Deutsche Bank: Give Recession a Chance

Some might argue the data points Joe Lavorgna are worried about are completely useless stuff, backward looking subterfuge. However, Joe wants all of us to give recession a chance.

Hey, anything can happen, right?

According to the firm’s Chief U.S. Economist Joseph LaVorgna, looking at the index of leading economic indicators — a measure by the Conference Board that includes economic indicators believed to change before the broader business cycle — brings cause for concern.

“While consumer spending was relatively sturdy in the second quarter and nonfarm payroll growth rebounded solidly last month, the downward trend in the growth rate of the LEI indicates that near-term risks to growth remain to the downside,” he writes.

Here’s a chart from the note, where recessions are shaded in grey. “As the chart below illustrates, in the past two business cycles, an outright year-over-year decline in the LEI after a prolonged period of growth has presaged recession,” LaVorgna says.

As of right now, recession doesn’t look likely. However, should we dive lower towards the end of 2016, fueled by energy prices falling to levels that place a sundry of American oil companies in financial distress, the narrative will quickly change from one of recovery to wrought with panic.

It’s hard to take such a bad firm seriously. I mean, really, Wedbush Morgan is the Rodney Dangerfield of investment banks. You know it. I know it.

Their scatter brained skepticism on Nintendo and Pokemon Go are, generally, incomprehensible. We all knew that Nintendo had a partner and everyone knew the revenue split. What exactly is new here, other than valuation?

Wedbush is skeptical about the game’s staying power and economics with Nintendo booking only modest profits from Pokémon Go and likely struggling to achieve its FY:17 guidance given its bullish 3DS software expectations and the potential for NX to slip out of the year Niantic is the publisher of the game and likely pays The Pokémon Company a royalty for the underlying IP. In addition, mobile revenues are split 70% / 30% between the publisher and the applicable storefront. Assuming Nintendo owns 32% of Niantic, matching its stake in The Pokémon Company, they believe that in a best case scenario Nintendo would be entitled to 22.4% of revenues or profits (70% times 32%), and any benefit will likely show up in non-operating income.

I’m not a fan of buying into a 100% melt up. But I do recognize when something special takes hold of people. Pokemon Go is something Nintendo will profit from, immensely. The question is, how sustainable is the hype?

They’ve been bullish on the stock since 2013. However, their price target has been achieved and they feel the risk reward no longer favors investors at these levels. As such, they’ve downgraded the stock and have quietly removed a price target.

BTIG Research downgrades FB to Neutral from Buy noting “While we were SELL rated on Facebook after its IPO due to concerns over it ability to pivot to mobile, we reversed to a BUY rating in October 2013, with the stock at $49.40. With Facebook stock now over $120, exceeding the $117 price target we set one year ago this week, we believe the risk/reward is no longer compelling. Facebook remains one of the only ways to play the shift of legacy media ad dollars to mobile and its advertising growth rate remains staggeringly high, especially for a $348 billion market cap company. However, investor expectations over the past year have risen dramatically and we now feel the bar is simply too high. In turn, we are downgrading the stock to Neutral from Buy and removing our price target.”

The company has been the dominant recipient of ad dollars for social media, period. BTIG would like nothing more than for them to suffer a pig’s death now, in order to look right and the lecture all of us about the virtues of risk analysis.

I agree with everything he said here. Look for domestic companies with little to no Chinese exposure. I like X and have said so inside Exodus. Also, I like military and infrastructure plays. I’ll provide the plebs here with a far reaching list of stocks the closer we get to the election.

A Hillary Clinton administration will be status quo and probably be better for stocks in the near term. Longer term, her Presidency will light the fire to the keg that blows us all to smithereens, however.

God bless Robert Parker

Admittedly, I’m a bit of a Bob Parker fan. For years, whenever Bob is on the radio or on my teevee, I stop whatever I’m doing to listen and hang onto every word her says, like a child. Most of the people on the teevee or radio get a Bronx cheer from me. I’ve been known to throw things at the teevee and have often had long, one sided, debates with my car stereo, where I’d tell whichever fuckhead was on the radio how truly stupid he/she was.

But Bob has never disappointed, ever. Like me, he’s always right and he is a blessing to the investment world as one of the few true great minds in all of finance.

In this clip, he describes the magnitude of the Italian banking crisis and how they need a bailout. He also wouldn’t rule out a banking failure of a very large magnitude in the meat ball’d state.

God bless Robert Parker.

SHOTS FIRED.

Here is Donald Trump’s 2016 GOP acceptance speech, in its entirety.

For those of you uninterested in the long version, here is my favorite part of his speech.

On the day after the attacks, the media narrative was one of a confused and deranged man snapping and committing heinous acts of murder against his fellow citizens. They left out the part that he’s from Tunisia or the fact that he did this in the name of his God, on behalf of the most violent religion in the history of mankind. There were numerous stories about how bad of a muslim he was. By golly, he ate pork, had homosexual proclivities, and drank a lot of booze. Therefore, he couldn’t possibly be a soldier of ISIS.

Prosecutor Francois Molins said the five suspects currently in custody face preliminary terrorism charges for their alleged roles in helping the 31-year-old in the July 14 attack in the southern French city.

Molins’ office, which oversees terrorism investigations, opened a judicial inquiry Thursday into a battery of charges for the suspects, including complicity to murder and possessing weapons tied to a terrorist enterprise.

The suspects are four men two Franco-Tunisians, a Tunisian and an Albanian and one woman of dual French-Albanian nationality.

“Investigations have not only confirmed the premeditated nature of the attack, but allowed us to establish that (Bouhlel) had support and accomplices in the preparation and execution of his criminal act.”

Examination of the terrorist’s mobile phone showed he had taken pictures at a Bastille Day fireworks display in Nice last year, as well as on a concert on the Promenade des Anglais on July 17, 2015.

On April 4, another Tunisian, Chokri C, 37, had sent Bouhlel a Facebook message reading: “Load the truck with 2,000 tonnes of iron… release the brakes my friend and I will watch.”

Hours after the attack, the same man filmed the bloody scene on the promenade.

There’s the truth. This was a well thought out plan, something that was discussed and strategized for more than a year, by agents of ISIS. Anything to suggest otherwise is a bald faced lie.

Bossman from UKIP, Nigel Farage, offered Trump some ideas on how to defeat the establishment, corporate whore beholden to big, globalized, business, who don’t give a shit about the plight of ordinary folks aka those with net worths less than $50 million.

Also, he touched on how the EU project, which was designed to contain the devils in Germany after WW2 has indeed failed. The devils are out and about, controlling every facet of Europe’s political system, forcing migrants down the throats of the entire continent.

Due to the invasion of migrants spilling into Austria in search of milk and honey, the government has unveiled a plan to build a large, reaching fence, more than 100km long, in order to keep them out. Said wall will be monitored by troops and police with angry dogs. The metrosexuals in Brussels are very upset by this and have expressed their dismay with both Austria and Hungary, who also have a wide, reaching, fence to keep out the barbarian hordes.

Austrian declares this new fence plan will make their border ‘impregnable’.

State officials have reached agreements with hundreds of landowners along the 100km stretch of border which will allow the fence to be put up in record time should the number of refugees increase again, according to a police spokesman.

Austria is on the Balkan migration route to the ‘promised lands’ of Germany and Sweden, where most asylum seekers arriving in Europe want to settle and start a better life.

At one point last year the country was brought to its knees by thousands of people crossing its borders every day, but the numbers have tailed off significantly since the EU signed its migrant deal with Turkey.

Neighbour Hungary is no stranger to border fences, having angered EU officials by building its own 175km fence along its border with Serbia last year when the migrant crisis was at its peak.

But relations between Hungary and Austria have been strained in recent months, with Vienna demanding that Budapest take back several thousand migrants under the Dublin agreement – a request which has so far been refused.

Do you know what’s better than a border fence? A border wall.

Learn the lessons of history and understand that is was the walled cities of Hungary that kept the Mongolian Golden Horde from conquering all of Europe. They were plagued by these fortress cities and left outside to play with their horses, starving like morons.

The Lord Sith has surpassed Warren Buffett and his dated portfolio of old economy companies, all the while taking a chainsaw to the retail industry en masse. His net wealth now stands at a paltry $65 billion, hardly enough money to fund the annual military budget of China.

Congratulations Jeff Bezos. You’ve come a long way from some asshole selling books from the basement of your mother’s cellar.