Select Page

‘Millennials Will Save The Stock Market’ – Bill Smead Explains The Bulls’ Latest Narrative

Submitted by TheMarket.ch Bill Smead, founder of Smead Capital Management, thinks that a generational change will give the US economy an unexpected boost. The renowned value investor spots opportunities in homebuilder stocks and blue chips like American Express, Disney and Home Depot. * * * Bill Smead, founder of Smead Capital Management Millennials are perceived as the «lost generation». Born in 1981 to 1996, they have been rattled by the financial crisis and are drowning in debt, or so goes the common narrative. What’s more, their unconventional spending patterns are held responsible for the anemic growth perspectives of the US economy. Bill Smead thinks that’s utter nonsense. The highly regarded founder of the Seattle based investment firm Smead Capital Management is convinced that millennials won’t do things differently than their parents and grandparents. In his view, the only real difference to previous generations is that today, more people graduate from college and therefore wait longer to start a family. According to the experienced value investor this means that in the coming years the focus of investors «will turn from technology-oriented companies which can do exciting things in an anemic environment to main street, on the ground, real life economic activity which is driven by household formation.» Against this backdrop, he bets on homebuilder stocks like NVR and Lennar as well as on blue chip names like Home Depot, Disney and...

Read More

Stormy Weather In Solarville: Amazon Joins Walmart In Saying Its Tesla Solar Panels Spontaneously Ignited

Many people theorized that the bail out “buy out” of Solar City, advocated for and led by Elon Musk, would eventually come back to bite Tesla. And now it looks as though we may be witnessing this first hand, not only in the collapse of Tesla’s solar business, but now in repeated allegations from a second multi-hundred billion dollar retailer claiming that Tesla’s solar panels ignited on their own. Tesla solar energy systems reportedly went up in flames at an Amazon warehouse in Redlands, California last June and now Amazon has stated that it has no further plans to buy solar energy systems from Tesla, according to CNBC. The news comes after Tuesday, when we reported that Walmart had suit Tesla over solar panels that ignited on their own and caused fires on top of 7 stores in recent years. As of right now, more than 240 Walmart stores have Tesla solar systems installed. Walmart claimed that Tesla only inspected 29 of more than 240 sites with Tesla solar roofs on them up until the day of the lawsuit. However, on Thursday night, it looks as though Musk may have been doing damage control, as the two companies released a joint statement regarding the lawsuit: “Walmart and Tesla look forward to addressing all issues and re-energizing Tesla solar installations at Walmart stores, once all parties are certain that all concerns have been...

Read More

BernieGate 2.0? Gabbard Gutted By DNC’s Dubious Debate Dodge

Authored by Michael Tracey via RealClearPolitics.com, Tulsi Gabbard is on the verge of being excluded from the next Democratic presidential debate on the basis of criteria that appear increasingly absurd… Take, for instance, her poll standing in New Hampshire, which currently places Gabbard at 3.3% support, according to the RealClearPolitics average as of Aug. 20. One might suspect that such a figure would merit inclusion in the upcoming debates — especially considering she’s ahead of several candidates who have already been granted entry, including Cory Booker, Amy Klobuchar, Beto O’Rourke, and Andrew Yang. But the Democratic National Committee has decreed that the polls constituting this average are not sufficiently “qualifying.” What makes a poll “qualifying” in the eyes of the DNC? The answer is conspicuously inscrutable. Months ago, party chieftains issued a list of “approved sponsoring organizations/institutions” for polls that satisfy their criteria for debate admittance. Not appearing on that list is the Boston Globe, which sponsored a Suffolk University poll published Aug. 6 that placed Gabbard at 3%. The DNC had proclaimed that for admittance to the September and October debates, candidates must secure polling results of 2% or more in four separate “approved” polls — but a poll sponsored by the newspaper with the largest circulation in New Hampshire (the Globe recently surpassed the New Hampshire Union Leader there) does not count, per this cockamamie criteria. There has not been an officially qualifying...

Read More

“We’re Taking No Chances” – How The Trade War Inspired One Company To Rebuild Its Entire Supply Chain

Larry Sloven has been building supply chains in Asia for the better part of his 30-year career. But in that entire time, he never encountered anything quite so challenging as the US-China trade war, and the adaptations that it forced his company – Capstone International, an HK-based subsidiary of Capstone Companies. Sloven, the president of Capstone, said he primarily focuses on building supply chains in Southeast Asia. Sloven, who is 70, has spent half of his life connecting factories, sourcing raw materials, and dealing with logistics, mostly in Southern China. But now, with his Big Box store clients demanding supply chain reshuffles at the drop of a hat, Sloven explained how “[i]t is the hardest thing I’ve ever had to do in all my 30 years in the business.” It was still early days when Sloven started looking at Thailand and other countries in the region to shift some assembly and sourcing of raw materials in early 2018. But a year passed swiftly, and by the spring of 2019, with trade talks seemingly stalled, Sloven, who grew up on Long Island, felt confident that he was prepared for anything. Initially, the tariffs didn’t have much of an impact on the cost basis for Sloven’s supply chains. But as the summer of 2019 dragged on, and it became clear that the trade war wouldn’t be ending any time soon, Sloven...

Read More

The Coming Whiskey Bubble?

Authored by Matt Kubiak via The Mises Institute, As Austrians we are always looking for evidence to lead us to the next bubble. I think most of us are on high alert after a decade of easy money, stock price inflation, and ever decreasing bond yields. However, identifying the specific bubble sector(s) ahead of time is extremely difficult (unless you are Mark Thornton). This notwithstanding, one industry seems to me to display all of the signs that it is in the midst of an Austrian business cycle theory (ABCT) bubble. That industry is whiskey (or whisky) production. Let’s review what makes whiskey production especially susceptible to expansion during the credit fueled boom and therefore likely to undergo a violent contraction during the inevitable market correction. Whiskey Has a Long Production Process “As implied by standard calculations of discounted factor values, interest-rate sensitivity increases with the temporal distance of the investment subaggregate, or stage of production, from final consumption.” Whiskey production can be one of the longest production processes in the entire economy. Planning whiskey production is extremely difficult, even if you assume a perfectly stable, hard money economy. Even moderate quality whiskies need to be planned years in advance. The youngest whiskey that can be legally labeled as bourbon must be barrel aged for at least 2 years, but most middle shelf bourbons are aged for 4, 6, or 8 years. Scotch whiskey...

Read More

Iran Issues Sanctions on Top Trump Admin Officials, Sen. Cruz

Iranian lawmakers are preparing to issue a salvo of sanctions on top Trump administration figures and their supporters in Congress, according to reports in the country’s state-controlled press that have already elicited reaction from those officials targeted. Iran’s parliament has set the stage for Tehran to sanction White House National Security Adviser John Bolton, Treasury Secretary Steven Mnuchin, and Sen. Ted Cruz (R., Texas) for what Iranian officials have described as their “long record of animosity towards Iran.” Recent Stories in National Security Iran Issues Sanctions on Top Trump Admin Officials, Sen. Cruz 2 NY Women Plead Guilty to Planning Terrorist Attack Against Law Enforcement, Military PA President Abbas: ‘Millions Of Fighters’ Will Take Over Jerusalem The sanctions would ban each of the Americans from ever traveling to Iran, bar them from engaging in any sort of talks with Iranian regime figures, and deny them the ability to trade with any Iranian entity. “The bill calls for lifetime bans on U.S. National Security Adviser John R. Bolton, U.S. Secretary of Treasury Steven Mnuchin, and American senator Ted Cruz and their family members’ traveling to Iran, in a reaction to Washington’s embargos on Iranian officials, and these figures’ strong hostile measures against Iran in the past few years,” Iran’s state-controlled Fars News Agency reported, adding the measure is payback for Bolton, Mnuchin, and Cruz seeking to isolate the Islamic Republic....

Read More

Gun Sellers Exploit Loophole In Facebook’s Marketplace To Sell Guns Online

Gun sellers are taking to Facebook’s Marketplace to broker sales, exploiting a loophole despite the sale of guns being specifically forbidden by Facebook policy, according to the Wall Street Journal. Facebook’s Marketplace feature was launched four years ago and has allowed more than 2 billion people to buy and sell secondhand items. The trick being used by sellers is to list gun cases or gun boxes at inflated prices that indicate to those “in the know” that a gun is also being sold. This helps users evade Facebook‘s banned items policy. Buyers and sellers then communicate via private messages to discuss the details of the transaction. For instance, one seller in North Carolina this month posted a photograph of a “gun case” that was being listed for $950. The case itself only has a retail cost of about $30. When the seller was interviewed, he indicated that he was actually trying to sell an AR-15, not just the case. He then privately shared a photograph of the rifle, laid out with more than 670 rounds of ammunition Dash and, of course, the case. He told the Wall Street Journal that he had more than 30 inquiries regarding the gun since he listed the case and had found an interested buyer last week, but a meeting scheduled with them fell through. Naturally, these types of postings are going to raise fresh scrutiny about...

Read More

“Triggered” – Trader Warns “It’s A Ridiculous Trading Environment”

Authored by Sven Henrich via NorthmanTrader.com, Every single dip was bought this week in anticipation of the Jay Powell speech and every technical signal was again ignored until it was too late when the triggers suddenly hit in the form of news headlines and tweets.I’ve called it a very dangerous market and Friday’s massive reversal again accentuates this point. In April in Combustion I outlined a technical case that I said should scare bulls and bears alike and this current toxic environments confirming that view and everybody needs to stay flexible and have an open mind. Nobody can afford to be stubborn in their views. As I said on twitter on Friday: Everyone has a trade plan until a tweet shreds their stops. — Sven Henrich (@NorthmanTrader) August 23, 2019 It’s a ridiculous trading environment to be in, but nevertheless it is the environment we have. Donald Trump’s twitter account is now the biggest market price discovery mechanism on the planet and he can jerk prices around anyway he likes. I presume he’s not trading his tweets, but if he were he could make a killing. Which trader wouldn’t love to have a twitter account with which to move global markets and face no consequences? 2019 has been all about multiple expansion on hope driven by cheap money to come again in the form of rate cuts and more QE programs...

Read More

Watch: Yet Another Tesla “Driver” Spotted Fast Asleep At The Wheel Doing 70 MPH In California

While everybody has been focused on new and emerging disasters at Tesla, like the company’s recent spontaneously combusting solar panel problem, coverup and ensuing lawsuits, it almost becomes easy to forget about the legacy disasters still taking place as a result of Tesla’s irresponsibility in the automobile industry. Such was the case when yet another California driver was spotted seemingly fast asleep behind the wheel of a Tesla on I-5 near Santa Clarita on Saturday. The video captured shows the driver asleep before eventually waking back up and putting a hand on the wheel.  Clint Olivier, the driver who saw the Tesla said: “He was completely out – sound asleep. My wife was on her phone on Instagram or something and I said get off your phone and record this!” Olivier said he didn’t contact police because the driver woke up eventually and regained control of the car. The Tesla was said to not be moving erratically, but was still traveling 70 to 75 mph.  This isn’t the first incident like this out of California, either. In June, video broke of a driver who also appeared to be fast asleep in his Tesla Model 3 for 30 miles, as the vehicle flew down the 405 freeway. A passenger alongside of the vehicle, Shawn Miladinovich, began taking video when he noticed that the driver was passed out, and that he had something “tied to the steering...

Read More

Boiling Frogs, Brainless Frogs, & Illinois

Authored by Mark Glennon via WirePoints.org, Why exactly doesn’t Illinois’ political establishment recognize that only drastic policy changes will reverse the population outflow crippling the state? That was the subject of our monthly Crain’s article. A new meme is afoot providing one answer, started by Richard Porter, a Chicago lawyer and GOP national committeeman. First, a little science lesson. Throw a frog into boiling water and he’ll scramble out, but do they really stay put if you start with a comfortable temperature and gradually raise it until boiling? Nope. Scientists have shown they’ll jump out as the water gets warmer. Researchers had to remove their brain to get them to stay as they raised the temperature, even though they remain functional enough to show discomfort. In other words, only brainless frogs stay put as the temperature becomes deadly. That’s Porter’s point. The establishment expects you to be brainless frogs. The establishment surely knows the real science, since they routinely call everybody else “science haters.” So, surely they don’t believe the mythical version and think everybody will stay if they just gradually raise taxes, incur more debt and ignore reforms. They must know the real science, and are betting that everybody will stay because they’re brainless frogs. How else could Gov. J.B. Pritzker expect us to accept his explanation for the state’s population loss, now five years running. He says it’s stability...

Read More