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space left open by department store closures is being filled by operators that offer either value or an experience. Former Macy's stores, for example, are being filled by Whole Foods or Life Time Fitness, according to JLL's report, while AMC Theatres and H&M have gone into space once occupied by Sears and JC Penney.

It's all part of the trend toward service-driven, experiential real estate. Consumers are looking for experiences; something that cannot be recreated online, or that can be posted on Instagram. Or both.''

But it ain't happening, folks! Tax cuts are not paying for themselves. Yes, there's more economic growth, but there's less revenue. Of course massive deficits are stimulative. Even we non economists know that. But where's the revenue growth? It's nowhere to be found.

...

Furthermore, the uptick in GDP growth isn't even as high as a couple of quarters in 2014. So there's not even that much evidence that the tax cut is stimulating much. For sure the economy would have been slower without it, but the limited economic gains produced by this spending have a cost.

I hate to beat the horse that's already dead, but that cost is massive federal borrowing. The deficits must be paid for by the issuance of ever increasing amounts of Treasury debt. When that debt comes to market dealers and investors must buy it. The Fed stopped printing the money to buy all that paper at the end of 2014. And since October of 2017, the Fed has actually been extinguishing money. There's less and less money in the banks, making it that much tougher for dealers and investors to absorb all the new paper.

Because of that, Treasury bill and note yields have been blowing the roof off. Short term bill rates and 2 year note yields are skyrocketing. The yield on the 10 year note is knocking at the door of 3% again.''

No. There's no evidence that this was even material... In other words, the rally was based on the idea that the Fed might not tighten as fast or as much if inflation is really slowing. It's perfectly obvious to us that it isn't.

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There's simply no reason in the CPI data to believe that the Fed will back off from its tightening regimen. The longer the market stays high and the more it rises, the greater the risk of a severe adjustment.

I'm still waiting, because $1 billion of bitcoin will evaporate in a week or two of selling. $2 or $3 billion of bitcoin gets transacted a day... Already 82% of all bitcoins are mined and around May 2020 new supply will halve. You can love or hate that, but bitcoin is solid deflationary money. We shouldn't hold the ‘digital gold' moniker against it. Bitcoin is a global currency, with increasing acceptance, a huge brand up there with Trump and the NFL, a global audience and a record of appreciation.

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What this basically means is that the state has a $91 billion debt in addition to its bonded state-related debt of $55 billion. And as the number of retirees and cost of health insurance grows, the OPEB debt will keep growing--unless something is done to reform or rein in these benefits.

...

The annual charge for retiree health coverage--which, excluding SUNY, came to about $1.6 billion in fiscal 2018--is just the tip of a very big iceberg. Counting all public agencies in New York, including localities and authorities, the Empire Center estimated in 2012 that the total unfunded OPEB liability came to $250 billion--a figure that now probably is closer to $280 billion, if not higher.

...

Government retirees at almost every level in New York are entitled to continuing health care coverage at a heavily discounted rate, or even for free--a benefit that has virtually disappeared from the private sector.

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Beijing may also decline to participate in the proposed trade talks with Washington later this month if the Trump administration goes ahead with the additional tariffs, The Wall Street Journal reported on Sunday, citing Chinese officials.

The Journal report quoted one senior Chinese advisory official saying China would not negotiate "with a gun pointed to its head".

This is really fascinating. The debate is between those who believe "policymakers deserve credit for doing enough to stop this from turning into a Second Great Depression", and "those who say policymakers didn't do enough to stop this from being far worse than it needed to be." There is apparently no space for those who think policymakers did too much, or even that they screwed up royally in creating the conditions for the collapse in the first place. Be afraid.

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Some of my New Year's Eve guests continued, as my husband and I did, to support the pro-European, pro-rule-of-law, pro-market center-right--remaining in political parties that aligned, more or less, with European Christian Democrats, with the liberal parties of Germany and the Netherlands, and with the Republican Party of John McCain. Some now consider themselves center-left. But others wound up in a different place, supporting a nativist party called Law and Justice--a party that has moved dramatically away from the positions it held when it first briefly ran the government, from 2005 to 2007, and when it occupied the presidency (not the same thing in Poland), from 2005 to 2010.

Since then, Law and Justice has embraced a new set of ideas, not just xenophobic and deeply suspicious of the rest of Europe but also openly authoritarian. After the party won a slim parliamentary majority in 2015, its leaders violated the constitution by appointing new judges to the constitutional court. Later, it used a similarly unconstitutional playbook to attempt to pack the Polish Supreme Court. It took over the state public broadcaster, Telewizja Polska; fired popular presenters; and began running unabashed propaganda, sprinkled with easily disprovable lies, at taxpayers' expense. The government earned international notoriety when it adopted a law curtailing public debate about the Holocaust. Although the law was eventually changed under American pressure, it enjoyed broad support by Law and Justice's ideological base--the journalists, writers, and thinkers, including some of my party guests, who believe anti-Polish forces seek to blame Poland for Auschwitz.

The good news is, the next one will probably generate a somewhat less painful hit than past episodes, according to their analysis. The bad news? Diminished financial market liquidity since the 2008 implosion is a "wildcard" that's tough to game out...

Assuming an average-length recession, the model came up with the following peak-to-trough performance estimates for different asset classes in the next crisis, according to the note:

U.S. stock slide of about 20 percent.

A jump in U.S. corporate-bond yield premiums of about 1.15 percentage points.

A 35 percent tumble in energy prices and 29 percent slump in base metals.

A 2.79 percentage point widening in spreads on emerging-nation government debt.

A 48 percent slide in emerging-market stocks, and a 14.4 percent drop in emerging currencies.

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[But] JPMorgan's Marko Kolanovic has previously concluded that the big shift away from actively managed investing -- through the rise of index funds, exchange-traded funds and quantitative-based trading strategies -- has escalated the danger of market disruptions. He and his colleagues wrote in a separate note Monday of the potential for a future "Great Liquidity Crisis." ... This change has "eliminated a large pool of assets that would be standing ready to buy cheap public securities and backstop a market disruption," Chang and Loeys warned.

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Nasdaq cut the entire trade on Wednesday and the exchange confirmed that the loss accounted for all of the exchange's own default fund of €7m and swallowed €107m, or two-thirds, of its €166m mutual default fund that clearing house members must contribute to.

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With Nasdaq and members of its clearing house repairing the damage, questions as to how a single trader could come close to wiping out the clearing house's layers of protection will merit the attention of regulators, including the European Central Bank.Members of the clearing house include some of the biggest banks and energy traders such as Morgan Stanley, UBS and Equinor, Norway's state oil company... .The catalyst for the trading loss was a series of backfiring bets on the price difference between German and Nordic power markets, according to multiple sources in the industry.

The action in the bond market signals mounting worry about the high-wire act at Tesla. Elon Musk is scrambling to ramp up Model 3 production fast enough to turn a profit -- and use that money for looming debt payments.

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More than $9 billion of Tesla's debt is scheduled to mature before 2025, including a total of $2.7 billion this year and next, according to a Goldman Sachs research report that called the company's balance sheet "concerning."

"Tesla is extremely leveraged. They have a gun to their heads dictated by the timing of the debt payments," said Cowen's Osborne, who has an "underperform" rating on the stock.

And in addition to Tesla, the government is gunning for Zuckerberg and Facebook. Snapchat is proving to be a disastrous investment (down nearly 65% from its IPO). WeWork bonds just got downgraded to junk... We're starting to see major cracks in tech investors' faith.

This is a MAJOR turn that's taken place over the last couple of months. And if tech stocks go down, the market is going with it. Tech stocks, in particular "FAANG" stocks -- Facebook, Amazon, Apple, Netflix, Google -- have been holding this market up for a long time. Tech stocks have been responsible for around 95% of stock market gains this year.

...

In addition to investor's losing faith, the government is also breathing down the necks of these tech giants... Senator Bernie Sanders introduced the cutely named Stop Bad Employers by Zeroing Out Subsidies Act (aka Stop BEZOS Act) that aims to tax companies for low-wage employees receiving government assistance.

...

And now companies are viewing their visionary founders as liabilities... Apparently investors and boards have woken up to the fact that these guys are fallible (and mortal), so there's more talk of key man risk insurance should anything happen to them.

It's been nothing but buttercups and unicorns for tech stocks these past few years. And these recent developments go to show you, everything moves in cycles. And we may be entering a downcycle in tech.

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A shift away from the focus on the neutral rate could buttress the arguments of those who feel the Fed should instead pay more attention to financial markets, and particularly to the evolution of financial risks.

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In a paper released Thursday evening, [Boston Fed President] Rosengren said the Fed in conjunction with state and local authorities should be preparing more to fight the next recession, including with the possible use of higher capital buffers for banks.

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But Trump got it wrong -- way wrong -- when he said it hasn't happened in a century. In the last 70 years, it's happened in at least 62 quarters, most recently in 2006.

Yes, and this is assuming GDP won't simply get revised down...

According to three people briefed on the initiative, Chinese Communist party officials have invited the heads of America's leading financial institutions to attend a "China-US Financial Roundtable" in Beijing on September 16th, followed by a meeting with Wang Qishan, vice-president of China.

Chinese officials hope the new group, which will be jointly chaired by Zhou Xiaochuan, a former Chinese central bank governor, and John Thornton, the former Goldman Sachs executive who now chairs mining group Barrick Gold, will meet every six months to discuss Sino-US relations and advise the Chinese government on financial and economic reforms.

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People briefed on the planning for the China-US Financial Roundtable said it reflected the Chinese government's frustrations in dealing with Mr Trump, who has refused to designate a point person for China relations and has increasingly deferred to the hawkish views of Robert Lighthizer, the US trade representative.

Stocks have since recovered all their losses, rallied to new highs, and extended their bull-market run to a record streak. But stocks are called risk assets for a reason -- their volatility -- and Citi's equity trading strategy team is alerting clients on the conditions that are brewing ahead of the next plunge.

"Indeed, after flirting with 'euphoric' levels for the past 2 weeks, Citi Research Strategy's Panic-Euphoria model finally tipped over the threshold this week [into euphoric territory], suggesting a 3x higher likelihood of negative SPX returns over the next twelve months," Antonin Jullier, the global head of equity trading strategy, said in a client note on Wednesday.