Frau Merkel Suffers Stinging Defeat in German Election

This is a very important development in German politics: the downward spiraling popularity of German Chancellor Angela Merkel. Today her party suffered a humiliating defeat at the hands of  an anti criminal immigration party, often referred to as ‘the super right wing party’ in Germany by demented liberal reporters. Such immigration policies have caused raping and pillaging across genteel European cities, all thanks and praise to Frau Merkel.

Bear in mind, the entire QE program in Europe is contingent upon German approval. Should Merkel fail to secure her role in this grande experiment in economic fuckery, markets will be exposed to a reality that it has not faced since 2011.

“This isn’t pretty for us,” said Michael Grosse-Broemer, one of Merkel’s top deputies in parliament in Berlin in a ZDF TV interview. “Those who voted for the AfD were sending a message of protest.”

Merkel’s approval rating has plunged to a five-year low of 45 percent, down from 67 percent a year ago, due to spreading disenchantment with her open-door policies on refugees.

According to a Der Spiegel magazine report, Merkel wanted to announce her intention of running for a fourth term this year but put that on hold due to resistance from her Bavarian sister party, the Christian Social Union. The arch-conservative CSU has demanded that Merkel put limits on the numbers of refugees.

“This was a dark day for Merkel,” Thomas Jaeger, a political scientist at Cologne University, told Reuters. “Everyone knows that she lost this election. Her district in parliament is there, she campaigned there, and refugees are her issue.”

The election took place exactly a year after Merkel’s decision to open Germany’s borders to hundreds of thousands of refugees and the discontent in the state was palpable.

“This is a slap in the face for Merkel — not only in Berlin but also in her home state,” said Frauke Petry, co-leader of the AfD. “The voters made a clear statement against Merkel’s disastrous immigration policies. This put her in her place.”

The AfD’s win was cheered by the leader of France’s far-right National Front party, Marine Le Pen, who posted on Twitter: “What was impossible yesterday has become possible: the patriots of AfD sweep up the party of Ms Merkel. All my congratulations!”

An awaking is happening, globally.

I haven’t done one of these updates in a month, because tight trading ranges are the sandboxes of imbeciles. Having said that, a fortnight ago, I went long gold with 26% of my assets. Last week, although uneventful, I did receive my monthly dividend in TLT, which reduced my basis to $118.6.

For the month of August, my short in FCX traded down 15% and TLT was flat. Overall, the SPY was about flat for August.

There weren’t many notable readings from the algos last week, aside from them hating on the fucking French. EWQ is flagged as overbought.

Let’s hope for a more eventful September and the complete and utter destruction of French markets–just for the novelty and fun of it all.

I’ve never met a theory that I didn’t enjoy entertaining.

The going theory in the social media world of pseudo-scientists is the SpaceX explosion was caused by some angry fucking aliens, who thumbed down on asshole CEO Mark Zuckerberg from Facebook.

Now I slowed down this video to 0.25x normal speed, so you could see what’s causing the hysteria. Obviously, there’s something zooming around that piece of shit rocket, meandering about, and then BOOM–to smithereens. Calmer heads say it was a bird or insects. Judging by the 12 second time delay of the explosion, extrapolating out the speed of sound at 1,125 feet per second, this camera was about 2.5 miles away from the rocket. As such, any object flying closer to the lens will appear to much faster, when in fact it was just a stupid ass bird.

You be the judge.

One of the tenets of Donald Trump’s candidacy is to favor U.S. steel producers and to protect their markets via tariffs. This, of course, is common sense. Globally, leaders are pissed off at China for flooding markets with their cheap, fucking, steel. However, China is simply blowing them off, declaring that the real issue has to do with demand and not supply.

What? Does that make any fucking sense at all?

“We recognize that the structural problems, including excess capacity in some industries, exacerbated by a weak global economic recovery and depressed market demand, have caused a negative impact on trade and workers,” G-20 leaders will say, according to the communique. “We recognize that excess capacity in steel and other industries is a global issue which requires collective responses.”

China has said the steel issue is one of demand rather than supply. Cutting overcapacity requires global action, China Vice Finance Minister Zhu Guangyao said Friday at a briefing in Hangzhou. Fewer accusations and more cooperation on the matter would benefit the global economy, Zhu said, adding China had been first among the major economies to take action in reducing overcapacity.

“There are concerns on specific issues like steel production, which today is excessive,” said Brazil’s Finance Minister Henrique Meirelles. “That will be a theme,” he said in reference to discussions at the G-20 summit.

The global flood of Chinese steel is stoking trade tensionswith nations from India to Europe, and U.S. lawmakers have asked President Barack Obama to raise the issue with his hosts at the G-20. President Xi Jinping has ordered as much as 150 million metric tons, or about 13 percent, of annual capacity to shut by 2020 as part of the Communist Party’s plans to address industrial overcapacity amid slowing demand for basic materials. China makes about half of the world’s steel.

Earlier this year, a group of 25 nations, including the U.S., said they were unable to persuade China to take greater accountability for the overcapacity in steel production. Donald Trump, the Republican nominee for U.S. president, vowed that if he is elected, his administration would ensure “American steel for American infrastructure” in a June speech outside of Pittsburgh.

The draft communique warns that financial market volatility is a downside risk to growth, and says G-20 members will use all tools available to boost their economies. Monetary policy alone cannot spur balanced growth, the statement says, another nod to the potential need for greater fiscal action on the part of governments.

“We reaffirm our previous exchange rate commitments, including that we will refrain from competitive devaluations and we will not target our exchange rates for competitive purposes,” according to the draft.

This year could be the lowest growth year since the global financial crisis, International Monetary Fund Managing Director Christine Lagarde separately told business leaders earlier Saturday at a panel in Hangzhou.

“So while the recovery’s under way, it’s not moving very fast, and it’s only moving because of one critical tool being used by central banks and that is monetary policy,” she said. “Growth in 2016 and possibly in 2017 is yet again going to be a year of growth below 3.5 percent. Way below that.”

Okay, the ‘recovery’ has been underway since 2009. Are these people fucking nuts? I love how they keep making excuses for their failed policies by saying ‘the recovery is under way.’ The world wants less steel from China. The Chinese leaders want an OPEC like structure to control and rig the fucking markets.

As you were.

Most people I know are outraged over the EU fining Apple for back taxes. But there’s another side to the story, one that involves insidiously fucked up global titans who slosh money around from country to country, never repatriating back to their home country, all in an effort to avoid paying any taxes. While the EU decision was stupid and punitive, the action by Apple to keep over $200 billion overseas in order to AVOID paying U.S. taxes is equally stupid and also absurd.

The Chancellor of Austria unleashed a tirade against a handful of American companies, who are profiting handsomely in his country, tax free.

Multinationals like coffee chain Starbucks (SBUX.O) and online retailer Amazon (AMZN.O) pay less tax in Austria than one of the country’s tiny sausage stands, the republic’s center-left chancellor lamented in an interview published on Friday.

Chancellor Christian Kern, head of the Social Democrats and of the centrist coalition government, also criticized internet giants Google (GOOGL.O) and Facebook (FB.O), saying that if they paid more tax subsidies for print media could increase.

“Every Viennese cafe, every sausage stand pays more tax in Austria than a multinational corporation,” Kern was quoted as saying in an interview with newspaper Der Standard, invoking two potent symbols of the Austrian capital’s food culture.

“That goes for Starbucks, Amazon and other companies,” he said, praising the European Commission’s ruling this week that Apple (AAPL.O) should pay up to 13 billion euros ($14.5 billion) in taxes plus interest to Ireland because a special scheme to route profits through that country was illegal state aid.

Kern criticized EU states with low-tax regimes that have lured multinationals – and come under scrutiny from Brussels.

“What Ireland, the Netherlands, Luxembourg or Malta are doing here lacks solidarity towards the rest of the European economy,” he said.

He stopped short of saying that Facebook and Google would have to pay more tax but underlined their significant sales in Austria, which he estimated at more than 100 million euros each, and their relatively small numbers of employees – a “good dozen” for Google and “allegedly even fewer” for Facebook.

“They massively suck up the advertising volume that comes out of the economy but pay neither corporation tax nor advertising duty in Austria,” said Kern, who became chancellor in May.

A great man once said, ‘the world is yours for a season.’ As it happens, the bulls stole the summer, slumbered for the past month with it, and closed out the month of August on a high note. Although the indices have been uncorked flat, there have been gauche returns in a sundry of sectors. If you made a living by shorting stocks, you were slammed into the sausage machine and ground out since March.

The ravenous elections loom over the heads of just about everyone. Expect the rhetoric to reach a fevered pitch. The didactic method by which we’re funneled into the election booths embody a faux priggishness that I am often guilty of myself. I sometimes chuckle at my self-righteous outrage, when discussing the topics of the day, as I am a fallible person, one with several low traits. But I try my best and I sometimes get it right.

With the finite time we have here, I might as well make mines count.

There is a dynamism to the voodoo that I publish here, at least I like to think that. Fifty percent of you are pissed off at me for ignoring trades and discussing topics unrelated to the art of making money. Chill, this too shall pass.

The sinuous paths that I’ve taken with iBankCoin since inception is what makes us unique, relevant and profitable. The growth and prosperous nature of the site can be attributed to a malleability that others have resisted, much to their chagrin. The landscape of financial blogging has changed, measurably, since I began my journey in 2006. Having my ears to the rails, I sense another shift coming, one that fully embodies the populism that is sweeping America, and the world. I’m all about the culture wars, always have been and always will be. Social graces dictate that a website, such as iBankCoin, should comport itself like the top hatted gentlemen they profess to be. But, every once in a while, the sleeves need to get rolled up and people need to get knocked out (extra Deebo).

Enjoy the long weekend. Some of you have earned it.

Unfortunately, a great lot of you will behave in a ribald manner, booze hounding and prattling on about topics that cause others to recoil with disgust. Man is mostly a barbarous, garrulous creature–bobbing and weaving throughout time like muppets high off cocaine leaves. Talking potatoes, most of you are.

With that said, Le Fly departs for afternoon festivities.

Cheers

Without equi

Markets are at record highs and hedge funds need to allocate funds. Because of size restrictions, much of the money is funneled into a select group of stocks that are capable of handling the big buy orders, without measurably affecting prints and share price.

Here are the top performing mega caps over the past 3 mos, also known as ‘hedge fund hotels.’

This is the same paper on the same day, but in different locales.

Cool? Zoning.

American journalism.

It has been talked about for a long time that America is facing a pension fund tsunami, that stands to threaten the fabric of this economy in a very systemic way. We’re not even talking about medicare and social security shortfalls, just people working at government and municipal jobs hoping to retire in peace.

Back in April, Moody’s issued a report on this ballooning crisis.

While the United States (Aaa stable) government’s unfunded pension liabilities are significant, they are still overshadowed by the projected funding shortfalls for both the Social Security and Medicare programs, says Moody’s Investors Service.

The unfunded liabilities of the various federal employee pensions systems, covering civilian and military employee benefits, amount to about $3.5 trillion, or 20% of US GDP. Additionally, Moody’s estimates that unfunded state and local government pension plan liabilities are of the same magnitude, bringing the total shortfall to 40% of GDP.

However, historical precedent suggests that it is unlikely that the federal government will offer significant financial support for distressed state and local government pension plans. As a consequence, this portion of the liabilities only poses a small risk to the creditworthiness of the US.

The bigger challenge to the US comes from the unfunded liabilities for the Social Security and Medicare programs. The Social Security funding gap is estimated at $13.4 trillion, or 75% of GDP, while the shortfall from the Hospital Insurance component of the Medicare program amounts $3.2 trillion, or 18% of GDP.

“As the stand-alone sustainability of these two programs wanes with an aging population, Social Security and Medicare will be among the primary drivers behind a sharp widening of federal budget deficits that is expected to occur after the fiscal year 2018,” says Steven Hess, a Senior Vice President at Moody’s.

The unfunded US pension liabilities are not abnormally large when compared with other developed countries with high credit ratings, according to the report “Government of United States – Government Employee Pension Liabilities Are Moderate Compared to Social Insurance Programs.”

Canada (Aaa stable) has the lowest burden from unfunded liabilities overall (12% of GDP in 2014), after it pushed through reforms more than a decade ago. Australia (Aaa stable) now operates a primarily defined contribution pension scheme, but also has unfunded general government pension liabilities (21% of GDP) from its legacy defined benefit system. The UK (Aa1 stable) faces higher risks from its public pensions with large unfunded liabilities equal to 66% of GDP in 2014.

I’ll translate that for you. Our government has been taking money from the paychecks of its citizens, which were supposed to be earmarked for their retirement, but instead spent it on wars, welfare and wasteful projects. That’s not hyperbole, but fact. If this happened at a hedge fund or any private enterprise, it would be called fraud and the criminal sentenced to 20 years in prison.

Bill Rodgers, former economist at the Labor Dept, and Professor at Rutgers, weighs in on the jobs landscape and later touches on Fed policy, with Steve Liesman later saying the Fed might need to move with rates because of a potential systemic risk of underfunded pensions.

CALPERS, one of America’s largest pension funds with about $300 billion in assets, has about 18%-20% of their money in fixed income and about 52% in stocks.

Best case scenario, pension funds could enjoy a slighter higher return on their bond portfolios, whilst also receiving gains on the equities side of the equation. Without question, the Fed has their work cut out for them–trying to provide pensions with enough return on their bonds and also keep the market heading higher.