Overnight

Not since January has the Nikkei 225 been this high as the yen weakened further against the dollar brightening the outlook for Japanese exporters. Up 0.7% to 17,989.73 early, the index hit as high as 18,043.72 and could finish up 3.6%, the biggest weekly gain since mid-August.

Fed Chair Janet Yellen's hawkish talk in Washington Thursday no doubt added to the hoped for rise interest rates next month, the first one in a year. That and hopes the new administration headed to Washington will help stimulate spending. The yen traded at 110.45 compared with levels below 105.00 prior to the U.S. election results. In other markets, the Hang Send was up 0.17%, the ASX 200 0.31%, Kospi down -0.34% and the Shanghai composite off -0.32%.

Reuters reported that:"Yellen testified to Congress where she said in prepared remarks that a rate hike could be "appropriate relatively soon," and added there were dangers to waiting too long to tighten monetary policy. She added she would not step down from her position as the head of the Federal Reserve until the end of her term. Her comments pushed the dollar higher, with the dollar index, which measures the greenback against a basket of currencies, reaching a session high of 101.32.
However, shares in Asian emerging markets faced further selling pressure, with analysts expecting more declines given that rate increases will likely spur a flight of capital back to the U.S., as investors search for higher yields. In Indonesia, the Jakarta Composite Index JAKIDX, +0.15%  was last down 0.5%, while the FTSE Bursa Malaysia Index FBMKLCI, -0.37%   was off 0.3%. “I expect the broad selloff to continue in emerging markets in Asia because I feel if the rates in the U.S. are really going to go up, there is no point putting your money in risky countries,” one analyst noted.

Oil prices fell as hopes that members of the Organization of the Petroleum Exporting Countries could reach a deal to cut output at their Nov. 30 meeting took a dive. Brent crude, the global price benchmark, was last down 1.0% at $46.01 a barrel overnight. The strong dollar didn't help gold and other so-called safe haven investments as the yellow stuff $1,207.40 an ounce, down 0.80%.

Economists Like To Flap

So you sold off your utility shares and other high yielding holdings scared off by the prospect of higher interest rates. And that might yet come, given Fed Chair Yellen's hawkish views today in Washington.

But the hike expected next month is already in the market if the sell off in bonds means anything. All of the damage there is most likely not just wishful thinking about more fiscal stimulus. But there might be fly in that linear thinking salve, an apparent overlooked one by many. The Trump corporate tax cut should it happen.

In his Financial Times "Hunt for groups that are not yet priced properly for a tax cut," John Authers cites Citi equity strategist Tobias Levkovich, "a cut to 20 per cent from the current effective rate of nearly 27 per cent would add $12 to his current top-down estimate of $129 for next year's S&P 500 earnings." Authers then ask which firms would be most sensitive to the tax cut, pointing out energy is one sector that has already benefited lower rates owing to loopholes or inversions.

Inversion were not very popular with Democrats and the outgoing administration you will recall. Quoting Levkovich, Authers writes: "telecoms and utilities stand to benefit most." Adding to that and the much disliked inversions where some politicians called those firms who sought them "traitors" and "un-American." It's a toss up which of these two pathetic excuses for parties and political leadership likes name calling the most, but by our reckoning it's the left.

Hoards of non-US earning idle overseas owing to unfriendly tax laws here at home. Should that change significantly that money could find its way here and add fuel to the markets flames in the form of buybacks and higher dividends. Critics will no doubt protests this won't help jobs and productivity. No, probably not. But it might help pension funds and insurance companies and other yield-starved folks.

It might also boost small cap firms despite their already strong performance. This is not to say, as Authers notes, there's an absence of other headwinds. There certainly are some loitering about. But if you're an investor you often have to take what the market gives you and skip all the name callers and    economists flapping their tongues. That is, unless you've forgotten these academics have successfully predicted 10 of the last three recessions.

Emotion

Charts they say tell their own tale. Here's one of interest since all the recent run-up in the market, especially the small cap stocks and the U.S. dollar. How much is real and how much emotion and how much is left?
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There is a school of thinkers among us who, though in some quarters might be considered dinosaurs in the business, harbor presumably valuable historical market experience, and always are attuned to conditions that might indicate either trend exhaustion-- when investors believe economic conditions are extremely weak or strong (not the case now)—or-- have a reason to be extremely pessimistic or optimistic about the future.

If the pendulum of investor sentiment was in the process of swinging painfully slowly from the former to the latter, then the election of Donald Trump to POTUS feels like it has accelerated the “rate of pendulum swing” (justifiably or not) towards optimism—perhaps excessive optimism in a very brief period. 
 
After a 7-year bull market in equities perpetuated by super easy monetary conditions, amid disappointing and sluggish economic growth, the implication of the shocking Trump victory-- i.e., the President-elect's comparatively aggressive pro-growth agenda, and the acute market optimism it has engendered-- could very well qualify as the "final catalytic euphoric blow-off" of the 2009-2016 bull market.

The question is whether the vertical price advance during November in general, and since the early hours of November 9 ^th , already has satisfied or largely discounted, the emotional reaction?



.businessinsider.com/high-yield-might-be-flashing-a-warning-sign-for-stocks-2016-11? 

Greater Clarity

Fed Chair Janet Yellen is set to speak to Congress Thursday. It's expected she will get as nearly everyone has of late some Trump questions.

 Federal Reserve Chair Janet Yellen will probably be quizzed about how President-elect Donald Trump’s fiscal policies might affect the economic outlook and path for rate increases when she gives congressional testimony Thursday. Don’t expect a clear answer.

The last sentence in that paragraph might be the first thing Bloomberg ever got correct. Yellen never gives clear answers. And there's good reason: She doesn't have any. And never has.

Bloomberg notes: While there’s growing confidence in a rate hike in December, Yellen may not be able to give the bicameral Joint Economic Committee in Washington many additional details on the more distant path for monetary policy. The future is loaded with more than the usual amount of hypotheticals that could alter the central bank’s economic forecasts and rate-hiking speed.

“She’ll continue to beat the drum as far as the Fed’s current outlook goes,” said Sam Bullard, managing director and senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “It’ll be interesting just to hear about the outlook given the political shift in landscape” but “I doubt seriously that they’re going to go too far out in making direct commentary on that until there’s greater clarity.”

The next time this Fed discovers greater clarity will be the first time. Seen any greater clarity ought to be the epitaph on Chair Yellen's Fed career. Wherever it's been it's a safe bet 2% inflation's hiding out there, too. Rumor has it they have economic interns and other underlings roaming the halls of the Eccles looking around corners and under tables for the missing twins, greater clarity and 2% inflation.

bloomberg.com/news/articles/2016-11-16/yellen-heads-to-congress-with-post-december-rate-outlook-in-flux

Overnight

Weakness on Wall Street set the tone for overnight weakness in Asia as the Nikkei 225 drifted lower in the face of the Bank of Japan's first fixed-rate debt purchasing move that crimped financial stocks with the Nikkei off 0.1% at 17, 848.79.

But it wasn't Wall Street action alone that affected Asian equities. Oil prices dropped, the Wall Street Journal reported, after data showed U.S. crude oil inventories in the country were higher than expected. Brent crude, the international benchmark, was last trading down 0.2% at $46.53 a barrel.
The data overshadowed comments from Russian Energy Minister Alexander Novak who told reporters at a Moscow energy forum that Russia would “support any decision” adopted by the Organization of the Petroleum Exporting Countries. Crude prices had surged nearly 6% Tuesday on news that OPEC would try to limit production ahead of a meeting in Vienna. During Asian trade, U.S. crude futures fell 0.35 percent to $45.41 a barrel, while Brent futures shed 0.34 percent to $46.47 a barrel.

This came ahead of inflation, jobs and exports data expected from the U.S. and testimony from Federal Reserve Chairwoman Janet Yellen on the economic outlook to Congress later Thursday. In other markets,the ASX 200 traded flat as a stronger dollar hurt commodities when it hit a 13-year high Wednesday in what investors believe will be a higher inflation and stronger fiscal stimulus scene with Trump policies coming on board.

The Kospi was off 0.06%, the Shanghai -0.30% and the Hang Send -0.23%.
 In the currencies, the greenback traded at 100.32 against a basket of currencies. In the U.S. on Wednesday, the dollar touched 100.57, its highest since April 2003. The yen strengthened against the dollar tracking 108.95, compared to 109 levels seen on Wednesday. The Australian dollar was trading at $0.7474 against the greenback, compared to levels above $0.75 seen earlier this week.

 Gold  held steady Thursday after the dollar soften from its recent high with spot gold at $1,227.50 an ounce, down slightly from its previous session.

What Legacy?

Reader: Listen, man, you can do practically anything you want. Just don't drink my good shine from a fruit jar or get dirt on my new coveralls.

Cartoonist: I hear you, man. I just want post my cartoon dedicating the Obama Legacy.

Reader: Who?

Cartoonist: The Obama Legacy, man.

Reader: You know I can't read.

Cartoonist: Everybody knows that, man.

Reader: Well, it better be funny or else I won't get it.

Cartoonist: Okay. See for yourself.

Reader:I don't get it. Are they puttin 'em up or taking  'em down?

Cartoonist: I told you it was funny, man. He never had no legacy.                                                

Man, Can't You Stop Shivering?

"We want...." The man isn't even in office yet. Imagine the arrogance of these bastards.
Maybe they've heard about ice water and hell too. Big business is a stench already, colluding as they did with MSM to fix an election and lying about it. Turning their heads to put an alleged criminal in the White House. It's getting healthier by the day.
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If President-elect Donald Trump is going to go soft on climate change regulations, big business is going to put up a big stink. 

"We want the US economy to be energy efficient and powered by low-carbon energy," they wrote, adding "failure to build a low-carbon economy puts American prosperity at risk."

More than 300 businesses signed the letter. It was announced in a press conference during the 22nd session of the Conference of the Parties (COP 22) currently being held in Morocco.

Trump said during his campaign that he would pull the U.S. out of the historic Paris Climate Agreement. The 175 signatories to the non-binding treaty, including the United States, are committed to reducing the emission of greenhouse gases as a way of fighting climate change.

Business leaders are not the only ones concerned over Trump's climate change stance. Scientists have questioned what a refusal of the Paris Agreement would mean for the environment, and have expressed concern over Trump's signaling that he will place climate change deniers in top White House positions.

money.cnn.com/2016/11/16/news/businesses-trump-climate-change

Tax Payer Money

They've thumbed their noses at the Federal law for a longtime and gotten away with it because of PC. If an individual tried it he or she would be in jail in seconds.The nerds of Silicon Valley complained about their money going back to Washington to support programs and people they disdain. Well, there are lot of Californians who don't want one cent of their tax dollars to go to support these kinds of cities who openly defy the law, especially in other states and that is what's been happening.

We couldn't agree with the tech heads more. So let's can get this financial can of peas open. Welcome abroad nerd heads. If you voted red, then you probably have some idea what to do.

President-Elect Donald Trump’s upset victory last week did nothing to show the light to renegade cities and counties that have refused to cooperate with federal immigration authorities.
Since the election, officials in Chicago, Seattle, Philadelphia, and elsewhere have reiterated their opposition to federal law. That position sets them on a collision course with the incoming Trump administration. Jessica Vaughan, director of policy studies at the Center for Immigration Studies, said the federal government doles out hundreds of millions of dollars each year in law enforcement grants.

“Definitely some of [the grant money] under the control of the Department of Justice … That’s the first obvious funding that should be denied sanctuary cities.”

“Definitely some of it is under the control of the Department of Justice … That’s the first obvious funding that should be denied sanctuary cities,” she said.
Officials in some of America’s largest so-called “sanctuary” jurisdictions expressed defiance in the wake of Trump’s win.
“I want to assure all of our families that Chicago is and will remain a sanctuary city,” Chicago Mayor Rahm Emanuel said during a news conference Monday. “Chicago has been a city of immigrants since it was founded. We have always welcomed people of all faiths and backgrounds, and while the administration will change, our values and our commitment to inclusion will not.”
Philadelphia Mayor Jim Kenney told Philly.com that his city should be described as a “Fourth Amendment city,” not a sanctuary city.

We respect and live up to the Fourth Amendment, which means you can’t be held against your will without a warrant from the court signed by a judge,” he said. “So yeah, we will continue to be a Fourth Amendment city abiding by the Constitution.”

Sanctuary Cities & Justice Department Grants

Jurisdiction	OJP* Grants
Connecticut	$69.3 million
California	$132.4 million
Orleans Parish (La.)	$4.7 million
New York	$60.1 million
Philadelphia	%16.5 million
Cook County (Ill.)	$6 million
Chicago	$28.5 million
Miami-Dade County	$10.8 million
Milwaukee	$7.5 million
Clark County (Nev.)	$6.3 million

*Office of Justice Programs

Source: DOJ Inspector General

Kenney offers a misleading description of his own policy, however. His executive order, issued in April 2014, limits cooperation with federal immigration authorities placing holds on illegal immigrants in city custody. According to Immigration and Customs Enforcement data, the city denied 171 so-called detainers — including for 106 people with prior criminal records — from Jan. 1, 2014, through Sept. 30, 2015.

lifezette.com/polizette/sanctuary-cities-in-the-crosshairs

Irrelevant

Senator Lindsey Graham is a joke.

 
He needs to spend his time and energy and taxpayer money on more important issues that the phony MSM vibes about Russians shacking into everything including my grandma's computer recipes. He's a neocon and needs to be voted out of office. Any opinions he has are irrelevant.

Your help is most likely no longer needed, sir And hopefully not wanted. Congress needs to get approval from the public at large before it continues to arbitrarily spend taxpayer money given the size of debt floating around these days. We need another congressional investigation spending money--especially one by both houses--like we need a known female criminal in the White House. 

There are more than enough Congressional hacks who most likely deserve some punishment to go around before we start importing fantasy foreign ones.
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Senior Republican Sen. Lindsey Graham urged Congress on Tuesday to investigate Russia’s role in the series of cyber attacks directed at U.S. political organizations leading up to last week’s elections, potentially forestalling Donald Trump’s desire for improved relations with President Vladimir Putin.
Graham, who has been publicly critical of Trump, proposed that both chambers hold hearings to probe “Russia’s misadventures throughout the world,” including the Obama administration’s conclusion that the Kremlin was behind the hack on the Democratic National Committee, New York Magazine reported.

 Assuming for a moment that we do believe that the Russian government was controlling outside organizations that hacked into our election, they should be punished,” Graham said. “Putin should be punished.”

U.S. officials formally accused Russia last month of directing cyber attacks against political computer systems in an attempt to influence the 2016 elections. Putin has repeatedly denied the charges.
Graham’s call for an investigation into Russia came one day after Trump and Putin spoke over the phone Monday. Trump’s appeals for closer ties with Moscow have raised significant concerns among foreign policy experts who are skeptical of Putin’s motives.

“Here’s what I would tell Republicans: We cannot sit on the sidelines as a party and let allegations against a foreign government interfering in our election process go unanswered because it may have been beneficial to our cause,” Graham said.

Graham added that despite his differences with the president-elect, he would “do everything to help him, because he’ll be commander in chief in dangerous times.”

freebeacon.com/national-security/lindsey-graham-presses-congress-investigate-russian-hacks/ 

Central Plannning Crumb Tossing

Here's an interesting chart that you might want to look over.

We've talked about stagflation before and a host of other possibilities. We've also said and we will say it again, if you, as this article correctly points out, have any hope of changing the existing corrupt disorder, you can not give up whatever leverage you've gained and you cannot settle for the same old crumb tossing elitist techniques to keep you quiet.

It becomes increasingly difficult to believe central planning policy tweaks can ensure a permanent extension of cooperation and prosperity.

Mao Zedong supposedly said, "There is great disorder under the Heavens and the situation is excellent." For those seeking to replace the existing social and economic order, chaos is a good first step. Those with a stake in the system decaying into disorder feel differently: for them, disorder is threatening and frightening.

Do we control the slide into disorder and the emergence of a new order? The short answer is no: the forces at work are systemic and structural, and not controllable with the usual political/economic tools.

Historian Peter Turchin explores historical cycles of social disintegration and integration in his new book Ages of Discord.

Turchin proposes a model of rising discord that eventually leads to a new cycle of cooperation and compares the expected result with historical data. He finds 25-year cycles that combine into roughly 50-year cycles, comparable (though not identical with) Kondratieff's proposed economic cycles (see chart below).

These 50-year cycles are part of longer 150 to 200-year cycles that move from cooperation through an age of discord and disintegration to a new era of cooperation.

This work draws upon his previous books, including War and Peace and War: The Rise and Fall of Empires, which I referenced in Following in Ancient Rome's Footsteps: Moral Decay, Rising Wealth Inequality (September 30, 2015) and The Lesson of Empires: Once Privilege Limits Social Mobility, Collapse Is Inevitable (April 18, 2016).

These long cycles parallel the cyclical analysis of David Hackett Fischer, whose masterwork The Great Wave: Price Revolutions and the Rhythm of History I've referenced many times over the years, most recently in We've Entered an Era of Rising Instability and Uncertainty (July 18, 2016).

   charleshughsmith.blogspot.com/2016/11/now-is-winter-of-our-discontent-our-era.