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Global Bubble Update: Obscure Chinese Company Soars By Half A Billion After Buying $50 Million Sapphire

We are now in that phase of the bubble cycle where pivoting to a sapphire results in unprecedented market cap gains. Shares of Yulong Eco-Materials, a tiny producer of fly-ash bricks based in Pingdingshan, China, surged as much as 950% on Wednesday – forcing the Nasdaq to halt trading four times within the first 30 minutes of trading – after the company revealed that it had completed the purchase of the Millennium Sapphire, a 17.9 kilogram gemstone that Business Insider described as “an icon in the world of art and gems.” Indeed, Yulong shares soared while US indexes ended slightly lower on the day, weighed down by a sharp drop in IBM and other tech stocks. Cannabis shares, the bubbly investment trend du jour, also sold off. The company paid $50 million for the stone (which it touted as a bargain in a press release). “We are extremely pleased to have completed the purchase of this undervalued world class asset for $50 million,” CEO Hoi Ming Chan said in a statement. “The most recent appraisal for the MS (September, 2018) was $60 to $90 million. World wide news headlines of the then unnamed rough sapphire purported the value between $90 to $500 million in 1996 when it was discovered.” But in the buying frenzy that ensued, investors apparently overlooked the fact that the company is also in the process...

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430% Property Tax Hike Drives ‘Black Panther’ Leader’s Chicago Home Into Foreclosure

Via WestCookNews.com, Cook County says the Maywood boyhood home of Illinois Black Panther Party leader Fred Hampton is worth $141,920. Its tax bill: $8,430, or an effective property tax rate of about six percent. Property tax rates that high– more than five times the national average– have become standard in inner-ring Chicago suburbs like Maywood. But the $700 per month tax bill has proven too rich for Hampton’s son, Fred Hampton, Jr. He’s asking for donations to help him stop the County from auctioning off the home next Tuesday. The tax bill at 804 S. 17th Avenue spiked more than 400 percent this year, to more than $8,000 from just $1,919. That’s after its previous owner, Hampton’s uncle, Bill, died and the property lost three tax exemptions, including one that freezes tax bills for seniors, according to the Cook County Treasurer. Hampton, Jr., who in 1993, was sentenced to 18 years in prison for throwing a Molotov cocktail into a Korean-owned clothing store in Englewood (he was paroled in 2001), told the Chicago Sun-Times he “doesn’t know” how he fell behind on payments for the home. He is president of the Uhuru Solidarity Movement, which has called for an end to capitalism and for white Americans to “take responsibility for the fact that white society rests on the pedestal of the oppression of African people” and pay reparations to black Americans for their “stolen wealth.” It...

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Obama’s National Security Advisor Continues To Work For The Saudis

Among the major revelations connected to the murder of journalist Jamal Khashoggi at the hands of the Saudis is just how resilient and unshakeable relations between the Washington deep state and the Saudi royals actually are. Or rather we should say it has created an atmosphere where “hidden in plane sight” truth of America being joined at the hip to one of the Middle East’s most brutal autocratic regimes can no longer be ignored by the mainstream, or can no longer be shaded from public view by another David Ignatius puff piece fawning over Saudi “reformer” despots.  A new Daily Beast investigation has revealed that Obama’s first National Security Adviser, James L. Jones, now works for the Saudis — and despite a growing public movement of Western companies and media organizations to divest and distance themselves from their previous close relationship with the kingdom and events sponsored by crown prince MbS — Jones is refusing to budge. As The Daily Beast concludes in its report, “It’s another sign of the deep reach of Saudi money into the Washington elite.” James (Jim) Jones, USMC (ret.), former National Security Advisor to President Obama. Image source: The National While noting the heat that Trump-connected individuals have lately taken over their close ties with the Saudis, The Daily Beast uncovers Obama-era officials’ continuing deep ties: But Obama World isn’t without close connections to the Kingdom. A company helmed by Jim Jones, then-President Barack Obama’s first National Security Adviser, has a contract...

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Chinese Verbal Intervention In The Market Fails As Stock Rout Accelerates

This morning, when we reported that the latest flood of margin calls, resulting from $600 billion in shares pledged as collateral for loans and representing a whopping 11% of China’s market cap, sent the Shanghai Composite tumbling 3% to the lowest level since November 2014, we noted that local government efforts to shore up confidence in smaller companies had, quite obviously, failed to boost sentiment… or stem the selling. So, as many expected, just before Beijing announced the latest batch of stagflationary economic data including retail sales, industrial production and fixed asset investment, of which the most important was Q3 GDP which printed at 6.5%, the lowest level since Q1 2009, and missing consensus expectations even as inflation has continued to creep higher… … the central bank delivered another round of massive verbal intervention, telling investors stocks are undervalued, the economy is sound, the central bank will use prudent, neutral monetary policy and keep reasonable, stable liquidity. Additionally, according to a Q&A statement with Governor Yi Gang posted on the PBOC website: the PBOC will use monetary policy tools including MLF lending to support banks’ credit expansion the PBOC to push forward bond financing by private cos. the PBOC says recent stock market turmoil was caused by investors’ sentiment the PBOC is studying measures to ease cos.’s financing difficulties the PBOC to push forward bond financing by non-state firms;...

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Stephen Hawking: Time Travel More Likely Than The Existence Of God

Authored by Eric Mack via Forbes.com, In Stephen Hawking’s universe there was no room for God, because the famous cosmologist came to believe that the entirety of existence was created out of, well… nothing. As he explains in his final book, “Brief Answers to the Big Questions,” before the Big Bang there was nothing, not even a God to create the universe. “I think the universe was spontaneously created out of nothing according to the laws of science,” Hawking writes. “There is no time for a creator to have existed in.” He goes on to explain that the only God who could be consistent with the laws of physics would be a deity who never directly influences the workings of the universe. “These laws may or may not have been decreed by God, but he cannot intervene to break the laws or they would not be laws.” While the existence of God makes little sense to Hawking, he’s more open to the possibility of something that most people might consider much more far-fetched: time travel. Hawking famously held a party for time travelers but did not send out the invitations until after the party. No one showed up for the festivities. But the scientist writes that there is still some hope that traveling back in time could be possible according to the laws of the universe.  He pegs this notion on the...

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Stagflation Looms As China’s Economy Suffers Weakest Growth Since Q1 2009

Chinese macro data has been serially disappointing for almost five straight months, and tonight – as Yuan tests down to cycle lows – all eyes are on the heavily ‘managed’ macro data to reasssure the masses that despite a 25-35% collapse in its stock market this year, all is well in the land of hidden debt. China’s regulator already offered up some reassurance tonight that “China’s financial market volatility is not in line with the healthy status of the economy…” adding that “financial risks are controllable.” Before tonight’s main meal of government-sponsored data is served up, we remind you, as we reported two weeks ago, an indicator produced by a Beijing-based business school in the style of the closely-watched purchasing managers index plunged last month, adding to concerns about the slowing economy and raising the question of whether business conditions may be worse than official statistics show. The index is based on a survey of CKGSB students and graduates who are executives at companies operating in China. The respondents represent around 300 privately-owned small and mid-sized enterprises across several sectors of the economy. “Most surveyed companies are now experiencing unprecedented difficulties and have become increasingly pessimistic about business prospects for the next six months,” Li Wei, the economics professor at CKGSB who oversees the survey, said in a commentary accompanying the September survey results. “For most, business has never...

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Trump on Gianforte: ‘Any Guy That Can Do a Body Slam, He’s My Candidate’

President Donald Trump on Thursday night praised Rep. Greg Gianforte’s (R., Mont.) intellect and then said that anybody that can do a body slam is his guy. “Let me just say on behalf of all of Montana, Mr. President, thank you for giving us hope again,” said Gianforte at a rally in Missoula, Montana. Trump then went up to the podium, where he said that Gianforte was “so smart” and warned people about wrestling him, referencing an incident last summer where he body-slammed Guardian reporter Ben Jacobs after he questioned him about the Republican health care bill the night before a congressional special election. “Any guy that can do a body slam is my candidate. He is my guy,” Trump said. “So I was in Rome with a lot of the leaders from other countries talking about all sorts of things, and I heard about it. And we endorsed Greg very early, but I had heard he body-slammed a reporter.” “I said, ‘This is terrible. He’s going to lose the election.’ And then I said, ‘Well, wait a minute I know Montana pretty well. I think it might help him.’ And it did,” Trump said. “He’s a great guy, tough cookie.” Shortly after the incident, Gianforte defeated Democratic opponent Rob Quist and publicly apologized for the incident. He would be charged with a misdemeanor assault and would donate $50,000 to the...

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Goldman And Morgan Stanley Are Desperate To Lend Money To The Uber Wealthy

Who said lending unlocked by QE failed to “trickle down” to the general population.” Well, maybe not the general population, but certainly the wealthiest 0.001%, or those who don’t actually need the money. In addition of making money through “traditional” means like trading and investment banking fees, both Goldman Sachs and Morgan Stanley made it clear this week that they are also heading full-scale into the business of lending money to their millionaire and billionaire wealth management clients; in fact, lending to the 0.001% is now a key part of both banks’ growth strategy. A Bloomberg report states that it can take as little as five minutes to underwrite a loan for wealthy clients who want to start a new business, pay down taxes or obtain a bridge financing for that new mansion. Morgan Stanley has tripled the amount of these loans over the last five years and Goldman Sachs is working on expanding this business overseas. Embracing this type of relatively risk-free lending comes as a result of banks being forced into becoming bank holding companies by the financial crisis. With other revenue-generating avenues narrowing, lending to wealth management customers is a key part of Goldman’s plan to grow its revenue. Morgan Stanley said this week that loans in the wealth unit climbed 7% in the past year to $82 billion, and interest income jumped 22%. The bank said in a January...

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U.S-Saudi Clash Could Spell Disaster For OPEC

Authored by Cyril Widdershoven via Oilprice.com, The Khashoggi case is far from over, as current harsh statements coming from Washington are showing. Not only is there a long line of U.S. Senators calling for an in-depth investigation of the matter, some have even openly called for the removal of Saudi Crown Prince Mohammed bin. Senior R-Senator Lindsay Graham, one of the staunchest supporters of US president Trump and Saudi Arabia, has broken ranks as he asked on US Fox-News to remove MBS from his position. These moves from Washington are not only endangering the very strong ties between Washington and Riyadh, but also endanger the overall Middle East and internal stability of OPEC. The oil cartel, led by Saudi Arabia, is looking at a very stormy ride the next couple of months, while the U.S. is heading for another showdown in the Arab world. The Khashoggi case has become a possible watershed in international relations. Statements made by US R-Senator Graham, already supported by other high-ranking U.S. officials, show that the position of Saudi Arabia as a strategic ally of Washington in the Middle East, and MBS in particular, is under severe pressure. The public threat, made by Graham news channel Fox-News, to put strong sanctions on Saudi Arabia, if the Crown Prince is not being removed, is a first. Not even in the case of Iran, Russia’s involvement...

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Philly Fed Finds Trump Tax Relief More Than Offsets Adverse Effect From Trade War

For all the concerns that Trump’s trade war and tariff increases could jeopardize corporate capital spending plans, resulting in a broader economic slump, a Special Question posed by this month’s Philly Fed survey found that this is not the case; in fact when taking into account Trump’s tax relief/fiscal stimulus just the opposite picture emerges. In Special Question #3 in the October Philly Fed survey, the regional Fed asks “How have each of the two factors, tax relief and trade policy (including tariffs), affected your expected capital spending for 2019 compared with 2018?“ What it found was that while some 40% of respondents would increase CapEx as a result of Tax Relief, only ~23% would cut capital spending plans due to the adverse consequences and unpredictability resulting from tariff increases and trade policy. In other words, as long as positive impulse from Trump’s tax relief permeates the economy, the president has little to worry about when it comes to adverse consequences from the ongoing trade war with China or other nations. And since according to Nomura said positive impulse will last at least into 2020… … the Trade war with China has a long way to...

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