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Our No-Win "Kobayashi Maru" Economy

Our No-Win "Kobayashi Maru" Economy Authored by Charles Hugh Smith via OfTwoMinds blog, It's time to reprogram the conditions of the economy to serve the many rather than the few. Star Trek's Kobayashi Maru training exercise tests officer candidates' response to a no-win scenario: any attempt to rescue the crippled ship's crew results in the destruction of the candidate's ship, while standing by and taking no action results in the loss of the Kobayashi Maru's crew. Captain Kirk famously defeated this no-win scenario by reprogramming the simulation to "change the conditions of the test." This can be viewed as either cheating or as creative problem-solving via "thinking outside the box." The Kobayashi Maru is a very apt description of both the U.S. and the global economies, which are currently running a real-world no-win scenario called "Profits, Infinite Growth, Low Inflation, Full Employment." (PIGLIFE). To win in the PIGLIFE scenario, you need permanent expansion of GDP, consumption, profits and employment and a permanently low limit on inflation. Anything less and you lose. Central banks and political leaders have managed to "win" the PIGLIFE scenario for decades, but at a cost that can no longer be cloaked by happy-happy statistics. The economy has been fatally hollowed out into a fragile shell of monopolies and cartels profiting from hyper-financialization and hyper-globalization, a system in which the only possible outcome is hyper-inequality and hyper-self-exploitation as the immense profits enable the purchase / capture of political and regulatory power. Now that the PIGLIFE economy has stripmined all the easy-to-exploit resources and workforces, scarcities are pushing inflation far above the "winning" low level. Oops, you lose. Now the real teeth in the Kobayashi Maru scenario are bared: if Central banks and political leaders close the spigots of "free money" that's been expanding GDP, consumption, profits and employment for decades, then all those slide from expansion into contraction. But if they keep the spigots of "free money" wide open, inflation threatens to feed back in a self-reinforcing loop of expectations of higher inflation that push inflation higher, which then justifies the expectations which then push prices, wages, etc. higher. Meanwhile, the two engines of the PIGLIFE expansion, hyper-financialization and hyper-globalization, have dived off the cliff of diminishing returns. Boosting debt, leverage and globalized supply chains aren't generating expansion, they're actively undermining whatever "growth" is still sluicing through the PIGLIFE economy. So sorry, Central banks and political leaders, you lose. The way you've rigged the system, it goes into self-reinforcing contraction if you close the spigots of "free money" even modestly. But if you don't, the Klingon ships of inflation destroy you. The more you push hyper-financialization and hyper-globalization as "solutions," the greater the destruction. Clearly, we need a new set of conditions for prosperity and well-being that do not rely solely on expanding GDP, profits, consumption and employment. Many economists, for example, Joseph Stiglitz, have proposed retiring GDP as a measure of prosperity and well-being and using more accurate and sustainable measures of well-being to inform policies. If we've learned anything, we've learned that enriching the already super-rich so they have even greater means to distort democracy to serve their private interests undermines the prosperity of the many rather than increases it. It's time to reprogram the conditions of the economy to serve the many rather than the few, and enable a truly winnable scenario of sustainable prosperity and well-being by tossing the "waste is growth / Landfill Economy" PIGLIFE model into the toxic waste dump of failed, no-win scenarios. *  *  * My new book is now available at a 10% discount this month: When You Can't Go On: Burnout, Reckoning and Renewal. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. Tyler Durden Wed, 06/22/2022 - 16:20.....»»

Category: blogSource: zerohedgeJun 22nd, 2022

These Are The 10 Biggest Military Spending Nations In The World

These Are The 10 Biggest Military Spending Nations In The World As Russia’s invasion of Ukraine has continued, military spending and technology has come under the spotlight as the world tracked Western arms shipments and watched how HIMAR rocket launchers and other weaponry affected the conflict. But, as Visual Capitalist's Niccolo Conte details below, developing, exporting, and deploying military personnel and weaponry costs nations hundreds of billions every year. In 2021, global military spending reached $2.1 trillion, rising for its seventh year in a row. Using data from the Stockholm International Peace Research Institute (SIPRI), this visualization shows which countries spent the most on their military in 2021, along with their overall share of global military spending. Which Countries Spend the Most on Military? The United States was the top nation in terms of military expenditure, spending $801 billion to make up almost 38% of global military spending in 2021. America has been the top military spending nation since SIPRI began tracking in 1949, making up more than 30% of the world’s military spending for the last two decades. U.S. military spending increased year-over-year by $22.3 billion, and the country’s total for 2021 was more than every other country in the top 10 combined.   The next top military spender in 2021 was China, which spent $293.4 billion and made up nearly 14% of global military spend. While China’s expenditure is still less than half of America’s, the country has increased its military spending for 27 years in a row.   In fact, China has the largest total of active military personnel, and the country’s military spending has more than doubled over the last decade. While Russia was only the fifth top nation by military spending at $65.9 billion in 2021, it was among the higher ranking nations in terms of military spending as a share of GDP. Russia military expenditures amounted to 4.1% of its GDP, and among the top 10 spending nations, was only beaten by Saudi Arabia whose spending was 6.6% of its GDP. Military Collaboration Since the Russia-Ukraine Conflict Russia’s invasion of Ukraine in February has resulted in seismic geopolitical shifts, kicking off a cascade of international military shipments and collaboration between nations. The security assistance just sent by the U.S. to Ukraine has totaled $8.2 billion since the start of the war, and has shown how alliances can help make up for some domestic military spending in times of conflict. Similarly, Russia and China have deepened their relationship, sharing military intelligence and technology along with beginning joint military exercises at the end of August, alongside other nations like India, Belarus, Mongolia, and Tajikistan. Since China’s breakthrough in hypersonic missile flight a year ago, Russia has now been testing its own versions of the technology, with Putin mentioning Russia’s readiness to export weaponry he described as, “years, or maybe even decades ahead of their foreign counterparts”. Sanctions and Energy Exports: New Weapons in Modern Warfare Along with advanced weaponry, sanctions and energy commodities have become new tools of modern cold warfare. As Western economic sanctions attempted to cripple Russia’s economy following its invasion, Russian gas and oil supplies have been limited and forced to be paid in rubles in retaliation. Global trade has been turned into a new battlefield with offshore assets and import dependencies as the attack vectors. Along with these, cyberattacks and cybersecurity are an increasingly complex, obscure, and important part of national military and security. Whether or not Russia’s invasion of Ukraine ends in 2022, the rise in geopolitical tensions and conflict this year will almost certainly result in a global increase in military spending. Tyler Durden Fri, 08/19/2022 - 22:40.....»»

Category: blogSource: zerohedge10 min. ago

Tent Cities Are Taking Over Vast Stretches Of Our Major Cities (And It"s Only Going To Get Worse)

Tent Cities Are Taking Over Vast Stretches Of Our Major Cities (And It's Only Going To Get Worse) Authored by Michael Snyder via The Economic Collapse blog, If brighter days are ahead for the U.S. economy, why are so many tent cities popping up all over the nation?  At this point things are so bad that even the New York Times is admitting that “America’s homelessness problem has the makings of an acute crisis”.  That article goes on to explain that our homeless population is steadily rising.  Tonight, hundreds of thousands of our fellow Americans will be sleeping in tents, under bridges, in overcrowded shelters or in their vehicles.  Of course there are many that are so addicted to drugs or alcohol that they just sleep wherever they end up passing out.  This is a tragedy that is growing with each passing day, and it is only going to get worse in the months ahead as the U.S. economy slows down even more. Earlier today, I was truly stunned by a Fox News article about what is going on in Portland right now.  Tent cities are literally taking over entire neighborhoods, and many residents are “resorting to selling their homes” as a result… Residents in a Portland, Oregon, neighborhood are resorting to selling their homes and moving due to homeless encampments right outside their front doors. “It’s a little scary because I know there is mental illness and that concerns me,” North Portland resident Maria Inocencio told KGW8. Residents of North Portland said at least three families on one street have left in recent days due to the homeless camps, and KGW8 reported seeing for-sale signs up and down streets. Portland was once such a beautiful place, but now it has literally been transformed into a hellhole. Needless to say, Portland is far from alone.  From Seattle all the way down to San Diego, communities all along the west coast are being plagued by relentlessly growing encampments.  In many cases, such encampments are magnets for drug addicts and other societal outcasts. But this is not just a west coast problem. Let me give you are couple of examples.  In recent weeks, tent cities have been popping up all over Pittsburgh… “We want immediate action. We want to see people in homes. There’s a humane way to deal with homelessness,” said Pittsburgh City Council president Theresa Kail-Smith. Homeless camps are popping up all over the Northside. You’ll see them on the Riverfront Trail to Millvale. Another makeshift tent city popped up underneath the Andy Warhol Bridge. And in Fayetteville, North Carolina one burgeoning homeless camp recently made news because it features quite a few registered sex offenders… There are 843 registered sex offenders living in Cumberland County. For dozens in Fayetteville, their home is a tent alongside the road. Deputies in the Sheriff’s Office Sex Offender Registration Enforcement Unit (SOREU) learned the group of offenders are homeless and stay in a tent community along where the busy Martin Luther King Jr. Freeway (Highway 87) goes over Gillespie Street. Some live under the overpass while others live in a nearby field beside Gillespie Street. From coast to coast, this is becoming an enormous issue. And the truth is that it is only going to intensify as the months roll along. In 2008 and 2009, millions of Americans lost their jobs as the economy plunged into a major downturn. Once those people lost their jobs, many of them could no longer afford their homes and soon found themselves on the streets. I wish that we would never have to see anything like that again.  It was truly a very dark chapter in our history, and countless people had their lives turned completely upside down. Unfortunately, it is starting to happen again. As I detailed earlier this month, large companies are starting to lay off workers in substantial numbers. This even includes Facebook.  This week, we learned that Facebook recently used a very unique method to lay off one group of workers… A group of about 60 contractors who work with Facebook learned they were laid off this week after they were chosen ‘at random’ by an algorithm. The layoffs are the latest example of Big Tech reining in spending and hiring, as just days ago Apple let go of about 100 recruiters. Meta CEO Mark Zuckerberg has also recently said he will weed out underperforming employees with ‘aggressive performance reviews’ as the company braces for a deep economic turndown. I suppose that is one way to avoid personal responsibility for firing someone. “Don’t blame me – it was the algorithm”. If a big corporation that is swimming in cash like Facebook already feels forced to “thin the herd”, I think that is a very bad sign for the employment market as a whole. In the months ahead, I think that there will be a lot more layoffs all over the country. And this comes at a time when the housing market is starting to collapse. Existing home sales in the United States have now fallen for six months in a row, and the numbers for the month of July were downright depressing… Sales of previously owned homes fell nearly 6% in July compared with June, according to a monthly report from the National Association of Realtors. The sales count declined to a seasonally adjusted annualized rate of 4.81 million units, the group added. It is the slowest sales pace since November 2015, with the exception of a brief plunge at the beginning of the Covid pandemic. Sales dropped about 20% from the same month a year ago. I anticipated that home sales would be lower than last July, but a 20 percent drop is pretty catastrophic. And as the Federal Reserve continues to raise interest rates, it is probably inevitable that the numbers will get even worse. The stage is being set for a historic economic meltdown, and I would encourage you to do what you can to get prepared for it. 2008 and 2009 were extremely bitter. What is coming will likely be even worse. And as the economy deteriorates, tent cities will continue to take over more neighborhoods all over America. But don’t look down on those that are living in tents. With a run of bad luck, you could be one of them too. *  *  * It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon. Tyler Durden Fri, 08/19/2022 - 20:20.....»»

Category: blogSource: zerohedge1 hr. 54 min. ago

US economy likely to face recession by year"s end as growth continues to slow, report says

The Conference Board's leading economic index dropped for the fifth consecutive month, suggesting the U.S. economy is slowing and could be headed for a recession......»»

Category: topSource: foxnews2 hr. 38 min. ago

China"s Endless COVID Hysteria Is A Dark Experiment In Social Conditioning

China's Endless COVID Hysteria Is A Dark Experiment In Social Conditioning There are many people that will say that Americans “rolled over” in the face of covid restrictions and vaccine pressures despite extensive evidence that neither of these things had any effect on stopping or stalling the pandemic.  But the notion of American pacifism is simply not true.  If it were then the US would be looking a lot more like China right now.   Growing opposition to meaningless covid lockdowns and the vaccine passports was a mainstay in the US that made government enforcement impossible.  Joe Biden's attempt to introduce federal vax passport rules for businesses failed miserably, red states defied the lockdowns within a few months of the start of the pandemic and the states that kept restrictions in place had HIGHER rates of infection while their economies sank.  When it became clear to the establishment that millions of Americans were not going to comply, they had to back off. Even blue states and cities have been forced to acknowledge that the farce is over; Los Angeles County tried to reintroduce mask mandates recently and the measure collapsed in failure as many municipalities said they planned to ignore any new ordnance.  Covid's median Infection Fatality Rate of 0.23% was not enough of a threat to convince the public to abandon their constitutional rights.  Without the millions of courageous people that refused to comply our country might look very different today.  The CCP has faced little public opposition over their draconian covid rules, and when they do, they don't worry much because the population is completely disarmed.  This has resulted in a veritable nightmare world for the citizenry.  In fact, it almost seems like an experiment to find out how much psychological torture and oppression human beings are willing to endure.     Mandate cheerleaders boasted endlessly about how China effectively stopped the spread and was ready to reopen while the western world floundered because we refused to submit and accept medical tyranny “for the greater good.”  Now these same people are silent as China goes though an array of outbreaks and lockdowns that cycle perpetually.  In the meantime, most of the west has reopened and some places (like dozens of conservative states) have been open well over two years.  Remember when leftists and foreign governments said we would be dying off in the streets and ruing our decision to follow the science rather than the hysteria?  Yeah, the great cleansing of conservatives they were hoping for never happened.     Open authoritarian systems require dramatic participation by the people being controlled.  They have to want to be locked down, otherwise the system cannot continue and it will eventually be toppled.  One has to wonder, do the Chinese people even remember anymore why they are locking down?  Or, have they just accepted the mandates as the new normal?   Currently, mass covid testing is a regular practice in most major population centers in China.  Almost every large indoor business or government building requires proof of a negative covid test.  This incessant testing is part of China's “zero covid” policy, and has led to testing booths in almost every neighborhood.  China has been perfecting the use of QR codes and tracking apps to keep the public cataloged; without these apps and codes a Chinese citizen would find it impossible to get a job or participate in the economy.  They would die from starvation first; the minuscule chance of dying from covid would be the furthest thing from their mind. Though PCR testing often reads asymptomatic cases as exactly the same as full blown infections, the CCP does not recognize the difference and treats every case as if each person is Patient Zero in a zombie apocalypse.  For example, a six-year-old boy with asymptomatic covid tested positive and was found through tracking apps to have visited an IKEA store in Shanghai a couple of days earlier.  So, rather than admitting that the testing and tracking is a failed system that does nothing to prevent covid spread, CCP authorities instead tried to lockdown the IKEA building with hundreds of people inside for a week.  Here was the result: Testing madness has even spread to the animals.  The government is now requiring testing for 5 million fisherman as well as testing of the FISH being delivered by commercial fishing vessels to Chinese ports.    The image of a fish being swabbed for covid is rather hilarious, but it's important to note that the CCP probably isn't stupid enough to believe that covid is transmitted through seafood.  More likely what this is about is initiating a firestorm of public conditioning to convince the population that covid is around every corner and under every bed forever.  The goal here is to engage in a constant fear campaign to make the people more compliant.  It is an assessment to see what the government can get away with.  And, in China at least, they can get away with quite a lot.   The Orwellian horror that China represents has essentially killed their tourist industry.  Millions of potential foreign visitors now fear that they could be trapped within China's borders if they time their visit to coincide with another surprise mass lockdown.  China's economy suffers extensively from their lockdown culture, but the CCP does not care.  The experiment is more important than anything else. This will never end.  Once a government obtains this kind of all pervasive power they will stop at nothing to keep it.  While the US has many problems to deal with and many elitists in positions of authority to unseat, at least we have a chance.  Some places, like China, are so poisoned by complacency that they can't escape the boot; it has already landed on them.    Tyler Durden Fri, 08/19/2022 - 18:40.....»»

Category: blogSource: zerohedge2 hr. 54 min. ago

Saudi Aramco Is Taking A Page Out Of The U.S. Shale Playbook

Saudi Aramco Is Taking A Page Out Of The U.S. Shale Playbook By David Messler of OilPrice.com Saudi Aramco reported Q-2, 2022 earnings this week and set tongues wagging with the sheer amount of cash being generated in its daily operations. Net income of $48.4 bn, Free Cash Flow of $34.6 bn for the quarter, and $65 bn for the first half, substantially eclipsed year-ago numbers of $22.6 bn and $40.9 bn for the same period. All of this was driven by price realizations for crude topping the $113.00/bbl mark for the quarter, exceeding year-ago prices ($67.90) by ~66%. What was noteworthy, and documented in a recent Wall Street Journal article, was the company’s capital allocation budget toward increasing production remained largely unchanged at the lower end of its previously announced range of $40-50 bn for 2022. The Journal article went on to note- “To be fair, $40 billion is a lot, much more than in 2021, but Aramco is very flush. It earned more than $65 billion in free cash flow in the first half of this year. That spending also includes diversifying into natural gas, wind, solar and blue hydrogen. And while capital discipline is laudable, surely if management really believes that oil demand is growing for the next decade, it should at the very least accelerate plans to expand its maximum sustainable oil capacity to 13.0 million barrels a day, currently set for 2027.” Where the Saudi mindset appears to depart from their oil-producing cousins on the other side of the planet, is what is to be done with the excess cash now being realized. While U.S. shale producers are raining wealth on their shareholders, in the form of stock buybacks and special dividends, KSA-94% owner of ARAMCO, has focused on paying down debt, and diversifying its energy portfolio. In some ways mimicking the actions of the mega oil producers like ExxonMobil, (NYSE:XOM) Chevron (NYSE:CVX) and BP (NYSE:BP), by delving into alternative energy forms.  The supermajors, tired of being clubbed by the climate alarmists, and having totally bought into the Paris Accord Net Zero by 2030 dictums, have been diverting capital away from legacy sources and toward cleaner energy forms that raise their ESG scores. Author of, The End of Fossil Fuel Insanity, Terry Etam, summarized their plight in an article carried in the BOE Report discussing the coming gap between supply and demand- “There is little producers can do to help out. Their ‘inventory’ – oil and gas reserves – is in incredibly high demand, and is being bid up in price. What would help alleviate this situation is to find and develop more reserves, but the world’s cultural elite, the group that dominates western political schools of thought, has ‘scientifically’ linked any weather event – anything at all – with climate change, which is linked to ‘fossil fuel combustion', which is therefore bad, and the mere suggestion of increasing production is unacceptable.” In this regard, the supermajors have been “Greenwashing” their portfolios in some cases and beginning to transition them in others. Here they depart from the Saudis who intend to straddle the gap between petroleum and green energy into the foreseeable future. In spite of a publically asserted view by Aramco CEO, Amin Nasser that oil demand will grow for the rest of this decade, KSA appears to be in no hurry to accelerate the timetable for achieving the 13 mm BOPD upper threshold set for 2027. Instead, KSA has embarked on an ambitious decade-long quest to diversify its economy away from its sole reliance on oil and gas, choosing a multi-pronged approach that includes hydrogen, wind, and solar.  One area where they are focusing their efforts is in the production of hydrogen-H2. A Financial Times-FT article notes that the Saudis plan to dominate the production of H2, a few years hence. With its abundant supplies of gas nearby the City of Neom, a Blue-H2 plant is being built with $110 bn of capital. This plant is planned to take 2.2 bn cubic feet of gas daily from the supergiant Jafurrah gas field, for processing Blue H2. It is forecast to come on line in 2026. Another massive hydrogen project will produce Green H-2, with power supplied by a 99-turbine wind farm. SP Global discusses this in an article focusing on Acwa Power’s 240K mt/ton per year, green hydrogen project that will make 1.2 mm MT of ammonia. It also is expected to start production in 2026. Finally, solar is thought to have unlimited potential in the Kingdom. It makes sense as the sun shines brightly there more than 300 days per year. Accordingly, KSA is fielding a number of new solar farm projects getting underway. The sovereign wealth fund of the Kingdom just this year let two awards for a total of 1 GW IPP One went to Acwa Power for a 700 MW farm at Al-Rass and a second smaller, 300 MW farm at Saad. The Kingdom has a goal of installing 54 GW of solar generation by 2030. Solar is also finding industrial uses as the Glass Point complex takes shape. This 1.5 GW project, the biggest solar farm in the world will power an aluminum smelting plant designed to use the solar mirrors on water-filled pipes to produce solar steam. This will save approximately 600K tons of carbon annually.  Your takeaway It is fairly clear from the decisions that KSA is making about the capital allocation for renewable forms of energy that their feet are firmly planted in both camps. The higher price regime that has settled on the oil market since 2021 has provided the cash to fund the projects we have discussed, that will fuel the Saudi Vision 2030 initiative. At the same time, like their shale counterparts in the U.S., they are committed to an orderly development of their legacy oil reserves in a way that will preserve value as far into the future as possible. That’s just good stewardship. What this means is that in spite of entreaties by world leaders including the American president to produce more oil to lower prices, oil producers in the U.S. and in Saudi Arabia are seemingly determined to hold the line on capital spending. This will have the effect of keeping supplies tight and prices higher than they otherwise would be. Tyler Durden Fri, 08/19/2022 - 19:00.....»»

Category: blogSource: zerohedge2 hr. 54 min. ago

The Great Resignation Is Coming To An End As Workers Return Back To Their Old Jobs

The Great Resignation Is Coming To An End As Workers Return Back To Their Old Jobs So it turns out the grass isn't always greener on the other side... That's what many who quit during "The Great Resignation" are apparently finding out, judging by a new Bloomberg piece that is highlighting how many people are returning to the old jobs that they quit over the last couple of years. 4.2% of all new hires for companies that advertised jobs on LinkedIn were boomerangs in Q1 this year - meaning employees that returned to their old jobs - the report says, This compares to 3.3% in 2019, showing clearly that people are returning to their old jobs. Firms are even "boasting" on places like social media, the report says.  Companies are writing blog posts and sharing photos of employees returning to their respective firms. Dan Black, EY’s global leader for talent attraction, commented: “On social media, you can very easily click back in and say, ‘Hey, I’d love to talk to someone again about maybe reengaging in employment with the firm.”  The move goes to show that the recent jobs data isn't necessarily indicative of a strong economy, but rather could mean the opposite: that people are returning back to work because rising rates, inflation and recession are starting to mire their quality of living.  Rachel Bentley, a 31-year-old from Austin, Texas who went back to her job at Duo, told Bloomberg: “I just realized that startups don’t really offer a lot of family benefits that larger companies do.” By going back she was able to reconnect with old friends...oh, and double her pay.  Adam Kail, founder and chief executive officer of Harrison Gray Search and Consulting commented on the trend: “The hard reality is that at 30, 40, or even 50, it’s really hard to change careers and maintain the lifestyle you’re used to. I’ve seen people switch careers drastically but in a short period of time realize, ‘I’m not as happy doing something I like more, but with my pay a third of what it was before.’” Matthew Wragg, CEO of engineering and tech recruitment firm Gattaca, told Bloomberg he has hired 6 former employees back over the past three months. He commented: “You’ve got that cultural cognizance. They know the culture. They know the operating processes.”  A study of about 30,000 employees who returned to their old jobs found that employees generally performed with the same efficiency as before they left the first time. This has been prompting companies to examine why these employees left in the first place. Poor cultural fits or underperformance generally don't solve themselves upon coming back to a firm, so companies want to be cognizant of such reasons for leaving.  Mark Royal, a senior director at consultant Korn Ferry, offered up tips for those wanting to go back to their old jobs: "You want to be framing it in terms of what you’ve learned in the role you’re now leaving and what you can bring back to your former employer and why that will be valuable for you both.” First question you should address: at what point, exactly, did you learn that free Covid money wasn't going to last forever and how did this effect your search for a job... Tyler Durden Fri, 08/19/2022 - 20:00.....»»

Category: blogSource: zerohedge2 hr. 54 min. ago

Late Summer Period of Reflection; FL Beats, DE Mixed

We are thankful for such a time, as it gives us a moment to pause and look back on what's transpired thus far in 2022. Friday, August 19, 2022As we exit the most consequential period of summer earnings season — jobs numbers, inflation, housing and earnings reports for the marquee names on the S&P 500 have all been heard from over the past few weeks — we enter the quietest period of trading this side of Christmas Week. We are thankful for such a time, as it gives us a moment to pause and look back on what’s transpired thus far in 2022.For instance, although all major indices are still down big year-to-date — from -7% on the Dow to -18% on the Nasdaq — we’re actually positive on two of the four over the past six months: the Dow and the small-cap Russell 2000 are both up slightly more than +1%, with the S&P 500 basically flat (-0.5%). Only the tech-heavy Nasdaq, which had gotten the biggest bid in the stellar trading year that was 2021, is still down -3% from February.Market futures are selling off somewhat in Friday’s pre-market on basically no news, unless you count Ryan Cohen selling all his Bed Bath & Beyond BBBY shares (sending that meme stock hurtling downward though still well off the sub-$5 per share trough we saw in early July). The run-up off the mid-June bottom has been impressive and efficient, although the muscle memory of sending indices too high too soon like we did back in the first trading days of the year is likely still fresh in many investors’ minds.For the past week, we’ve been in pretty much a holding pattern, even though intra-day highs and lows demonstrated a bit more volatility than the closing numbers would indicate. We are seeing signs across a widening spectrum of the economy that inflation is pulling back notably, but there is still a long way to go until the Fed funds rate at all resembles the current rate of inflation. Everyone agrees the Fed has a rendezvous with 3%; the only question is whether we touch it in September or the Fed leaves a little more slack.Next week’s summit in Jackson Hole will bring plenty of analysis based on public statements from Fed Chair Jay Powell and others. The Fed has taken plenty of lumps over its monetary policy decisions over the past year, but the fact of the matter is: they’re not sunk yet. Despite a first-half ’22 negative GDP, which unofficially touched off a recession, a still-strong labor force and supply chain improvements have our current economy resembling something better than recessionary strife.Foot Locker FL shares are up big on the company’s Q2 earnings report ahead of Friday’s opening bell, with a big beat on the bottom line — earnings of $1.10 per share versus 75 cents in the Zacks consensus, for a positive surprise of +46.7% — on revenues of $2.07 billion, which topped estimates by +0.62%. Comps were -10.3% year over year, but 2021 was a record year for the company. Shares are way up on the report, which marks Foot Locker’s ninth-straight beat, though still below the early-year levels, before the stock plummeted on Q4 earnings back in February. For more on FL’s earnings, click here.Deere & Co. DE also posted earnings this morning, though its results were mixed: earnings of $6.16 per share missed the Zacks consensus by -7.23% (though up nicely from $5.32 per share a year ago) on $13 billion in quarterly sales, marking a +0.76% positive surprise. This breaks an 11-quarter streak of earnings beats for the farm machinery major, which is trading down more than -4% in today’s early session. Shares are still positive year to date. For more on DE’s earnings, click here.Questions or comments about this article and/or its author? Click here>> How to Profit from the Hot Electric Vehicle Industry Global electric car sales in 2021 more than doubled their 2020 numbers. And today, the electric vehicle (EV) technology and very nature of the business is changing quickly. The next push for future technologies is happening now and investors who get in early could see exceptional profits. See Zacks' Top Stocks to Profit from the EV Revolution >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Deere & Company (DE): Free Stock Analysis Report Foot Locker, Inc. (FL): Free Stock Analysis Report Bed Bath & Beyond Inc. (BBBY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.....»»

Category: topSource: zacks4 hr. 53 min. ago

SNAP Might Cease Development of Pixy Flying Selfie Drone

SNAP might pause the development of Pixy, its $230 flying camera drone that was first announced in April, as the company fights slowing ad demand and a challenging economy. Snap Inc. SNAP is shutting down the production of Pixy, a drone-powered camera that can record videos and photos for sharing on Snapchat, just four months after its launch, per a Wall Street Journal report.Snap, which calls itself a camera company on its website, has been trying to break into hardware, most notably through several iterations of Spectacles sunglasses with built-in cameras.The Pixy selfie drone was designed to float around and capture footage, set to a pre-determined flight path. The 3.6-ounce device measures 131.7mm x 106mm x 17.6mm and includes a rechargeable lithium-ion battery.The Pixy’s $230 entry price includes a bumper, battery, carrying strap, a battery, and USB-C cable. A $250 bundle includes two additional batteries, and each battery holds 5-8 flights using the default flight modes.Pixy remains available for purchase in the United States and France, presumably until inventory runs out.Snap Inc. Price and Consensus Snap Inc. price-consensus-chart | Snap Inc. QuoteSnap Battles Poor Ad Revenues, Challenging Macro EnvironmentSNAP second-quarter results reflected a decrease in advertising demand as advertisers continue to face supply-chain disruptions and labor shortages amid steady user growth. Shares of the company have fallen 72.7% in the year-to-date period compared with the Zacks Internet-Software industry’s decline of 53.3% and the Zacks Computer and Technology sector’s decrease of 32.3% in the said time frame.The company is also reportedly planning a wave of layoffs as part of broader cost-cutting efforts. As of the end of June 2022, the social messaging and media company had 6,446 full-time employees, up 38% year over year.This development comes after IT companies, crypto exchanges and financial firms cut out jobs and slowed down the hiring process due to slow global economic growth caused by higher interest rates, rising inflation and an energy crisis in Europe.Several tech companies recently announced hiring freezes and layoffs, such as Facebook’s parent company, Meta Platforms META, Twitter TWTR and Microsoft MSFTMeta is limiting its intake of new employees to cut costs due to weak revenue forecasts. Meta expects total revenues between $26 billion and $28.5 billion for the third quarter of 2022. Unfavorable forex is expected to hurt year-over-year top-line growth by 6%. Facebook's parent company is pausing or slowing down hiring for most mid-to-senior level positions after announcing a strategy to expand into the metaverse. The social media giant has 83,553 employees worldwide.Last month, Twitter announced the layoff of 30% of employees from its recruitment team amid the $44 billion takeover by Elon Musk. The micro-blogging platform had earlier announced halting most hiring processes across various divisions as part of a broader attempt to cut costs.Microsoft is slowing down hiring for its Office, Windows, and Teams groups to better prepare itself for the coming fiscal year and contend with the current economic environment. Microsoft’s fourth-quarter earnings were negatively impacted by a sharp slowdown in its cloud business, declining videogame sales and the effects of a strong dollar.In May, Snap also issued a profit warning due to a worsening macroeconomic environment. This Zacks Rank #4 (Sell) company will significantly slow hiring, invest in its advertising business and find new sources of revenues in order to grow at a faster pace in the near term.Snap has found early success with its paid subscription service Snapchat+, which has reached 1 million subscribers since its launch on Jun 29. The company is focused on introducing several features to retain existing users and attract new ones to its platform.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. How to Profit from the Hot Electric Vehicle Industry Global electric car sales in 2021 more than doubled their 2020 numbers. And today, the electric vehicle (EV) technology and very nature of the business is changing quickly. The next push for future technologies is happening now and investors who get in early could see exceptional profits. See Zacks' Top Stocks to Profit from the EV Revolution >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report Twitter, Inc. (TWTR): Free Stock Analysis Report Snap Inc. (SNAP): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks4 hr. 53 min. ago

Pre-Market in Red on Profit Booking

Pre-Market in Red on Profit Booking. As we exit the most consequential period of summer earnings season — jobs numbers, inflation, housing and earnings reports for the marquee names on the S&P 500 have all been heard from over the past few weeks — we enter the quietest period of trading this side of Christmas Week. We are thankful for such a time, as it gives us a moment to pause and look back on what’s transpired thus far in 2022.For instance, although all major indices are still down big year-to-date — from -7% on the Dow to -18% on the Nasdaq — we’re actually positive on two of the four over the past six months: the Dow and the small-cap Russell 2000 are both up slightly more than +1%, with the S&P 500 basically flat (-0.5%). Only the tech-heavy Nasdaq, which had gotten the biggest bid in the stellar trading year that was 2021, is still down -3% from February.Market futures are selling off somewhat in Friday’s pre-market on basically no news, unless you count Ryan Cohen selling all his Bed Bath & Beyond BBBY shares (sending that meme stock hurtling downward though still well off the sub-$5 per share trough we saw in early July). The run-up off the mid-June bottom has been impressive and efficient, although the muscle memory of sending indices too high too soon like we did back in the first trading days of the year is likely still fresh in many investors’ minds.For the past week, we’ve been in pretty much a holding pattern, even though intra-day highs and lows demonstrated a bit more volatility than the closing numbers would indicate. We are seeing signs across a widening spectrum of the economy that inflation is pulling back notably, but there is still a long way to go until the Fed funds rate at all resembles the current rate of inflation. Everyone agrees the Fed has a rendezvous with 3%; the only question is whether we touch it in September or the Fed leaves a little more slack.Next week’s summit in Jackson Hole will bring plenty of analysis based on public statements from Fed Chair Jay Powell and others. The Fed has taken plenty of lumps over its monetary policy decisions over the past year, but the fact of the matter is: they’re not sunk yet. Despite a first-half ’22 negative GDP, which unofficially touched off a recession, a still-strong labor force and supply chain improvements have our current economy resembling something better than recessionary strife.Foot Locker FL shares are up big on the company’s Q2 earnings report ahead of Friday’s opening bell, with a big beat on the bottom line — earnings of $1.10 per share versus 75 cents in the Zacks consensus, for a positive surprise of +46.7% — on revenues of $2.07 billion, which topped estimates by +0.62%. Comps were -10.3% year over year, but 2021 was a record year for the company. Shares are way up on the report, which marks Foot Locker’s ninth-straight beat, though still below the early-year levels, before the stock plummeted on Q4 earnings back in February.Deere & Co. DE also posted earnings this morning, though its results were mixed: earnings of $6.16 per share missed the Zacks consensus by -7.23% (though up nicely from $5.32 per share a year ago) on $13 billion in quarterly sales, marking a +0.76% positive surprise. This breaks an 11-quarter streak of earnings beats for the farm machinery major, which is trading down more than -4% in today’s early session. Shares are still positive year to date. How to Profit from the Hot Electric Vehicle Industry Global electric car sales in 2021 more than doubled their 2020 numbers. And today, the electric vehicle (EV) technology and very nature of the business is changing quickly. The next push for future technologies is happening now and investors who get in early could see exceptional profits. See Zacks' Top Stocks to Profit from the EV Revolution >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Deere & Company (DE): Free Stock Analysis Report Foot Locker, Inc. (FL): Free Stock Analysis Report Bed Bath & Beyond Inc. (BBBY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks4 hr. 53 min. ago

Louisiana-Pacific (LPX) Down 22.5% in YTD: High Inflation Ails

Louisiana-Pacific (LPX) ails from intense inflationary pressure, persistent supply chain woes and higher sales and marketing spending. Louisiana-Pacific Corporation LPX or LP’s shares have declined 22.5% this year, compared with the Zacks Building Products – Wood industry and the Construction sector’s 21% and 18.3% fall, respectively.The leading wood products manufacturer has been witnessing intense inflationary pressure, particularly raw material and freight, persistent supply chain woes and project delays. Also, increased discretionary investments, including siding mill conversions and sales and marketing costs, are additional headwinds.In second-quarter 2022, its top and the bottom line fell 3% and 9.5%, respectively, year over year. OSB segment’s net sales declined 14% year over year. The gross margin contracted 1,280 basis points and adjusted EBITDA declined 26.2% from the prior year period.Image Source: Zacks Investment ResearchLet’s discuss the factors impacting the performance of this Zacks Rank #5 (Strong Sell) company.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Factors Impacting PerformanceTepid Views & Prospect: Owing to the ongoing macro economic headwinds, LP has provided tepid third-quarter views. It expects OSB revenues to be sequentially low by 40% (based on Random Lengths’ report published on Aug 5, 2022). In second-quarter 2022 and third-quarter 2021, it reported OSB net sales of $673 million and $600 million, respectively.It anticipates a consolidated adjusted EBITDA of $200 million, significantly down from $491 million posted in the previous quarter and $522 million reported a year ago.For the third quarter, the Zacks Consensus Estimates for net sales and earnings is pegged at $851.95 million and $1.83 per share, reflecting a year-over-year decline of 30.1% and 52.7%, respectively.The same for 2022 net sales and earnings reflect a 12.3% and 7% year-over-year decline, respectively. Again for 2023, the consensus mark depicts a 19.3% and 55.4% fall from the year-ago period’s levels, respectively.Year’s High Inflation Ails Profitability:  Louisiana-Pacific and other Wood industry players like Weyerhaeuser Company WY, Boise Cascade Company BCC and Rayonier Inc. RYN have been witnessing significant inflationary pressure, primarily for material and labor. Wood fiber is the primary raw material used by Louisiana-Pacific. The cost of different varieties of wood fiber is subject to volatility owing to governmental, economic or industry conditions.One of the major cost components of goods sold is the cost of lumber products. The company has no control over the costs of imported lumber products, which are dependent on factors like government policies, environmental regulations, weather conditions, economic conditions and natural disasters. The lumber market is highly volatile and the market swings have had a negative impact on various operations that are primarily focused on variable price products.The company also uses a significant quantity of various resins in the manufacturing processes. Resin product costs are influenced by changes in the prices or availability of raw materials used to produce resins, primarily petroleum products and the demand for and availability of resin products.Supply Chain Headwinds & Project Delays: the company has been facing supply chain issues in the past several quarters. Although raw material availability has improved recently, it has taken downtime in the first quarter and early in the second quarter due to the inability to get railcars/trucks in some of the Canadian facilities to deliver finished goods inventory. Also, it has been experiencing delays in various projects.Higher Costs: Increased marketing investments associated with accelerating repair and remodel channel penetration along with new product introductions have been putting pressure on the company’s performance over the last few quarters. During the first half of 2022, the company’s adjusted EBITDA declined 2.7% year over year. In the first half, the company incurred $19 million of discretionary investments in support of future growth, including siding mill and sales and marketing costs.Dependence on Housing Market: Demand for the company’s products has a strong relationship to the level of new home construction activity in North America, which historically has been characterized by significant cyclicality. The housing industry is cyclical and is affected by consumer confidence levels, prevailing economic conditions and interest rates. Any untoward situation influencing the construction and housing sectors will impact the company's financials.The federal government’s actions related to economic stimulus, taxation and borrowing limits can affect consumer confidence and spending levels, which in turn can hurt the economy and the housing market.The company has started facing slowness in demand of its products, especially for a more specialized and higher value-added offerings.Discussion of Above-Mentioned StocksWeyerhaeuser is one of the leading U.S. forest product companies. The company has been benefiting from solid new residential construction activity, which in turn is leading to improved demand. Also, its focus on operational excellence has been advantageous over time.The Zacks Consensus Estimate for WY’s 2022 earnings has moved up to $3.14 per share from $3.05 in the past 30 days.Boise, ID-based Boise Cascade is aided by favorable commodity wood products, pricing and robust construction activity.BCC’s earnings estimate for 2022 has moved north to $20.06 per share from $18.17 in the past 30 days.Jacksonville, FL-based Rayonier is well-positioned to capitalize on robust domestic demand trends, with a solid portfolio of timberlands in some of the most productive timber-growing regions of the Southern United States, Pacific Northwest and New Zealand. This will help the company improve the export market conditions and create a favorable pricing environment. RYN is also focused on adding high-quality timberlands to its portfolio through acquisitions.The consensus estimate for RYN’s 2022 earnings has witnessed a downward revision from 65 cents per share to 64 cents in the past 30 days. How to Profit from the Hot Electric Vehicle Industry Global electric car sales in 2021 more than doubled their 2020 numbers. And today, the electric vehicle (EV) technology and very nature of the business is changing quickly. The next push for future technologies is happening now and investors who get in early could see exceptional profits. See Zacks' Top Stocks to Profit from the EV Revolution >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Weyerhaeuser Company (WY): Free Stock Analysis Report LouisianaPacific Corporation (LPX): Free Stock Analysis Report Rayonier Inc. (RYN): Free Stock Analysis Report Boise Cascade, L.L.C. (BCC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks4 hr. 53 min. ago

Top Stocks to Buy for Dividends and Economic Resilience

Investors might want to consider buying top-ranked stocks that pay solid dividends and boast resilient earnings outlooks despite economic downturn fears. Today’s episode of Full Court Finance at Zacks explores where the stock market and the economy stand as Q2 earnings season winds down and Wall Street wrestles with what’s next for inflation and interest rates. Amid the continued unknowns and following the huge comeback off the mid-June lows, investors might want to consider buying top-ranked stocks that pay solid dividends and boast resilient earnings outlooks despite economic downturn fears.The Nasdaq fell 2% through mid-afternoon trading Friday and 10-year U.S. Treasury yields popped to nearly 3% as Wall Street realizes it might have started declaring peak inflation too soon. The S&P 500 and the Dow also slipped to end the week.The selling comes as investors lock in some profits following an impressive two-month surge that saw the Nasdaq climb over 20% off its lows and the S&P 500 approach those same new bull market levels. Along with profit taking, some on Wall Street are reevaluating their expectations that Jay Powell and the Fed will be able to ease up on the tightening front.The 10-year yield is still well below the new decade-long highs of 3.5% it hit in the middle of June. The higher yields were based on Wall Street bets that the Fed would have to really ramp up its rate hike efforts to tame inflation. Those fears have eased, but investors have pushed yields back to around 3% from 2.57% on August 1.July’s CPI, though flat month from June, still showcased 40-year high inflation. St. Louis Fed President James Bullard indicated Thursday that he’s leaning toward another 0.75% rate hike in September. “We should continue to move expeditiously to a level of the policy rate that will put significant downward pressure on inflation,” Bullard told the Wall Street Journal.Higher rates will once again put pressure on resurgent growth stocks. The earnings outlook for the third quarter is also starting to fall and reflect higher costs and slowing consumer spending. This doesn’t mean investors should stay on the sidelines when staying in cash comes with an 8% fee. Now might be a great time to add more dividend-paying stocks that have also managed to lift their earnings outlooks during an economic slowdown.The first stock up is self-storage standout Extra Space Storage EXR which lands a Zacks Rank #1 (Strong Buy) right now. The company has grown its revenue every year since Extra Space went public back in 2004, including 16% growth in 2021. Zacks estimates call for Extra Space to post 20% higher revenue in FY22 and 8% stronger sales in 2023 to lift its adjusted earnings by 22% and 7.4%, respectively. EXR’s dividend yields 2.8% at the moment, and people are just going to keep buying more stuff that they need to store somewhere.Next up is oil and gas giant BP BP which operates across the entire hydrocarbon landscape. BP posted another blockbuster quarter to start August and its outlook remains strong in the face of lower oil prices. BP’s 4.5% dividend yield tops its highly-ranked industry’s average and it’s trading near 20-year lows of 4.5X forward 12-month earnings. And some investors might appreciate the fact that BP trades for around $32 per share. How to Profit from the Hot Electric Vehicle Industry Global electric car sales in 2021 more than doubled their 2020 numbers. And today, the electric vehicle (EV) technology and very nature of the business is changing quickly. The next push for future technologies is happening now and investors who get in early could see exceptional profits. See Zacks' Top Stocks to Profit from the EV Revolution >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP p.l.c. (BP): Free Stock Analysis Report Extra Space Storage Inc (EXR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks4 hr. 53 min. ago

For Japan"s Sake, Drink

For Japan's Sake, Drink By Stefan Koopman of Rabobank For Japan's Sake Some remarkable news from Japan caught our attention yesterday. Where governments usually raise excise duties and spend millions on campaigns to turn people away from alcohol, Japan is going the opposite way and now encourages its use, especially among young adults (and potential life-long consumers..?). Alcohol consumption has been in a downward trend since the 1990s, as the population ages and has become more conscious of its adverse effects, while sales in the izakayas are under additional pressure due to the pandemic. In this summer’s campaign – dubbed Sake Viva! – the government calls on its citizens to come up with ideas to revitalize the liquor industry and to get consumption going again. It doesn't matter whether it’s sake, shochu, whisky, beer or wine, as long as its Japanese, raises taxes and helps to get yens circulating in the domestic economy. So, here’s my idea, at least for when tourism gets going again: “For Japan’s sake, drink!” Let’s switch to a country that doesn’t need as much encouragement. This morning, the UK’s GfK consumer confidence fell to a new record low of -44 in August, with all sub-categories falling. Readings of -30 or lower generally portend a recession. Consumers are still slightly less pessimistic about their own finances than about the general economic outlook, which would suggest that actual spending holds up a bit better than feared, but at these depths this distinction seems to be a little academical. Retail sales were up +0.3% m/m in July, but -1.2% on a rolling 3m/3m basis and on a steady downward trend since the summer of last year. Sales volumes are up just 0.4% compared to three years ago and likely to move lower than higher as record inflation erodes buying power, a consequence of events that are far beyond the control of ordinary people. Unfortunately, for some, that is more than enough reason for a drink or two... The new prime minister will face a distressed electorate, which senses a decline in institutional trust, sees a sluggish response to the cost of living crisis, and knows of the structural prospect of a trade war with the EU. The government could have been more clear on what support will be in place before energy bills skyrocket in October, could have acknowledged that now is not the time to engage in trade conflicts with Europe, and should have sought ways in how to restore the social contract between the government and its citizens. None of that is happening. Yes, Liz Truss says she will slash taxes and consider targeted cost-of-living payments if she becomes Prime Minister, but the ugly combination of stagnating economic growth and high inflation will significantly reduce the GBP 30bn worth of fiscal headroom she still claims to have. She could of course always opt for an emergency budget, which would effectively side-line the Office for Budget Responsibility and allow her to rely on a set of economic forecasts that are six months out of date rather than an updated one, but that is a brazen move that would further erode the institutional framework responsible for the UK economy. If demand stimulus in the face of sky-high inflation is indeed her immediate answer to a crisis, i.e., if she really wants to channel her inner Erdoganomist, why not urge the Bank of England to cut rates too? After all, that’s what Turkey’s central bank did yesterday: doubling down on a strategy that has failed over and over again. Despite inflation nearing a reported 80%, which is 16 times the ostensible target, the central bank still decided to reduce the policy rate by 100 bps to 13%. Once again, investors were reminded that a core plank of Erdonomics is that by making borrowing cheaper and by giving less money to bond holders via lower interest payments, inflation will slow down rather than push higher and higher. To be fair, in macro and in markets, cause and effect are always convoluted and change direction more often than economists are willing to accept, but the CBRT clearly sets itself apart as the central bank that believes bringing inflation back towards a somewhat acceptable rate is no longer the policy target, let alone less than a year before the general election. It’s also again daring to blow away its remaining FX reserves in order to defend the value of the currency, something that is eventually bound to fail, as the UK itself knows all too well. In five-sixths of all daily observations since 1990, the lira was weaker against the dollar than it was in the year prior (... and, logically, stronger than it was next year). The pair currently trades at 18.1, up 0.8% from yesterday and up 112.4% from this time last year. Where will it be next year? The dollar itself got a boost yesterday following some goldilocks data from the US and is again nearing parity with the euro. The Philly Fed jumped to 6.2 from -12.3. This is the highest in four months. It contrasts sharply with Monday’s miserable Empire Fed, reporting a rise in employment and a less pronounced weakening in new orders. Delivery times improved too, adding to a rapidly expanding list of evidence that supply chain constraints are easing relative to the current state of demand. Jobless claims were at 250k lower than expected too, defying fears of a too rapid cooling in the labor market. The Fed’s Kashkari, Bullard, George and Daly had speaking engagements yesterday: there wasn’t a single sign of any backing away from further rate hikes ahead. On the other hand, US existing home sales fell to a two-year low of 4.81 million. With house prices still at or near their peak and mortgage rates having just spiked, housing affordability is under stress in most if not all Western economies. Fewer and fewer first time buyers qualify for the mortgage required for an averagely priced home, while other buyers have an incentive to wait for a correction. This is already leading to a rise in inventories of homes on the market, which suggests there is deceleration in price increases ahead of us. As such, housing markets continue to be weak spots, being the most responsive and vulnerable to this year’s tightening in financial conditions. House values are a key determinant of household balance sheets and do influence a broad set of discretionary spending decisions, even among households who don’t directly borrow against home equity to finance spending on reconstruction, remodelling or other big tickets. There are many good reasons to believe that housing cycles leads the business cycle, a continued spate of weak data on this front is a warning signal that requires close attention. Tyler Durden Fri, 08/19/2022 - 15:30.....»»

Category: worldSource: nyt6 hr. 10 min. ago

Fed Hawks Hammered Stocks, Bonds, Bullion, & Bitcoin This Week As J-Hole Looms

Fed Hawks Hammered Stocks, Bonds, Bullion, & Bitcoin This Week As J-Hole Looms Comments from Richmond Fed president Barkin today summed a week of hawkish prompts from the central bank that a pivot ain't coming soon and there's more pain to come (for the economy and the market): "The Fed must curb inflation even if this causes a recession," adding that The Fed "needs to raise rates into restrictive territory." All of which sent rate-cut expectations plunging on the week while rate-hike expectations remained high... Source: Bloomberg “The Fed would, in order to get inflation down to the 2% target, have to crush the economy,”  said Ann-Katrin Petersen, a senior investment strategist at BlackRock Investment Institute. In order to bolster growth, the Fed will at some  point “accept to live with inflation. This dovish pivot is not likely in  the very near term, in contrast to what markets seem to be expecting  right now, but this dovish pivot may come in 2023,” she told Bloomberg. The hawkish nudge finally hit the YOLO/MOMO crowd sending stocks reeling today after a big options expiration. Nasdaq and Small Caps were clubbed like a baby seal today (down over 2%) and all the US Majors ended the week lower (with The Dow the prettiest horse in the glue factory this time as growthy tech was hammered with rising rates)... Dow, Nasdaq, and S&P all reversed at their 200DMAs this week... The S&P reverted back down to its 50% Fib retracement level... Source: Bloomberg And DO NOT forget our post suggesting cover on the back of Mike Hartnett's top call... Source: Bloomberg Energy stocks went from worst to almost first on the week after a big puke at the Monday open. Staples were the leaders while Materials the laggards.... Source: Bloomberg Before we leave stock-land, there's this utter shitshow... Did the YOLO-ers just shoot their final wad? "Most Shorted' Stocks tumbled hard this week as it appears the squeeze ammo has run out... Source: Bloomberg US Treasury Yields surged this week with the belly underperforming dramatically... Source: Bloomberg 10Y spiked up to 3.00% - erasing all the price gains from the ECB/US-weak-data bond rally... Source: Bloomberg US 30Y yields rose back above China 30Y yields which dropped to 6 year lows: Traders might be betting that lower mortgage rates - led by expected cuts in loan prime rates - will push banks to buy more longer-dated bonds, wrote Qin Han, an analyst at Guotai Junan Securities in a note. Source: Bloomberg The hawkish speak sent the dollar soaring with Bloomberg's Dollar Index up a stunning 2% on the week - its biggest weekly spike since April 2020. Notice that the dollar broke back above the FOMC day selloff highs... Source: Bloomberg Cryptos were monkeyhammered lower as the week progressed with ETH and BTC down around 12%... Source: Bloomberg EU NatGas soared to a new record high (and US Natgas closed at its highest since 2008) Source: Bloomberg Gold tumbled back below $1800 this week as the hawkish hammering spread to commods... And oil ended the week lower - despite some choppy trading - with WTI holding around $90... Finally, we note that we've seen these kind of bounces before... Source: Bloomberg ...and it didn't end well. Tyler Durden Fri, 08/19/2022 - 16:01.....»»

Category: worldSource: nyt6 hr. 10 min. ago

Ukrainian spies snuck into Russia ahead of the invasion and found a lot of drunk Russian troops had traded supplies for alcohol: report

In many respects, the invasion has been humiliating for the Russian military, which has suffered massive troop and equipment losses. Russian veteran border servicemen pose for a photo with a Soviet sculpture in a fountain of Gorky Park, marking the Border Guards Day, May 28, 2022, in Moscow, Russia.Getty Images Ukrainian spies slipped into Russia ahead of the invasion and saw drunk Russian troops, the Washington Post reported. The troops reportedly traded fuel and other supplies for alcohol, leaving vehicles stranded. The Post's report details how intelligence failures saw Russia's war plans in Ukraine to fall flat.  In the days leading up to Russia's invasion of Ukraine in late February, Ukrainian spies were sent into Russia to conduct surveillance on the Russian military and encountered "a lot" of drunk soldiers, according to a new Washington Post report.The Russian troops had apparently traded fuel and other supplies for alcohol. "A lot of them were drunk," a Ukrainian official who saw reports from the spies told the Post.Their observations, which also included tank formations without crews or maintainers, suggested that Russia was unprepared for war and reportedly fueled some degree of disbelief among some officials in Ukraine that Russia would actually attempt an invasion. In many ways, as has since been demonstrated, Russia wasn't ready, but it moved forward anyway.The Post's report, which relies heavily on a trove of sensitive materials gathered by Ukrainian officials and other security services, offers intricate details on Russian intelligence failures ahead of the war.Russia began laying the groundwork for an invasion years ago, according to the report, and cultivated a significant network of agents in Ukraine with the ultimate goal of toppling the government and subjugating the former Soviet republic. Prior to the invasion, it was widely believed that if Russia did launch a military incursion it would be able to defeat Ukrainian forces in a matter of days, but that's now how the conflict has played out.The Russian military failed to take Kyiv, as the Ukrainian military put up a much stiffer resistance than many expected. The fight has now lasted nearly six months, with Russia making only incremental progress as the conflict has morphed into a grinding war of attrition. In many respects, the invasion has been humiliating for the Russian military, which has suffered massive troop and equipment losses.Russia's primary spy agency, the FSB, bears much of the responsibility for the failed war plans and the overconfidence that catalyzed the Russian military's ambitious objectives, according to the Post's report. The FSB, for example, reportedly offered the Kremlin misleadingly positive assessments that suggested Ukrainians would welcome Russia with open arms."There was plenty of wishful thinking," a senior Western security official told the Post, adding that the FSB had the sense "there would be flowers strewn in their path." The FSB apparently thought that a rapid assault would quickly bring down the Ukrainian government. But, according to the Post report, FSB officers ultimately ended up retreating from Kyiv alongside Russian troops. Previous reports suggested that Putin received bad intel because his advisors are "too afraid" to give him negative assessments. Individuals who have angered or displeased the Russian leader have at times ended up dying in violent or mysterious ways, while others have landed in prison. "We believe that Putin is being misinformed by his advisors about how badly the Russian military is performing and how the Russian economy is being crippled by sanctions because his senior advisors are too afraid to tell him the truth," a US official said in late March."Putin," the official said, "didn't even know his military was using and losing conscripts in Ukraine, showing a clear breakdown in the flow of accurate information to the Russian president."Read the original article on Business Insider.....»»

Category: worldSource: nyt6 hr. 53 min. ago

97% of corporate execs think US economy is in recession or headed for one, survey shows

A majority of corporate executives expect the U.S. economy to slide into a recession within the next year as they confront painfully high inflation and a labor shortage......»»

Category: topSource: foxnews6 hr. 54 min. ago

Economic Report: The U.S. economy is not in recession — it’s growing. But for how long?

The U.S. economy is down, but it's far from out. The most recent evidence suggests the U.S. is not on the verge of a second recession in three years......»»

Category: topSource: marketwatch8 hr. 54 min. ago

Consumer Confidence Hits Record Low And Retail Sales Show Discount Trend

UK consumer confidence sinks to 50 year low amid concerns about the cost of living and wider economic outlook Evidence that shoppers are intent on seeking out bargains amid the cost of living crisis FTSE 100 unperturbed by falling confidence and wider risks as the week ends Brent crude expected to end the week lower, […] UK consumer confidence sinks to 50 year low amid concerns about the cost of living and wider economic outlook Evidence that shoppers are intent on seeking out bargains amid the cost of living crisis FTSE 100 unperturbed by falling confidence and wider risks as the week ends Brent crude expected to end the week lower, reflecting concerns about a global economic slowdown and potential supply boosts from producers .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2022 hedge fund letters, conferences and more   Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown: “UK consumer confidence has plummeted to the lowest level since comparable records began, as the soaring cost of living casts serious doubt over people’s personal finances, while wider economic slowdown concerns are also a source of anxiety. In monthly research from GfK, the August index score for consumer confidence fell to minus 44, from minus 41 the previous month. This move is hardly surprising given prices are rising at double digits, while we’re seeing the largest drop in real wages for more than 20 years. The read across of this for the broader economy is that we now know as a certainty that nerves are getting worse, not better. That has far-reaching implications for corporate margins as we’re likely to see increased discounting, as well as a sustained trend of people looking for bargains. That’s precisely what the latest ONS Retail figures have shown, where discounts online helped lift retails sales in July compared to June. However, sales fell on a three month basis and compared to 2021 three monthly volumes fell 4.9%. Data implies a stark 10.4% rise in prices over the year which simply can’t be stomached by many customers. Non-food stores sales volumes fell by 0.7% over July, while food sales barely nudged. This implies a purposeful shift away from non-essential spending, and even when buying everyday items, what’s being loaded onto the conveyor belt is highly controlled. This is a trend unlikely to reverse while inflation persists. Getting inflation back in line is a huge ask, with the underlying causes of soaring commodity prices and supply bottlenecks difficult for central banks to address with interest rates alone. The FTSE is unperturbed by the darkening mood music, largely because this has already been priced in, with the FTSE100 struggling to find its jumping-off point in the year-to-date. News of further consumer turmoil has been seen coming down the pipes for some time. Brent crude is hovering at around $96 per barrel as it’s on track to end the week lower, as concerns about a global economic slowdown and potential supply boosts from major producers outweighing signs of stronger fuel demand. Recession fears are being heightened, not least because the US Federal Reserve seems fixated on further ramping interest rates, which while aimed at bringing inflation under control, stirs up further questions of the economy’s ability to pick itself up.” About Hargreaves Lansdown Over 1.7 million clients trust us with £123.8 billion (as at 30 June 2022), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month. Updated on Aug 19, 2022, 11:29 am.....»»

Category: blogSource: valuewalk10 hr. 10 min. ago

Velocity"s Back And It"s Taking Inflation With It

Velocity's Back And It's Taking Inflation With It By Simon White, Bloomberg Markets Live analyst and reporter Rising velocity will keep inflation persistently elevated and at risk of becoming unanchored, leaving longer-term yields looking structurally too low. Central bankers should be careful what they wish for. After years of trying to arrest the fall in the velocity of money, it is finally on the rise again. Velocity is little talked about these days, but in the first throes of the financial crisis it was the center of attention. Defined here as the ratio of GDP to M2 money, velocity continued to fall no matter what the Fed threw at it in the fevered months and years after the GFC That’s a major problem when you’re trying to resuscitate demand. Velocity is in essence the average number of times each dollar is spent in the economy, so its inexorable decline meant that, despite the Fed creating trillions of new dollars, total demand was still falling as each dollar was being spent fewer times. The problem was not causal. Demand was collapsing as households and businesses were in the midst of a major retrenchment in the aftermath of the financial crisis. Risk appetite was rock-bottom and the main providers of credit to the economy -- banks -- were pulling back from lending in order to rebuild their balance sheets, or just stay alive. The Fed was running up the down escalator as it created ever more reserves only for them to be hoarded by banks, firms and households. That’s why the Fed was unable to create sustainable inflation despite expanding its balance sheet to unprecedented levels. But the times they are a-changing. Velocity is related to rates, and falling rates through much of the 2010s meant it fell too. But now that rates are rising, there is a greater incentive for savers to decrease money balances and hold higher-yielding assets, which means a higher velocity of money. Velocity today is rising faster than it has done since 2010 and is set to keep advancing. This explains why inflation -- even though it is very likely to fall in the coming months -- will remain persistently elevated above its long-term average and continue to be susceptible to flaring even higher later in the cycle. Elevated inflation is the spark that lights the fire, and velocity is what fuels it. Rising velocity without high inflation is not normally a problem, but when inflation also starts rising it creates more demand for money and thus velocity rises, with a feedback loop developing. We are on the cusp of that today. We can now see how the trillions of dollars of hitherto largely idle reserves at the Fed could rapidly become very inflationary. Prices rise, requiring more money to pay for the rising nominal cost of goods and services. Ultimately this means greater demand for reserves, i.e. the velocity of reserves increases, which soon translates into a rise in the velocity of broader money measures too. More inflation ensues. Wash, rinse, repeat. Even people without much money are experiencing an inflationary-driven increase in demand for it, which is manifesting itself through a rise in bank loans. Rising velocity typically precedes accelerating growth in commercial and industrial loans by about three quarters (C&I loans are a good proxy for loans overall given the stringent lending standards generally attached to them). Demand for C&I loans is also rising, but banks are tightening their standards for such loans. This is unusual as demand for loans normally falls when standards are being tightened, suggesting demand for loans -- to cover inflation-driven rises in costs -- is overwhelming the tighter loan standards. More loans means more money, which banks can conjure out of thin air, meaning yet more inflation potential. QT is an attempt to mitigate the inflationary potential of Fed reserves by curtailing velocity. The reduction in reserves should lead to an even greater fall in demand, meaning velocity should fall. Rate increases, on the other hand, are supposed to work on the demand channel as they can only affect the price of reserves while leaving the volume unchanged. QE was supposed to work in reverse to QT, causing velocity to rise as demand increased more than the increase in money. We know it failed to achieve that aim. If something fails one way, it’s prudent to assume it might not work in the opposite direction either. Rising velocity will keep the inflation embers alive for some time yet. Tyler Durden Fri, 08/19/2022 - 11:03.....»»

Category: dealsSource: nyt11 hr. 6 min. ago

Stocks Extend Losses, Yields Spike After "Recession" Comments From Fed"s Barkin

Stocks Extend Losses, Yields Spike After "Recession" Comments From Fed's Barkin Federal Reserve Bank of Richmond President Thomas Barkin says “getting inflation under control is going to be necessary to set up what we have the potential to do in the economy.” Barkin warned that "The Fed must curb inflation even if this causes a recession," adding that The Fed "needs to raise rates into restrictive territory." “I’ve convinced myself that not getting inflation under control is inconsistent with a thriving economy” Barkin further added that “I’ve been supportive of front-loading." The Richmond Fed president's comments echoe'd ECB's Schnabel's words of warning that "even if we entered a recession, it’s quite unlikely that inflationary pressures will abate by themselves," Schnabel said. "The growth slowdown is then probably not sufficient to dampen inflation." It appears the world's central bankers are rapidly realizing that a recession is needed to tamp down inflation... and in fact even that may not do the trick - this is a supply issue, not a demand issue. Translation: we need a depression to 'fight' Putin! This prompted further weakness in stocks with Nasdaq down 2%... And yields spiking higher with 10Y inching closer to 3.00%... ...erasing all the price gains from the ECB/US-weak-data bond rally. Is the scene being set for Powell to steal the jam out of the 'Fed Pivot' bulls' donut next week in J-Hole? Tyler Durden Fri, 08/19/2022 - 11:19.....»»

Category: dealsSource: nyt11 hr. 6 min. ago

New Strong Sell Stocks for August 19th

CRAWA, AJRD, and CCCS have been added to the Zacks Rank #5 (Strong Sell) List on August 19, 2022. Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today:Hickok CRAWA is a developer and manufacturer of products for diverse markets primarily in healthcare, education, automotive, aerospace, trucking and petrochemical industries. The Zacks Consensus Estimate for its current year earnings has been revised 27.7% downward over the last 60 days.Aerojet Rocketdyne Holdings AJRD is a technology-based engineering and manufacturing company that develops and produces specialized propulsion systems as well as armament systems.The Zacks Consensus Estimate for its current year earnings has been revised 14.3% downward over the last 60 days.CCC Intelligent Solutions CCCS is a  provider of SaaS platform for the property and casualty insurance economy powering operations for insurers, repairers, automakers, part suppliers, lenders and more.The Zacks Consensus Estimate for its current year earnings has been revised almost 14.3% downward over the last 60 days.View the entire Zacks Rank #5 List. How to Profit from the Hot Electric Vehicle Industry Global electric car sales in 2021 more than doubled their 2020 numbers. And today, the electric vehicle (EV) technology and very nature of the business is changing quickly. The next push for future technologies is happening now and investors who get in early could see exceptional profits. See Zacks' Top Stocks to Profit from the EV Revolution >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Aerojet Rocketdyne Holdings, Inc. (AJRD): Free Stock Analysis Report Crawford United Corporation (CRAWA): Free Stock Analysis Report CCC Intelligent Solutions Holdings Inc. (CCCS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks11 hr. 25 min. ago