Category: ZeroHedge

Euro Breakup Contagion Risk Is Exploding

With existential elections looming, Sentix Euro Break-up Contagion Index – a market measure of the contagion risk from one or more countries leaving the euro area within the next 12 months period – has hit its post-2012 record recently…

As Sentix notes, the Eurocrisis is once again in the limelight. And this time the
drama consists of three main actors: Greece, Italy and France.

How
dangerous
this tendency for the cohesion of the eurozone could become is
a look at the index to the spreading risk, which has almost climbed to
the 50% mark – an all-time high!


h/t Constantin Gurdgiev

France and Italy both seeing Euro-exit odds rising…

The Eurozone has now developed many more breaking points than just Greece. Although it has now been somewhat calmer about Italy, the euro exit probability remains almost unchanged at 13.9%. Added to this is the strong rise in the probability of exit from France. This is now 8.4% – compared to 5.7% in January! An all-time high.


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America’s In A Drugged Stupor

Authored by Bill Bonner (Bonner & Partners) via Acting-Man.com,

Learning Machine

The Dow, the S&P 500, and the Nasdaq remain near record highs and are up about 10% since Election Day. Fed officials say they could raise interest rates “fairly soon.” Blah… blah… blah…

 

One of these days… sooner rather than later… as soon as the data permit…

 

The economy is a learning machine. So is a person. We’re not talking about the kind of faux “learning” you do in school. Much of that is negative – ideas, information, and skills that destroy or delay real learning. In fact, some people stay in school to avoid learning.

Learning can be painful, humbling, and hard. And only win-win deals teach you  anything useful. Economist Adam Smith described the process more than 250 years ago. Willing buyers and sellers discover what things are worth (what someone is willing to pay).

This information directs – like an “invisible hand” – investors, producers, and consumers. Result? More wealth (or, in other words, satisfaction). This learning metaphor is more useful than we thought: How do you learn? By trying. When do you try? When you have to.

 

Adam Smith’s famous tome…

 

Why does extreme poverty persist in Baltimore and other places? Because the feds pay people not to try – and not to learn. Why do rich kids often get nowhere in life? Because their parents give them money; they don’t have to figure things out for themselves. They spend; they don’t learn.

Why does the U.S. economy stagnate? Because fewer people are learning. The zombies don’t have to learn. The cronies learn the worst lesson of all: that crime pays.

 

Win-Lose Deals

Today, smart mommas want their babies to grow up to be Washington lawyers or Wall Street bankers or crony hacks. That’s where the stolen money is – and they know it. But that is not how an economy learns.

Those are win-lose deals forced onto people by regulations, legislation, and the fake-money system. Some people win; most people lose. Those who aren’t in on the larceny get stuck in lower-paying, lower-learning jobs.

They’re at the checkout counter at Sheetz gas stations in Virginia. Or clearing away trees from the power lines in Ohio. Or they have no work at all. Economist Nicholas Eberstadt at the American Enterprise Institute think tank:

Between 2000 and 2015, according to [government statistics office the Bureau of Economic Analysis], total paid hours of work in America increased by just 4% (as against a 35% increase for 1985-2000, the 15-year period immediately preceding this one). Over the 2000-2015 period, however, the adult civilian population rose by almost 18% – meaning that paid hours of work per adult civilian have plummeted by a shocking 12% thus far in our new American century.

What do you learn when they have no work to do? Not much. According to one study, unemployed adult Americans dedicate 2,000 hours to TV and the internet a year. You learn by satisfying demanding customers and impatient bosses; you learn nothing from watching TV or surfing the web.

 

Growth in hours of paid work may have slowed, but there’s evidently nothing wrong with hours of TV watched…  and look at this, they do actually learn something!

 

Drugged Stupor

But it could be worse. And it probably is. Our brother-in-law, a retired preacher, enlightened us.

“I couldn’t believe it. I’ve been telling everybody that we live way down here in the rural Virginia mountains and how nice everyone is. It’s just like The Andy Griffith Show. But then the police showed up and arrested everyone in the house down the road. They were running a drug business. They had more than $100,000 in cash. Imagine, here in Nelson County.”

According to the DEA, in 2015, more Americans died from drug overdoses than from traffic accidents or guns. Washington spends trillions of taxpayer dollars to stop terrorists. But that year, Americans were 3,096 times more likely to kill themselves by drug overdose or suicide than to die in a terrorist attack.

 

The modern breakfast that will keep you in a proper trance for most of the day – cube morphine, a handful of happy pills… best washed down with Bogg’s Tawny Cocaine Port, the well-known cure for drunks – to keep you from nodding off completely.  If you don’t work, you’ll have way too much time to think, but there are ways to ensure you’ll remain only semi-conscious. The colorful little helpers on the right are even paid for by Papa State (not to forget, the government promised to create new businesses, and apparently it is succeeding in this particular field, see below).

 

The president’s Council of Economic Advisers tells us that about half of all working-age Americans without jobs are on some form of drug – either prescription or illegal. Where do they get all these drugs? From the feds, of course. Eberstadt continues:

Of the entire un-working prime-age male Anglo population in 2013, nearly three-fifths (57%) were reportedly collecting disability benefits from one or more government disability program in 2013… As [Sam Quinones’ book] Dreamland explains:

 

[The Medicaid card] pays for medicine – whatever pills a doctor deems that the insured patient needs. Among those who receive Medicaid cards are people on state welfare or on a federal disability program known as SSI [Supplemental Security Income]. If you could get a prescription from a willing doctor, Medicaid health-insurance cards paid for that prescription every month. For a three-dollar Medicaid co-pay, therefore, addicts got pills priced at thousands of dollars, with the difference paid for by U.S. and state taxpayers. A user could turn around and sell those pills, obtained for that three-dollar co-pay, for as much as ten thousand dollars on the street.

How much can you learn when you’re in a drugged stupor? Probably not much.

 

Zombie Effect

Another place you can’t learn much is prison. The U.S. has about 5% of the world’s population. But according to the International Centre for Prison Studies, it has about 22% of the world’s prison population. America has more people behind bars than any other nation – about 2.3 million souls.

 

Worrisome statistics – US prisons are brimfull, both in absolute and relative terms – click to enlarge.

 

Shuffling around their cells, following orders… what do they learn? Fake money produces much the same prison-like zombie effect on the economy. It dulls the senses. It cushions the pain of failure. It lulls people into not trying.

Where’s the real learning done in an economy? In new businesses. Those are the ones with the new ideas, new models, and new products. Each one is an experiment. If successful, they grow and hire people.

But the rate of new business formation in America has collapsed. It is now only about half of what it was in 1978. A recent World Bank study puts the US in 51st place for the ease of starting a business. That’s behind the Ivory Coast, Afghanistan, Ukraine… even France. By comparison, Canada ranks No. 2.

But there’s more to business than just starting one. The World Bank study also shows that the U.S. is still near the top in at least one category – “Getting Credit.”

Yes, when it comes to making fake money available to people who can’t afford to pay it back, the U.S. is still among the best.

 

An interesting batch of crony-indicators: the number of new jobs created by new businesses and the distribution of existing employment between large and small business establishments – click to enlarge.

 

But wait – the fake money flows to the big boys, not the start-ups. They use it to keep out entrepreneurs. And their revolving-door contacts in the regulatory agencies also help prevent competition. Learning is stifled.


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Q1 GDP Estimates Tumble: Goldman, Atlanta Fed Cut To 1.8%, JPM At 1.5%, Bank Of America Sees Only 1.3%

With the Fed telegraphing an imminent rate hike, one which together with the “tempered” Trump speech has once again unleashed the reflation trade, and sent the Dow Jones soaring above 21,000, it appears the Federal Reserve will be hiking in a quarter in which GDP comes in in the mid 1%-range.

The reason: while “soft data” – which is important to animal spirits if not actual economic output – continues to surge as shown most recently by today’s Manufacturing ISM survey, the “hard data”, that which actually matters to the economy, is still disappointing.

On Wednesday morning, this divergence was noticed by the Atlanta Fed, which after forecasting Q1 GDP as high as 3.4% one month ago, revised its forecast sharply lower and moments ago reported that its GDPNow model forecast for real GDP growth in the first quarter of 2017 is 1.8 percent on March 1, down from 2.5 percent on February 27. The forecast for first-quarter real personal consumption expenditures growth fell from 2.8 percent to 2.1 percent after this morning’s personal income and outlays release from the U.S. Bureau of Economic Analysis.

According to the “beancount” breakdown of details, this is what the Atlanta Fed sees as of this moment:

PCE contribution est. at 1.44%

  • Nonresidential equipment investment contribution est. at 0.50%
  • Nonresidential intellectual property products Investment contribution est. at 0.21%
  • Nonresidential structures investment contribution est. at 0.18%
  • Residential investment contribution est. at 0.54%
  • Government contribution est. at -0.10%
  • Net exports contribution est. at -0.47%
  • Change in inventory investment contribution est. at -0.52%

* * *

What crushed the Atlanta Fed’s recent exuberant optimism? Perhaps it was a similar cut to GDP forecasts unveiled earlier today by Goldman Sachs,  which now likewise expects Q1 GDP of 1.8%, down from 2.1% previously. The reason: disappointing data in both consumer spending and residential investment, to wit:

Personal income rose 0.4% (mom) in January, slightly above consensus expectations for a 0.3% rise. Nominal wage and salary incomes increased by 0.4% (mom), but real disposable personal income fell -0.2%. Consumer spending increased by 0.2% in nominal terms – below expectations – and fell 0.3% adjusted for inflation. The personal saving rate edged up to 5.5% from 5.4% previously. The core PCE price index (excluding food and energy) increased 0.30% month-over-month and rose to 1.74% year-over-year, rounding down to +1.7%. This result was very slightly below our expectations, reflecting a 3bp miss on the mom change and yesterday’s small downward revision to core PCE inflation for Q4. Headline PCE inflation firmed but also a touch less than expected, rising 0.43% mom and 1.89% yoy.

 

Construction spending edged down by 1.0% (mom) in January, against consensus expectations for an increase (+0.6%). January construction spending showed an increase in private residential investment (+0.5%) that was offset by softer public residential (-15.1%) and nonresidential (-4.7%) spending and flat private nonresidential building. Total public spending is now 9% lower than a year ago, driven by declines in public spending on residential construction (-16.3%) and infrastructure-related categories, including power (-28.8%), sewage and waste (-27.3%), transportation (-11.7%) and highways (-10.1%).

Goldman’s conclusion: “Following this morning’s data we have lowered our tracking estimate for Q1 GDP growth by three tenths to +1.8%, primarily due to weaker-than-expected real consumer spending for January.”

* * *

JPMorgan was not far behind, and the bank similarly cut its 1Q GDP forecast to 1.5% from 2.0%, tied to “weak” January real consumer spending, which declined 0.3% in the month, economist Michael Feroli wrote in in note.  He maintained his call for Fed’s next rate hike to come in May, with March meeting used to signal the move. “The market is clearly giving the Fed a free pass to hike two weeks from today. However, in doing so the Fed would be opening the door to possibly hiking as many as four times this year”; unlikely Yellen wants to go that route

* * *

And then there was Bank of America, which first cut its 1.8% GDP estimate coming into today to 1.4% following the poor consumer spending data, then took another 0.1% off the number after the plunge in construction spending.

Real consumption contracted 0.3% mom in January, missing consensus expectations of  -0.1% and our expectations of 0.1%. While retail sales were strong during the month, auto sales saw a large payback after reaching a cyclical high in December. Utilities consumption was also very weak amid above-average temperatures in the US. On balance, these data chopped 0.4pp from 1Q GDP tracking, bringing us down to 1.4%.

And then this:

Construction spending declined 1.0% mom in January, owing largely to a 5.0% plunge in public spending. Private spending was up 0.4% mom, as residential spending grew 0.5%. Meanwhile, private nonresidential spending was unchanged.  The disappointing January data nudged 1Q GDP tracking 0.1pp lower, leaving us at 1.3%. Meanwhile, the revisions did not move the needle for 4Q, which remains at 1.9%. Table 1 provides a breakout for the composition of growth, with changes to tracking highlighted.

Assuming the two banks (and their other peers who similarly have slashed their GDP forecasts), and the regional Fed are right, and Q1 GDP prints around 1.5%, this will be worst quarter since Q1-Q2 2016, when rate hike odds for the “data dependent” Fed were effectively non-existent, making one wonder just what data is the Fed looking at this time around?


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BELIEVE

Markets are forward looking indicators. Over the past 8 years, the market kept pricing in central bank rigging, rightly so. From the BOJ to the ECB to our Fed, central banks showed a keen willingness to boost asset prices since the financial crisis in 2008 — helping reflate equities and keep Humpty Dumpty together. What Trump is talking about is totally different — a return to American greatness, something that resonates with just about all Americans — because everyone loves a fairytale.

Whether he can pull it off or not is immaterial as of today. All people care about now is the future and how bright it looks. Gone are the dreary days of being beholden to Fed speeches, listening to ugly people in bad clothes discuss our future. These new plans that Trump has outlined paints a colorful picture of an American renaissance — high paying jobs for all, affordable healthcare, strong military, strong borders — peace.

At some point in life, you start figuring out mostly everything you knew was bullshit, smoke and mirrors, parlour tricks, a delightful game of three card monte until the end. People want to believe. Trump is a superb salesman, probably the best you’ve ever seen — because you don’t see him coming. At times he sounds off the cuff, petulant, and unrehearsed — drawing jeers from professional losers. That’s likely done with purpose. You don’t see him coming, a yet here he is worth $10b and President of the United States.

The market is the sum total of hope, the expectations of the masses, an endless parry betwixt by fear and greed.
Content originally generated at iBankCoin.com

 


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Mexican Peso Surges On Chatter Fed Will Rescue Currency From Trump’s Damage

After President Trump's plans for renegotiating NAFTA and building a border wall have monkeyhammered the Mexican Peso to record weakness, it appears Banxico has found a friend to help defend its currency – The Fed.

Bloomberg reports that, according to three people with knowledge of the discussions, Banxico is considering requesting swap line with Fed to ensure liquidity in peso trading should volatility jump.

And The peso is surging…

Swap lines, similar to those used in 2008-2009 financial crisis, are being considered in addition to other liquidity measures, the people said.

A fourth person said interest-rate swap auctions have been prepared in case Mexico needs to bolster bond market in future.

All four people declined to be named because they aren’t authorized to speak publicly about the matter.

Banxico Governor Agustin Carstens was scheduled to meet with Fed Chair Janet Yellen earlier this week, according to one of the people.

*  *  *

We wonder just what President Trump will make of the fact that Janet Yellen is 'helping' the Mexicans?


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SEC Freezes Accounts Of “Highly Suspicious” Traders Who Made $3.6 Million On Fortress Takeover

First, it was the leak of the massive Heinz-Unilever deal that may have scuttled the Warren Buffett-inspired transaction, now it appears that another recent megamerger was leaked 4 days ahead of the announcement. On Wednesday morning, the SEC froze brokerage accounts of several unnamed traders who made more than $3.6 million in profits by trading in the four days before the $3.3 billion takeover of Fortress Investment Group was announced by Japan’s SoftBank.

According to the FT, the traders placed “highly suspicious” orders for shares and contracts for difference, or CFDs, through Singapore-based Maybank Securities and a brokerage in London, R.J. O’Brien. Breaking the second cardinal rule of insider trading, i.e., never to buy stocks in bulk in the day ahead of the announcement (the first such rule is never to buy calls the before a deal is announced although the “insiders” did that too), all the trades through Maybank were made within a 24-hour period before the deal to buy the US-listed private equity firm was announced to the market; meanwhile trade through R.J. O’Brien took place between February 10 and 14, the day the deal was disclosed the SEC reported.

“The timing, size and profitability of these trades are highly suspicious,” the SEC said in a court filing asking for the freeze.

As the FT adds, the SEC is seeking a judgment to force the traders to disgorge the profits and pay a penalty. SoftBank’s offer for Fortress was a 30 per cent premium over the private equity firm’s closing share price that day. Also, as the SEC further notes, it appears that the rookie traders decided to really bring attention on themselves by also breaking Cardinal rule #1: a burst of option buying ahead of the deal. Just like in the case of the Unilever deal, which saw a surge in call option volume for both Unilever and Kraft Heinz ahead of the announcement…

…  the size of bets in the options market prior to the deal raised eyebrows in the US, leading several market experts to believe that information had been leaked ahead of the deal.

The volume of options trading in Fortress was more than eight times the normal level ahead of the deal’s public announcement. Specifically, customers of Maybank bought 950,000 shares in Fortress hours before the announcement, selling them the next morning for $1.7 million. R.J. O’Brien’s customers bought CFDs and shares in Fortress, which they sold on February 15 for $1.9 million, according to the SEC’s complaint seeking the freeze.

Also notable is how quickly the leak appears to have emerged: the Maybank clients began placing the trades on February 14, building up a $5 million position, 33 minutes after Fortress’s board of directors received an email with draft resolutions approving the deal, according to the SEC. Only two days before, there was “serious doubt” as to whether the deal would even go through, the SEC complaint said.

Discussions between SoftBank and Fortress had begun in December, and the two companies initially planned to finalise the deal over the weekend of February 10-12, putting it to a board vote at Fortress on February 12.  The R.J. O’Brien clients began buying CFDs on February 10, through an account with Merrill Lynch, just before that weekend. The only other time Maybank bought any Fortress stock through its account at UBS was in February 2016, when 10,000 shares were bought and later sold in April.

As the FT notes, the emergency court order obtained by the SEC on February 24 will prevent the traders from accessing any of those gains. As yet, the SEC said they do not know the identities of the traders, but said in the complaint they are “believed to be foreign traders trading through foreign accounts”.

In recent years, suspicious trading before deals has been under increased scrutiny by the SEC and regulators around the world after insider trading prosecutions in New York over the past decade exposed the extent of the crime. The SEC has yet to launch a probe into the far larger Unilever leak(s).


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Something’s Not Right

It all made sense earlier (to those attempting to write the narrative explaining why The Dow gapped open to 21,000) but the last couple of hours have seen an odd decoupling between the USD Index and bonds (and a recoupling of the USD Index and stocks). The question is – what happens next?

Who's right? Bonds or the dollar?

 

Gold is rising as the USD drops (no decoupling there)

 

And have stocks run their course?

 

Still with options buyers surging into S&P 2,600 strike calls for December, what could go wrong.


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Dramatic Aerial Footage Shows What The Oroville Dam Looks Like Now

Via Daniel Lang of SHTFPlan.com,

Earlier this month, we all heard the news that the Oroville Dam was damaged, and that thousands of residents living in its shadow would have to be evacuated. Fortunately the dam held, and the residents of Oroville were able to return to their homes. For the most part the story has since faded from the news. However, the damage remains.

When the crisis was at its peak, you may have heard about what specifically went wrong with the dam. The main spillway was damaged when the dam operators attempted to release some water to control the depth of Lake Oroville. Essentially, a crater unexpectedly emerged in the middle of the spillway, and when the water flowed through that hole, it eroded the soil beneath. So the dam operators decided to let the water flow over an emergency spillway instead. But as the emergency spillway began to erode as well, an evacuation order was issued.

But hearing that doesn’t really do it any justice. To really appreciate the magnitude of what occurred that day, you have to see it with your own eyes. And now you can.

On Monday the California Department of Water Resources stopped the flow of water down the spillway so that they could assess the damage. Here’s what they found:

I have a feeling that this isn’t going to be fixed for a long time.


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Uber’s CEO Wants You To Know He’s “Ashamed” Of Leaked Video Footage; Says He Needs To “Grow Up”

Last night, following the video leak of a combative exchange between Uber CEO Travis Kalanick and his driver over Uber’s fare structure, which culminated with Kalanick suggesting that his driver should “take responsibility for his own shit”, we asked: “So, where should we set the over/under on Kalanick’s remaining tenure with Uber?”

Fast forward less than 24 hours and it’s clear that Kalanick is feeling the pressure after sending an apology email to Uber staff saying that he’s “ashamed” of his comments and clearly needs to “grow up” and seek “leadership help.” Per the Financial Times:

“To say that I am ashamed is an extreme understatement,” Mr Kalanick said in an email to Uber staff.

 

“My job as your leader is to lead . . . and that starts with behaving in a way that makes us all proud. That is not what I did, and it cannot be explained away.”

 

He added: “It’s clear this video is a reflection of me and the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”

 

Mr Kalanick apologised to “the driver and rider community, and to the Uber team”.

Kalanick

 

Sure, because the best place to “grow up” and learn how to be a good “leader” is at the helm of a $60 billion company.

* * *

For those who missed it, here is what we wrote about Kalanick’s leaked video:

Earlier this month, on Superbowl Sunday, in fact, Uber CEO Travis Kalanick hopped into an Uber Black Car with two female companions for what he thought would be just another easy trip to the destination of his choice.  Unfortunately, this particular ride got a little more complicated than he had hoped when his driver, 37-year-old Fawzi Kamel, decided to confront him on Uber’s falling fares, which he alleged had cost him a total of $97,000 and forced him into bankruptcy.  After the ride, Kamel rated Kalanick at 1-star and submitted his recorded conversation with the confrontational CEO to Bloomberg

The first 3 minutes and 50 seconds of the video is nothing more than a series of awkward exchanges between Kalanick and his special lady friends along with a series of random body gyrations to the tune of Maroon 5’s “Don’t Wanna Know”. 

That said, things start to heat up when one of the young ladies implies that Uber is having a rough year financially (she must be a reader).  Of course, Kalanick responds by implying that burning hundreds of millions of dollars annually is all part of his master plan:

“I make sure every year is a hard year.  That’s kind of how I roll. I make sure every year is a hard year. If it’s easy I’m not pushing hard enough.”

But things really get interesting when Kalanick’s driver decides to confront him on falling Uber fares:

Kamel: “You’re raising the standards, and you’re dropping the prices.”

 

Kalanick: “We’re not dropping the prices on black.”

 

Kamel: “But in general the whole price is—”

 

Kalanick: “We have to; we have competitors; otherwise, we’d go out of business.”

 

Kamel: “Competitors? Man, you had the business model in your hands. You could have the prices you want, but you choose to buy everybody a ride.”

 

Kalanick: “No, no no. You misunderstand me. We started high-end. We didn’t go low-end because we wanted to. We went low-end because we had to because we’d be out of business.”

 

Kamel: “What? Lyft? It’s a piece of cake right there.”

 

Kalanick: “It seems like a piece of cake because I’ve beaten them. But if I didn’t do the things I did, we would have been beaten, I promise.”

 

Kamel: “But people are not trusting you anymore. … I lost $97,000 because of you. I’m bankrupt because of you. Yes, yes, yes. You keep changing every day. You keep changing every day.”

 

Kalanick: “Hold on a second, what have I changed about Black? What have I changed?”

 

Kamel: “You changed the whole business. You dropped the prices.”

 

Kalanick:  “Bullshit.  Some people don’t like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck!”

We must admit that we’re somewhat perplexed by Kamel’s argument as Uber fares, now and in the future, are clearly headed in precisely one direction, irrespective of who’s sitting in the CEO’s chair, and that is, well, down…but it makes for good entertainment anyway.

Fast forward to the 3:50 mark for the fireworks:

 

As Bloomberg points out, this incident just adds to what has already been a relatively rough couple of months for Uber which has included everything from patent infringement lawsuits to sexual harassment charges to Kalanick being forced to resign from Trump’s business advisory council.

In December, Uber pulled its self-driving cars off the road in San Francisco after the California Department of Motor Vehicles said they were operating illegally without an autonomous vehicle license. In January, more than 200,000 people uninstalled their accounts, and #DeleteUber trended on Twitter, after the company was accused of undermining a New York taxi union strike protesting President Donald Trump’s refugee ban. On Feb. 2, Kalanick reluctantly left his spot on Trump’s business advisory council to appease the company’s liberal-leaning employees and users—not to mention its many immigrant drivers. On Feb. 19, a former software engineer at Uber wrote a blog post alleging that she had been propositioned for sex by her manager and that when she’d taken the issue to human resources, an HR rep had said that he wouldn’t be punished, in part, because he was a “high performer.” On Feb. 23, Alphabet’s autonomous car company Waymo sued Uber and its self-driving car company Otto, accusing an Uber employee of stealing trade secrets by downloading 14,000 files onto an external hard drive. On Monday, Uber’s head of engineering resigned after the company said it learned that he had faced a sexual harassment complaint at Alphabet, his former employer. He denied the allegations.

So, where should we set the over/under on Kalanick’s remaining tenure with Uber?


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Bunds Are Crashing

After reaching a record low yield of -95.8bps at the end of last week, 2Y german bond yields are exploding higher.

 

The last 3 days – capped by today’s spike – have seen a 13bps explosion – the most since Dec 2015 (and second biggest spike in four years).

 

Of course, we have seen these sudden squeezes numerous times but they have always ended with dramatically lower yields.


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