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Apple Stock Is A Sell (Video)

February 24, 2017 by EconMatters   Comments (0)

By EconMatters


We discuss the reasons why Apple stock is a sell in this video, sure you have to get the position sizing right, as well as the timing, but this stock is going down. We discuss 9 main drivers for what will move Apple`s stock lower over the next 3 quarters, the best unbiased, objective analysis you are going to find anywhere right here in this video. Don`t Buy Apple at these levels period like the greater fools need to ultimately make money with their poor investment price decisions!

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Shorting Opportunities in Financial Markets (Video)

February 23, 2017 by EconMatters   Comments (0)

By EconMatters


We discuss the wonderful shorting opportunities there are in Financial Markets right now in this video. There are a lot of Market Dislocations right now, many stocks are set up for massive repricings over the weaker investment months of the year.

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Brazil cuts rate 75 bps, sees easing to 9.5% end-2017

February 23, 2017 by CentralBankNews   Comments (0)

    Brazil's central bank lowered its benchmark Selic rate by another 75 basis points to 12.25 percent and reiterated its guidance that further rate cuts and possible changes to the pace of easing will continue to depend on the forecast and expectations for inflation.
    The Central Bank of Brazil has now cut its rate by 200 basis points since embarking on an easing cycle in October last year and by 150 points this year alone following January's larger-than-expected 75-point rate cut due to decelerating inflation and a slowing economy.
    The central bank's monetary policy committee, known as Copom, was unanimous in its decision, which was without bias, and said it expected inflation to ease to around 4.2 percent this year and around 4.5 percent for 2017 based on cutting the key rate to 9.5 percent by the end of this year and 9.0 percent by the end of 2018.
    Fresh economic data also show signals that are consistent with a stabilization of the economy and a gradual recovery of activity during this year while inflation is expected to continue to decelerate as inflation expectations for this year fell to around 4.4 percent.
     Brazil's inflation rate fell further to 5.35 percent in January from 6.29 percent in December, well within the central bank's 2.5-6.5 percent tolerance range, and sharply lower than 2015's inflation rate of 10.67 percent and below 2014's 6.41 percent.
    For 2017 and 2018 the tolerance range has been narrowed to 1.5 percentage points but around the same midpoint of 4.50 percent. In June the government is expected to reduce the midpoint target slightly with most economists looking at a new target for 2019 of 4.25 percent.
    However, that would still remain above most other countries, including those in South America, where Chile and Colombia target 3 percent, like most emerging market economies, whereas Peru targets 2 percent, a level that is typically found in developed economies.
    Brazil's economy shrank by an annual rate of 2.9 percent in the third quarter of last year, down from a 3.6 percent drop in the second quarter.

    The Central Bank of Brazil issued the following statement:
   
 

"The Copom unanimously decided to reduce the Selic rate to 12.25 percent per year, without bias.

The following observations provide an update of the Copom's baseline scenario:
The set of indicators of economic activity released since the last Copom meeting shows some mixed signals, which are, however, consistent with stabilization of the economy in the short run. Available evidence suggests a gradual recovery of economic activity during the course of 2017;
The global outlook remains quite uncertain. Nevertheless, stronger global economic activity and its positive impact on commodity prices have so far mitigated the effects on the Brazilian economy of revisions of economic policy in some large economies;
Inflation developments remain favorable. The disinflation process is more widespread, and includes IPCA components that are most sensitive to the business cycle and monetary policy. Food price disinflation resumed, which constitutes a favorable supply shock;
Inflation expectations for 2017 collected by the Focus survey fell to around 4.4%. Expectations for 2018 and longer horizons remained around 4.5%; and
The Copom's inflation forecasts in the market scenario retreated to around 4.2% for 2017, and remained around 4.5% for 2018. This scenario assumes a path for the policy interest rate that ends 2017 and 2018 at 9.5% and 9%, respectively.
The Committee emphasizes that its baseline scenario involves risks in both directions: (i) the highly uncertain global outlook might make disinflation more difficult; (ii) the favorable food-price shock might produce second-round effects and, thus, contribute to additional reductions of inflation expectations and inflation in other economic sectors; and (iii) the recovery of economic activity might be more (or less) gradual and delayed than currently anticipated.
The Committee highlights the importance of approval and implementation of the necessary reforms – notably those of fiscal nature – and of adjustments in the Brazilian economy for the sustainability of disinflation and for the reduction of its structural interest rate.
Taking into account the baseline scenario, the current balance of risks, and a wide array of available information, the Copom unanimously decided to reduce the Selic rate to 12.25 percent per year, without bias. The Committee judges that convergence of inflation to the 4.5% target over the relevant horizon for the conduct of monetary policy, which includes 2017 and, with a gradually increasing weight, 2018, is compatible with the ongoing monetary easing process.
The Copom judges that the extension of the monetary easing cycle will depend on estimates of the structural interest rate of the Brazilian economy, which the Committee will continue to reassess over time.
The Copom emphasizes that a possible acceleration of the pace of monetary easing will depend not only on the estimated extension of the cycle, but also on the evolution of economic activity, on the other risk factors, and on inflation forecasts and expectations.
The following members of the Committee voted for this decision: Ilan Goldfajn (Governor), Anthero de Moraes Meirelles, Carlos Viana de Carvalho, Isaac Sidney Menezes Ferreira, Luiz Edson Feltrim, Otávio Ribeiro Damaso, Reinaldo Le Grazie, Sidnei Corrêa Marques, and Tiago Couto Berriel."

Technical Analysis Is Garbage (Video)

February 23, 2017 by EconMatters   Comments (0)

By EconMatters


We discuss in this video why Technical Analysis is completely useless right now at these elevated levels in the Financial Markets. It literally all comes down to one thing, who is the big seller that chickens out first.

You can throw all that Technical Analysis Garbage out the window, everything can be reduced to the first big player that decides to take profits, starts the entire stampede out of the market. Technical Analysis isn`t going to give you the heads up, in fact it will come without any notice at all, the player just makes the move, that they want to be first, and everybody else is left dealing with the consequences or ramifications of the fact that they are at best second to exit.

I have seen it start quietly overnight in Asia, after the European Close, after an awful job`s report, an ECB Meeting, a Political Event. But these are just the excuses for the selling, it all comes down to a game of chicken, making your move first before the music stops, and the bagholding game begins in earnest.

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Zambia cuts rate 150 bps in first easing since 2012

February 22, 2017 by CentralBankNews   Comments (0)

     Zambia's central bank cut its policy rate by 150 basis points, the reserve ratio by 250 points and the overnight lending facility rate by 400 points citing a sharp fall in inflation, continued appreciation of the kwacha's exchange rate and improving economic prospects.
     It is the first cut in rates by the Bank of Zambia since since the current policy rate was introduced in March 2012 when the bank moved away from targeting money supply. It is also the first change in rates since November 2015 when the tightening cycle came to an end.
    Today's rate cut brought the policy rate down to 14.00 percent from 15.50 percent, the overnight lending facility rate was narrowed to 600 basis points above the policy rate from 1,000 points, and the statutory reserve ratio was lowered to 15.50 percent from 18.0 percent.
    "The Bank of Zambia will closely monitor domestic and external developments and stands ready to take appropriate monetary policy measures on price and financial system stability that support the diversification and growth of the economy," the central bank said.
      Zambia's inflation rate fell to 7.0 percent in January from 7.5 percent in December and down from 22.9 percent in January 2016, reflecting dissipation of base effects, the rise in the Kwacha and a deceleration in both food and non-food inflation.
    The central bank expects inflation to remain within its 2017 target range of 6-8 percent in the medium term, with risks favoring low and stable inflation from expected normal to above normal rainfall, fiscal consolidation and a projected improvement in global economic growth.
     Zambia's is Africa's second-largest copper producer and its economy has suffered from the fall in global commodity prices, strained public finances, electricity shortages, subdued consumption and low investment.
    But the central bank said economic growth prospects are now improving, with Gross Domestic Product seen rising by 3.9 percent and 4,6 percent this year and 2018, respectively. Growth is underpinned by an improving agricultural sector, due to better weather, increased energy supply and minerals production.
    The government's 2017 budget was approved in December with the aim of reducing the budget deficit to 7.0 percent of GDP and the central bank said an effective implementation would present a good base for rebalancing fiscal and monetary policies.
    The external sector is also expected to improve this year due to a recovery in export prices, a stable exchange rate and higher foreign reserves, which ended last year at US$2.4 billion, the equivalent of 3.3 months imports.

    www.CentralBankNews.info
   
 

Pigs Waiting To Get Slaughtered (Video)

February 22, 2017 by EconMatters   Comments (0)

By EconMatters


We discuss the Stock Market Bubble is this video and provide some metrics to help the Federal Reserves Members spot the Bubble, since they seem to be having difficulty spotting the Bubble Market. The Fed should call an emergency meeting tomorrow, and hike rates the 50 basis points they were supposed to do last year, but passed on.

This Federal Reserve is the most clueless Federal Reserve in a long line of incompetent Federal Reserves. They have followed in the exact footsteps of the 2007/08 Financial Crisis Playbook, it is as if The Federal Reserve is trying to Destabilize the entire Global Financial System on purpose.

We are definitely witnessing the euphoric phase of the stock market bubble, because investors couldn`t be more blindly bullish than they are right now. This is the equivalent to the shoe shine story regarding the Market Psychology right before the 1929 Market Crash, clueless ebullience is off the charts right now in Financial Markets!

Do you spot the Bubble now Janet Yellen? I will give you my person number, and I will be happy to walk you through it, so that you understand the magnitude of why this is the biggest stock market bubble of all time.

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The Natural Gas Market 2-20-2017 (Video)

February 20, 2017 by EconMatters   Comments (0)

By EconMatters


We discuss the fundamentals and technicals of the natural gas market in this video. A very mild winter with a year end run up in natural gas prices has led to quite the position unwind in this commodity. We have more Natural Gas Rigs than a year ago which could bring more future NatGas supply to market. Natural Gas bulls better hope for a very hot summer with air conditioners running at peak demand levels. Gotta love the Natural Gas Market; one of the few markets left that react to fundamental news, and not phony QE artificiality!

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Mauritius keeps rate, still preparing for new framework

February 20, 2017 by CentralBankNews   Comments (0)

    The central bank of Mauritius left its key repo rate at 4.0 percent, saying rising business confidence and public investment should support domestic output this year while an uptick in global commodity prices, especially energy, remain a key upside risk to inflation.
    The Bank of Mauritius, which cut its rate by 40 basis points last year, added it was still working on achieving "the necessary conditions" before implementing a new monetary policy framework.
    In its last statement from November, the central bank said it planned to implement the new framework early this year. It would be the first change in framework since December 2006.
    The economy of Mauritius expanded by an annual rate of 4.0 percent in the third quarter of last year, up from 2.5 percent in the previous quarter, but the central bank "noted with concern" the recent adverse performance of exports but still maintained its forecast for 2017 growth of 3.8-4.0 percent.
    Headline inflation eased to 1.8 percent in January from 2.3 percent in December but the central bank said underlying measures remain stable below 3 percent and bank staff project headline inflation of about 2.5 percent for 2017.
    The Mauritian rupee, which fell sharply in 2014, has been firming this year and was trading at 35.3 to the U.S. dollar today, slightly up from 35.85 at the start of this year.

     The Bank of Mauritius issued the following statement:  

"The Monetary Policy Committee (MPC) of the Bank of Mauritius unanimously decided to keep the Key Repo Rate unchanged at 4.00 per cent per annum at its meeting today.
Growth in major advanced economies is likely to strengthen in 2017. The IMF’s World Economic Outlook Update released in January 2017 projects world growth to increase from 3.1 per cent in 2016 to 3.4 per cent in 2017 and further to 3.6 per cent in 2018. Growth in both advanced economies and emerging market and developing economies are also expected to gather pace in 2017 and 2018. However, the MPC noted that there may be downside risks to global growth as the external environment continues to be characterised by increasing risks and uncertainties. Global inflationary pressures are expected to be relatively stronger in 2017, partly due to the on-going accommodative monetary policy stances and recent increases in commodity prices.
Real GDP for Mauritius grew by 4.0 per cent in 2016Q3, supported by strong domestic demand conditions, marking a significant pick-up over the 2.5 per cent and 2.8 per cent growth recorded in 2016Q2 and 2015Q3, respectively. Growth, in the same quarter, was reinforced by the continued strong performance of key services sector and the rebound in the construction sector. Rising business confidence and higher public investment are expected to provide support to domestic output in 2017. The MPC, however, noted with concern the recent adverse performance of exports of goods. Bank staff maintains its projections for real GDP growth between 3.8 – 4.0 per cent for 2017.
Headline inflation ticked up slightly since the last MPC meeting, while year-on-year inflation showed some volatility due to base effects. The underlying measures of inflation remained stable at below 3 per cent. Current domestic and external economic conditions are expected to contribute to headline inflation in the near term. Bank staff projects headline inflation at about 2.5 per cent for calendar year 2017. The uptick in international commodity prices, especially energy prices, if persistent, would remain the key upside risk to domestic inflation.
The MPC viewed that holding the Key Repo Rate unchanged is consistent with economic conditions in the foreseeable future.
The Bank has sterilised excess liquidity to the tune of Rs59 billion as at 17 February 2017. The MPC took the view that the Bank should continue its efforts to achieve the necessary conditions prior to the implementation of the new monetary policy framework and for an effective transmission to the real sector.
The MPC will issue the Minutes of its meeting on Monday 6 March 2017."


Kazakhstan cuts rate 100 bps, room for new cuts limited

February 20, 2017 by CentralBankNews   Comments (0)

    Kazakhstan's central bank lowered its base rate by another 100 basis points to 11.00 percent but said "the potential of further easing of monetary policy is limited" as the new level reflects the long-run balance between price stability and financial stability.
    The National Bank of Kazakhstan has now cut its rate by 600 basis point since starting an easing cycle in May 2016 and today's cut follows last month's guidance that it would ease its policy today provided that the decline in inflation continues and confidence in the tenge currency remains.
   "The decrease in inflationary expectations, the stability and the predictability of the situation on the domestic FX and money markets, the recovery of business activity, and also the favorable external economic conditions caused the easing of monetary conditions," the central bank said.
    Kazakhstan's inflation rate decelerated to 7.9 percent in January from 8.5 percent in December, falling into the central bank's target range of 6-8 percent for the first time since September 2015.
    The drop in inflation was in line with the central bank's forecast and higher commodity prices are not expected to have a significant impact on future inflation as they will be offset by moderate price trends in other consumer goods and services.
     The latest surveys of inflation expectations also shows a declining trend to the lowest level since mid-2016, with expectations within the target range and at 6.6 percent for January, below actual inflation.
    "In the absence of adverse shocks, inflation will persistently remain within the target band throughout the entire year of 2017, and also during the first half of 2018," the central bank said.
    Last month the central bank forecast that inflation would end 2017 between 7.3 and 7.7 percent but it did not repeat this forecast today. The central bank's director of research and statistics has forecast 2018 inflation of 5-7 percent, 4-6 percent for 2020 and below 4 percent in 2020.
    The exchange rate of Kazakhstan's tenge, which fell sharply in August 2015 following the central bank's move to a floating exchange rate regime, has been firming in recent months and was trading at 318.79 to the U.S. dollar today, up 4.6 percent this year.
    The central bank's move to a floating exchange rate regime last year came in response to capital outflows and the conversion of many tenge bank deposits to foreign currency. Oil accounts for about 60 percent of Kazakhstan's exports and over 10 percent of its Gross Domestic Product. 
    The central bank said devaluation expectations, and the cost of hedging exchange rate risks, had continued to decrease and the share of foreign currency deposits have declined to 53 percent by the end of January.
    Economic activity in Kazakhstan is also continuing, the bank said, saying Gross Domestic Product is estimated to grow above 2 percent this year.
    In the first three quarters of 2016 Kazakhstan's GDP grew by an annual rate of 0.4 percent.

     
     The National Bank of Kazakhstan issued the following statement:

"The National Bank of Kazakhstan has decided to reduce the base rate to 11% with a corridor of +/- 1%. In January 2017 the annual inflation rate has reached the target band of 6-8%. The decrease in inflationary expectations, the stability and the predictability of the situation on the domestic FX and money markets, the recovery of the business activity, and also the favorable external economic conditions caused the easing of the monetary conditions. The new level of the base rate reflects the long-run balance between the price stability and the financial stability; therefore, the potential of the further easing of the monetary policy is limited.
The decision on the base rate was made with the account of the following factors.
The annual inflation rate has slowed down in January 2017 to 7.9%, which completely matches the forecasts of the National Bank. The acceleration of the price growth in the specific commodity markets and in the paid services will not have a significant impact on the dynamics of the overall level of inflation and will be offset by the moderate price tendency in the markets of other consumer goods and services.
According to the survey taken in January on the inflationary expectations of the population, the observed tendency of improved expectations of respondents regarding the future level of inflation indicates the mitigation of their pro-inflation behavior. Quantitative assessment of the inflationary expectations shows that the expectations of the population are formed within the target band and fixed on the levels (6.6% in January) that are lower than the actual inflation Furthermore, the share of the respondents, who expect the high level of inflation, has decreased to the lowest value since the middle of the last year.
So, in case of the absence of the adverse shocks, the inflation will persistently remain within the target band throughout the entire year of 2017, and also during the first half of 2018.
Devaluation expectations not only of the population, but also of the professional market participants, have been decreasing, which is reflected in the survey outcome and the hedging cost of exchange rate risks.
The deposit market data show the ongoing process of de-dollarization of the bank deposits and the continuing tendency of depositors’ preferences towards national currency. According to the preliminary data, the share of the foreign currency deposits has decreased to 53% by the end of January 2017.
The signs of the economic recovery are getting more defined. Short-term economic indicator, which reflects the development of economy’s main sectors, is in the recovery zone and has reached 103.8% in January 2017. In 2017 the real GDP growth is estimated to be above the level of 2%.
In spite of the positive signals of the business activity recovery and the stability of the domestic money and FX markets, the possibility of the external and internal shocks occurrence, which have the potential risks for the further economic development and, primarily, for the inflation processes, still exists. Among those the following risks should be noted: external risks associated with high dependence on the quotations in the world commodity and financial markets, the speed of the economic recovery of the countries – trade partners; and also the revision of budget expenditures upwards. Next decisions on the base rate will depend on the further dynamics of the fundamental factors of the domestic demand and the stability of the financial sector.
The next decision on the base rate will be announced on April 10, 2017 at 17:00 Astana time."

    www.CentralBankNews.info

Trump`s Deficit Spending Plan Will Bankrupt United States

February 19, 2017 by EconMatters   Comments (0)

By EconMatters


We discuss giving more wasteful government defense contracts to private corporations, and lower taxes and the damage done to the growing and out of control National Debt in this video. Corporations are already paying a much lower effective tax rate, they need to be paying more taxes in my opinion. Especially given the mergers and acquisitions that the government has let go over the last 30 years which creates massive system and sector monopolies and oligopolies that lead to non competitive industries, and is ultimately bad for competitive market environments and consumers.

First of all, the President of the United States should not be cozying up to any CEOs or Corporations this just leads to massive conflicts of Interests, shoot several Corporations have made me sign massive Anti-Bribery Documentation Agreements to avoid this very type of conflict of interest. This is just bizarre theatre under the guise of Job Creation. But we need to downsize all Military Spending given our unsustainable National Debt profile, the interest portion of servicing this National Debt is very troubling for the future economic health of the United States.

Sure Donald Trump might get a short-term, and I mean very short-term jump in GDP with deficit spending programs, but any increase in Military Spending with an already out of control government expenditure of the overall budget on this category is just pure stupid fiscal policy. And to lower Corporate Taxes at the same time as raising Defense Spending and government spending overall is just more "short-termism" government policy that has dire consequences down the line in just two years time for our federal deficit, national debt, interest on the debt and economic prosperity.

Donald Trump we don`t need the Boeing or Lockheed Jet program, we need to cut defense spending given what waste and inefficiencies there are already are in this budget expenditure. The overkill factor alone regarding what the United States spends on the Military versus all of our nearest competitors combined is mind-numbing economic stupidity at its finest. No wonder we cannot balance our budget, pay our bills, and have an unsustainable 20 Trillion Dollars in National Debt. The Rate of Change on the National Debt is just beyond alarming, going from 8 Trillion to 20 Trillion in ten years. Let me restate this: Going from 8 Trillion to 20 Trillion in ten years.

Deficit Spending and Increasing Military Spending is great if somebody else is footing the bill, this money ultimately comes from you and me in the form of higher taxes. Sure you can lower Corporate Taxes, but this is only temporary, because everyone`s taxes including Corporations will just be raised higher in the future (Another 2 years) because of unsound financial policy and our Blow Out National Debt, and Higher Debt Servicing Costs. This is not Rocket Science, this is basic 6th grade Math here. This isn`t a political statement, a Democratic or Republican issue, this is a Taxpayer and American Financial Advisor issue.

You don`t get something for nothing, and given the Rate of Change of our National Debt this country cannot afford Corporate Tax cuts period, A Massive Infrastructure Spending Program, or A Costly Deregulation Program that all over the next four years lead to increased government spending, increasing our National Debt, and ultimately bankrupting the United States.

I know this wasn't what the country wants to hear because citizens want to think there is a magic solution to all these problems with Voodoo economics, but remember Bush`s statement: "Read My Lips: no new taxes" lowering Corporate taxes will backfire bigtime on Republicans and the Economic future of the United States. This just means taxes will have to be raised by the next administration, probably in two years to address growing budgetary imbalances. Surely, the Republicans in Congress are not this stupid, Donald Trump`s Tax Policy is economic suicide. Most Corporations pay much lower effective tax rates, it is part of the reason we cannot pay our current budgetary bills. You cannot get something for nothing, and somebody always has to pay! You can lower Corporate Taxes, You can lower Individual Taxes, but somebody still has to pay for any budgetary gaps, and our growing National Debt. And that usually means higher future taxes to play catchup to unsound fiscal budgetary policy.

This is why Bush had to raise taxes. You Republicans should be smarter than this, to fall for this trap: You Don't Get Something For Nothing! Somebody Has To Pay! Moreover, Donald Trump sure didn`t want to pay his fair share of government taxes the last 18 years, this just means somebody else did! Guess who? It is always easy to Deficit Spend Somebody Else`s Money Donald Trump!! And keep in mind I am a-political; I am not coming at this National Debt problem with a political axe to grind: we just are a pretty unsound fiscally run country right now, and headed in the wrong direction at an alarming rate of speed.

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