House so we can complete our investigation. I thank the Department of Defense for providing us with unclassified versions of these documents.”

First, the Oversight Committee has obtained a letter to Flynn on October 8, 2014, from the Defense Intelligence Agency (DIA) Office of General Counsel explicitly warning Flynn, as he entered retirement, that he was prohibited by the Constitution from receiving payments from foreign sources without advance permission:

“Foreign Compensation Requires Advance Approval

The Emoluments Clause of the U.S. Constitution, article I, section 9, clause 8, as interpreted in Comptroller General opinions and by the Department of Justice Office of Legal Counsel, prohibits receipt of consulting fees, gifts, travel expenses, honoraria, or salary by all retired military personnel, officer and enlisted, regular and reserve, from a foreign government unless congressional consent is first obtained. Consent is provided by Congress under 37 U.S.C. 908, which requires advance approval from the relevant service secretary and the Secretary of State before accepting employment, consulting fees, gifts, travel expenses, honoraria, or salary from a foreign government. … Accordingly, if you are ever in a position where you would receive an emolument from a foreign government or from an entity that might be controlled by a foreign government, be sure to obtain advance approval from the Army prior to acceptance.” (emphasis in original)

In addition, this week, the Defense Department produced to the Oversight Committee an unclassified, redacted version of a letter that DIA originally sent to the Committee in classified form on April 7, 2017.

The new DIA letter counters the suggestion by Flynn’s attorney on Tuesday that Flynn followed appropriate procedures for accepting foreign funds for his trip to Moscow in December 2015 when he dined with Russian President Vladimir Putin. The DIA letter states:

“DIA did not locate any records referring or relating to LTG Flynn’s receipt of money from a foreign source. … DIA did not locate any records of LTG Flynn seeking permission or approval for the receipt of money from a foreign source.”

Flynn’s attorney issued the following statement on Tuesday:

“As has previously been reported, General Flynn briefed the Defense Intelligence Agency, a component agency of the Department of Defense, extensively regarding the RT speaking event trip both before and after the trip, and he answered any questions that were posed by DIA concerning the trip during those briefings.”
In other words, regardless of whether Flynn discussed his trip to Moscow with DIA, the Committee has obtained no evidence that he disclosed the payments he received from the Kremlin-backed propaganda outlet RT or that he obtained permission from the Secretary of the Army and the Secretary of State, as required.

The new DIA letter also confirms that the Pentagon warned Flynn explicitly when he retired in 2014 not to accept payments from foreign government sources without obtaining advance approval:

“LTG Flynn was advised of the legal restrictions concerning foreign compensation and instructed to report any potential receipt of compensation in advance.”
In another development, on April 11, 2017, the Inspector General of the Department of Defense sent a letter informing the Oversight Committee that it has now launched its own investigation:

“This office has initiated an investigation to determine whether Lieutenant General (LTG) Flynn, U.S. Army (Retired) failed to obtain required approval prior to receiving any emolument from a foreign government.”

The White House is still refusing to provide even a single document as part of the Committee’s investigation and has refused to comply with the bipartisan document request sent by Chairman Jason Chaffetz and Ranking Member Cummings on March 22, 2017.

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Federal Reserve Beatdown: GDPNow Slashes Q1 GDP Forecast to Just 0.2%

How will the Yellen Fed recover from this humiliation? They’ve been hiking into a maelstrom — reducing the money supply at a time when the economy is literally in shambles.

Prove me wrong.

The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.2 percent on April 27, down from 0.5 percent on April 18. The forecast of first-quarter real consumer spending growth fell from 0.3 percent to 0.1 percent after yesterday’s annual retail trade revision by the U.S. Census Bureau. The forecast of the contribution of inventory investment to first-quarter growth declined from -0.76 percentage points to -1.11 percentage points after this morning’s advance reports on durable manufacturing and wholesale and retail inventories from the Census Bureau. The forecast of real equipment investment growth increased from 5.5 percent to 6.6 percent after the durable manufacturing report and the incorporation of previously published data on light truck sales to businesses from the U.S. Bureau of Economic Analysis

The sages over at JP Morgan have cut estimate too, down to 0.3%

We now believe that real GDP increased 0.3% saar in 1Q. This incorporates the various source data that were released this morning as well as a correction to our treatment of the annual revision to the retail sales data that was released yesterday. The updated details of our forecast are in the table below.

In terms of the retail sales data, it appears that this year the BEA will not incorporate the updated figures until the May GDP report, so this Friday’s GDP release will be based on an older vintage of retail sales data. Reverting to the older data, we think Friday’s GDP report will show real consumption at 0.9% saar.

Turning to today’s reports, the flurry of information was a negative for 1Q growth on net, mainly through the inventory components. Wholesale inventories declined 0.1% in March, retail inventories increased 0.4%, and durable manufacturing inventories ticked up 0.1%. These figures continued what has been a weak run for much of the inventory data, and we now think that the real change in inventories in 1Q will actually be negative (at -$2bn saar). This very weak inventory figure expected for 1Q should be a positive development for 2Q growth, but we hold our 2Q growth forecast at 3.0% saar.

Separately, the nominal goods balance widened from -$63.9bn to -$64.8bn in March, with declines in both exports (-1.7%) and imports (-0.7%) during the month. This was slightly less widening in the deficit than we had been expecting for the month and it looks like net exports will be a small positive for growth in 1Q. However, the trade report did have some negative implications for equipment spending, and we now think that real equipment spending increased 5.2% saar in 1Q despite a modest upside surprise on the core capital goods shipments data that were also released today. Core capital goods orders and shipments have both been trending higher lately, with the latest figures showing core orders up 0.2% in both February and March and core shipments up 0.4% in March after a 1.1% gain in February.

Two things come to mind when viewing this forecasts.

1. How can Janet Yellen and her cadre of losers look in the mirror after learning that they were hiking into a potential recession?
2. What will Trump do to up the ratings of this bad show?

We all know the President loves high ratings. I am certain a recession is worse than death for him, form a PR standpoint. He will have none of it and will raze North Korea to the ground in order to avoid being canceled in 2020.

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