Tag Archives: History Repeating

IRS: 330K Taxpayers Hit by ‘Get Transcript’ Scam

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“The Internal Revenue Service (IRS) disclosed today that identity thieves abused a feature on the agency’s Web site to pull sensitive data on more than 330,000 potential victims as part of a scheme to file fraudulent tax refund requests. The new figure is far larger than the number of Americans the IRS said were potentially impacted when it first acknowledged the vulnerability in May 2015 — two months after KrebsOnSecurity first raised alarms about the weakness. The IRS’s experience should tell consumers something about the effectiveness of the technology that the IRS, banks and countless other organizations use to screen requests for sensitive information.”

http://krebsonsecurity.com/2015/08/irs-330k-taxpayers-hit-by-get-transcript-scam/

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John Hussman: Debt-Financed Buybacks Have Quietly Placed Investors On Margin

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“Not only is the equity market at the second most overvalued point in U.S. history, it is also more leveraged against probable long-term corporate cash flows than at any previous point in history. As we observed during the housing bubble, yield-seeking by investors opens the door to every form of malinvestment. The best way to create a debt-financed wave of speculative and unproductive activity is to starve investors of safe return. In 2000 that wave of speculation focused on technology. The next Fed-induced wave of speculation focused on mortgage securities, which financed a housing bubble. In our view, [in the current cycle,] it has been debt-financed corporate equity purchases.”

http://www.hussmanfunds.com/wmc/wmc150817.htm

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Stan Druckenmiller’s Massive Bet on Gold

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“Druckenmiller is one of the world’s most successful and respected traders. As a hedge fund manager from 1986 to 2010, he generated an incredible average annual return of 30%.  Druckenmiller was also George Soros’s right-hand man at Quantum, Soros’s famed hedge fund. Quantum’s now legendary 1992 trade shorting the British pound was Druckenmiller’s idea. It made Quantum about $1 billion. People say the trade ‘broke the Bank of England.’  Druckenmiller’s fund recently bought $300 million worth of SPDR Gold Trust (GLD), an ETF that tracks the price of gold. It’s a huge bet, even for a big-time trader like Druckenmiller. He put 20% of his fund’s money into this trade; it’s his largest position.”

http://www.caseyresearch.com/articles/this-pig-just-made-a-massive-bet-on-gold

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War: Still a Racket

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“President Obama has been spending American blood and treasure in and around Syria for a full year now.  Whether attacking the Islamic State is necessary or advisable is beside the point. The War Powers Resolution clearly requires the president to withdraw from hostilities within 60 days unless Congress consents. It has not.  Keep in mind, this same Congress claims Obama has overstepped his authority in other areas and has taken many symbolic votes to prove it. They have filed lawsuits against him on matters far less serious than an illegal war. Yet in this case, they are happy to let him keep bombing. Why?  The real answer is that war is very profitable.”

http://www.thedailybell.com/news-analysis/36474/War-Still-a-Racket/

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We’re a year into the unofficial war against Isis with nothing to show for it

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“This Saturday marks one full year since the US military began its still-undeclared war against Islamic State that the government officials openly acknowledge will last indefinitely. What do we have to show for it? So far, billions of dollars have been spent, thousands of bombs have been dropped, hundreds of civilians have been killed and Isis is no weaker than it was last August, when the airstrikes began.  But don’t take it from me – that’s the conclusion of the US intelligence community itself. As the Associated Press reported a few days ago, the consensus view of the US intelligence agencies is that Isis is just as powerful as it was a year ago, and they can replace fighters faster than they are getting killed.”

http://www.theguardian.com/commentisfree/2015/aug/08/unofficial-war-isis-nothing-to-show-for

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A Major Cause of the Financial Crisis Is Making a Comeback

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“Subprime lending is surging.  Subprime loans are made to people with bad credit. They’re riskier than traditional loans. Lenders charge higher interest rates on subprime loans to compensate for the higher risk.  Subprime lending exploded in the early-to-mid-2000s and fueled the housing bubble. When people couldn’t pay back these expensive loans, the housing market crashed.  It sparked the biggest financial crisis since the Great Depression…and almost took down the whole US financial system. Lenders aren’t giving people subprime loans to buy houses much anymore. Instead, they’re giving subprime loans to people to buy cars… and to buy stuff on their credit cards.”

http://www.caseyresearch.com/articles/a-major-cause-of-the-financial-crisis-is-making-a-comeback

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The Yuan Drop Just Added $14 Billion to Asia Inc.’s Debt Burden

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“The record devaluation of the yuan has dragged down almost every currency in Asia. As they drop, the foreign debt bills of the region’s companies are rising.  Almost $1.6 trillion of bonds and loans denominated in dollars and euros across Asia outside Japan and China has just become $14 billion more expensive for companies that service the debt in their home currency, Bloomberg-compiled data show.  The cost to insure Malaysian government debt against nonpayment touched 171.5 basis points Wednesday, the highest since October 2011. Protection costs in Thailand, Indonesia, India and Vietnam also tested altitudes not seen in over a year.”

http://www.bloomberg.com/news/articles/2015-08-13/the-yuan-drop-just-added-14-billion-to-asia-inc-s-debt-burden

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One of the biggest Wall Street dealmakers sounds the alarm on M&A

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“Total M&A activity is also at the highest level since 2007, with global volumes at $2.9 trillion for the year to date, according to the data provider Dealogic. That is up around 38% on the same period last year.  Effron has been one of the biggest beneficiaries. He advised Kraft on its $58 billion merger with Heinz, and he is advising General Electric of its disposal of $200 billion of assets, according to Centerview’s website.  He added that the high valuations in the M&A wave were being justified in the context of today’s environment of low interest rates. That isn’t likely to last forever.”

http://www.businessinsider.com/blair-effron-on-mergers-and-acquisitions-activity-2015-8

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Chinese Brokers Now Selling Margin Loan-Backed Securities

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“Now, the PBoC will look to supercharge efforts to re-engineer a stock market bubble via leverage by pushing brokerages to issue ABS backed by margin loans.  If brokerages simply offload the margin loan risk to investors and use the proceeds to fund still more margin lending which can also be turned into still more ABS, and so on, then the effect will be to pile leverage on top of leverage. What happens in the event the underlying stocks become completely illiquid (i.e. Beijing decides to suspend trading on three quarters of the market again)?  The punchline: the senior tranche (which accounts for CNY475 million of the total CNY500 million deal) is rated AAA.”

http://www.zerohedge.com/news/2015-08-08/peak-insanity-chinese-brokers-now-selling-margin-loan-backed-securities

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Tesla is losing over $4,000 on each car it sells

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“Tesla is losing over $4,000 on every sale it makes of its Model S car, according to a report on its most recent financials by Reuters. That brings the loss between April and June of this year to a whopping $359 million.  In response to this, the car manufacturer has been forced to cut its production budget for 2015-2016. However, the company’s founder Elon Musk has promised investors that by the first quarter of next year, his company will have made enough money to move into the mass production of its affordable Model E, which is expected to cost approximately $35,000.  It’s an ambitious deadline and it will certainly be interesting to see if Musk can stick to it.”

http://thenextweb.com/insider/2015/08/10/whats-that-musk/

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