Financial Markets and Economy
Fitch reveals the $2 trillion black hole in China's economy that heralds a lost decade (The Telegraph)
Bad debts in the Chinese banking system are ten times higher than officially admitted, and rescue costs could reach a third of GDP within two years if the authorities let the crisis fester, Fitch Ratings has warned.
Oil Firm Spending Seen Up in 2017 for First Time Since 2014 (Bloomberg)
The oil industry may be ready to open its wallet after two years of slashing investments.
Companies will spend 2.5 percent more on capital expenditure next year than they did this year, the first yearly growth in such spending since 2014, BMI Research said in a Sept. 22 report.
Hard to swallow: emerging markets get tougher for drugmakers (Reuters)
Emerging markets have lost their luster for Big Pharma making drug firms ever more dependent on the United States for growth just as American anger over high medicine prices is building.
Airbus Chief Warns Workforce That Cuts ‘Won’t Be Negligible’ (Bloomberg)
Airbus Group SE’s plan to cut costs and streamline operations will have a significant impact on the aerospace group’s headcount, Chief Executive Officer Tom Enders has warned in a letter to employees.
The Real Goal Behind Next Week's OPEC-Russia Meeting (Money Morning)
For the last few days, oil prices have been trading in a very narrow range between $42 and $45 a barrel. They won't be staying there for long.
You see, there are two factors keeping prices locked in that range. One is short term, here in the United States.
Central London's Prime Real Estate Prices To Drop By 9% (Forbes)
Analysts at global real estate companies Savills and Knight Frank believe that the combined effect of the uncertainty caused by the UK’s decision to leave the European Union, coupled with previous reforms to Stamp Duty Land Tax, which significantly increased the overall burden on real estate costing more than £1 million and on secondary residences in all price ranges, are taking a toll on the market.
Here’s How We Know The Census Bureau Report On Household Income Is Bogus (The Wall Street Examiner)
The US Government publishes lots and lots of economic data, much of it conflicting, and much that’s highly suspicious. We know that the Household Income data released this week was suspicious, but I could not quite figure out what the problem was.
Why Falling Employee Tenure Could Be Good News About the U.S. Economy (The Wall Street Journal)
Americans are accumulating less seniority in their workplaces—and that could be good news about the health of the U.S. labor market. Median employee tenure, the length of time a worker has been with his or her current employer, was 4.2 years in January, the Labor Department said Thursday.
30% of U.S. Refining Assets Are Owned by Foreign Companies, and Saudi Is Buying More (INO.com, EconMatters)
A recent article noted that Saudi Arabia Is Buying Up America's Oil Assets. Saudi Aramco is buying U.S. refining and petrochemical assets as well as energy and technology companies through its Saudi Aramco Energy Ventures LLC fund.
The "Wealth Effect" Didn't Die: It Was Never A Valid Concept No Matter How High Stocks Go (Alhambra Investment Partners)
Over the years, the “wealth effect” has been taken as a core component of monetary policy. Central bankers will not admit it, of course, but particularly stock prices are a central element of their strategy.
How Janet Yellen Rationalizes The Most Pervasive Financial Bubble In History (The Felder Report)
Janet Yellen has obviously read Kahneman’s work. That’s the only way I can think of to explain what she said about “asset values” yesterday. She hopes that if the Fed, probably the greatest “authoritarian institution” on the planet today, says it enough then people will just take it as fact.
How Singapore Beat New Zealand to Be Expats’ Top Place to Live (Bloomberg)
The city-state beat New Zealand to rank first in a survey of expat destinations for the second year running. Among nearly 27,000 expats in 190 economies, Singapore is the best place to live, work and raise a family abroad, according to the latest and ninth edition of HSBC Holdings Plc’s annual Expat Explorer report.
Backlash Against Trade Deals: The End of U.S.-Led Economic Globalisation? (The Frontline, Naked Capitalism)
There is much angst in the Northern financial media about how the era of globalisation led actively by the United States may well be coming to an end.
Horseman Capital Reveals The "Best Short In The World At The Moment" (Zero Hedge)
When Japan's PM Shinzo Abe spoke at the Reuters Newsmaker event yesterday, one prominent hedge fund manager was present: Third Point's Dan Loeb.
GDP Estimates in Free-Fall: FRBNY Nowcast 2.26% for 3rd Quarter, 1.22% for 4th Quarter (MishTalk)
GDP estimates for third and fourth quarter are now in a free-fall.
Last Friday the FRBNY Nowcast was in a blackout period because of the FOMC meeting on Wednesday.
How the Fed dots have been pruned over time (Robin Wigglesworth)
Why the Coming Wave of Defaults Will Be Devastating (Of Two Minds)
In an economy based on borrowing, i.e. credit a.k.a. debt, loan defaults and deleveraging (reducing leverage and debt loads) matter.
Monte Paschi Rescue On The Rocks: Regulators Now "Expect Bank To Ask Italy For Bailout" (Zero Hedge)
Ever since two months ago, when Italy's third largest bank – and the world's oldest – Sienna's Monte dei Paschi, failed Europe's latest stress test, it had scrambled, and assured markets, that it would obtain a private sector cash injection, aka bailout, amounting to roughly €5 billion in fresh capital, there was significant speculation in the Italian press that the capital raise was not going well as third party investors were uncomfortable to allocate funds to a bank whose history of failure and unprecedented bad NPL book remained a daunting obstacle.
Companies
Japan's most powerful advertising company is facing a huge over-billing scandal (Business Insider)
Dentsu, Japan's most powerful advertising company is facing a huge over-billing scandal that threatens to seriously damage its reputation in the country.
Apple Tax Case: Not the Rate, the Loopholes (True Economics)
As it says on the 'tin' – the problem with Apple Tax is not the rate of corporate taxation set in law in Ireland (the 12.5% 'red line' rate), and not tax competition, nor the benign nature of tax exemptions that Ireland bestows on all companies, including the MNCs.
Twitter Receives Analyst Downgrade, Thanks to Record Discontent Among Advertisers (Bloomberg)
Advertisers just aren't that into Twitter Inc.
That's the conclusion of RBC Capital Markets Analyst Mark Mahaney, who downgraded shares of the micro-blogging social media network to "underperform" and lowered his price target to $14, from $17.
Adidas and Under Armour are challenging Nike like never before (Business Insider)
Nike's competitors are gaining on the athletic apparel giant.
The brand is facing unprecedented headwinds spurred by Adidas and Under Armour making progress, according to analysts at Morgan Stanley.
I called the Wells Fargo ethics line and was fired (CNN Money)
Millions of phony accounts. Fake bank card PIN numbers. Fictitious email accounts.
Wells Fargo admitted to firing 5,300 employees for engaging in these shocking tactics. The bank earlier this month paid $185 million in penalties and has since apologized.
Hybrid: $90B Lawsuit filed By US Government Against Largest Producers Of Isocyanates (Hybrid Coating Technologies Inc., Globe News Wire)
SAN FRANCISCO, Sept. 22, 2016 (GLOBE NEWSWIRE) — Hybrid Coating Technologies Inc. (HCTI:OTC Pink:HCTI) announced today that the US government, represented by Kasowitz, Benson, Torres & Friedman LLP, has launched a $90 billion dollar False Claims Act (FCA) lawsuit against BASF Corporation, Bayer Material Science LLC, Dow Chemical Company and Huntsman International LLC.
EU Risks Billions in Sanctions as WTO Faults Airbus Support (Bloomberg)
The European Union failed to eliminate subsidies to planemaker Airbus Group SE that were previously found to violate trade rules, the World Trade Organization said in a ruling that opens the door to billions of dollars in sanctions against Brussels.
Marriott buys Starwood, becoming world's largest hotel chain (Associated Press)
Marriott International closed Friday morning on its $13 billion acquisition of Starwood Hotels & Resorts Worldwide, bringing together its Marriott, Courtyard and Ritz Carlton brands with Starwood's Sheraton, Westin, W and St. Regis properties.
Politics
Hillary Clinton Proposes 65% Top Rate for Estate Tax (The Wall Street Journal)
Democratic presidential candidate Hillary Clinton would levy a 65% tax on the largest estates and make it harder for wealthy people to pass appreciated assets to their heirs without paying taxes, expanding the list of tax increases she would impose on the top sliver of America’s affluent.
Why Do People Who Need Help From the Government Hate It So Much? (NY Times)
Arlie Hochschild’s generous but disconcerting look at the Tea Party presents a likable fellow named Lee Sherman, who once worked for a Louisiana chemical plant where his duties included illegally dumping toxic waste into the bayou.
Trump campaign chair in Ohio resigns over ‘no racism before Obama' remarks (The Guardian)
Donald Trump’s campaign chair in a crucial Ohio county has resigned after an interview with the Guardian in which she said there was no racism in America until the election of Barack Obama.
Trump wants to recreate New York’s unconstitutional, ineffective stop-and-frisk program (Vox)
One of Donald Trump’s latest proposals is to revive and expand the practice of stop and frisk, a now-defunct, ineffective, and unconstitutional New York City policy that once allowed officers to search any person they suspected of a minor crime — and was used disproportionately against black and Latino men.
Insiders clash over politics of terrorism (Politico)
Democrats are confident the rising salience of terrorism and police shootings of African-Americans this week will benefit Hillary Clinton. Republicans, meanwhile, believe overwhelmingly that Donald Trump will win the terrorism argument but are less confident that he'll react in a measured way to the recent protests in North Carolina.
Chris Christie Protected Culprit in Bridge Lane Closings, Agency Head Testifies (NY Times)
NEWARK — The acknowledged culprit behind the closing of traffic lanes leading to the George Washington Bridge in September 2013 was “protected by Chris Christie,” the executive director of the Port Authority of New York and New Jersey agreed during court testimony on Thursday.
Technology
Tesla will unveil its solar roof in October (Business Insider)
Tesla's solar roof is coming.
Tesla CEO Elon Musk said the company will unveil a solar roof October 28 in the San Francisco area. It will be integrated with the new version of Tesla's at-home battery, the Powerwall 2.0, and Tesla's charger.
'Array Of Things' Collects Facial Biometrics And License Plates Images (Mass Private I)
Argonne Labs and DHS are installing over 500 spying devices called the 'Array of Things' (AoT) throughout Chicago and plan to install them in cities across the country. Plans are in the works to replicate the project in the coming years in more than a dozen other cities.
Ray Kurzweil: We Can Control AI Before It Controls Us (Singularity Hub)
Over time, technology offers solutions to old problems while creating new issues in the process. The more powerful the technology, the greater its potential to do good and harm. Artificial intelligence is no exception, and as AI has advanced, worry about its risks has grown too.
Samsung: Half of Note7 devices with exploding batteries have been exchanged (Mashable Asia)
Samsung's initial pleas for customers to stop using and return their Galaxy Note7 devices with faulty batteries weren't particularly fruitful, but now that the recall is official and replacement devices are arriving en masse, the plan is working.
AT&T wants to make every telephone pole an ultra-fast wireless hotspot (The Washington Post)
AT&T says it plans to start testing a technology next year that could ultimately blanket the country in ultra-fast wireless Internet — without the need for expensive cell towers.
The project, known as AirGig, promises speeds that are many hundreds of times faster than what consumers currently get with their mobile data connections.
Health and Biotech
The Fat Advantage (Scientific American)
Attendees at the 2015 Genitourinary Cancers Symposium in Orlando, Florida, were presented with a head scratcher. At a poster session on renal cancer, a team at the Dana-Farber Cancer Institute in Boston, Massachusetts, led by Laurence Albiges, now at Gustave Roussy near Paris, presented its findings from a study of 4,657 individuals with metastatic kidney.
Why the Father of Modern Statistics Didn’t Believe Smoking Caused Cancer (Priceonomics)
In the summer of 1957, Ronald Fisher, one of the fathers of modern statistics, sat down to write a strongly worded letter in defense of tobacco.
Life on the Home Planet
Climate Change Threatens World’s Coffee Supply, Report Says (NY Times)
A report examining the many ways climate change threatens coffee and coffee farmers has alarmed people who are now imagining what it would be like getting through the day without their caffeine fix.
Puerto Rico Blackout Enters Second Day – Entire Island Of 3.5 Million People Without Power (Zero Hedge)
The 3.5 million people of Puerto Rico are entering their second day with no power after a substation fire knocked out service to the entire island. The power outage has left schools scrambling to cancel classes and public hospitals forced to cancel surgeries.
Fiercest airstrikes yet on Aleppo after Syria declares offensive (Reuters)
Warplanes launched some of the heaviest air strikes yet on rebel-held areas of Aleppo on Friday after the Russian-backed Syrian army declared an offensive to fully capture Syria's biggest city, killing off any hope of reviving a ceasefire.
Riots in Charlotte Over Shooting: N.C. Governor Declares State of Emergency; Why So Many Bad Cops? (MishTalk)
Today, in Charlotte North Carolina, riots are underway for the second day. Governor Pat McCrory declared a State of Emergency and deployed the National Guard to ‘assist local law enforcement’.
Bomb kills three Thai police officers in southern ambush (Reuters)
Three Thai policemen were killed and two wounded on Friday in a bomb and gun attack in the southern province of Yala where Muslim separatists have been waging a simmering insurgency against the state.
