The auto industry has been struggling this year after seven consecutive years of growth. This is especially true as auto sales dropped 1.8% year over year to an annualized 16.13 million units in August, marking the lowest level since February 2014. This was the eighth straight monthly decline in sales thanks to Hurricane Harvey. Of the six major American and Japanese automakers, General Motors (GM – Free Report) and Toyota (TM – Free Report) saw sales increase of 7.5% and 6.8%, respectively, while Nissan Motor (NSANY – Free Report) and Fiat Chrysler (FCAU – Free Report) posted the biggest sales decline of 13% a...
“Oceania was at war with Eurasia; therefore Oceania had always been at war with Eurasia.”1984, George Orwell. The hurriedly organized investor call with Plains All American (PAA ) a week ago (rushed because of approaching Hurricane Harvey) must have been inspired by the revisionist history propagated by “the Party” in Orwell’s polemic against totalitarianism. PAA’s distribution “reset” (Newspeak for a cut) was larger than previously expected and was directed towards rapidly lowering leverage. Like Orwell’s Ministry of Truth, they explained “…we have assessed the appropriate distribution level to accelerate our deleveragi...
ETH/USD Daily Chart Technical Outlook: Ethereum prices reversed off slope resistance last week with the decline now approaching in initial support at the confluence of the 100% extension, the 38.2% retracement and the trendline extending off the July lows at 295-303. Heading into the start of the month, the focus will be on this region and price will need to stabilize here if the broader ascending channel structure is to remain viable. ETH/USD 240min Chart Notes: Last week we noted Ethereum price targets at, “374 backed by 385– Note that this level also converges on parallel resistance into the close of the month.” Indeed the...
The Federal Reserve Bank of Kansas City is a relatively solid, well-run institution and its President Esther George is among the most sensible members of the Federal Open Market Committee when she is permitted to attend it (her next triennial year of service is 2019). It is thus surprising and regrettable that its annual Jackson Hole conference has become a factory for bad ideas second only to the annual Davos Gabfest. This year it surpassed all barminess records, with the usual monetary madness of recent years joined by regulatory madness and fiscal madness. Surely the Kansas City Fed can find better things to do than sponsor this nonsense! ...
Today, stocks opened down in Europe. A rise in political tensions brought about by North Korea’s nuclear test triggered a retreat towards safe haven assets and a bump in the price of gold to 1340 USD. The US dollar fell against the Swiss franc to 0.9554, and against the yen to 109.38. The euro/dollar pair has recovered to 1.1922. Traders were already aware of the threats directed towards North Korea on Tuesday, the 29th of August after they launched a ballistic missile over Japan into the Pacific Ocean. If the US limits itself to purely verbal threats this time, the dollar should recover its position by the end of the week. The euro is con...
The European Central Bank (ECB) is expected to begin reducing its bond purchases gradually tampering its stimulation program of Quantitative Easing (QE). Nevertheless, reliable sources tell of the ECB being extremely cautious fearing what will happen if buyers do not appear and rates begin to rise sharply. The difference between the ECB and the Fed is stark. The ECB owns 40% of Eurozone government debt. The Fed does not even come close. Obviously, the European financial markets have become addicted to the unprecedented inflow of cheap money even though there has been no appreciable rise in economic growth or inflation as was expected. This ra...
from the International Monetary Fund — this post authored by Sandra Lizarazo, Adrian Peralta-Alva, and Damien Puy U.S. lawmakers getting ready to rewrite the nation’s tax code have a fundamental question to answer: What are the priorities for tax reform? Do you want faster growth? Less income inequality? A tax cut that doesn’t increase the budget deficit? In a recent working paper, we find that, depending on how a tax cut is targeted, it is possible to make some progress toward the first two objectives. Personal income tax cuts can help support growth and, if well targeted, can also help improve income distribution. However, we ...
In March of 2013, 3G Capital and Berkshire Hathaway closed on the acquisition of Heinz, privatizing this foodmaker for a total acquisition price (including debt) of around $28 billion. 3G’s cash contribution (the acquisition made significant use of debt) was just $4 billion. Fast forward to 2015, and 3G Capital and Berkshire Hathaway made another transformative merger in the food industry. This time, the two companies arranged for a merger between publicly-traded Kraft Foods and privately-held H.J. Heinz to create publicly-traded Kraft Heinz (KHC). Why is this significant? Well, at the time of Kraft Heinz’s most recent proxy statement, ...
While it was a dull week for FX futures positioning heading into (August) month-end, it was a much more interesting story in how the US dollar managed to overcome another spike down to fresh (20-month) lows on Monday, and then Friday’s disappointing (US) jobs report. After what seemed like such a bleak start to last week, the Dollar Index (DX) actually finished modestly higher, not only highlighting bullish technical divergence (daily RSI), but hinting of a temporary base for the oversold greenback. The latest Commitment of Traders (COT) report (as of August 29th) also pointed-out the continued gradual unwind of the popular (Japanese)...
USD/JPY The US dollar had a volatile session on Friday as the jobs number came out less than anticipated. Because of this, the markets sold off rather drastically, but found enough support to turn around and bounce above the 110 level again. By doing so, this shows the resiliency of this market but I also see a significant amount of resistance at the 111 level. Once we break above there, I feel that the market will probably go looking towards the top of the consolidated range, meaning that we should go to the 114.50 level. This market has been consolidating for some time, and quite frankly nothing that I’ve seen recently tells me that it’...