November 16: Daily Contrarian Reads

Wall Street Dirty Secret: The Only Net Buyer of Stock Since 2008 Has Been Corporate Buybacks

Ever since 2012 (see "How The Fed's Visible Hand Is Forcing Corporate Cash Mismanagement")  we have warned that as a result of the Fed's flawed monetary policy and record low rates, corporations have been incentivized not to invest in growth and allocate funds to capital spending (the result has been an unprecedented decline in capex), but to engage in the quickest, and most effective - if only in the short run - shareholder friendly actions possible, namely stock buybacks. We got a vivid confirmation of that recently when Credit Suisse showed that the only buyer of stock since the financial crisis has been the corporate sector', i.e. companies repurchasing their own shares.

A Warning To Trump---Rein In The Rogue Royal Of Riyadh

If the crown prince of Saudi Arabia has in mind a war with Iran, President Trump should disabuse his royal highness of any notion that America would be doing his fighting for him. Mohammed bin Salman, or MBS, the 32-year-old son of the aging and ailing King Salman, is making too many enemies for his own good, or for ours.

Auto-Loan Subprime Blows Up Lehman-Moment-Like

Of the $1.2 trillion in auto loans outstanding, $282 billion (24%) were granted to borrowers with a subprime credit score (below 620)......But delinquencies are concentrated in the subprime segment – that $282 billion – and all hell is breaking lose there.

The Bubble Predator Strikes Again---Amazon Announces Second Round of Deep Grocery Price Cuts

Three months after Amazon slashed some Whole Foods prices by as much as 43% on the day its purchase of the grocery chain closed in its first (of many) attempts to steal market share from competitors by selling at a loss, today Amazon announced round 2 of the grocer wars, when it unveiled even more discounts on several grocery products at Whole Foods, just days ahead of the Thanksgiving holiday, sending stocks of rival ultra-low margin grocers tumbling.

Stocks Are Flashing An Ominous Signal Not Seen Since The Financial Crisis---The Hindenburg Meets the Titanic

All is not well beneath the surface of the stock market. Market dislocations are running rampant, suggesting turbulence ahead that could go well beyond the modest weakness that major indexes have seen over the past two weeks. And to make matters worse, some of the market's most ominous technical indicators are flashing serious warning signals. John Hussman, the president of the Hussman Investment Trust and a former economics professor, is particularly concerned about the growing dispersion of stock market returns.

Why The Tesla Bubble Is Fixing To Blow

The ongoing vendetta between the scourge of Enron, Jim Chanos, and Elon Musk escalated when the Kynikos Associates founder said he has been adding to his Tesla short position throughout the year even as the company’s shares soared to record highs. Speaking at the Reuters Global Investment 2018 Outlook Summit, Chanos - who first disclosed his TSLA short last May - said that he expected Elon Musk to step down from his position by 2020 to focus on his private rocket ship company SpaceX as competitors such as BMW and Porsche expand their lines of luxury electric vehicles.

How Washington And Its Allies Set Out To Destroy Syria

There are 22 members of the Arab League, 21 of which are clients of the US. Syria is the remaining Arab state whose allegiances lie elsewhere.  Syria is a client state of Russia and Iran is their only ally. The US want Syria’s army to be US trained, the Qatari pipeline to go through Syria. The Syrian conflict has never been about democracy, or human rights. It has always been about Assad’s relationship with Iran. In the first of this two-part series, we examine the media myths in relation to Syria, and the extent to which corporate media-state power continues to demonise the country’s president through propaganda.

Why Retail Sales Are Not "Strong"

There just isn’t a level of weak consumer spending that won’t be described in the most glowing terms. In modern logic, it’s a fallacy in the cult-like obedience to authority, in this case monetary officials at whatever central bank. So long as they continue to raise rates, as in the Fed’s case, and proclaim the economy strong all the data is immediately colored in the mainstream by those terms alone; rather than the data performing as necessary evidence to validate, or deny, the official subjective opinion.

Cradles of Capitalism: The City-States of Greece and Italy

The wool trade, salt, silks, olive oil, all flourished during this time and the phenomenon of the modern-day entrepreneur came on the scene, emerging out the guild-run craft economies of the Middle Ages. Where city-states flourished, the modernization of the general economy followed: the mobility of labor improved, jurisdictional sovereignty was codified in law, transportation systems were founded, and the division of labor expanded. Close to 500 years later, a newly unified Italy would be without leadership once more and the country would only begin to industrialize at the turn of the 20th century.

The 1 and 50 Rule---Richest 1% Own 50% of World's Wealth, The Poorest 50% Own 1%

The world's richest 1% of families and individuals hold over half of global wealth, according to a new report from Credit Suisse. The report suggests inequality is still worsening some eight years after the worst global recession in decades......The bottom half of adults collectively own less than 1% of total wealth, the richest decile (top 10% of adults) owns 88% of global assets, and the top percentile alone accounts for half of total household wealth," the credit Suisse report said.

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