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    Daily Digest 9/4 – Factories Feeling The Trade-Conflict Pinch, Don’t Believe Your ‘Lying Highs’

    by DailyDigest

    Tuesday, September 4, 2018, 3:45 PM


Factories feeling the pinch from escalating trade conflict (Thomas R.)

“While we remain alert to the risk of a further loss of momentum from factors such as more protectionism and liquidity shocks, we still think that the most likely scenario is a modest slowdown after the exceptional performance of 2017,” said Ben May at Oxford Economics.

10 Years Later – No Lessons Learned (thc0655)

Corporate executives tied their compensation to stock performance and reaped extravagant salaries and bonuses. This same scenario played itself out in 2007 – 2009. These brilliant CEOs bought back a record amount of stock just before the financial collapse. Using their borrowings, along with Trump’s tax cut windfall, current day S&P 500 company CEOs are saying “Hold My Beer”. They are on pace to buy back $1.2 trillion of their stock at all-time highs. When stock prices are cut in half again, these greed monkeys will pay no price for their reckless stupidity. All of this idiocy has been aided and abetted by the Fed with their near zero interest rates a decade after the crisis supposedly ended.

Don't Believe Your 'Lying Highs' (DG)

Consider the machinations of these markets. 10 years of virtual non stop global central bank intervention repressing rates, causing the TINA (there is no alternative) effect, forcing yield seeking forces to enter risk assets they otherwise wouldn’t (think pension funds). In a world where volatility compression changed the dynamics of price discovery active fund managers increasingly found their human intellect driven choices inferior to a world driven by algos, ETFs, central banks. Dissatisfied investors tired of lagging returns threw in the towel and threw their assets into ETFs. There are now more ETFs than individual stocks. Everything is indexed and automatic allocations keep buying the ever shrinking float that is out there. Shrinking because there are now significantly fewer individual stocks to buy than 20 years ago. Shrinking because record buybacks keep reducing the publicly available shares outstanding to buy.

Argentine currency crisis spreads to politics (sign-in required, Thomas R.)

It may be that the peso is finally overshooting,” said Alejandro Catterberg, a director at Poliarquía, a pollster. “But even if we are at the bottom of the foreign exchange crisis, I am not sure that we have reached the bottom of the political crisis.

Human impact has pushed Earth into the Anthropocene, scientists say (LesPhelps)

“We could be looking here at a stepchange from one world to another that justifies being called an epoch,” said Dr Colin Waters, principal geologist at the British Geological Survey and an author on the study published in Science on Thursday.

Turkey braced for further turmoil amid signs of corporate distress (sign-in required, Thomas R.)

The lira, which has lost about 40 per cent of its value this year, has suffered extreme swings in recent weeks. Investors, already unnerved by inflationary pressure and the wide current account deficit, took further fright after the eruption of a dispute between presidents Donald Trump and Recep Tayyip Erdogan.

Ford to cut car models as part of restructuring: The Times (Thomas R.)

Ford lost $73 million in Europe between April and June, and faces additional challenges from Britain’s plans to leave the European Union, the Times said.

Analysts at Morgan Stanley said Ford could lay off as many as 12 percent of its more than 200,000 workers and that the layoffs would largely be concentrated in Europe.

Inauthentic Behavior (jdargis)

In an April 2017 white paper, “Information Operations and Facebook,” the company’s executives expressed concern about “false amplification, which we define as coordinated activity by inauthentic accounts with the intent of manipulating political discussion (e.g., by discouraging specific parties from participating in discussion or amplifying sensationalistic voices over others).” The bounds of acceptable behavior are ill-defined, here. How can false amplification be usefully distinguished from organic amplification? Political discussion is manipulated all the time by hashtag campaigns, ads, the mercurial swell of public opinion, and well-organized online communities on platforms like Reddit. Where is Facebook drawing a line?

The Collapse Of Venezuela's Imaginary Oil Currency (Michael S.)

But as Reuters details in a special report, the region is not only lacking in oil production, but there is no visible effort at developing oil in this area at all. The only evidence of an oil presence were old rigs that have clearly been inoperable for a long time, as they are rusted out and covered in weeds. “There is no sign of that petro here,” a local resident told Reuters. Worse, the town suffers from blackouts, hunger, poverty and decrepit infrastructure, an increasingly common plight for the country on the whole.

Canadian Government Invests $250 Million Into Dairy Industry (Thomas R.)

Despite criticism of federal moves in favor of the dairy industry, supply management and animal agriculture subsidies are not without supporters.

Prime Minister Justin Trudeau said that supply management is a system he 'will standup to defend' – while MP Mike Bassio emphasized the importance of 'healthy and well-regulated dairy products'.

Plastic straw ban? Cigarette butts are the single greatest source of ocean trash (Paul D.)

A California assemblyman proposed a ban on cigarettes with filters, but couldn’t get the proposal out of committee. A New York state senator has written legislation to create a rebate for butts returned to redemption centers, though that idea also stalled. San Francisco has made the biggest inroad — a 60-cent per pack fee to raise roughly $3 million a year to help defray the cost of cleaning up discarded cigarette filters.

Gold & Silver

Click to read the PM Daily Market Commentary: 9/1/18

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

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