AFM: Neon Buys Tilda Swinton’s ‘Memoria’ for North America

November 7, 2019

Neon has bought North American rights to Apichatpong Weerasethakul’s “Memoria,” starring Tilda Swinton, Jeanne Balibar, Daniel Giménez Cacho, Juan Pablo Urrego and Elkin Diaz. The drama is produced by Weerasethakul’s Kick the Machine, Burning and Illuminations Films. Weerasethakul previously won the Cannes Palme d’Or in 2010 for “Uncle Boonmee Who Can Recall His Past Lives.” The deal was […]

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Gundlach Blames "Fed Manipulation" For Repo Market Madness

11 December 2019

Gundlach Blames "Fed Manipulation" For Repo Market Madness

It wasn't so long ago that Jeffrey Gundlach, founder of DoubleLine Capital, said he would never again appear on CNBC, after a particularly contentious interview last year that led to some brief drama between him and Jim Cramer.

But on Wednesday afternoon, Gundlach invited "the Judge" - CNBC's Scott Wapner - to his company's offices for an hour-long interview where Gundlach explained his relatively recent turn toward bullishness on the US economy and equity market - even though he still has all the long-term gripes about the Fed and monetary policy that he's shared with business journalists for years.

Gundlach started off by saying that "one of the most important statements that has gotten less play than it should is Jay Powell said in late October that we would have to see a 'significant' rise in inflation that is persistent to even consider raising interest rates to fight inflation."

To Gundlach, it's evidence that the Fed wants to keep benchmark rates below the rate of inflation to keep negative real rates in effect for the US economy. He also claimed that the Fed "knows we have a debt problem" and probably wants to push the day of reckoning as far into the future as possible.

"So the Fed wants inflation to be higher, actually, and they've contextualized this by saying 'well, 2% was our target for many years and we fell short, so now we need to fill the gap', which makes no sense to me whatsoever. I think it's cover for wanting interest rates to basically be below the inflation rate, which seems to be the game plan for central banks in developed countries around the world."

"So now we have the 10-year Treasury yield is below the inflation rate and CPI is up at 2%, core CPI is up higher than 2%, and yet the interest rates are being kept below that. The Fed knows that we have a debt problem in the United States and that the way to push the day of reckoning out into the future is to keep interest rates below the inflation rate."

Overall, Gundlach's comments about Jay Powell were largely negative, though he appears to disagree with President Trump about the need for rate cuts last year.

"Its difficult to give him a lot of credibility...instead of raising rates, we've cut rates."

But Powell has one redeeming quality.

"One reason I'd give him a C- and not a D is he has said that to fight the next recession, negative interest rates won't happen in the United States."

Looking ahead, whenever the next recession arrives, the Fed will be ill-equipped to defend the economy from its ill-effects. And markets, as the round-trip we've taken over the past year or so shows, are in sync with the central bank.

"Now the market is completely in sync with the Fed. What Jay Powell has done is he raised rates four times in 2018 and cut rates three times in 2019 we've been on a wild ride," Gundlach said.

Convincing the Fed to hike rates at this point would be extremely difficult, Gundlach said. Even if inflation made a comeback, "it will need to be pretty remarkable," he said.

"The Federal Reserve has turned into a body that's essentially following the market. And now the bond market is saying there's no purpose in raising rates, there's no purpose in cutting rates, we'll probably be unchanged with interest rates until the third quarter of next year."

Moving on to a discussion of the labor market, Gundlach offered an insightful explanation for why the economy 'feels' better today than it did under Obama.

"People keep talking about how good the labor market is and, yes, it's good - for sure. But the jobs growth under Trump has actually been lower than Obama...what's better is people aren't getting laid off. Weekly unemployment claims are really low...they're down about 30% from the last three years of Obama. That, I think, is why the economy is perceived to be better on the jobs market because the labor market participation has increased."

Whatever happens in the coming months, Gundlach is convinced that there won't be a recession before the end of 2020. He insisted that there haven't been enough 'leading indicators' going off.

"I think there's unlikely to be a recession...the odds are there won't be a recession before the end of 2020."

Still, people are definitely spooked, and one wouldn't be wrong to call last summer a period of paranoia for the Street.

"In the summer, there were white papers circulating on Wall Street calling on the Fed to make a 50 basis point emergency cut thanks to some of the global manufacturing data out there."

As for Trump's 'Phase One' trade deal, Gundlach believes it's mostly a sham, concocted to give off the illusion that progress is being made with China, even though there's no evidence of that. Going even further, Gundlach said the press conference where Trump and Liu He unveiled he 'agreement' was perhaps the low point in Trump's presidency.

"I don't think there will be a substantive deal before the election, I've thought that all year," Gundlach said.

Finally, Gundlach offered some thoughts about the political situation. He said his 'base case' for the 2020 election is a Trump victory, though he also said the market is under-pricing the risk of Elizabeth Warren, Bernie Sanders and the impact of the resurgent left.

He likes Pete Buttigieg, but fears he's "way too young" to be president, especially after only ever having run the city of South Bend.

Soon, CNBC asked Gundlach to explain the blowup in repo markets that began in September came about, and the Fed's role in causing the panic in money markets.

Gundlach said the fact that there weren't buyers for o/n money is a sign that the Fed is keeping interest rates at artificially manipulated levels.

"What's interesting about that is the overnight repo market had been struggling to stay in lines with the Fed funds rate but that day Sept. 17 it just blew out and the Fed had to panic and come to the rescue and add reserves to the system...that to me is a worrisome development because it suggests that the market doesn't ratify the Fed funds rate. The Fed funds rate is at a level that really isn't clearing the market...that corroborates my viewpoint, which I think is a minority opinion."

"It's really telling that you can't find buyers for overnight money in excess of a 2% interest rate and yet the 10-year Treasury is below 2% with inflation at 2% and higher. It tells you that the inflation levels being maintained by the Fed aren't market levels...they're manipulated levels."

Watch the full interview below:

Tyler Durden Wed, 12/11/2019 - 18:45 Tags Business Finance

Blain: Tomorrow’s UK Election Will Be Shockingly Binary

11 December 2019

Blain: Tomorrow’s UK Election Will Be Shockingly Binary

Blain's Morning Porridge, submitted by Bill Blain

“Bet your bottom dollar that tomorrow there’ll be sun!”

One day more….

As trade war mumbleswerves rumble on (no more tariff increases), the Impeachment case continues to build its own pointless momentum, Aramco opens limit up (+10%) (Hint – sell!), and we get ready for Christine Lagarde facing the media after running her first ECB Meeting, all eyes are on the UK – our little island set in a silver sea - where tomorrow we get to vote for the least bad of some very poor choices.

Suddenly, we have last minute wobbles in UK election predictions. Suddenly, the predicted Tory landslide may be less than expected. Suddenly, a hung Parliament is, apparently, a “real” possibility. Suddenly, these long Sterling positions look very dangerous. Suddenly, Labour party are eating into Conservative Support – or so says one poll. Suddenly I see… the Great Game of British Self Flagellation might be extended for another 5 years or so. Joy oh Joy.. !

Please remove all sharp objects from my desk if it happens.

Of course, hungoparlphobia is exactly what they Tory strategists want us to fear most. Scare the Bejesus out of us. Present us with a shocking vision of five more years of excruciating Laura Kuenssberg ~~opinions~~ reports, Andrew Neil public vivisections, Naga and Charlie insulting guests on the Brek-drek couch. Who would possibly not want that..? (The BBC and Channel 4 will love it – 5 more years of political indecision will ensure no one is asking them the hard questions about what they think their role is in elections. Should they merely report the news, or continue to set the news?)

Like it not, this election is a critical moment for the UK. We can move forward and elect a government no one (particularly me) is going to be particularly happy about, or we can continue to wallow in our ongoing collective cognitive dissonance over Brexit. It’s really simple. It’s not actually about parties, party politics or policies – good or bad as they might be. It’s about making a choice of having a government empowered to act, or not.

Imagine the future. 10-years time and the UK is doing much as it always does, and no one really remembers the Brexit nonsense. We’re still drinking French Wine and Proseco, skiing in the Alps, driving EVs designed in Germany and made in Sunderland, and spending summers in the Med. Or, we’re still arguing about where to stay or leave. Take your pick. The Europeans don’t care – they just want it done.

The horror of a shock defeat or hung-parliament is a narrative the Tories have been pushing since the start – raising the spectre of a small number of tactical voters in key constituencies stealing the election. The message is simple: if we Brits don’t vote Tory tomorrow then the UK will be trapped forever in a hung parliament, unable to move forward, and likely to suffer another 5 years of indecision, political vacuum and dither over Brexit.

That may be about the truest thing the Tories have said through the whole election.

Meanwhile, the opposition have done surprisingly well redirecting voter fears towards saving our beloved National Health Service. In order to deny the Tories a chance to move forward, Labour – the party I naturally and have always supported – have redirected the debate down a pointless avenue about how the NHS isn’t safe in Tory hands. Without money and focus it’s not safe in anyone’s hands. A few well-placed front page stories to show the dismal state of the NHS, pin it on Tory indifference and suddenly it’s the number one issue for the electorate.

From a political perspective – well done Labour, snatching something back from the Tories. From the perspective of the UK's Future – it’s a disaster. We now have an unholy alliance of voters who think a wrecking vote for a hung parliament – consigning the UK to five more years of directionless whittering in Parliament – means they get a chance to reverse the referendum and stay in Europe and save the NHS at the same time. Wrong.

Democracy really is a terrible way to run a country….

It would be easier to accept the need to vote for them if the Tories accompanied the Get-It-Done message with some really sensible initiatives on growth, trade, AI, Robotics, sellable polices about rebuilding social infrastructure, opening up and focusing education and making it free. But that’s not the fight they chose to fight.

The NHS is a key matter – it can no longer remain a sacred cow. Doctors and Nurses are the most valuable people in our society, and they will tell you the NHS needs reform, less management and more leadership, and funds redirected to get the elderly into long-term care rather than filling hospital beds and emergency rooms. A root and branch grub out of entrenched bureaucracy will do more to make it fit for purpose than screaming headlines. Reforming the Health Service will be a massive undertaking, and doesn’t for one moment mean privatising it – yet no UK political party has the bravery to address it.

Tomorrow’s UK election will be shockingly binary. Either:

We move forward – which happens with a Conservative Majority, or We start the Brexit debate all over – which happens under a hung parliament, a Labour led coalition or an unlikely Labour majority.

Buy or sell the UK and Sterling on that basis. The vote actually boils to down to the choosing a government that will govern and move the UK out of its current hole. If we fail to do so, then don’t blame the politicians – blame ourselves.

Election Coverage

The plan for the Election here at Shard is going to be an all-nighter from 10-pm onwards. I’ll be putting out a stream of commentary on www.morningporridge.com, and posting Porridge Specials early morning, a round up at 6.00 am and a final porridge comment at the usual time…

Tyler Durden Wed, 12/11/2019 - 18:25 Tags Politics

Harvey Weinstein Reaches $47 Million Settlement, Wiping The Civil Slate Clean

11 December 2019

Harvey Weinstein Reaches $47 Million Settlement, Wiping The Civil Slate Clean

Money talks and sexual predators walk.

That appears to be the anticlimatic end of the #MeToo story arc, which started with Harvey Weinstein, and is set to conclude with a multi-million cash settlement ending effectively all civil cases against the former Hollywood mogul.

According to the WSJ, Harvey Weinstein, his former associates, insurers and accusers have all reached a nearly $47 million tentative settlement of virtually all the civil cases pending against him, about $25 million of which will compensate women who have accused the Hollywood producer of sexual misconduct.

Under the terms of the agreement, Weinstein and his former associates won't admit wrongdoing; the deal still needs to be approved by a bankruptcy judge and a judge overseeing a proposed class-action lawsuit. Even better for the "not guilty" Weinstein, the bulk of the settlement money will be paid not by him but by his insurance policies, including those held by his former studio.

While the deal will resolve all but two of the civil sexual-misconduct lawsuits and other legal claims filed against Weinstein, the settlement won’t impact the criminal case brought by Manhattan prosecutors against the former producer, which is set to go to trial on January 6. Weinstein has pleaded not guilty and denied all allegations of nonconsensual sex.

The WSJ reports that the settlement is the culmination of more than a year of negotiations, which involved countless parties, including Weinstein's lawyers, his former film studio, the New York attorney general’s office, insurers and alleged victims. The negotiations also included the former associates of Mr. Weinstein who some women claimed had enabled Mr. Weinstein’s alleged abuse. It also resolves a suit filed by the New York attorney general that accused his former studio’s executives and board of failing to protect women from his alleged misconduct.

Here is how the money will be divided up according to the proposed deal:

$6 million will go to women who have filed lawsuits and legal claims and their attorneys. $18.6 million will be set aside to create a settlement fund for additional alleged victims, including those covered by the attorney general’s suit. $7 million will go to some creditors of the film studio $12 million will cover the costs of lawyers who defended Weinstein’s former associates against the suits. $1 million will fund Weinstein’s defense costs to fight lawsuits against two victims who aren’t participating in the settlement.

In other words, for every dollar Weinstein's alleged victims receive now, his lawyers will get two.

Lawyers for those women who refused to take part in the deal portrayed the settlement as unfair. Douglas Wigdor, a lawyer for one of those women, said in a statement that he didn’t believe the deal was the best possible settlement. "It is shameful that $12 million of the settlement is going to the lawyers for the directors who we alleged enabled Harvey Weinstein."

Surely he would prefer that $12 million was going to the plaintiff's lawyers, and speaking of, perhaps it's now time to change the name of #metoo to #paymetoo.

Tyler Durden Wed, 12/11/2019 - 18:04 Tags Law Crime Entertainment Culture

The Wealthy Are Hoarding Physical Gold

11 December 2019

The Wealthy Are Hoarding Physical Gold

Via SchiffGold.com,

The world’s rich are hoarding gold – this according to data buried in a recent Goldman Sachs note to clients.

In the note published over the weekend, Goldman recommended diversifying long-term bond holdings with gold, citing “fear-driven demand” for the yellow metal.

Hedge funds and other large speculators boosted their bullish bets on gold by 8.9% through the week ended Dec. 3, according to government data released last Friday. That represents the biggest gain since the end of September.

The Goldman note cited political uncertainty and recession fears as the catalyst for the move toward gold. It also mentioned worries about a wealth tax, increasing interest in Modern Monetary Theory (essentially money-printing) and the current loose central bank monetary policy.

Data buried in the note also revealed that owning physical gold appears to be the preferred method to “hedge against tail events” by the rich.

"Since the end of 2016 the implied build in non-transparent gold investment has been much larger than the build in visible gold ETFs.”

Goldman said the data is consistent with reports that vault demand is surging globally.

Trade data implies that gold in storage has increased far more rapidly than is reflected by financial market instruments, indicating a widespread preference for physical gold instead of gold-linked financial assets … Political risks, in our view, help explain this because if an individual is trying to minimize the risks of sanctions or wealth taxes, then buying physical gold bars and storing them in a vault, where it is more difficult for governments to reach them, makes sense.

“Finally, this build can also reflect hedges by global high net worth individuals against tail economic and political risk scenarios in which they do not want to have any financial entity intermediating their gold positions due to the counter-party credit risk involved.”

As a writer for Yahoo Finance put it.

“This means that for those including gold in their end-of-the-world trade, owning gold bullion is a must.”

You don’t have to be super-rich to invest in gold. And the same reasons the wealthy are hoarding the yellow metal apply to average investors. In a world drowning in government, corporate and consumer debt, and with never-ending loose monetary policy, along with and a political landscape becoming more and more favorable to socialism, it makes sense to own physical gold and store it securely so you have access to your wealth with minimal counterparty risk.

Tyler Durden Wed, 12/11/2019 - 17:55 Tags Business Finance

China Quietly Ramps Up Oil Production In Iran

11 December 2019

China Quietly Ramps Up Oil Production In Iran

Authored by Simon Watkins via OilPrice.com,

The supergiant Azadegan oil field, comprising major north and south sites, is as important to Iran’s overall strategic plan to survive the current sanctions environment and to prosper when they are lifted as the flagship South Pars supergiant gas field and the added-value products of its petrochemicals sector. Last week Iran’s Petroleum Engineering and Development Company (PEDEC) announced that five new development wells and an appraisal well are to be spudded in North Azadegan to maintain current production levels. OilPrice.com understands from various senior energy sources in Iran that this is only part of the picture, with much bigger plans having been agreed for rollout in the coming six months with the help of China and Russia.

Located around 80 kilometres west of Ahvaz, close to the Iraqi border, the entire 900 square kilometre Azadegan field is the third-largest hydrocarbon reserve in the world after the Ghawar oil field in Saudi Arabia and the Burgan oil field in Kuwait. Its total reserves are estimated at about 42 billion barrels of oil, with around 7 billion barrels currently deemed recoverable. The first exploration well was drilled in 1976 but, despite its potential, a long lead time across the four main layers – Sarvak, Kazhdomi, Godvan, and Fahilan – of the site has meant that the pace of production has been slower than at many neighbouring fields, especially those over the border in Iraq.

A key reason for this was the attitude of Chinese firms active in Iran around that time, which can be broadly characterised as doing the minimum necessary to generate some oil flows from the fields back into China whilst not spending too much money. This attitude, though – particularly when Iran was already in the process of negotiating the Joint Comprehensive Plan of Action (JCPOA) in the run-up to its being agreed in 2015 – resulted in the National Iranian Oil Co. (NIOC) cancelling China National Petroleum Corp’s (CNPC) contract to develop Phase 11 of the South Pars natural gas field in 2013. A year later – with CNPC having drilled only 7 of the 185 wells it had planned at the South Azadegan field - the NIOC also cancelled this development contract with the Chinese company as well. CNPC was further warned at that time that its contract for North Azadegan would go the same way if it did not up the development tempo, which it did, increasing production from around 15,000 barrels per day (bpd) at that stage to around 35,000 bpd within a year or so.

As it stands, with CNPC still the key foreign developer at North Azadegan, the relationship dynamic between Iran and China has shifted again. With re-imposed U.S. sanctions still in place, Iran cannot afford to alienate China and over the past few months has offered it extremely advantageous deals to return to previous developments or to take on an even greater role in existing ones. The most notable of these have been South Azadegan and Phase 11 of the supergiant South Pars non-associated gas field, although others are in the offing.

“The understanding agreed between Iran and China when the French [Total] started to wobble on continuing with Phase 11 [of South Pars] after the U.S. pulled out of the JCPOA was that China would assume Total’s entire stake [to 80.1 per cent] and really push production,” a senior oil industry source who works closely with Iran’s Petroleum Ministry told OilPrice.com last week.

“At the same time, China would also be allowed to go into South Azadegan to create a unified field development programme with its North Azadegan activities,” he said.

“When the details of the deals began to leak out, though, South Pars [Phase] 11 and South Azadegan had to be put on the back burner but the plans will go ahead within the next six months,” he added.

In this hiatus, though, China has been advancing its reach into neighbouring Iraq, as highlighted recently here.

From China’s perspective, its ‘One Belt, One Road’ vision – which will absolutely change the global geopolitical power balance forever – is totally dependent on Iran’s participation for three key reasons.

First, Iran is closely involved in the affairs of those countries that constitute the Shia crescent of power – Jordan, Lebanon, Syria, Iraq, and Yemen – which allows China to hold the U.S in check in those areas.

Second, it is a direct land route into Europe, via both Turkey and the Former Soviet Union states and Russia.

And third, it has huge oil and gas reserves currently going cheap.

These broad factors underpin the game-changing 25-year comprehensive strategic partnership signed earlier this year in Beijing by Iran’s Foreign Minister, Mohammad Zarif, and his China counterpart, Wang Li.

All of this means in the short-term that China needs to make continued solid progress on North Azadegan until such time as the Islamic Revolutionary Guard Corps (IRGC) tells President Hassan Rouhani that the Iranian public and moderate MPs will be able to tolerate China’s further multi-layered expansion in Iran. Currently, North Azadegan is producing just shy of 80,000 bpd but the Phase 2 plan – including the spudding of the new wells – is aimed at boosting this output to at least 100,000 bpd. More specifically, China is expected by Iran to ensure that the output from North Azadegan when combined with the output from South Azadegan (currently being developed by Iranian firms) is at least 250,000 bpd. South Azadegan is now producing a steady 105,000 bpd with spikes to 115,000 bpd plus, according to the Iran source.

Longer-term, Iran’s plan is to increase the recovery rate from all of its oil fields, beginning with those in the massive West Karoun area (in which North and South Azadegan are located, along with North and South Yaran, and Yadavaran, among others) to at least 25 per cent from the current 4.5 per cent (it was 5.5 per cent before U.S. sanctions were re-imposed). By comparison, the average recovery rate from Saudi Arabia’s oil fields is around 50 per cent, with plans to raise that to 70 per cent.

As the West Karoun fields together are estimated to contain at least 67 billion barrels of oil in place, for every one per cent increase in the rate of recovery that can be achieved the recoverable reserves figure would increase by 670 million barrels, or around US$34 billion in revenues with oil even at US$50 a barrel. Once China has also taken over at South Azadegan, according to the Iran source, it will be expected to increase the output from the three fields – North and South Azadegan and Yadavaran – by at least 500,000 bpd within three years from the signing of the South Azadegan deal (expected within the next six months).

Tyler Durden Wed, 12/11/2019 - 17:45 Tags Business Finance

A$AP Rocky in first Swedish concert since he spent a month in Stockholm jail over the summer

12 December 2019

Fans were eager to see rapper A$AP Rocky's triumphant return to the stage in Sweden months after his arrest for assault, which turned into an international brouhaha.

'It's up to YOU now': Boris Johnson makes final plea to voters HOURS before election

12 December 2019

Boris Johnson told a crowd at a glitzy rally in east London that it is 'up to you now' after another frenetic day of campaigning in which he warned the risk of a Jeremy Corbyn government is 'very real'.

Man, 27, arrested over 'murder' of young mother Levi Davis is RELEASED without charge

12 December 2019

Ms Davis, 25, was believed to have been stabbed following a road rage fight in Rushden between the former suspect and Jake Swords, also 27.

Jersey City shooting revealed on surveillance camera footage

12 December 2019

Francine Graham, 50, and David Anderson were filmed on surveillance cameras approaching JC Kosher Supermarket on Tuesday after calmly getting out of their U-Haul.

What was the most popular Christmas present the year YOU were born?

12 December 2019

A fascinating look at how gifts have changed over the past five decades has shown how shoppers now spend up to eight times as much on Christmas presents.