NO STRINGS ATTACHED NEWS THAT MAINSTREAM JUST WON'T COVER.
Rep. Dan Kildee, D-Mich., pushed back Tuesday on the defenses being offered by the White House and Republicans for President Trump’s phone call with the president of Ukraine, which has prompted an impeachment inquiry that will involve public testimony this week.
https://www.foxnews.com/media/dan-kildee-republican-defenses-ukraine-call
Social Media Goes Wild After Ryan Reynolds Pounces On "Peloton Wife"
After the internet was triggered by a Peloton ad featuring a yuppie buying a $2,500 exercise bike for his already-thin girl, not known on Twitter as "Peloton wife," actor Ryan Reynolds came up with a brilliant idea;
He hired Peloton Wife - since identified as actress Monica Ruiz, and made a commercial for his Aviation Gin brand.
Seen by over 6 million people since its Friday release, the ad features Ruiz sitting at a bar, flanked by two supportive friends. Clearly shaken from her Peloton experience, she looks at her drink and says "This gin is really smooth," before downing the entire drink.
"You look great, by the way" says one of the other actresses - playing off the recent outrage over the Peloton commercial in which "Grace from Boston" documents a year in her life since her male partner gave her the expensive exercise bike.
Exercise bike not included. #AviationGin pic.twitter.com/jYHW74h81l
— Ryan Reynolds (@VancityReynolds) December 7, 2019 https://platform.twitter.com/widgets.jsThe ad sparked a mass triggering - with some suggesting it was about a thin woman under pressure to lose even more weight for her man. On Monday, writer and comedian Eva Victor made a parody that went viral, in which she passive aggressively thanks her man for a "fucking workout bike for Christmas."
when my husband gets me a Peleton for Christmas ........ pic.twitter.com/Z2d3ewMhPu
— Eva Victor (@evaandheriud) December 2, 2019 https://platform.twitter.com/widgets.jsIn response, Peloton shares fell 7.4% last week, while "Peloton" was as more popular search term than "impeachment" according to Google Trends.
This week there have been more US Google searches for Peloton than impeachment. pic.twitter.com/Jo0YR4UsMs
— Elliott Schwartz (@elliosch) December 4, 2019 https://platform.twitter.com/widgets.jsNow watch the ads together:
This is what you get when you put together the Peloton ad and the Ryan Reynolds gin ad as one continuous story. Art. pic.twitter.com/WYlP6grZ2j
— JERRY DUNLEAVY (@JerryDunleavy) December 7, 2019Ruiz told Deadline that the Peloton team "was lovely to work with," adding "Although I’m an actress, I am not quite comfortable being in spotlight and I’m terrible on social media."
"So to say I was shocked and overwhelmed by the attention this week (especially the negative) is an understatement," she added.
"When Ryan and his production team called about Aviation Gin, they helped me find some humor in the situation."
https://platform.twitter.com/widgets.js Tyler Durden Sat, 12/07/2019 - 16:30 Tags Entertainment CultureKerry's Endorsement Of Biden Fits: Two Deceptive Supporters Of The Iraq War
Authored by Paul Norman Solomon via CommonDreams.org,
On Thursday afternoon, the Washington Post sent out a news alert headlined "John Kerry Endorses Biden in 2020 Race, Saying He Has the Character and Experience to Beat Trump, Confront the Nation’s Challenges." Meanwhile, in Iowa, Joe Biden was also touting his experience. "Look," Biden said as he angrily lectured an 83-year-old farmer at a campaign stop, "the reason I’m running is because I’ve been around a long time and I know more than most people know, and I can get things done."
But Kerry and Biden don’t want to acknowledge a historic tie that binds them: Both men were important supporters of the Iraq war, voting for the invasion on the Senate floor and continuing to back the war after it began. Over the years, political winds have shifted – and Biden, like Kerry, has methodically lied about his support for that horrendous war.
Then Senate Democrats John Kerry, Carl Levin, Majority Leader Harry Reid and Joseph Biden take part in a news conference on March 14, 2007 following a procedural vote on Iraq. (Photo: Karen Bleier/AFP via Getty Images)
The spectacle of Kerry praising Biden as a seasoned leader amounts to one supporter of the Iraq catastrophe attesting to the character and experience of another supporter of the same catastrophe.
The FactCheck.org project at the Annenberg Public Policy Center has pointed out: "Kerry agreed that Saddam Hussein had weapons of mass destruction and should be overthrown, and defended his war authorization vote more than once – including saying in a May 2003 debate that Bush made the ‘right decision to disarm Saddam Hussein.’ . . . Kerry also told reporters in August 2004 that he would have voted for the resolution even if he had known that the U.S. couldn’t find any weapons of mass destruction."
As for Biden, he can’t stop lying about his major role in pushing the war authorization through the Senate five months before the March 2003 invasion. During his current presidential campaign, more than 16 years after the invasion, Biden has continued efforts to conceal his pro-war role while refusing to admit that he was instrumental in making possible the massive carnage and devastation in Iraq.
Three months ago, during a debate on ABC, Biden claimed that he voted for the war resolution so it would be possible to get U.N. weapons inspectors into Iraq – saying that he wanted "to allow inspectors to go in to determine whether or not anything was being done with chemical weapons or nuclear weapons." But that’s totally backwards.
An explosion rocks Baghdad during air strikes March 21, 2003, via Reuters.
It was big news when the Iraqi government announced on September 16, 2002 – with a letter hand-delivered to UN Secretary General Kofi Annan – that it would allow the UN weapons inspectors back in "without conditions." The announcement was a full 25 days before Biden joined with virtually every Republican and most Democratic senators voting to approve the Iraq war resolution.
That resolution on October 11 couldn’t rationally be viewed as a tool for leverage so that the Iraqi government would (in Biden’s words) “allow inspectors to go in." Several weeks earlier, the Iraqi government had already agreed to allow inspectors to go in.
Biden keeps trying to wriggle out of culpability for the Iraq war. But he won’t be able to elude scrutiny so easily. In a mid-October debate, when Biden boasted that he has a record of getting things done, Bernie Sanders (who I actively support) made this response:
"Joe, you talked about working with Republicans and getting things done. But you know what you also got done? And I say this as a good friend. You got the disastrous war in Iraq done."
Indeed, Biden – as chair of the Senate Foreign Relations Committee – presided over one-sided hearings that greased the war-machine wheels to carry the war resolution forward. He was the single most pivotal Senate Democrat for getting the Iraq invasion done. While sometimes grumbling about President George W. Bush’s diplomatic performance along the way, Biden backed the invasion with enthusiasm.
Now, dazzled by Kerry’s endorsement of Biden, mainstream news outlets are calling it a major boost. Media hype is predictable as Kerry teams up with Biden on the campaign trail.
"The Kerry endorsement is among Mr. Biden’s most significant to date," the New York Times reports. "His support provides Mr. Biden the backing of the Democratic Party’s 2004 presidential nominee and a past winner of the Iowa caucuses." Kerry praised Biden to the skies, declaring that "I believe Joe Biden is the president our country desperately needs right now, not because I’ve known Joe so long, but because I know Joe so well."
This year, many progressives have become accustomed to rolling their eyes at the mention of Biden’s name. A facile assumption is that his campaign will self-destruct. But that may be wishful thinking.
The former vice president has powerful backers in corporate media, wealthy circles and the Democratic Party establishment. Deceitful and hidebound as he is, Joe Biden stands a good chance of becoming the party’s nominee – unless his actual record, including support for the Iraq war, catches up with him.
Tyler Durden Sat, 12/07/2019 - 16:00 Tags Politics War ConflictIsrael Conducted Nuclear Missile Test "Aimed At Iran": FM Zarif
Iran is crying foul after Israeli's Defense Ministry confirmed a major test of a mystery new "rocket propulsion system" on Friday morning.
“The defense establishment conducted a launch test a few minutes ago of a rocket propulsion system from a base in the center of the country,” the ministry said. “The test was scheduled in advance and was carried out as planned.”
Giving no further details, international reports were rife with speculation over the nature of the rocket, with many saying it was a nuclear-capable ballistic missile. This was enough for Iran's Foreign Minister Mohammad Javad Zarif to go off, saying in a statement posted to Titter: “Israel today tested a nuke-missile, aimed at Iran.”
Israel today tested a nuke-missile, aimed at Iran. E3 & US never complain about the only nuclear arsenal in West Asia—armed with missiles actually DESIGNED to be capable of carrying nukes—but has fits of apoplexy over our conventional & defensive ones. https://t.co/r4EqXkhcCN
— Javad Zarif (@JZarif) December 6, 2019 https://platform.twitter.com/widgets.jsAnd he further complained that the West looks the other way when it comes to “about the only nuclear arsenal in West Asia,” but that it “has fits of apoplexy over our conventional defensive [rockets].”
The mystery Israeli test was significant enough to require the temporary diversion of all inbound flights to Tel Aviv's Ben Gurion Airport.
Israeli media publications also considered the possibility that it was a ballistic missile test, likely nuclear warhead capable surface-to-surface Jericho system, an intercontinental ballistic missile which according to foreign reports can support a nuclear payload.
It comes at a tense time in the region following Israeli airstrikes on Syria and even Iraq, against what the IDF alleges were 'Iranian targets'. According to the Times of Israel:
Israel does not publicly acknowledge having ballistic missiles in its arsenals, though according to foreign reports, the Jewish state possesses a nuclear-capable variety known as the Jericho that has a multi-stage engine, a 5,000-kilometer range and is capable of carrying a 1,000-kilogram warhead.
And according to a Avi Scharf, the editor of the English version of Haaretz newspaper, the missile test may have had a flight trajectory deep into the Mediterranean, as far West as past the island of Crete.
To track and handle it all, IAI telemetry plane + at least two Israeli AF g550 aewc/shavit spyplanes + hercs flew all the way out past Crete pic.twitter.com/s9VyBQLVKJ
— avi scharf (@avischarf) December 6, 2019 https://platform.twitter.com/widgets.jsTehran officials, while complaining about the provocative rocket test which they claimed was an ICBM, vowed they are still “determined to resolutely continue its activities related to ballistic missiles and space launch vehicles.”
Israeli residents captured part of the rare launch on video:
#Israel #IDF a effectué un essai du système de propulsion de missiles depuis la base aérienne de Palmachim, au sud de #TelAviv, en ce matin du 6 décembre 2019. Le test a été pré-planifié et réalisé comme prévu.#Tsahal pic.twitter.com/TFOg8PPAIc
— Rebecca Rambar (@RebeccaRambar) December 6, 2019 https://platform.twitter.com/widgets.jsWashington has repeatedly condemned similar Iranian launches, even while the program is not formally banned under the 2015 JCPOA, and has leveled sanctions targeting the Islamic Republic's ability to produce advanced missiles.
Tyler Durden Sat, 12/07/2019 - 15:30 Tags Politics War ConflictMacro Hive: "When We Fall Back Into A Recession And Real QE Returns, Watch Out"
Submitted by George Goncalves of MacroHive; Goerge is a twenty years fixed income markets veteran. Over that time he has covered rates, structured products and credit. He worked both on the buy-side and sell-side.
Fed’s Challenge To Administer Liquidity Into Year-End And Beyond
Even with hundreds of billions of dollars in new liquidity created out of thin air, it’s too soon for the Fed to signal a clear coast for repo markets. On the one hand, through heavy liquidity dosages the Fed has doused the fire; but on the other hand, we do not know if that dosage was too much or too little. The true test still lies in the weeks around year-end.
Fed Fears the Worst
The Fed has not idled in wait of potential new flare-ups. Since our last update on Fed policy dynamics, it has rolled out more repo operations and added 42-day calendar repos to help provide funding over the year-end turn. These operations have seen nearly double the amount of submissions versus the offering size of $25bn each. This demonstrates that primary dealers aren’t taking any chances either.
In addition to daily and term repo operations, the Fed has purchased over $100bn T-bills for its SOMA portfolio since October. These so-called ‘not QE’ asset purchases, along with the repo operations, have led to the Fed’s balance-sheet growing at a faster clip than that experienced in the first twelve weeks of QE2 and QE3 (Chart 1). Luckily it’s not QE though, right?
If that’s true, we come to our primary question: what comes next in 2020? But before we brainstorm that and the implications thereof, we should take stock of what has changed in the key Fed balance sheet categories.
Source: St Louis FRED and Macro Hive
The Balance Sheet Changes Since September
As of November’s last week, the Fed’s balance sheet has grown in size by nearly $300bn since the repo flare-up. This speed goes to prove a concept well known in the marketplace: the Fed tightens slowly and eases quickly. In less than three months the Fed unwound basically half of QT.
The Fed has imperfect control over its liabilities, so investors should never assume a one-for-one relationship exists between asset purchases and the expansion of excess reserves. For starters, currency in circulation has been on cruise control since the financial crisis (rising at ~6% a year). But it’s the non-reserve items, foreign central bank (FCB) reverse repos, and Treasury general account (TGA) that make it challenging to predict reserve trends.
Source: St Louis FRED and Macro Hive
As seen above (Chart 2), total reserves have increased. But the TGA grew much more in total (in fact, the first week post 9/11 was the week that led to the reserve shortfall/repo spike as TGA expanded). It’s as if most of the Fed repos since that period indirectly provided short-term cash to the Treasury as dealers are able to purchase more USTs and ‘temporarily’ fund them with the Fed.
Now, it’s not that simple and there is overlap with the T-bill purchases which are producing more permanent excess reserves. Nonetheless, the amount of Fed repos nearly matches the growth in TGA. If the Fed had not expanded, its balance sheet there would have been more reserve draining because UST issuance would have mopped up cash needed to restock the TGA. Meanwhile, FCBs have pulled some money from the Fed and are providing relief by reducing their F-RRP allocation.
Source: St Louis FRED and Macro Hive
The Hand-off From Repo to ‘Not QE’ Reserve Growth
The effective Fed funds rate is back under control as are repo rates for the most part. That said, there is the occasional drift up in rates and the year-end turn is trading hundreds of basis points above the Fed target. The rest of this month could still see further pressures build as dealers pull back balance sheet usage and shy away from Fed term repos. Dealers will also aim to run a tight ship and will likely operate one day at a time in December.
But here is the tricky part (and another example of falling into a false sense of security). Clearly with the Fed on notice and providing a laddered safety net of repo liquidity, this year-end should theoretically be better than last year. And once we turn the calendar into 2020, commercial banks should start to open up their balance sheets and so Fed’s repo should decline as well.
The 2020 Path
So back to our main concern: 2020. Assuming there isn’t something more nefarious going on in the banking system by some point in early next year, Fed repo assets should decline in size. That said, the handoff from temporary liquidity to ‘not QE’ T-bill purchases may end up being more abrupt than risk markets are comfortable with.
Case in point: as seen in Chart 3, in the months after the initial spike due to Lehman, some of the Fed’s temporary liquidity programs started to see less usage as the panic subsided. This led to actual reserve declines as QE1 took some time to replace them. On a smaller scale, there is risk of a similar sort of repeat in 1H20. For example, if repo usage dropped to normal levels (i.e. as they were used pre-crisis), repo assets at the Fed could drop by over $200 bn (it would take over 3 months to replace those reserves via T-bill purchases).
Curve Could Steepen
Further complicating matters, if the Fed only buys T-bills they may end up enriching enough to encourage money market funds to start using the RRP again (which would drain reserves from banks). If that were to occur, the Fed would likely need to start buying out the curve and buy less T-bills (maybe via a curve control process through 5s). At that point they would need to stop their line that their purchases are “not-QE” (it would clearly be QE). This would favour staying with steepeners outright and/or on a forward basis as the front part of the curve (eg 2ys) would start to get depressed by this QE.
One way the Fed could avoid having to morph the T-bill purchases into outright QE would be to figure out how to launch a standing repo facility soon. This would be akin to ‘QE on demand’ but more so for reserve expansion for banks whenever they actually need it. All of these moving parts highlight how difficult it becomes for a central bank that is increasingly active on providing cash and collateral to the marketplace.
Bottom Line: This all feels very technical but, unfortunately, it’s the world we live in since the Fed needs to provide reserves in ample supply to keep using the floor system to set rate policy. If and when we fall back into a recession and real QE returns, watch out. In many ways that is what risk markets are yearning for: forward expectations of QE. Meanwhile, as we wait the risk is that the Fed’s balance sheet can actually temporarily shrink before growing (slowly via the T-bill purchases). Such a scenario is not priced into most asset classes.
Tyler Durden Sat, 12/07/2019 - 15:05 Tags Business FinanceCentral Bank Liquidity Firehose Turns Wall Street Most Pessimistic In 15 Years
Almost exactly one year ago today, the stock market was tumbling and on December 24, 2018 was set to post its first 20% "bear market" correction since the financial crisis. However, not even the most jittery market since the financial crisis, one which saw virtually every major asset class post sharply negative returns, managed to sap the sellside analyst crew of its traditional optimism.
As a reminder, at the start of December 2018 Bloomberg calculated that of the 14 forecasts for 2019 from firms it tracks, the average prediction was for the S&P 500 to rise 11% to 3,056 by the end of 2019. And while the steepness of the forecast path reflected the recent damage done to stocks, it was the most optimistic call since the bull market began in 2009.
In retrospect, three Fed rate cuts later, the launch of QE4...
... the fastest expansion of the Fed's Balance sheet since the financial crisis...
... and the most aggressive rate cuts by central banks since the financial ctisis...
... and Wall Street's optimism one year ago turned out to be too conservative, with the S&P now trading at an all time high of 3,150, almost 100 points above the average year-forward S&P forecast one year ago of 3,056.
And to think it only took a crisis-like response by central banks to achieve it.
So what happens next year? Well, this is the strange part, because whereas Wall Street was euphorically bullish one year ago even as stocks were tumbling, this time with the S&P up 25% for the year (the best annual performance since 2013) even Wall Street's most reliable optimists are starting to sound like cranks, as Bloomberg's Lu Wang points out.
Take Binky Chadha, Deutsche Bank's chief global strategist, who one year ago was among the most optimistic of sellside analysts as he saw the S&P 500 rising to 3,250 this year - the highest of anyone tracked by Bloomberg - and yet who now expects the S&P to do absolutely nothing in the coming year. Why? Because according to Chadha, the market has already priced in a strong rebound in macro and earnings growth, "back up to the peaks of this cycle, much stronger than we expect."
Chadha's pessimism reduces to the following sequence of numbers, in which the final number is a clear outlier:
19.6% 25.7% 20.5% 27.3% 15.5% 10.8% 13% 16% 13.3% 18.7%and...
0%What are these numbers?
Well, after a decade of forecasting large double digit returns in the S&P 500 in his year ahead outlooks, Deutsche Bank's chief equity strategist Binky is finally expecting a flat market, or a 0% return for all of 2020, as his 2019 and 2020 S&P estimates are the same, or 3,250 (technically, Chadha expects a 3.3% return to the end of 2020 from current levels). While we will present some more from Chadha's forecast in a subsequent post as it touches on some key market fundamentals, this is why one of the formerly most bullish Wall Street analysts expects a largely disappointing sideways market next year:
We see EPS of $175; a multiple of 18.5x; and set a 2020 year-end target for the S&P 500 of 3250. This would represent a very modest increase (+3.5%) from last week’s close. Indeed it is the same as our target for 2019, which if achieved by this year-end, would imply a sideways market in 2020. Both a maintenance of the 10-year trend channel of the S&P 500 (+10% to the bottom in end 2020; +23% to the middle), and our demand-supply framework (+10%) with lower but still robust buybacks, could be used to argue for much stronger returns. But we see the market already pricing in a strong rebound in macro- (ISM 57) and earnings growth (+15%), back up to the peaks of this cycle, much stronger than we expect. Equity valuations (19.1x) are at the high end of their historical range (mostly 10x-20x), having been higher (ex the late 1990s equity bubble) only 10% of the time over the last 85 years, while a continued normalization of payout ratios argues for a modest de-rating. The US presidential election should make it difficult for the fundamental uncertainty emanating from US trade policy, which has plagued corporates and been a key driver of the US and global growth slowdowns, to dissipate completely. This argues for a break in the downward trajectory of growth and some bounce, not a rebound to the peaks of this cycle as the market is pricing. With key measures of CEO confidence down at recession levels, we see the risks to the outlook as being to the down side.
Of course, that "other" reason for the surge in stocks, the record stock buybacks - which is how corporate management teams translated the world's ultra low interest rates into higher stock prices by way of record BBB-rated debt issuance - is also starting to fade, which only substantiates Chadha's skeptical outlook.
What is remarkable is that Chadha is hardly the sole bull turned bear on the year ahead: as Bloomberg calculates, the Deutsche Banker's skepticism is the prevailing sentiment as Wall Street strategists are giving the least optimistic annual outlook in 15 years, with an average call among 17 estimates being for the S&P 500 to end next year at 3,280. As of Friday's close, that represents a 4.3% expected increase, the smallest for any year since 2004.
Chadha key concerns for the coming year - summarized above - also happen to be the reason why so many traditionally cheerful strategists are far more pessimistic this time around:
Pulling returns from the future: the market's impressive rise in 2019 has reduced the size of the advance analysts see in 2020. Strategists are concerned about the relatively anemic earnings growth upon which this year’s rally is based. As we noted repeatedly in the past, and as Goldman stated two weeks ago, all of this year’s gains are the result of multiple expansions and wider valuations, a trend few see continuing. As a reminder, this is what Goldman said in its 2020 year ahead forecast: "With S&P 500 earnings on track for roughly zero growth from this time last year, solid returns likely would not have been possible without central bank support." As of this moment, consensus is that central banks won't be nearly as generous as they were in 2019, although all that would be required to change this is another 10%-20% drop in the S&P.Here it is worth recalling that while strategists can be more or less optimistic any one year, they will never - as a group - call for a lower market in the year ahead. Indeed, as Bloomberg notes, "analysts have never called for a down year in the period Bloomberg has tracked them." Which is why the notable step down in the 2020 forecast is remarkable; meanwhile, those optimists who see the remarkable rally of 2019 continuing are in for disappointment, as "betting on a repeat of 2019 would be a mistake, considering such key risk factors next year as the U.S. presidential elections and a re-escalation of trade tensions."
Even more remarkable, at least three strategists expect the S&P to be lower in 2020 compared to Dec. 31, 2019. Among them are the now traditional bears, such as Morgan Stanley's Mike Wilson and UBS' Francois Trahan, both of whom have a year-end target of 3,000, while Sophie Huynh at Societe Generale has 3,050.
Meanwhile, there are fewer surprises on the bullish side where Bloomberg notes that for the second year in a row, Jonathan Golub at Credit Suisse has the highest sellside forecast, with a 3,425 target on the S&P: "Citing an improving earnings outlook and relatively attractive valuations, Golub says it’s too early to bail even with the record-long bull market heading toward its 12th year."
That said, at 19.1x trailing earnings, the S&P 500 is trading at a multiple that’s higher than any time since the dot-com era, except for a few months in late 2017 and early 2018. As Chadha writes, "the S&P 500 trailing multiple has historically mostly stayed in a range between 10x-20x. So current valuation at 19.1x is clearly at the higher end of the historical range. Indeed, over the last 85 years, outside the late 1990s equity bubble, the multiple remained below current levels around 90% of the time. Moreover, episodes when the multiple did rise above current levels were often associated with markets exiting recessions as stock prices rose sharply in anticipation of a recovery in earnings that was still to materialize."
Still, as Bloomberg notes, with the Federal Reserve in an easing mode and Treasury yields hovering near record lows, stocks can continue rising as multiples expand ever more into excessively over-valued territory.
On the other hand, the only other time all three central banks were easing at the same time as they are now, was during the financial crisis:
As such, it will be difficult to keep injecting hundreds of billions of freshly "printed" liquidity into the market without someone finally asking if the global economy finds itself in another crisis right now to justify such a massive liquidity euphoria.
Which brings up one final question: what happened when Wall Street Strategists were as bearish as they are now, and forecast gains of 5% or less? Well, in 2014 and 2017, they ended up under-shooting by at least 7% points according to Bloomberg, and in 2005, they were right on target.
“It’s important to understand what the consensus is,” said Palisade Capital CIO Dan Veru. "Expectations are very low. I always want to take the other side of that." It wasn't exactly clear if the "other side" of that is to expect a negative return for 2020, or for the liquidity gusher to turn into a tsunami as the world careens into a global depression and stocks explode in one final, record meltup...
Tyler Durden Sat, 12/07/2019 - 14:34 Tags Business Finance
![Manufactures Are Coming Back To The US, [CB] Tries To Push Against The Plan - Episode 2039a](https://i1.ytimg.com/vi/TVpuwhIyfGI/hqdefault.jpg)
