Wednesday, December 13, 2017

Why Victory In Alabama Imperils The Future Of The Democratic Party -- And A Few Other Thoughts

A humble tweet from Trump accurately puts the loss of the Alabama Senate Seat in perspective...the 2% who chose write-ins.

As a Democrat, I do not think the party has any future, and this is how whatever future we do have left will play out:

The Democrats romantic illusion of a supposed "Resistance" is going to quickly become a sad reality -- but since it was more of a loose and decentralized "coalition", it will be hijacked by the well organized factions on the Extreme Left who will view it as a mandate to adopt an ill-conceived Socialist Platform.

From there, Northern/Coastal Elitists -- who are still out of touch with the realities of the Blue-Collar core of the party itself -- will drive away the remaining Moderate, Rust Belt, and Reagan Democrats still left in the party. Identity politics and issues such as removing Confederate Statues ARE NOT THE MOST IMPORTANT THING in the minds of people who cannot find a job, let alone barely afford to put food on the table.

Vetting potential Democratic Presidential Candidates for 2020 will be priority number one here on out, while going ALL IN on the idea the Trump being impeached is a foregone conclusion.

Economic plans to revitalize the Rust Belt are based on the failures of Soviet Collectivization -- what is extremely more worrisome is this obsession of glorifying Communism and washing away the stains of a man just as evil as Hitler -- Josef Stalin.

In a few months, Trump's Infrastructure bill will pass with bi-partisan support. David Petraeus - a very fine man and the best American General in decades - is poised to join the administration and right the ship (possibly along with Newt Gingrich, which pretty much implies the GOP is going to get its act together and deal with an outlandish Trump by reducing his role as President by 99% and using the Dick Cheney/W. model).

Finally and most importantly...hubris. Simply put, who needs the First Amendment when someone you disagree with should be physically removed/shut up...yeah, 50% of Millennials will go that far.

Who the hell needs the Constitution anyway?

Trump won in 2016, what makes anyone sure he cannot do the same in 2020? Four more years of Trump on top of the three we have left is the diagnosis --- unless, ironically, we start listening to people like Charles Barkley, and Democrats move BACK TO THE CENTER.

Tuesday, December 12, 2017

Tuesday, December 12, Night Wall Street Roundup: S&P, Dow Close Higher; Brent Falls After Hitting $65

By Stephanie Kelly
December 12, 2017

The S&P 500 and the Dow closed higher on Tuesday along with major European stock indexes a day ahead of the Federal Reserve’s expected U.S. interest rate hike, while Brent crude oil fell after reaching $65 per barrel for the first time since mid-2015.

The Fed, whose two-day policy meeting ends Wednesday, is widely expected to raise its benchmark rate to between 1.25 and 1.50 percent.

The S&P and the Dow hit record closing highs, boosted by bank stocks as investors focused on a potential cut in U.S. corporate tax rates and continued strong economic growth.

“As investors become more comfortable (that) the economic recovery appears to be expanding, they’re starting to dip their toes into the value sectors like industrials, financials and energy that need earnings growth to expand,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

The Dow Jones Industrial Average .DJI closed 118.77 points, or 0.49 percent, higher at 24,504.8, the S&P 500 .SPX gained 4.12 points, or 0.15 percent, to 2,664.11 and the Nasdaq Composite .IXIC dropped 12.76 points, or 0.19 percent, to 6,862.32.

Mergers and acquisitions helped boost European stocks, with the pan-European STOXX 600 index closing up 0.66 percent.

Shares of Gemalto (GTO.AS), a Netherlands-based digital security services company, surged 34.6 percent after a 4.3 billion euro bid from French tech consultancy Atos (ATOS.PA).

The earlier jump in oil prices also boosted energy-heavy European stock indexes, with the STOXX 600’s oil and gas sector .SXEP jumping 1.56 percent.

MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.02 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.43 percent.


Brent LCOcv1 was last at $63.56 per barrel, down 1.75 percent. Oil prices rose to a more than two-year high earlier after Britain’s Forties pipeline was shut due to cracks as a cold snap swept the country.

U.S. crude CLcv1 fell 1.26 percent to $57.26.

The Forties pipeline is important for the global oil market because the crude it carries normally sets the price of dated Brent, a benchmark used to price physical crude around the world and which underpins Brent futures.

The shutdown comes as oil supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) have helped drain some of the excess inventories built up following a global supply glut which began to emerge in late 2014.

Investors will keep their focus on policy decisions worldwide, with a slate of central banks, including the Fed, the European Central Bank and the Bank of England, set to meet this week.

The U.S. dollar rose against a basket of currencies as the Fed began its meeting. Investors will watch for any signs that Fed officials are more optimistic on the prospect of faster growth as lawmakers appear close to passing a major overhaul of the tax code.

The dollar index .DXY rose 0.19 percent, with the euro EUR=down 0.2 percent to $1.1745.

The Japanese yen strengthened 0.05 percent versus the greenback at 113.51 per dollar JPY=, while sterling GBP= was last trading at $1.3317, down 0.15 percent on the day.

The New Zealand dollar NZD= reached a one-month high earlier as investors welcomed the appointment of national pension fund chief Adrian Orr to head the Reserve Bank.

U.S. Treasury yields rose as stronger-than-forecast data on producer prices in November offset average demand at a $12 billion auction of 30-year bonds.

The two-year yield reached its highest in more than nine years as traders anticipated a Fed rate increase.

Benchmark 10-year notes US10YT=RR last fell 4/32 in price to yield 2.3993 percent, from 2.385 percent late on Monday.

The 30-year bond US30YT=RR last fell 2/32 in price to yield 2.7746 percent, from 2.772 percent late on Monday.

Article Link To Reuters:

Hooray For Bitcoin (But Don’t Buy It)

The price reached $19,000 last week. It is certain to hit zero.

By Lawrence Baxter
The Wall Street Journal
December 12, 2017

The price of bitcoin broke $19,000 last week, and traders and speculators are giddy. Fortunes are being made. But in the long run, the smart bet is against bitcoin, for at least four reasons.

First, bitcoin is too volatile to be a reliable store of value. National currencies rest on the real productivity and fiscal capacity of citizens. With bitcoin there is no there there—only some kind of euphoric trust. But this trust is undermined by hackers who have breached bitcoin repositories.

Second, the bitcoin community is using breathtaking amounts of electricity—about as much as all of Denmark, according to one recent estimate. The currency is built so that recording transactions, and thereby generating new bitcoin, requires solving complex mathematical problems. This keeps bitcoin scarce, but it also means that massive server farms are tasked with essentially wasteful calculations. When environmentalists begin to understand this, there will be a firestorm.

Third, the currency is a vehicle for criminal transactions and for avoiding government restrictions on moving capital. This is why bitcoin has been so popular in Venezuela and China, and why such countries are cracking down.

Fourth and most important, bitcoin is on a collision course with sovereign states. Bitcoin was founded on a libertarian ethos, and its proponents zealously resist licensing and regulation. Taken to its logical conclusion, this philosophy would entail the elimination of central banks.

So far, the volume of actual bitcoin transactions has been minuscule. Western governments are dozing. But if bitcoin ever grew to critical mass, politicians around the world would wake up.

King Philip IV of France once could not repay his debts to his bankers, the Knights Templar. So in 1307 he had their leaders arrested on trumped-up charges and then burned at the stake. No modern sovereign will give up the power of the purse without a similar fight, if perhaps a less bloody one.

At the first serious (and likely coordinated) move by governments to regulate or bank the digital currency, bitcoin’s price will crash to zero. Panicked owners will rush to exit and the bubble will burst. Bitcoin futures and options may just as well be based on pixies and fairies. Nothing will be able to save them. Speculators will depart for the next lunacy, leaving behind the greater fools to wonder where their supposed wealth went and demand that government do something about it.

All the same, the bitcoin bubble is doing some good. How can this be? The high price of bitcoin, though wildly fluctuating, is attracting attention to the underlying platform, called blockchain. This technology could revolutionize future transactions of many kinds, providing secure execution of “smart contracts,” as well as fast, efficient claims processing that eliminates expensive middlemen.

Eventually those platforms will be stable and secure. But it will take a lot longer than the frenzied bitcoin market suggests. Before this frontier is reached, bitcoin itself—neither stable nor secure—will have crashed to zero.

Article Link To The WSJ:

Bitcoin Hits Another Record High In March Toward $20,000

By Gertrude Chavez-Dreyfuss
December 12, 2017

Virtual currency bitcoin hit another all-time peak on Tuesday, two days after the launch of the first ever bitcoin futures on a U.S. exchange and ahead of the start of another futures contract next week, as investors grew optimistic that the $20,000-mark is within reach.

On Sunday, Chicago-based derivatives exchange Cboe Global Markets (CBOE.O) launched bitcoin futures, enabling investors to get exposure to the currency via a large, regulated exchange.

The CME Group (CME.O) is expected to launch its futures contract on Dec. 17.

“We’re going to see bitcoin emerge as a payment network,” said Trevor Koverko, chief executive officer of Polymath, a securities token platform.

“Currently bitcoin is being used as a speculative asset and store of value. But as scaling solutions...emerge, bitcoin’s utility dramatically increases along with its price,” Koverko said.

Bitcoin, the world's biggest and best-known cryptocurrency, was quoted at $17,310 on the Luxembourg-based Bitstamp exchange BTC=BTSP, up 5.1 percent on the day. Earlier on Tuesday bitcoin hit a record high of $17,428.42, registering a roughly 20-fold increase in its price for the year as it drew in millions of new investors.

A Reuters technical analysis that measures the ups and downs in trading prices, known as waves, showed bullish momentum for bitcoin.

The technical analysis suggests an extension of a wave, which could mean that bitcoin would easily surge above the psychologically important level of $20,000, according to the Reuters analysis.

”It’s remarkable how back in November $10,000 seemed like a psychological end-of-year target,“ said Lukman Otunuga, research analyst at FXTM. ”With the current gravity-defying bullish momentum, it may be no surprise if bitcoin concludes 2017 on $20,000.

But as bitcoin set a new record, digital currency exchange operators Coinbase and Bitfinex reported problems with service through their websites on Tuesday, frustrating traders seeking to cash in on the latest surge in the value of bitcoin and other cryptocurrencies.

The newly launched one-month bitcoin futures on the Cboe Futures Exchange were slightly tepid, with prices generally steady and volumes about a third of those seen on Monday. Bitcoin futures maturing in January XBTF8 were at $18,450, with just 1,416 contracts traded as of late afternoon in New York, compared with 3,956 contracts on the first day.

A total of $26.4 million was notionally traded so far on Tuesday, compared with around $73 million on Monday.

“The trading volume was huge yesterday as bitcoin price fluctuated in a wide range over the weekend,” said Park Nok-sun, a cryptocurrency analyst at NH Investment and Securities in Seoul.

“Now that the exchange price is relatively calm, it is obvious for futures trading volume to fall.”

While market participants are still heavily divided over the digital currency’s utility, value and safety, they expect the futures contract to offer a legitimate means for institutions to bet on bitcoin. Some investors even expect the futures will offer markets an easier means to take short positions on the cryptocurrency.

The futures are cash-settled contracts based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, which is owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss.

Article Link To Reuters:

The Force Behind Bitcoin’s Meteoric Rise: Millions Of Asian Investors

Retail investors, mostly in Asia, are pushing the price of bitcoin to new heights.

By Steven Russolillo and Eun-Young Jeong
The Wall Street Journal
December 12, 2017

Behind the stunning rise of bitcoin lies a new force in global financial markets: millions of individual Asian investors.

Despite the attention focused on the launch of bitcoin futures in the U.S. this weekend, the center of gravity for trading the virtual currency, measured by volumes, has been in the East—starting in China, before shifting earlier this year to Japan, and recently to South Korea as the latest hot spot.

And unlike past financial frenzies—such as the dot-com bubble of the late 1990s, when U.S. retail investors only piled in at the later stages of the rally—individual investors have been first to the party, fueling bitcoin’s 1,600% rise this year.

“Bitcoin is one of the few markets we’ve ever had in history where you’ve seen these astronomical gains around the world and the retail investors in Asia are the ones driving it,” said Chris Weston, chief market strategist at IG Group, one of the world’s largest online trading platforms. “It feels like this whole thing is being driven by the average Joe who isn’t nearly as financially literate as a professional fund manager.”

Various forces have stoked Asia’s bitcoin fever. While individual wealth has been growing in recent years, particularly in China and South Korea, lucrative investment opportunities can be hard to find, with property markets expensive and stock markets fully valued.

Anecdotal evidence suggests that Asians are more comfortable with the concept of virtual currencies such as bitcoin, particularly younger people who have grown up in a world of e-commerce and mobile payments.

China last year made up the bulk of trading volume before regulators clamped down. But by the end of November, Japan, South Korea and Vietnam accounted for nearly 80% of bitcoin trading activity globally, according to research firm CryptoCompare, while U.S. trading was about one-fifth of the volume. In the past few weeks, the U.S. share of the overall total has increased.

And while the numbers can fluctuate significantly on a daily basis, South Korea at one point last week accounted for as much as a quarter of bitcoin trading activity, exceeding that of the U.S., according to Coinhills, a data firm that tracks digital currencies. South Korea has a population of about 51 million, compared with 323 million in the U.S.

“Asia in general has a lot of interest in trading cryptocurrencies…[They] are the cool new thing that young people are excited about” said Vitalik Buterin, the creator of another type of cryptocurrency called ethereum, in a recent interview in Seoul.

Lee Sang-chul, 32, is one of the millions of South Koreans who have become besotted with bitcoin. Mr. Lee, who runs a car-detailing shop in the southern port city of Busan, invested 100 million South Korean won (about $92,000) into the virtual currency in October, a decision he describes as life-changing thanks to the gains he has made.

“Before bitcoin, I’d be at my shop from morning to evening. Now, I close shop when I have an appointment or leave early,” said Mr. Lee. He has hired two people at his shop since he started investing in bitcoin, and bought his wife an expensive Chanel handbag for their wedding anniversary.

“My goal is to accumulate as many bitcoin as I can,” Mr. Lee said, adding that he expects the virtual currency to replace standard currencies in the future.

In Hong Kong, cryptocurrency fans gathered one recent Friday evening at what was advertised as a “Bitcoin Bubble Bash.” The meetup was organized by BitMEX, a local trading platform, which arranged for pizza, wraps, beer and wine to celebrate “the most successful year of bitcoin history yet (again!),” according to the event invite. Nearly 200 people registered, with attendees including teachers, equity traders and insurance brokers.

“I’ve doubled my money. It’s only going up. I’m getting rich so quick,” said one person who attended the event.

It is people like these across Asia who have propelled bitcoin’s prices higher this year. Analysts reckon traditional Wall Street professionals won’t become the market’s main driving force for some time.

“It’s the first ever bankerless bubble,” Joshua Brown, chief executive of New York investment-advisory firm Ritholtz Wealth Management, wrote on his blog this month. “There’s never been a phenomenon like this where the general public beats the ‘big money’…We have a full-blown mania on our hands and Wall Street is still at the drawing board.”

Bitcoin’s popularity in South Korea has led to the cryptocurrency often trading at a higher price there than elsewhere. When bitcoin surged past $17,000 last week for the first time, according to CoinDesk, a research site that distributes the most widely quoted price across the crypto space, it hit almost $25,000 on Bithumb, South Korea’s biggest cryptocurrency exchange. Two other Korean exchanges, Coinone and Korbit, also displayed prices well above $20,000. Those spreads have since narrowed.

“Every market had its own local rules and that creates all different types of discrepancies,” said Cedric Jeanson, founder and chief executive of BitSpread, a bitcoin-focused hedge fund.

The bitcoin frenzy in Asia has triggered a backlash from regulators and politicians. China has already this year banned cryptocurrency exchanges and initial coin offerings, a form of fundraising that uses cryptocurrencies.

Late Monday, Hong Kong’s market regulator issued a warning that some unregulated cryptocurrency exchanges could be illegally offering futures and other cryptocurrency-related investment products.

Earlier this month, Pan Gongsheng, deputy governor of China’s central bank, warned investors about bitcoin at an event in Shanghai. “There’s only one thing we can do—watch it from the bank of a river,” he said. “One day you’ll see bitcoin’s dead body float away in front of you.”

South Korean Prime Minister Lee Nak-yon has also sounded the alarm. “If we let things continue, I feel that it will lead to some serious distorted or pathological phenomenon,” he said in a speech last month.

The chairman of Korea’s Financial Services Commission, Choi Jong-ku, on Monday told reporters the government wouldn’t officially authorize any cryptocurrency exchanges or introduce bitcoin futures trading.

“Too many people have jumped in to invest without knowing the basics,” said Josephin Jung, a former teacher turned bitcoin trader in her mid-40s, who regularly gives private lectures on bitcoin in Seoul. “And too many are getting cheated in the process.”

Article Link To The WSJ:

20% vs. 22%: The Tension Over Two Points In The Corporate Tax Rate

President Trump has raised possibility of increase, which amounts to about $200 billion over a decade.

By Theo Francis
The Wall Street Journal
December 12, 2017

Two percentage points are generating a big tussle in the debate over the right corporate tax rate.

As House and Senate lawmakers continue hashing out differences between their tax-overhaul bills, the prospect lingers that they could push the new corporate tax rate to 22%.

Both chambers passed bills that would have cut it to 20%, down from 35% today, as part of a broader package of tax-law changes, and lawmakers are eager to keep it there. Still, President Donald Trump has raised the possibility of such a change, and pressure is growing in some quarters to find money for a variety of interests, from lower-income workers to small grocers.

A 22% corporate rate instead of a 20% one is significant, amounting to about $200 billion in tax revenue over 10 years, based on a rule of thumb that puts each percentage point of corporate tax at about $100 billion over that period, tax experts say.

For U.S.-based companies, either cut would be sharply lower than today’s 35% statutory corporate rate, and push the U.S. rate below that of most major developed countries. “In the end, Corporate America will write a lovely thank-you note to the Congress of the United States, regardless which of those tax rates ends up being imposed,” said University of Southern California law professor Edward Kleinbard.

Moody’s Corp., the bond-rating giant, offered a glimpse of that contrast in a presentation to investors and analysts last week. The company’s effective tax rate under current law is about 30%, Chief Financial Officer Linda Huber said. Each percentage-point reduction in that figure would increase earnings by 7 cents to 8 cents a share.

So cutting the firm’s effective tax rate to 20% would raise earnings by 70 to 80 cents a share, Ms. Huber said, or between $134 million and $153 million using the company’s Sept. 30 share count. She suggested the difference between that and a 22% rate would mean giving up between 14 cents and 16 cents of that benefit. In 2016, Moody’s reported earnings of $1.36 a share, or about $267 million.

Lawmakers are seeking to give companies a reason to invest in the U.S. rather than overseas, and they worry that effort will fail if they adopt a tax rate that isn’t low enough—particularly because other countries are likely to cut their rates in response.

“That’s the whole idea, is to come in at below the average,” Sen. Rob Portman (R-Ohio) told reporters last week. “If we go ahead and take it up to the average or above, then we’re not giving our workers the competitive advantage we’re trying to provide here.”

Companies might be more amenable to a slightly higher rate if that means lawmakers ditch other tax-overhaul provisions they don’t like.

That could include a Senate proposal to maintain the corporate alternative minimum tax, or AMT, or provisions that postpone some tax cuts—the Senate bill puts off the corporate cut until 2019—and make others temporary.

Delays encourage gaming the tax system, as companies consider putting off or accelerating spending to maximum effect, while temporary provisions complicate corporate-tax planning, said Steven Rosenthal, senior fellow at the Tax Policy Center, a nonpartisan think tank run by a former Obama administration official.

“Whatever changes we want to make to the corporate tax rate, we should make it immediate and make it permanent and pay the price,” Mr. Rosenthal said.

Article Link To The WSJ:

The Cost Of The Republicans' Tax Delusion

Sweden could teach the U.S. a lesson in effective tax-cutting. Unfortunately, the GOP's leaders are bad at math.

By Justin Fox
The Bloomberg View
December 12, 2017

Last June, the center-left government in Sweden proposed cutting the country's top corporate tax rate, already a below-the-international-average22 percent, to 20 percent. The rate cut would be offset by a set of limitations on the deductibility of interest, so overall the Swedish government -- currently running a fiscal surplus of more than 1 percent of gross domestic product -- did not expect any revenue loss from the changes.

The proposal has been slowly working its way through the Swedish system since then. After a comment period that ended in September, the government began composing legislation that is due out the first half of next year and expected to take effect on July 1. The interest-deductibility changes, aimed at making "aggressive tax planning" harder and reducing corporate debt, are the centerpiece of the plan, so the reduction in the corporate rate may become bigger or smaller once the interest provisions are finalized.

Here in the U.S., lawmakers are also close to finalizing legislation that would cut the top corporate tax rate to 20 percent and limit interest deductions by corporations. Just like Sweden! Except for this part: Given how much higher the U.S. corporate tax rate was to start with (35 percent), the revenue loss from the rate cut is going to overwhelm the gains from the interest deduction limits. As a result, a fiscal deficit that's currently at 3.5 percent of GDP seems likely to pass 4 percent, even if the legislation delivers a substantial boost to economic growth.

I have written several columns lately about Republican claims that tax cuts will pay for themselves from the resulting increase in economic growth, and have been wondering why I get so worked up about them. The obvious reason is that the claims are false: No serious analysis by even the most sympathetic economist has found any of the big tax-cutting legislation enacted or proposed since 1980 to be even close to revenue-neutral. And so while I really can't say with confidence whether the tax bill being hammered out by House and Senate conferees this week will be good for the U.S. economy or bad, I can say with confidence that when Senate Majority Leader Mitch McConnell asserts that the bill will be revenue-neutral or better, or Treasury Secretary Steven Mnuchin trots out a joke of an "analysis" to make the same claim, they are full of baloney.

But I think what may bother me even more is that this insistence on the magical properties of tax cuts seems to have prevented the U.S. from taking full advantage of the actual positive properties of tax cuts and tax reforms that other wealthy countries such as Sweden have discovered over the past few decades. Since Ronald Reagan was elected president in 1980, it has worked something like this in the U.S.: Republican true believers push for tax cuts that often have quite sensible aspects but leave gaping holes in the budget, which subsequently have to be filled by Republican realists (George H.W. Bush in 1990) or Democrats, who generally try to do so by increasing taxes on the wealthy.

The result is a tax system that relies more heavily on income taxes than is the norm among members of the Organization for Economic Cooperation and Development, the club of the world's affluent democracies, and also levies those taxes more progressively (that is, there's a bigger gap between the top rate and the middle and bottom) than most other rich countries do.

The U.S. also has the highest statutory corporate tax rate among OECD members (which of course may be about to change big time), but the actual taxes it collects from corporations are below the OECD norm. Not coincidentally, the U.S. runs one of the biggest government deficits in the OECD. Its economy has also failed to grow significantly faster than those of other OECD countries (Sweden, for example) with much bigger overall tax burdens -- a result, economist Peter Lindert has convincingly argued, of much more economically efficient tax and social-welfare systems outside the U.S.

Now it's possible that I have the causation backward. Maybe it's mainly Democratic unwillingness to consider the economic benefits of a flatter, more consumption-oriented tax system that has kept the U.S. from moving more in that direction. But given that it's the Republicans who have mostly driven the national discussion on taxes since 1980, and are certainly driving it right now, it seems fair to focus on what they're doing and what they say.

What they've been doing this fall is pushing through a tax bill with some sensible aspects (and some not-so-sensible ones!), while not just largely ignoring its negative impact on government revenue but claiming against all evidence that it won't have a negative impact. Instead of responsibly advancing their priorities, they're leaving a mess for somebody else to clean up. And it's unlikely to be cleaned up in a way that either Republicans or Swedes would approve of.

Article Link To The Bloomberg View:

‘Buy the Dip’ Has Never Been More Popular In U.S. Stocks

By Luke Kawa
December 12, 2017

The practice of treating any and all pullbacks in risk assets as opportunities to accumulate more has become entrenched in global equity markets, especially in the U.S., according to analysts at Bank of America Merrill Lynch.

“Investors no longer fear shocks but love them,” a team led by global equity derivatives researcher Nitin Saksena wrote in a note Tuesday. “Since 2013, central banks have stepped in (or communicated that they may step in) to protect markets, leaving investors confident enough to ‘buy-the-dip.’”

Intraday realized volatility for the S&P 500 Index relative to the realized volatility in the open-close ratio for the benchmark gauge has soared to record highs this year, emblematic of an environment in which buying the dip has become gospel for traders, according to the bank’s analysis of price action going back to 2003. This ratio is also above the 90th percentile for the Euro Stoxx 50 Index and Nikkei 225.

Bank of America Merrill Lynch

In practice, this suggests any early weakness in stocks is being met with an onslaught of buying that propels the index back to where it opened by the time the closing bell sounds.

BofA equity derivatives strategist Clovis Couasnon puts it this way:

Imagine the S&P 500 Index is down 1 percent at midday, only to rebound and finish broadly unchanged. The open-to-close return would be close to zero, but under the surface there were two moves of about 1 percent.

“So if the buy-the-dip behavior is strong enough to cause mean reversion, this will cause intraday vol to be more supported than open-to-close vol,” he explained.

That mentality has been rewarded in 2017 as the market has climbed, with bounce-backs from some of the biggest retreats happening in record time. It took just three sessions for the S&P 500 Index to fully repair the damage caused by May 17’s 1.8 percent decline -- the quickest recovery from a five-sigma selloff since 1962, according to BofA.

Article Link To Bloomberg:

Gillibrand-Trump Fight Is On After Nasty Tweet: ‘He’s Trying To Silence Me’

The New York senator, who called on the president to resign over sexual harassment allegations, responded forcefully to the president's tweets slamming her.

By Annie Karni
December 12, 2017

Democratic Sen. Kirsten Gillibrand’s phone buzzed Tuesday morning while she sat in the Hart Senate Office Building, participating in her bipartisan Bible study group.

She ignored it. But when a member of her senior staff rang her again, and then again, the junior senator from New York finally stepped out into the hallway, bracing herself for a potential crisis.

Instead, one of the staff members on the line alerted Gillibrand to a political gift — a tweet from President Donald Trump, which was read to her over the phone:

“Lightweight Senator Kirsten Gillibrand, a total flunky for Chuck Schumer and someone who would come to my office ‘begging’ for campaign contributions not so long ago (and would do anything for them), is now in the ring fighting against Trump. Very disloyal to Bill & Crooked-USED!”

Less than 24 hours earlier, Gillibrand had joined four male senators in calling on Trump to resign because of the multiple allegations of assault and sexual misconduct. (Hawaii Democratic Sen. Mazie Hirono became the second female senator to join the call Tuesday.) Trump has repeatedly denied those allegations. But it was Gillibrand alone who managed to bait him into a response.

“What do you want to say?” two of Gillibrand’s senior staff members asked her, as she paced in the hallway. Her response, according to an aide, was immediate and visceral: “He’s trying to silence me.”

After crafting a tweet to that effect – “You cannot silence me or the millions of women who have gotten off the sidelines to speak out about the unfitness and shame you have brought to the Oval Office” – Gillibrand returned to Bible study, filling in her colleagues about the cause of the disruption, according to an attendee.

One of the members of the Bible study group, Oklahoma Republican Sen. James Lankford, later defended his prayer partner. “Our leaders should focus on the issues, not personal attacks,” Lankford said in a statement to POLITICO.

Gillibrand’s aides, meanwhile, clarified to reporters that she had met with Trump just once, in 2010, during a period when he gave money to many Democratic elected officials. Ivanka Trump, they noted, had also been present at the meeting.

The confrontation with Trump elevated a fight against sexual harassment that Gillibrand has been waging for years — and distinguished her from the pack of potential 2020 challengers all vying to play the role of Trump slayer.

In recent weeks, Gillibrand has made it clear she is outraged by the charges of sexual harassment being lodged against powerful men in media, politics, entertainment and other industries – and doesn’t want to litigate the gradations between unwanted touches and full-blown sexual assault. “Let’s say the line is here, and it’s all bad,” Gillibrand said last week, during POLITICO’s Women Rule conference.

Her no-tolerance policy drew cheers from the majority-female audience. But on Tuesday, some Democrats worried her rush to the frontlines of the #MeToo movement – she was one of the first senators to call for Minnesota Democratic Sen. Al Franken to resign last week, and earlier this month said President Bill Clinton should have resigned over his affair with Monica Lewinsky – carries with it some potential risk in a moment where the rules of the game are being figured out in real time.

“There should be rigorous pursuit of these kinds of charges, but right now there are no rules,” said David Axelrod, a former top adviser to President Barack Obama. “She’s been a leader on the issue [of sexual assault]. But the danger for her is looking so craven and opportunistic it actually hurts her.”

Another top Democratic operative worried Gillibrand risked putting the conviction before the trial. “If you cared about the Democrats and 2018,” said the operative, “you would be calling for hearings [for Trump]. When you call for resignation, you’re jumping the gun.”

The operative added: “I’d rather have congressional candidates being asked, ‘do you support hearings?’ Calling for resignation is not really what’s best for the party, but it’s good for her.”

On Tuesday, Democrats who had left Gillibrand in the wilderness after her comments on Clinton rushed to her defense. Warren accused Trump of trying to “slut-shame” Gillibrand by insinuating she might have traded sexual favors for campaign cash. But White House officials defended the president’s tweet, arguing that the intention was not to launch a sexist broadside – but to underscore that Gillibrand was a “swamp” politician who relied on wealthy donors like Trump to get where she is today.

White House aides on Tuesday went on the defensive Tuesday, sifting through vintage Trump tweets, looking for similar attacks on male politicians like New York Attorney General Eric Schneiderman, to prove that Trump’s attack of Gillibrand was not sexist.

“He’s talking about the way our system functions as it is,” press secretary Sarah Huckabee Sanders said at Tuesday’s press briefing. “Politicians repeatedly beg for money... there’s no way it’s sexist at all.” Calling Gillibrand a “wholly owned subsidiary” of her campaign donors, Sanders added: “This president is someone who can’t be bought.”

The White House did not argue, however, that Trump was attempting to delegitimize a potential political challenger.

“His legitimacy as president is widely questioned, and his reaction is to question the legitimacy of someone else,” said Stu Loeser, a Democratic operative and a former aide to New York Democratic Sen. Chuck Schumer. “His implication is that Gillibrand is only where she is because of people like him, which undermines her legitimacy.”

It’s a similar strategy to the one Trump has employed against another potential female 2020 challenger: Warren. By calling her “Pocahontas,” Trump has attempted to remind voters that as a professor at Harvard Law School, Warren had identified herself as a minority with Native American heritage. Trump’s implication is that Warren furthered her own career with a false affirmative action claim – a question of legitimacy.

Trump’s effort to delegitimize Gillibrand on Tuesday, however, only boosted her profile. A pre-scheduled press conference on tractor- trailer truck safety suddenly became must-see TV. Gillibrand called Trump’s tweet a “sexist smear.”

For Gillibrand, who for years has made issues of sexual assault in the military and sexism in Congress central to her political platform, Trump’s tweet was widely seen as a fundraising boon.

“I’m going to keep speaking out with the millions of women who are raising their voices,” Gillibrand wrote in a fundraising email her staff blasted out Tuesday afternoon. “We won’t be silenced by a tweet.”

The comedian Samantha Bee tweeted: “May this tweet be @SenGillibrand’s superhero origin story and ignite her 2020 campaign to replace your sexist ass.”

Testimonials defending Gillibrand flooded in from feminist icons like Gloria Steinem, local politicians like New York City Mayor Bill de Blasio, celebrities like actress Connie Britton—Gillibrand’s college roommate—and colleagues like Warren. (Hillary Clinton did not weigh in.)

But Axelrod added that it remains to be seen who emerges as the overall political winner from the #MeToo movement. “The important thing is that there is an established set of rules,” he said. “It may be that the person who emerges here may be the one who says, let’s be rigorous and let’s be consistent, about how we approach these things.”

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Alabama Senate Election: 5 Things To Watch

Doug Jones' chances hinge on African-American turnout and college-educated crossover voters, while Roy Moore is banking on an animated conservative base.

By Daniel Strauss
December 12, 2017

Alabama’s tumultuous special Senate election will take a final unconventional turn on Tuesday, either electing a Republican facing allegations of child predation or giving Democrats their first statewide win in nearly a decade in one of the reddest states in America.

Republican Roy Moore was presumed to be the favorite, despite a history of controversial comments and actions, after defeating appointed Sen. Luther Strange in the GOP primary. But Moore’s standing fell after multiple women accused him of sexual misconduct when they were teenagers. Remarkably, Moore remained competitive despite Senate Republicans pulling their support and some calling for him to be expelled from the Senate if elected, but Democrat Doug Jones has surged into contention for Attorney General Jeff Sessions’ old seat.

Polling of the race has been all over the place, and the results will hinge on just who decides to vote in the highly unusual December special election. Jones’ campaign has made a massive push to turn out black voters and convince Republicans he’s a Democrat worth backing, while the controversy surrounding Moore has inflamed committed backers who are sticking with him.

Polls close at 8 p.m. Eastern. Here are POLITICO’s five things to watch as Moore and Jones face off:

Do black voters turn out in force for Jones?

The single biggest piece of the Democratic coalition in Alabama is the African-American vote, and Jones likely needs at least one-quarter of the electorate to be black in order to win. As a result, even as Jones kept most of the national Democratic Party at arm’s length this fall, he has campaigned with Georgia Rep. John Lewis, the civil rights legend, and other African-American politicians including New Jersey Sen. Cory Booker and former Massachusetts Gov. Deval Patrick. Former President Barack Obama and Vice President Joe Biden recorded late robocalls urging Jones supporters to vote. And Jones has spoken incessantly on the trail about prosecuting Ku Klux Klansmen responsible for the 16th Street Baptist Church bombing when he was a U.S. attorney.

The black vote is concentrated in Alabama’s biggest cities as well as the stretch of smaller “Black Belt” counties, like Selma’s Dallas County and Tuskegee’s Macon County, running through the middle of the state. High turnout there is a must-have building block for a Jones victory.

How will college-educated white voters break?

College-educated whites have become a bigger and bigger part of the Democratic vote in other states around the country. But they have remained reliably Republican in Alabama — except when it comes to Roy Moore.

When the controversial Moore ran for state Supreme Court in 2012, he ran well behind GOP presidential nominee Mitt Romney in Alabama’s most-educated counties, and he performed poorly there in this year’s Republican primaries, too. Since then, lawn signs backing Jones have sprouted in some more moderate Republican suburbs.

“Hoover, Vestavia [Hills], Homewood, Mountain Brook — that’s your college-educated white box,” Alabama Republican strategist Blake Harris said of several Birmingham suburbs.

Public polling has shown Jones peeling off more support from this group than from blue-collar whites, but it’s unclear just how much crossover support Jones can count on — or whether a big chunk of these voters will simply throw up their hands at both candidates and not cast ballots at all. Watch Shelby County, a big suburban county south of Birmingham. It leans heavily Republican, but it has more college degrees per capita than anywhere else in Alabama, and Jones will likely need to run well ahead of Hillary Clinton and other past Democratic presidential nominees there to win.

Will rural conservatives stick with Moore?

While Jones wants to crank up turnout in Alabama’s big cities, Moore can outdo him by piling up decisive wins in Alabama’s more numerous rural counties. That’s where Moore drew his strength from in both this year’s Republican primaries and in his past runs for statewide office, thanks in part to strong support from religious conservatives.

“He's got a real solid core of supporters who are going to stick with him come hell or high water. You're just not going to be able to pry any of those folks away,” said Democrat Bob Vance, who lost to Moore in the 2012 state Supreme Court race.

Moore’s path looks much like President Donald Trump’s in that sense — and Trump gave him a late boost in the campaign, affirming his support with days left and prompting the Republican National Committee to reengage in the race. (The RNC had previously pulled out of Alabama after the sexual misconduct allegations against Moore.) Trump’s help, including a last-minute get-out-the-vote robocall, could be critical.

“If Judge Moore does not carry the rural counties, which are his stronghold, within about a 57-60 [point] margin, then he’s probably going to have a more difficult time than he would expect to have,” said Alabama Secretary of State John Merrill, a Republican.

Does the write-in vote hurt Moore?

While Trump went all-in for Moore, other Republican leaders — including Alabama Sen. Richard Shelby — have declared that they can’t support him, and a large write-in vote from voters who typically support the GOP could have a big effect if the race is close.

“I couldn't vote for Roy Moore. I didn't vote for Roy Moore,” Shelby said Sunday on CNN’s “State of the Union.” “But I wrote in a distinguished Republican name. And I think a lot of people could do that. Will they do it? I'm not sure.”

Shelby’s call has been joined by Romney and others, and Democrats are also stoking the write-in flames. The Democratic opposition research organization American Bridge has also released a video urging voters who can’t bring themselves to vote for Jones or Moore to write-in University of Alabama football head coach Nick Saban. Over past elections, Saban has received hundreds of write-in votes, according to the Tuscaloosa News.

How will the Republican Party react to the results?

Trump is sure to herald a Moore win if it comes to pass, as he has with other special election victors this year. But other than that, it’s hard to say how the rest of the GOP will react Tuesday night, whether Moore or Jones wins the election.

The National Republican Senatorial Committee pulled its support from Moore last month, and its chair, Sen. Cory Gardner of Colorado, called for him to be expelled if he were elected to the Senate. Many other Republican senators want nothing to do with Moore. Senate Majority Leader Mitch McConnell has said he wished Moore had dropped out of the race and reiterated that Moore should expect to face an ethics inquiry if he is elected. Moore has explicitly run against the GOP Senate leader during his campaign. Needless to say, their relationship may be a difficult one if Moore goes to D.C. For example: If Moore is elected and sworn in as a senator, the Senate Republican Conference doesn’t have to assign him to committees, though he could still vote and offer amendments on the floor.

But a Jones victory would present plenty of other problems for Washington Republicans, reducing their Senate majority to a spare 51 seats and putting control of the chamber up for grabs in the 2018 midterms. And either way, the special election could cause the GOP to accelerate deliberations on its tax bill while Strange, a reliable Republican vote, is still in the Senate. (It may take weeks for Alabama to certify the results and seat the new senator.)

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