TOP STORIES:
Companies haven’t fudged their numbers this much since the
financial crisis - (finance.yahoo.com)
Almost all of the companies
in the S&P 500 (^GSPC) have announced their quarterly earnings, and now Wall Street’s
number crunchers are finalizing their conclusions as to what actually happened
during the last three months of 2015. Unfortunately, it’s become an
increasingly challenging task to understand the true financial performance of
the big publicly traded companies because of the widening of something called
the “GAAP gap.” Don’t worry: this topic isn’t as scary a concept as it sounds.
In a nutshell, there’s a standard known as generally accepted accounting
principles, or GAAP, which encourages some uniformity in how companies will
report financial results. Unfortunately, the strict standards of GAAP often
force companies to report big one-time, non-recurring items that will distort
quarterly earnings, in turn making them a poor reflection of underlying
operations.
This Oil Sector Hasn’t Crashed Yet… But It’s About to - (www.wolfstreet.com) Unlike
the rest of the oil industry – which has been decimated by lower oil prices –
U.S. oil refiners have marched on to new highs. But the five-year-long bull
market for these companies is about to come crashing down. Let me explain… You
can see the incredible uptrend in the following chart of refining giant Valero
Energy (VLO). Its shares are trading near an all-time high… Does that look like
the chart of a company whose commodity is down more than 30% over the last 10
months? Heck no. And it won’t stay that way for long. As longtime Growth
Stock Wire readers know, fracking has
allowed the U.S. to tap oil reserves in areas like Texas’ Eagle Ford and North
Dakota’s Bakken shales. Because of this, annual U.S. crude oil production is up
more than 70% since 2008.
Everyone
is worried that a third China bubble is about to pop - (www.businessinsider.com) First,
China's property bubble popped. Then, China's stock market bubble burst over
the summer, and investors lost a ton of money before the government took
control of the system. Now, the concern floating around the world of markets is
that the third in China's 'triple bubble' is about to
burst. That bubble is credit, especially corporate bonds which have absolutely
exploded over the past year as refugees from the other bubble bursts searched
for yield. This one is going to be for a very straight-forward reason too
— supply. Simply put, there are about to be too many bonds in China, and that
could ultimately harm the weakest part of the Chinese economy, the debt-loaded
zombie companies which helped form the property bubble and are now unable to
turn a healthy profit.
Are
'Wealthy' Americans Scrambling To Find Cash To Cover Their Tax Bill? – (www.zerohedge.com) Every year around this time, Americans face the
certainty of tax time, and that means - in general - finding the cash to pay
Uncle Sam his just deserts. This scramble for cash is seasonally evident
in the variable-rate tax-exempt (Muni) bond market, where the typically
wealthy stash their cash, as rates rise into tax time and fall after (as flows
come and go). This year however, the scale of the outflows is enormous,
spiking money-market fund rates from 1bp to 29bps...
Brazilians Brace for More Drama at Top Court, Congress - (www.bloomberg.com) Brazil is bracing itself for another week of
drama, in which the Supreme Court and Congress will chart the path through the
nation’s political crisis after a poll showed two-thirds of its citizens want
President Dilma Rousseff ousted. The Attorney General’s office over the weekend
called on the Supreme Court to quickly and definitively settle a legal dispute
over former President Luiz Inacio Lula da Silva’s appointment to become
Rousseff’s chief of staff. Several injunctions preventing Lula from taking
office have alternately been imposed and lifted, with the latest ban for him to
join her cabinet coming from Supreme Court Justice Gilmar Mendes late on
Friday.
Wall Street's Pile of Unwanted Treasuries Exposes Market Cracks - (www.bloomberg.com)
This Is What's Going On Beneath the Subprime Auto-Loan Turmoil - (www.bloomberg.com)
U.S. existing home sales tumble in warning sign for housing market - (www.reuters.com)
Valeant CEO Pearson Will Step Down, Ackman Added to Board - (www.bloomberg.com)
China banking regulator tells lenders to rein in risks- sources - (www.reuters.com)
China’s debt mountain will get even bigger - (www.reuters.com)
UK manufacturing output sees biggest drop since 2009, rebound expected - CBI - (www.reuters.com)
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