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Cryptocurrency Hedge Fund Returns 2,129% YTD

August 22, 2017 Tyler Durden 0

We’ll preface this post by saying we have never heard of the Alternative Money Fund – which “Specializes in Returning Freedom and Value” – and very well may never hear of it again, however it is notable for two things: i) it is a “hedge fund” invested …

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A coal country dispute over an alleged Trump promise unmet

August 22, 2017 Energy 0

The Trump administration has declined to pursue an order coal executives sought from the president this summer.The post A coal country dispute over an alleged Trump promise unmet appeared first on NASDAQ.
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EUR/USD: ‘Buy The Rumor, Sell The Fact’ Into Jackson Hole – ING

August 22, 2017 Yohay Elam 0

There is a lot of hype ahead of the Jackson Hole Symposium. Will Draghi hint about QE or talk down the euro? What does Janet Yellen have in store for us? Here is the outlook from ING: Here is their view, courtesy of eFXnews: ING FX Strategy Research notes that given the Jackson Hole line-up, […]

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Trader Warns Jackson Hole’s “Hesitantly Optimistic” Chatter Will Be “Nothing But Buying Time”

August 22, 2017 Tyler Durden 0

Hawkish, dovish, hawkish, dovish? As many market participants suspect, this week’s Jackson Hole ‘retreat’ wil be a nothing-burger with perhaps a side-dish of temporary volatility as machines quibble over various words in headlines. Former fund manager Richard Breslow warns not to expect much

Via Bloomberg,

Expect to Hear Jackson Hole Is Great in August

At some level, I hope I’m wrong. This week would end up being far more interesting if we do indeed get some juicy policy announcement out of one, or, why not be greedy, two, of the big kahunas headlining Jackson Hole. But it’s unlikely and markets may well end up having to figure out what they want to do between now and autumn on their own.

As much as these folks love to talk, they probably have little intention of communicating.

What do we know?


The Fed doesn’t pre-commit. But has essentially done so on a taper announcement and commencement in the fall. Their best laid plans call for as benign a start to this process as possible. Whether Chair Yellen mentions it again is largely irrelevant. They want to do it and think they can. And they won’t if something untoward happens.


If her base case is transitory inflation and one more hike this year, this is neutral not hawkish. Or I should say uninformative. Their first priority is balance sheet and rates after. A hike requires waiting to see inflation numbers tick up. We’re going to know nothing new on this subject before the Aug. 31 release, at the earliest, of the PCE deflator.


President Draghi’s notion on timing of a taper has to be influenced by the German election. And that comes after the ECB’s September meeting. The Chancellor’s re-election is widely assumed. But peace and harmony within the Zone will be the order of the day until it is over. Periphery spreads are still tight but have begun to show signs of widening out. Another 10 basis points wider in the BTP to bund spread and things begin to look interesting.


The ECB has a much harder task than the Fed in pulling back stimulus due to the structure of the PSPP and use of the capital key. Confidently dismissing the process as harmless for markets is a luxury they can’t indulge in.

Of course, if the market “misinterprets” anything (translation – sells off), there are numerous officials willing and able to step into the breach and save the world with some clarifying “that’s not what he/she meant” remark. As Breslow concludes, we have all got rather used to it…

Unfortunately, there are the speeches and then the chit chats. With all of the winks, spins and low-downs we’ve come to expect. So, no matter what is said from the podium, expect to be treated to no end of assurances as to what they really meant.


In truth, they’re buying time, hesitantly optimistic and have a plan that sounds great in theory.

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Phoenix Police And FBI On “High Alert” Ahead Of Trump Rally Tonight

August 22, 2017 Tyler Durden 0

There is no shortage of controversies surrounding Trump’s appearance tonight in Phoenix that could turn what is supposed to be a peaceful political rally into complete chaos.  With Trump’s reaction to the Charlottesville tragedy still fresh in the minds of political activists on the left, there are expected to be as many protesters outside the Phoenix Convention Center as there are inside watching the President’s speech. Sprinkle on top of that the fact that Trump could comment on a potential pardon of Sheriff Joe Arpaio and/or blast Arizona Senators John McCain and Jeff Flake and you have all the ingredients of another national disaster in the making.

As The Hill points out, the Phoenix Police Department has planned for “maximum staffing” during Trump’s visit and the FBI and DHS are also coordinating on the event.

Political leaders and law enforcement officials in Arizona are on high alert ahead of President Trump’s campaign rally Tuesday night in Phoenix.


The big question is whether there will be more supporters of Trump inside the Phoenix Convention Center, which holds 29,000, or protestors outside.


Phoenix Police Chief Jeri Williams said in a statement that her force will have “maximum staffing during the visit.”


The department is “working 24/7 with our partners to ensure all of our resources are in place,” Williams said.


Stanton said the city is committed to keeping everyone inside and outside the arena safe.


“The Phoenix police is always professional and the FBI and Department of Homeland Security have been great about coordinating with local law enforcement,” former Arizona GOP chairman Robert Graham told The Hill.

Meanwhile, Phoenix Police Chief Jeri Williams offered the following warning to protesters:

“There is a distinct difference between voicing your first amendment rights and committing unlawful acts.  As always, free speech will be supported but criminal conduct will be immediately addressed.”


Of course, racial tensions arising from Charlottesville are only part of what makes tonight’s rally a recipe for disaster.  Some fear that Trump could use the occassion to announce that he’ll pardon Maricopa County’s controversial former Sheriff, Joe Arpaio, who was found guilty of racially profiling hispanics and sentenced to jail time.

The president has mused publicly about pardoning controversial former Maricopa County Sheriff Joe Arpaio, an early Trump supporter who was found guilty of racially profiling Latinos. Arpaio, who was prosecuted and convicted of racial profiling by former President Obama’s Justice Department, is a well-known and controversial figure in Phoenix.


Democrats are warning that a public pardon at a campaign rally would stoke racial tensions at a time when the nation is on edge.


Stanton said a pardon would “enflame emotions and further divide our nation,” while Rep. Ruben Gallego (D-Ariz.) said Arpaio “shouldn’t be let off the hook for his crimes” just so Trump can win “some bonus points with his most racist supporters.”


But some Republicans in the state believe Arpaio was railroaded by the Obama Justice Department and are eager to see his name cleared.


Rep. Andy Biggs (R-Ariz.) released a statement on Monday calling Arpaio’s conviction “the culmination of a political witch hunt by the Obama administration to sideline and destroy a formidable opponent.”


“Sheriff Arpaio has been a faithful servant of this nation for over six decades,” Biggs said. “He should be allowed to live out the rest of his days in peace and confidence that his efforts were not in vain.”



And then there is Trump’s growing fued with Arizona Senator Jeff Flake whose book “Conscience of a Conservative,” which argues that Republicans must reclaim the soul of their party from Trump, apparently didn’t sit well with the White House.

Speculation is rampant among political operatives in Arizona about whether Trump will meddle in the state’s 2018 primary, where Flake has attracted a primary challenger in state Sen. Kelli Ward (R), who will attend the rally — though not as a guest of Trump’s.


The president has not made an endorsement in Flake’s race but has tweeted support for Ward, a former state senator who is not viewed as a credible challenger by many establishment Republicans.


A super PAC supporting Ward’s bid has received a $300,000 donation from conservative mega-donor Robert Mercer and several operatives from a pro-Trump outside group have peeled off to work for her.

Great to see that Dr. Kelli Ward is running against Flake Jeff Flake, who is WEAK on borders, crime and a non-factor in Senate. He’s toxic!

— Donald J. Trump (@realDonaldTrump) August 17, 2017


Finally, of course, we all know how Trump feels about John McCain who cast the deciding vote to kill the Obamacare repeal bill just before the August recess.

The fireworks are set to start at 7pm local time…

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More Peak Shale: World’s Largest Miner Is Selling Its Shale Assets

August 22, 2017 Tyler Durden 0

Over the past several months, we have wondered if despite new all time high shale production, whether the US shale sector in the has peaked. Some of our recent thoughts can be found in the following articles:

The “peak shale” narrative got a boost in late July when one of the world’s most bearish hedge funds, Horseman Global, announced it was aggressively shorting shale companies on the thesis that funding is about to “run dry”, resulting in a sharp drop in production and with the lack of capex, would lead to another round of industry defaults (while sending the price of oil higher).

More evidence was revealed in the latest Baker Hughes data, which showed that both active Horizontal and Permian oil rigs had finally peaked and were now declining, while the number of oil rigs funded by Public junk bond deals had plateaued, suggesting little interest in future funding:

Fast forward to today when overnight, we got the clearest indication yet that the US shale sector may have indeed have peaked, when BHP Billiton – the world’s largest miner – said it was in talks with potential buyers of its U.S. shale assets, purchased during a frenzied $20 billion buying spree in 2011, just as the price of oil peaked.

“We’re talking to many parties and we’re hopeful” of completing a small number of trade sales to divest the onshore oil and gas division, Chief Executive Officer Andrew Mackenzie told Bloomberg Television Tuesday in an interview, adding that the moves on shale and potash aren’t the result of shareholder pressure. “We have been moving in this direction for some time” on shale.

As Bloomberg adds, BHP’s strategic pull-back by comes after new Chairman Ken MacKenzie, who starts his job next month, met more than a hundred investors in recent weeks in Australia, the U.S. and the U.K. in the wake of the campaign by some shareholders calling for reform.

BHP’s admission that there is no more upside for its shale assets, in their current form, is a victory for Elliott Singer’s ongoing activist campaign, which has been pushing for a disposition of these assets in a vocal activist campaign. According to Singer’s Elliott Management, strategic missteps by BHP’s leadership, including in the shale unit, have destroyed $40 billion in value; Elliott launched its public campaign seeking a range of reforms in April.

Admitting that Elliott is right, during a call with analysts, CEO Mackenzie said BHP’s 2011 shale deals had been too costly, poorly timed and the eighth-largest producer in U.S. shale didn’t deliver the expected returns. That said, if the company expected oil prices to rebound, or if the shale assets to become sufficient productive where they would generate positive returns, he would hardly have sold them. Which is why in the current configuration of prices and technology, at least one major player in the space has confirmed that shale’s euphoric days may be over.

This was confirmed by Macquarie Wealth Management Division Director Martin Lakos who said that BHP likely concluded the shale and Jansen assets were “not going to generate the returns that is going to make the grade,” although he added that “it’s most likely the Elliott activity has accelerated the shale sales process.”

BHP’s disposition of shale has been a long time coming:

Discussions among BHP shareholders have been dominated by concerns over shale and potash, according to Craig Evans, a portfolio manager at Tribeca Investments Partners Pty, which holds the producer’s shares. Tribeca and other investors have also pressed the case with BHP directly, he said.


“Elliott put the first balls in motion on this in calling them to task,” Evans said. “It’s no coincidence that we’re talking about those issues now.”


Investors including AMP Capital, Schroders Plc, Escala Partners and Sydney-based Tribeca have added to criticism of BHP, or offered support for some of Elliott’s proposals, in recent weeks. Elliott didn’t immediately respond to a request for comment on BHP’s decisions on shale and potash

Some believe that BHP timed its asset sale at just the right time: “BHP are going to get better value than they would have two years ago after the surge in crude oil price from last year’s 12-year low,” David Lennox, an analyst at Fat Prophets, said on Bloomberg TV. The company has “probably picked an opportune time because we’ve seen the oil price come up from a bottom,” he said.

Of course, a much bigger question is whether the potential buyer will agree, as any acquiror will be purchasing not on current or historical prices, but where they expect oil prices to go in the future. As such, the big wildcard is shale’s access to cheap funding, which for the past 3 years has been the only factor that mattered not only for the US oil industry, but also for OPEC, whose repeated attempts to push the price of oil higher has been foiled every single time thanks to record low junk debt yields and an investor base that will oversubscribe every single shale offering. Well, as we showed last month, that is now ending as bond investors have suddenly turned quite skittish, and the result is that US shale production has not only peaked but is once again declining. While it remains to be seen how the overall industry will respond, if indeed we have hit “peak shale”, OPEC’s long awaited moment of redemption may finally be here.

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