Ron Paul: “How Stable Can The System Be, If It’s Threatened By Fed Transparency”

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Fire The Fed?

President Trump’s frustration with the Federal Reserve’s (minuscule) interest rate increases that he blames for the downturn in the stock market has reportedly led him to inquire if he has the authority to remove Fed Chairman Jerome Powell. Chairman Powell has stated that he would not comply with a presidential request for his resignation, meaning President Trump would have to fire Powell if Trump was serious about removing him. read more

Nomura: Stocks Begin Their Re-Correction; Watch Out Below 2,600

Has Nomura’s cross-asset strategist, Charlie McElligott done it again: after calling the market’s last two inflection points, did he time the latest market mini peak to the day?

Readers will recall that one week ago, when sharing his tactical perspective for the immediate future, Nomura’s strategist – referring to the bank’s Sep 2018-Jan 19 S&P “comp” to the Oct 2007-Oct 08 analog…

… predicted that Friday could mark a “local high” in the SPX before resumption of a -5% selloff over the 9 sessions thereafter, before then commencing another extended rally thereafter (see day count table below) read more

‘Hedge Fund Hotel’ Arconic Crashes 25% As Sale Plan Abandoned

Widely-held by hedge funds (e.g. Elliott Mgmnt with 52mm shares), aerospace company Arconic has decided to no longer pursue a potential sale of the company. The shares are down over 25% pre-market

What changed in 4 days?

Jan.18: Arconic Hopes to Finalize Sale to Apollo This Weekend: NY Post

  • Apollo Global Management is nearing a deal to buy aluminum giant Arconic in a deal valued at roughly $22 a share, or $10.6 billion, The Post has learned.

Jan 22: Arconic no longer pursuing sale of company read more

Tesla’s Customer Service E-Mail Address Implodes, Returning “Mailbox Full” Errors

For Tesla, production hell wound up turning into delivery hell. And now delivery hell may very well be turning into customer service hell.

After Friday’s announcement that the company would be laying off 7% of its staff and cutting its guidance, skeptics started to ask the question of how the company was going to continue to run its business with what already felt like a bare bones staff.

Current owners are about to experience what it’s like to have zero customer support. All $TSLA cost centers are in service/repair, the opposite of every other auto co., because of terrible initial product quality. https://t.co/1JJaYGDkRi read more

It’s A “Sea Of Red” As Global Stocks, S&P Futures Tumble

Monday’s selloff, which spared the US cash market which was closed for MLK day, has stretched for a second day, with US traders walking in to a sea of red in Asian and European markets, while S&P futures are down over 20 points following a pessimistic economic assessment by the IMF, renewed trade concerns after the US submitted a formal request to extradite the Huawei CFO from China and “very poor” results from UBS.

The appetite for risk is exceptionally low,” Ajay Kapur, head of Asia-Pacific and global emerging market strategy at Bank of America Merrill Lynch, told Bloomberg Television. “Most of the time, when you buy when sentiment is this depressed, you tend to make money,” unless there’s a recession, he said. “If you’re confident there will be no recession in the next year or so, I think this is a good indicator.” read more

Overnight Clashes Follow Venezuelan Officers’ Failed Attempt To Lead Anti-Maduro Coup

Venezuela remains on edge after in the pre-dawn hours of Monday morning a small group of soldiers attempted to launch a military coup against the Maduro regime, but failed, resulting in the arrests of 25 members of the Venezuelan National Guard who temporarily gained control of a police station located a short distance from the presidential palace in Caracas, and the apprehension of two others at another location, in total 27 detained  all of which sparked riots in local neighborhoods, some of which appear to have continued throughout the night.  read more

UBS Tumbles On “Very Poor” Results As Clients Pull $13 Billion

The parade of weak bank earnings continued on Tuesday when UBS, one of the first major European banks to report, announced that it had missed analysts’ profit estimates (though it did record a rise in full-year profits) due to outflows from its key global wealth management division.

UBS

Here’s a summary of its earnings report courtesy of Bloomberg:

  • UBS reports $7.9b in net new money outflows in global wealth management in 4Q, while asset management business saw outflows of $4.9b.
  • UBS says seen some normalization in markets in early 2019
  • Expects 1Q client activity affected by volatility, geopolitics, trade disputes
  • Market volatility remains muted, which is less conducive to client activity
  • 2018 dividend CHF0.70/shr
  • Targets to buy back $1b worth of shares in 2019 vs CHF750m in 2018
  • 4Q adj. pretax profit (excl. litigation costs) $1.01b vs company- compiled est. $1.04b
  • Global wealth management adj. pretax $912m vs est. $943m
  • Investment bank adj. pretax $30m vs est. $229m
  • Challenging markets affected equities, corporate client solutions revenues
  • 4Q adj. cost/income ratio 97%
  • Personal & corporate banking adj. pretax $375m vs est. $397m
  • Asset management adj. pretax $134m vs est. $119m
  • Investment bank adj. pre-tax profit $30 million vs $229 million company compiled est.
  • 4Q net $696m vs est. $729m
  • End-Dec. CET1 capital ratio 13.1%; CET1 leverage ratio 3.8%

The bank’s net profit attributable to shareholders for 2018 was $4.897 billion, compared with $969 million in 2017. That’s compared with a Reuters estimate of $4.906 billion. The bank warned about further weakness in its wealth management unit as it expects investors will continue to pull money out due to rising protectionism, increased market volatility and geopolitical tensions. Withdrawals at the bank’s global wealth management unit totaled almost $8 billion in Q4, while another $5 billion flowed out of it asset-management business. read more

China Threatens Retaliation As US Confirms Plan To Extradite Huawei CFO

Despite China’s demands that the US government use the shutdown as an excuse not to make a formal extradition request for Huawei CFO Meng Wanzhou, DOJ officials have reportedly told a Canadian diplomat that the DOJ will submit its formal extradition request by the Jan. 30 deadline (the US has 60 days from the day of Meng’s arrest in Vancouver to formally ask for extradition).

The news, which was first published Tuesday by Canadian newspaper Globe and Mail, sent the offshore yuan lower as Chinese officials accused the US of “abusing” the extradition system in the Meng case. According to the report, David MacNaughton, Canada’s ambassador to the US, met with senior White House and State Department officials about the Meng case. read more

Anti-Trump Frenzy Threatens To End Superpower Diplomacy

Authored by Stephen Cohen via The Nation,

Baseless Russiagate allegations continue to risk war with Russia…

The New Year has brought a torrent of ever-more-frenzied allegations that President Donald Trump has long had a conspiratorial relationship – why mince words and call it “collusion”? – with Kremlin leader Vladimir Putin.

Why the frenzy now? Perhaps because Russiagate promoters in high places are concerned that special counsel Robert Mueller will not produce the hoped-for “bombshell” to end Trump’s presidency. Certainly, New York Times columnist David Leonhardt seems worried, demanding, “The president must go,” his drop line exhorting, “What are we waiting for?” (In some countries, articles like his, and there are very many, would be read as calling for a coup.) Perhaps to incite Democrats who have now taken control of House investigative committees. Perhaps simply because Russiagate has become a political-media cult that no facts, or any lack of evidence, can dissuade or diminish. read more

Caterers At UK Airports Are Stockpiling In-Flight Meals To Prepare For ‘No Deal’ Brexit

In the days after the UK’s chaotic no-deal Brexit, as companies scramble to re-engineer supply chains to account for time-consuming customs checks on goods entering the country from the EU, air travelers leaving the UK (passport in hand) can rest assured that, even if their flights linger on the runway for hours, at least they will have a tasty in-flight meal to enjoy as they lash out at Theresa May and her government on Twitter.

That’s because the world’s biggest caterer of airplane meals, snacks and beverages has already stockpiled enough supplies to last about ten days in a warehouse in Peterborough, England, Bloomberg reports. read more