What We're Reading

Great news for LVS, MGM, WYNN, FLL, CZR and BYD.  High speed rail is on the way.  Imagine the increase in revenues long term as patrons will be able to get there, in the blink of an eye.

China Railway International USA CO., LTD. and XpressWest have agreed to form a joint venture that will accelerate the launch of the XpressWest rail project connecting Las Vegas, Nevada to Los Angeles, California (the “Southwest Rail Network”). The Project will develop, finance, build and operate the Southwest Rail Network, with stations in Las Vegas, Nevada, Victorville, California, and Palmdale, California, and service throughout Los Angeles. The decision to form a joint venture is the culmination of years of work and builds upon the significant accomplishments of XpressWest.

Supported by $100 Million in initial capital, this new high-speed rail line (approximately 370 km(s) in length) will create new technology, manufacturing, and construction jobs throughout the interstate corridor and will connect

There are a lot of things the world does better than the US: Literacy, life expectancy, general happiness, and, of course, soccer. You can now add Netflix to that list.

On Monday (Sept. 14), the US streaming television service updated (and redesigned) its monthly speed index website, where it ranks Netflix speeds by internet provider. Given that the company has expanded into over 50 countries, with plans for hundreds more, the index now ranks Netflix speeds by country as well.

The US and Canada, where Netflix accounts for a whopping 37% of peak web traffic, are both in the middle of the pack when it comes to Netflix speeds. Scandinavian countries dominate the rankings, which shouldn’t be too surprising, as those same countries generally boast some of the fastest internet speeds in the world (pdf).

The index measures how well Netflix performs during prime viewing hours. Essentially, the higher the ranking, the better the Netflix viewing experience is in that country. Viewers in count

Today’s factories are highly automated and use amazing robotic machines to do the work of thousands of men. These factory machines don’t look like the robots in the movies. They are a very specialized breed called CNCs, which stands for Computer Numerical Control machines. These sophisticated machine tools are operated by computer programs.

But these aren’t new toys, by any means. CNCs have been around since the early 1970s when computer-controlled systems were introduced.

The first modern-day industrial robot, the Unimate, was put into use by General Motors in 1961. The Unimate was a 4,000-pound robotic arm that attached to a giant steel drum and did things like pour liquid metal into die casts, weld auto bodies, and lift 500-pound car bodies.

The Unimate performed tasks that humans often found dangerous or boring, and did them with speed and exacting detail. The robot never called in sick, asked for a raise, or went on strike. Plus, it worked 24 hours a day. As you can imagine, robo

The world’s biggest corporations have been riding a three-decade wave of profit growth, market expansion, and declining costs. Yet this unprecedented run may be coming to an end. Our new McKinsey Global Institute report, Playing to win: The new global competition for corporate profits, projects that the global corporate-profit pool, which currently stands at almost 10 percent of world GDP, could shrink to less than 8 percent by 2025—undoing in a single decade nearly all of the corporate gains achieved relative to the world economy during the past 30 years (exhibit).

Exhibit

• Enlarge

From 1980 to 2013, vast markets opened around the world while corporate-tax rates, borrowing costs, and the price of labor, equipment, and technology all fell. The net profits posted by the world’s largest companies more than tripled in real terms from $2 trillion in 1980 to $7.2 trillion by 2013,¹ pushing corporate profits as a share of global GDP from 7.6 percent to almost 10 percent. Today, companies

Over the years, it's become essential (to me) to understand monetary policy and money flows across the globe. With all of the recent 'pining' over whether the Fed will begin to raise rates this year, I felt this piece from Financial Times gave a great representation of who is worried over what, and why.  I truly recommend you give if it a read.  There's also more discussed on this article.  Enjoy.

Why is the Fed considering raising interest rates now?

Why have rates in the US been held so low for so long?

One Thursday morning in early June, the ballroom of the Rosewood Sand Hill hotel, in Menlo Park, was closed for a private presentation. The grand banquet hall appeared worthy of the sprawling resort’s five-star designation: ornate chandeliers hung from the ceiling; silk panels with a silver stenciled design covered the walls. Behind a stage in the 2,800-square-foot room, a large sign bore the name of Andreessen Horowitz, one of Silicon Valley’s most revered venture-capital firms.

As breakfast and coffee were offered, the company’s partners mingled with the men and women who endow their $1.5 billion fund. The investors were dressed invariably in business casual, with the top button of their dress shirts noticeably undone. (A mere handful of men stood out in a suit and tie.) Off in the distance, you could make out the faint purr of Bentleys and Teslas ferrying along Sand Hill Road, depositing the Valley’s other top V.C.’s at their respective offices—Greylock Partners, Draper Fisher Jurv

Most of the time, weekly data published by the China Securities Depository and Clearing Corporation (CSDC) is as dull as the organization’s name would suggest. But of some interest this year has been the weekly number of people opening trading accounts that allow them to buy and sell stocks.

Earlier, Quartz reported that a record 3.3 million individuals had rushed to join China’s stock market in the single week ending April 17. That was far above this year’s previous average weekly sign-up rate of 800,000.

After that week the market continued to grow until June 11, when it began a dramatic, prolonged crash that roiled markets worldwide. Quartz wanted to see how many people had signed up in the weeks from April 17 until now.

Oddly, however, the CSDC—which publishes data as far back as July 2013—has none of its typical investor data past May 29—two weeks ahead of the market’s descent:

It’s not clear why the CSDC either stopped publishing or removed its weekly data. Perhaps it doesn’t

China’s moves to spur its slowing economy and restore investor confidence are having an important but less obvious effect on the tech sector: Strengthening Chinese companies that already were making life difficult for U.S. rivals, many of whom have staked their growth plans on the world’s second-largest market.

The government’s surprise decision in early August to devalue China’s currency, in particular, could make it harder for U.S. companies to sell into the country by making their products more expensive to local buyers.

At the same time, a cheaper yuan makes Chinese-produced goods less costly abroad—dovetailing with government policies that have been promoting foreign sales by Chinese technology vendors.

“We see the key driver [of government action] being exports,” said Handel Jones, a consultant at International Business Strategies Inc. who has written books on China’s high-tech sector. Chinese companies “will become more aggressive.”

Once known mainly for its low-cost manufacturi

(Edited 2:00pm)  I especially enjoy the part when the commentator withdrew his request for an interview after Schiff refused to blame everything on China.  Yes, MSM wants us to believe it's all China's fault.  Don't drink the koolaid.  Use your head.

Hat tip Ed

You know it's coming and it won't be any easier to take than when you were small and your Mother said "I told you so".  The blogisphere will now erupt with the force of an annoying snaggle tooth emphatically screaming "I warned you" and "I said it was coming.........now buy my plan so you're prepared"  and ca-ching, you cough up the coin like a kid at the carnival freak show.   Every smidiot and hack will now attack your inbox on how they could have prevented your losses and how (via in their premier plan) you would have benefited this week.......if you had only listened.

Puhlease. 

Markets correct.  On occasion, they correct more than mere pullbacks but the essential thing to remember is, they recover.  

No, it's not a master plot against Donald Trump.  His over-swept hair is safe and........seriously?  Who would even dream up that scenario (smh) but the heavy-selling picture last week certainly backed up a Dow sell-signal and have many wondering, just where we'll stop or is the bu

I've long wondered about MLP's as interest rates begin to creep higher and crude oil, obviously, remains low.  After all, they're supposedly not tied to the price of crude oil, right?  Certainly 2015 has not been their "year" as the 10 year fluctuated, leaving me even more cautious but did this translate into a buying opportunity?  Consider this interesting piece here by TheReformedBroker

I’m sitting at the Strip House with a wholesaler from a large mutual fund / UIT sponsor two years ago. He’s a good guy but he’s there to sell. I’m there to eat thick-cut slab bacon and shrimp cocktail. I told him in advance that I’m not a buyer, but I have an open mind.

He’s showing me an SMA (separately managed account) strategy whereby his firm’s team of experts picks the best MLPs. The pitch is that MLPs are a way to participate in the growth of energy infrastructure but without having exposure to the volatility of oil prices. MLPs, he explains, are uncorrelated to the price of oil because they a

In the stock market, until recently, just about any news was good news.

Company earnings stumbled? Investors shrugged them off, sending shares higher. Economic growth was disappointing? So what.

But now that is changing.

Consider the recent trading in Apple, the world’s most valuable public company and a certifiable stock market darling. Apple announced third-quarter results on July 21 that were “amazing,” according to Tim Cook, its chief executive. Revenue rose 33 percent over the same period last year, and earnings per share were up 45 percent.

But investors seized on the fact that demand for the iPhone and the company’s new smartwatch didn’t meet expectations. Apple’s shares have lost 11.3 percent since then.

“I thought the break in Apple was a pretty big deal,” said Bill Fleckenstein, a veteran money manager at Fleckenstein Capital in Seattle. “They made all the numbers, but units were light. Maybe that is a precursor to what the entire tape is going to show us.”

The reaction to C

As Americans spend more money on doing things, not buying things, department stores are losing out.

A rebound in overall spending at retailers, which grew 0.6 percent in July from the previous month, has eluded department stores, where sales dropped 0.8 percent.

Department stores made up one of just two categories tracked by the Commerce Department where spending declined, the latest in a choppy performance from them this year. Spending at electronics and appliance stores also fell 1.2 percent in July.

Data released by the Commerce Department shows that American consumers are putting what little extra money they do have to spend each month into eating out, upgrading their cars or fixing up their homes, as well as spending on sports gear, health and beauty. Spending at restaurants and bars has jumped more than 9 percent this year through July compared with the same period last year, and on autos by more than 7 percent, according to the agency.

Analysts say a wider shift is afoot

While main stream media does their level best to keep us hugging our equities, they seem to ignore the fact that quantitative easing ran the market up from 2009 and while the economy has come a long way since the bottom, maybe, just maybe, it's strong enough to sustain us, but not equities at elevated levels.

Federal Reserve officials have signaled they think the economy is robust enough to withstand a round of interest-rate rises starting this year. But the bond market still seems skeptical.

While yields on short-term Treasury notes have started moving higher in anticipation of an interest-rate increase as early as September, yields on longer-term debt have remained stubbornly low. That is a sign that many investors are still doubtful about the health of the economy, and the ability of the Fed to keep raising rates without jeopardizing growth.

On Tuesday, yields on short-term U.S. Treasury notes rose after a Fed official sounded the latest all clear for a rate rise as soon as Septembe

I don’t begrudge the $15.3 million annual salary that Texas Rangers shortstop Elvis Andrus is knocking down this year, or even the $24 million that Rangers first baseman Prince Fielder will pocket.

The same goes for the $75 million that actor Robert Downey Jr. pocketed last year — more power to these gentlemen.

Indeed, all of them possess exceptional talents, and their agents negotiated the best money deals possible for them. These deals were struck in arm’s length transactions with rational, willing buyers of their talents — a professional baseball team and movie studio in these instances.

So big payouts such as those are fine by me. I don’t care.

But the same cannot be said for the exorbitant pay packages of corporate chief executive officers, which I find distasteful on two fronts.

First, the relationship between corporate boards of directors, who set compensation levels, and their CEOs is much too incestuous to resemble anything remotely akin to free market negotiations.

Seco

With the new Intermediate-Term Trend Model (ITTM) BUY signal on TLT and the break out for second time above the March low, I decided it was definitely time to abort the bearish Adam and Eve double-top pattern that I have been watching in earnest. Instead, I'm now seeing a rounded bottom; also known as a saucer bottom, it is a reversal chart pattern representing a long period of consolidation that turns from a bearish bias to a bullish bias (ChartSchool article on Rounded Bottoms located here). The Price Momentum Oscillator (PMO) has also been making a case to move bullish on TLT, it has continued to rise and is now in positive territory. The SCTR value is rising again and the On Balance Volume (OBV) shows that volume is behind this move (thumbnail shows that best). The recent Long-Term Trend Model (LTTM) SELL signal suggested the double-top would execute, but now it appears that signal is in jeopardy as the 50-EMA reaches out to crossover the 200-EMA.

You can see the major double-top

eMarketer estimates that this year, there will be 190.5 million US smartphone users of all ages, representing 73.4% of internet users and 59.3% of the population. By 2019, the smartphone audience will reach 236.8 million, or 85.5% of internet users and 71.4% of total consumers in the country.

Based on recent research, these users may be bigger addicts than they think. Among US smartphone owners polled in May 2015 by Gallup, 52% of smartphone owners said they checked their phones at least a few times an hour, with 11% doing so every few minutes. One-fifth looked at their devices about once an hour. About a quarter did so at least a few times a day.

However, further results indicated that many of these users were in denial about just how much they relied on such devices. Fewer than half (46%) of smartphone owners said they couldn’t imagine life without their phones. Females were 10 percentage points more likely than males to say they couldn’t picture living without their smartphones, an

Let’s face it: business models are less durable than they used to be. The basic rules of the game for creating and capturing economic value were once fixed in place for years, even decades, as companies tried to execute the same business models better than their competitors did. But now, business models are subject to rapid displacement, disruption, and, in extreme cases, outright destruction. Consider a few examples:

• Bitcoin bypasses traditional banks and clearinghouses with blockchain technology.
• Coursera and edX, among others, threaten business schools with massive open online courses (MOOCs).¹
• Tencent outcompetes in Internet services through microtransactions.
• Uber sidesteps the license system that protects taxicab franchises in cities around the world.

The examples are numerous—and familiar. But what’s less familiar is how, exactly, new entrants achieve their disruptive power. What enables them to skirt constraints and exploit unseen possibilities? In short, what’s the process o

When crude oil was stopped by it's 200 month simple moving average in June, I wrote here that this posed a problem for the energy sector.  We analyzed rig counts and even questioned here if the Saudis had it wrong.  I had already posed here that there would be no recovery in 2015 and we should be fearful of the nasty word "deflation" here and it doesn't appear I was wrong.  Who's feeling the most pain from these prices?  We took a look here as these countries could pose good buying opportunities down the road.  What's being said now on crude oil's recent drop in price is even more interesting.....at least until there's a disruption in supply or the Saudi's change their mind.

Back in January, Morgan Stanley drew similarities between the current oil crash and the one in 1986— when oil prices fell 45%.  Though they have been making these parallels for six months, analysts are now saying that the current crash could fare even worse.  "On current trajectory, this downturn could become wor