Friday , October 18 2019
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The author Wolf Richter
Wolf Richter
Founder, Wolf Street Corp. In his cynical, tongue-in-cheek manner, he muses on WOLF STREET about economic, business, and financial issues, Wall Street shenanigans, complex entanglements, and other things, debacles, and opportunities that catch his eye in the US, Europe, Japan, and occasionally China.

Wolf Street

There Are a Couple of Things Not Coming Together Here

I Get it: Stock-Market Shorts Sit on Sideline, Fearing Rally. Investors Deleverage, Fearing Sell-Off. VIX Falls Asleep, Fearing Nothing. Of the total shares outstanding of the SPDR S&P 500 ETF, only 2.6% were out on loan to short sellers this week, the lowest since early October 2018, and down from 7% during the summer, according to IHS Markit data cited by Bloomberg. Meaning that short-sellers who want to short the entire market, and not specific companies, are worried that the...

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Housing Bubble in Silicon Valley & San Francisco Bay Area Turns to Bust Despite Low Mortgage Rates & Startup Millionaires

Ironically, house prices dropped the most in Silicon Valley. In the nine-county San Francisco Bay Area, house prices – as measured by the median price where half of the houses sold for more and half sold for less – dropped 5.4% in September compared to September last year, to $880,000, according to the final data by the California Association of Realtors (C.A.R.) released today. It was the eighth month in a row of year-over-year declines. The median price in September was down 16.2%...

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Braindead or Willfully Manipulative? How the Media Reported Retail Sales

Like a centrally directed disinformation campaign. Here’s what happened. And it was everywhere. Misleading headlines about retail sales, from which reporters then extrapolated silly conclusions about the consumer while clamoring for a rate cut from the Fed. Barron’s: “The American consumer – backed by strong wage growth – has offset weakness in corporate profits and capital spending for much of the past year. The Commerce Department’s latest update of retail and food service...

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Why Banks Didn’t Lend to the Repo Market When Rates Blew Out: JPMorgan CEO Dimon

“Does that mean that we have bad markets?” This still doesn’t show who or what triggered the fire in the repo market in mid-September when overnight lending rates more than quadrupled and briefly hit 10%, but it confirms who sat there and watched the fire and fanned it though they could have extinguished it. During the earnings call today, JPMorgan Chase CEO Jamie Dimon told analysts that the bank had $120 billion in cash on deposit at the Fed in the morning of those days, and that...

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JP Morgan Chase, BofA, Citi, Barclays, Deutsche Bank, BBVA, Santander Accused of Rigging Government Bond Auctions in Mexico. Bank of Mexico Implicated

Collusion and “absolute monopoly practices.” By Nick Corbishley, for WOLF STREET: Mexico’s antitrust agency Cofece has accused the domestic subsidiaries of JP Morgan Chase, Bank of America, Citigroup, Barclays, Deutsche Bank  Santander, and BBVA of colluding to rig Mexican bond prices, in particular treasury notes, over a ten-year period. Following a three-year investigation, Cofece on Monday declared that it had notified “various economic agents” of their likely involvement in a...

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Dual-Track Economy: Slowdown in Industrial Sectors Hits Truckers & Railroads. But Consumers Are Still Buying Stuff

The hangover after the tariff-front-run boom last year. Freight shipments by all modes of transportation – truck, rail, air, and barge – within the US fell 3.4% in September 2019, compared to September last year, according to the Cass Freight Index for Shipments. For the index – which tracks shipment volume of consumer and industrial goods but not of bulk commodities – it was the 10th month in a row of relentless year-over-year declines: The stacked chart below shows how shipments in...

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The WOLF STREET Beer Mugs Are Here

Dear Friends and Readers: Still, in this chaotic world there are some things that are just for fun, including the WOLF STREET beer mug. It has arrived. “Nothing Goes to Heck in a Straight Line,” it says on one side of the wrap-around design, with a funny wolf – that would be me – doing the talking on the other side. Pour in some liquidity, such as a “Repo IPA” or as has been suggested in the comments, a “QE Lite,” and you’re ready to relax with a laugh at my expense: The art is by...

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Without the Outliers, Inflation Is Running Hot. Fed Has Started Mentioning these Measures in the Minutes

Cleveland Fed’s Underlying Inflation Measure Hits 3.0%, Hottest in the Data. “Soft inflation?” The inflation measure by the Cleveland Fed — the “Median CPI,” which is based on Consumer Price Index data but removes the outliers in the data to reveal underlying inflation trends — jumped 3.0% for September, the highest in the data series going back to the Financial Crisis, when this measure was launched. By comparison, “core CPI,” which removes food and energy prices, hit 2.4% in August...

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Will Social Security Be There for You? Status of the Social Security Trust Fund in Fiscal 2019

“Don’t rely on Social Security”: Inflation adjustments are punitively low, and benefits become more inadequate as you age. The  Old-Age and Survivors Insurance (OASI) Trust Fund – which does not include the Disability Insurance (DI) Trust Fund – closed the fiscal year 2019 at the end of September with a balance of $2.80 trillion, according to figures released by the Social Security Administration. This balance was up by $3 billion from September last year, but was down $16 billion from...

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Just Weeks After the Collapse of Thomas Cook, Spain Launches First Bailout of its Huge Tourism Industry

“An unforeseen crisis.” Other headwinds intensify too. By Nick Corbishley, for WOLF STREET: Less than a month after the collapse of Thomas Cook, the global travel & vacation-giant and airline operator, the Spanish government has unveiled an €800 million taxpayer-funded bailout of its all-important tourism industry. During the presentation of the new 13-point royal decree, Spain’s vice-president Carmen Calvo described the measures as a “reasonable response to an unforeseen crisis” —...

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