• More On The Government’s Fraudulent New Home Sales Report

    This is from a reader who posted this comment:
    I live in ‘the south’ in a very very nice area by the beach. A ‘developer’ built over 20 new homes and purchased several more lots to build on. His last home sold 6 months ago and the rest stay EMPTY! Lock box, not sold, and some for sale signs have been taken off to decrease competition from the other people trying to sell their home.
    The average asking price is $500,000 . The lots are cleared but undeveloped. He put a sign up on one lot to show the home that ‘could’ be built there IF anyone purchased it.
    In short… IT’S OVER! WE’RE BACK TO 2007 LOOKING DOWN AT A DEEPER AND STEEPER DECLINE!
    I’m beginning to think that the Census Bureau now includes ‘intent to sell’ as a ‘sale’ because I’m sure there’s a lot of people who are thinking of selling of in order to ‘get ahead of the market.’ Sorry, it’s too late.

    This post was published at Investment Research Dynamics on August 25, 2016.


  • Treasury Vol Crashes To 2016 Lows

    With all eyes focused on the collapse in equity risk over the last few months, it seems Treasuries have been ignored. This week has seen intraday trading ranges for 10Y Treasury yields crash to 2016 lows. The last time the volatility was this compressed was early June, which pre-empted a major surge in risk, slide in stocks, and drop in rates…
    As Bloomberg details, the benchmark 10-year U. S. Treasury note traded Wednesday in a yield range of less than 0.03 percentage point, the tightest since June. It’s the second-smallest range of 2016, excluding days the market was closed for American holidays, as bond traders await Federal Reserve Chair Janet Yellen’s speech in Jackson Hole on Aug. 26.

    This post was published at Zero Hedge on Aug 25, 2016.


  • Central Banks Cut Rates 667 Times Since ’08 & Own $25 Trillion Of Financial Assets – Episode 1058a

    The following video was published by X22Report on Aug 25, 2016
    Gold slammed down again. Subprime auto delinquencies surge. Durable goods orders decline. Capital goods shipments decline. Services PMI declines. Central banks have cut the interest rate 667 times and have accumulated 25 trillion worth of financial assets, the system cannot be sustained in this manner. More and more banks are joining a system that bypasses the dollar. The dollar as the reserve currency is doomed.


  • Terminal Economy: ‘Private Sector Will NEVER Recover…This Time, Replacing Humans Altogether’

    People are already taking the expected financial recession pretty badly.
    There are literally millions of people in the United States who’ve become deeply entrenched in a struggle to find or hold a good job, while keeping expenses covered on the income they do make.
    But most people assume they will shielded from the worst of it, that at some point things will pick up.
    Sadly, the forecast is much darker, and the next financial collapse much deeper than almost anyone has prepared for. The outlook from this global strategist at the Macquarie Group is beyond doom and gloom – it is a literal existential crisis.
    via the Epoch Times:


    This post was published at shtfplan on August 25th, 2016.


  • ‘Last Economist Standing’ John Taylor Urges “Less Weird Policy” At Jackson Hole

    Economist John Taylor is on his way to join the world’s central bankers at Jackson Hole for the 35th annual monetary-policy conference in the Grand Teton Mountains. As he explains (via EconomicsOne.com)…
    I attended the first monetary-policy conference there in 1982, and I may be the only person to attend both the 1st and the 35th.
    I know the Tetons will still be there, but virtually everything else will be different. As the Wall Street Journal front page headline screamed out on Monday, central bank Stimulus Efforts Get Weirder. I’m looking forward to it.

    This post was published at Zero Hedge on Aug 25, 2016.


  • Jackalope Janet: Bond Traders Sick With Fedspeak (As Commercial & Industrial Loan Delinquencies Increase)

    I think most of us are sick of Fedspeak, but every bond trader will likely be listening to Fed Chair Janet Yellen’s Friday morning speech in Jackson Hole, Wyoming. And hoping it will be more Jackson Hole than a Black Hole.
    According to Bloomberg, the world’s biggest bond traders are getting fed up with Fedspeak.
    Weeks of conflicting economic reports have whipsawed investors seeking to handicap the path of interest rates, and money managers overseeing about $6 trillion, including Pacific Investment Management Co. and Vanguard Group Inc., say policy makers aren’t making their task any easier.
    While the minutes from the Federal Reserve’s July meeting showed divisions within the rate-setting committee, New York Fed President William Dudley, San Francisco Fed President John Williams and Kansas City Fed President Esther George have signaled that a hike may be coming by year-end. Amid the mixed messages, investors are taking to the sidelines, leaving benchmark 10-year yields stuck in their narrowest range in a decade.

    This post was published at Wall Street Examiner by Anthony B. Sanders ‘ August 25, 2016.


  • Jackson Hole’d – A New Monetary Order Looms

    Just what goes on at the annual Kansas City Fed economic symposium in Jackson Hole? The short answer is ‘Generally, not much’.
    Will this year’s confab be any different, with Chair Yellen slated to speak on Friday? Fed Funds Futures markets don’t think so, with just an 18% chance of a rate hike at the September FOMC meeting and coin-toss odds of a bump in December.
    The title of this year’s Jackson Hole proceedings is, however, telling: ‘Designing Resilient Monetary Policy Frameworks for the Future’. Merriam-Webster defines ‘Resilient’ as: 1) able to become strong, healthy, or successful again after something bad happens 2) able to return to an original shape after being pulled, stretched, pressed, bent, etc. So what does the Fed have in mind when it considers the need for future resilience? Perhaps this year’s Jackson Hole conference (or its title, anyway) will offer more clues to future policy than just Chair Yellen’s talk.
    While the Kansas City Fed’s annual conference in Jackson Hole is safe for this year, come 2017 they are going to have some competition for hotel rooms and other local resources; there is a full eclipse of the Sun scheduled on August 21st. Local papers report that civic leaders are already working through plans for an additional 40,000 visitors/day to Jackson for the entire week around the ‘The Great American Eclipse’, the moniker the event now carries. Here is a quick article from a local newspaper, highlighting the one (quite unexpected) ‘facility’ that locals are most anxious to reserve:

    This post was published at Zero Hedge on Aug 25, 2016.


  • Hedge Funds Suffer Worst Outflows since Financial Crisis

    2016 may see second-highest redemptions in history!
    The toxic mix of crummy performance and high fees are having some impact. And it’s big money: The hedge fund industry has over $3 trillion under management. And some of this money is getting antsy.
    In July, hedge funds experienced net outflows of an estimated $25.2 billion, the largest monthly net redemption since February 2009 ($28.2 billion), according to an eVestment report cited by Bloomberg. In June, hedge funds got hit with net outflows of $23.5 billion. In March, redemptions had hit $7 billion, and in January $20 billion. With some inflows in the remaining three months, total outflows for 2016 so far amount to $55.9 billion.
    ‘Unless these pressures recede, 2016 will be the third year on record with net annual outflows,’ according to eVestment’s report. The other two years were 2008 and 2009.
    During the first seven month, when the S&P 500 rose 7.6%, hedge funds industry-wide had gains of only 1.2%, according to Bloomberg. The 10 funds with the largest redemptions lost on average 4.1%.

    This post was published at Wolf Street by Wolf Richter ‘ August 25, 2016.


  • A Typical Pattern Shows We’re Headed for Recession

    We’re witnessing a very typical pattern right before recessions and market collapses.
    The market’s price-to-earnings (P/E) ratio is currently at a level seen only before recessions.

    Before we flat out say there will be a recession, we need to dig deeper into why we’re here today.
    First, we can look at earnings (the E in P/E.) Earnings have stalled. Yet prices (the P in P/E) have still rallied. This pushes the P/E ratio upward.

    This post was published at FinancialSense on August 25th, 2016.


  • “The End Will Be Very Painful” Massive European Pension Fund “Single Biggest Concern” Is “Central Bank Pumping”

    ‘All our risk analysts are trying to peel the onion to understand if this is all correlated or if there’s something we can find that isn’t correlated,’ Carsten Stendevad, the chief executive officer of ATP, said in an interview in Copenhagen. ‘The truth is, yes, we can find pockets of things that are slightly less correlated. But the question is when this kind of moving-in-tandem will be very painful, when things move in the other direction.’
    Well done Central Banks…

    This post was published at Zero Hedge on Aug 25, 2016.


  • Millennials Love Free Markets, But Don’t Understand Them

    In a recent Reason-Rupe Survey, 58 percent of Americans ages 18 – 24 said they viewed socialism favorably. However, when asked if they favored a free market economy or a government-managed economy, 64 percent of Millennials said they favored the free market. How is it possible for Millennials to favor both a socialist government and a capitalist economy? The answer is simple, Millennials simply do not understand what either of these words really mean, especially capitalism.
    The word capitalism is generally unpopular on college campuses around the country. In pop culture, it is rare, though not impossible, to find a story where the capitalist ends up being the hero. All day long we are bombarded with anti-free market propaganda. Oddly enough, most of this anti-capitalist rhetoric is available to us through mediums that exist only because of the free market. For example, every time a young, enthusiastic socialist tweets about the injustices of capitalism from his or her iPhone, they are living proof that Millennials love the free market.
    If there is one thing the Millennial generation struggles with, it’s patience. We have grown up in a world where everything has been available to us with the click of the button. We have never had to use encyclopedias or spend hours doing research in a library. Instead, we Google whatever it is that we were looking for and in a matter of seconds, we have a plethora of sources. Socialism is not generally associated with quick results. Instead, extreme bureaucracy usually tends to make things take even longer than they otherwise would, much like a government bread line. Likewise, a government-run healthcare system usually results in longer waiting periods even for simple office visits. Millennials hate waiting. I am willing to bet that if these self-proclaimed socialists were to spend some time in a socialist country, they would not last very long.

    This post was published at Ludwig von Mises Institute on Aug 24, 2016.


  • Subprime Auto Delinquencies Jump 17% In July, Net Losses Soar 28%

    There was a troubling development at the end of July, when as we noted at the time, the largest US subprime auto lender delayed its Q2 earnings released due to “Accounting matters”, an event which promptly raised red flags not only over the fate of the company (whose stock plunged as a result), but the entire US subprime auto space.
    This is what SC said as justification for its 10-Q filing delay:
    Santander Consumer USA Holdings Inc. (NYSE: SC) (“SC” or the “Company”) announced today that it will delay the release of its Q2 2016 financial results, previously scheduled for Wednesday, July 27, 2016, because the Company’s financial statements for the quarter have not yet been completed. The Company is in discussions with its current and previous independent accountants regarding certain accounting matters, primarily related to the Company’s discount accretion and credit loss allowance methodologies. The resolution of these matters may impact prior period financial statements and the timing of the filing of the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2016 (the “Form 10-Q”).
    The Company is working diligently to file the Form 10-Q and schedule its earnings call as soon as practicable.

    This post was published at Zero Hedge on Aug 25, 2016.


  • Why Investors Are Buying $12 Trillion in Negative-Yield Bonds

    But it’s not just institutions that are buying into negative-yield bonds – retail investors are, too. And there are several reasons why…
    Don’t Miss: The best dividend stocks continue to raise their payouts. The best of the best do so for 50 years in a row… like these ‘dividend kings’…
    First, someone might buy a negative-yield bond to profit from a rising currency. For instance, an investor in Switzerland might buy a German one-year Treasury bond because they think the euro will appreciate against the Swiss franc. Since the Swiss investor’s home currency is lower in value, a big enough gain in the euro would offset the negative yield.
    Second, anxious investors might prefer to take a small loss on government bonds than bigger losses elsewhere. This mostly pertains to Europe, where negative interest rates have often compromised traditional outlets for money, like savings accounts. For instance, a smallcommunity bank in southern Germany is now charging a fee of 0.4% on deposits of more than 100,000 euros in accounts. This was in direct response to the European Central Bank’s negative-interest-rate policy.

    This post was published at Wall Street Examiner by Cameron Saucier ‘ August 25, 2016.


  • AUG 25/GOLD AND SILVER HOLD AS OPTIONS EXPIRE ON THE COMEX TONIGHT/PEER TO PEER LENDING CAPPED IN CHINA: THIS IS A MAJOR SOURCE OF FUNDING FOR CHINESE HOUSING/PORTUGAL MAY LOSE ITS INVESTMENT GRA…

    Gold:1320.40 down $4.30
    Silver 18.48 down 7 cents
    In the access market 5:15 pm
    Gold: 1322.00
    Silver: 18.55
    For the August gold contract month, we had a huge sized 214 notices served upon for 21,400 ounces. The total number of notices filed so far for delivery: 14,100 for 1,410,000 oz or tonnes or 43.866 tonnes. The total amount of gold standing for August is 43.788 tonnes.
    In silver we had 11 notices served upon for 55,000 oz. The total number of notices filed so far this month: 501 for 2,505,000 oz.
    Options expiry for the gold and silver contracts ends today August 25. Options for the OTC and London’s LBMA contracts expire August 31.
    Let us have a look at the data for today.
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    In silver, the total open interest FELL BY ONLY 419 contracts DOWN to 205,845. The open interest hardly fell DESPITE THE FACT THAT THE SILVER PRICE WAS DOWN 36 CENTS IN YESTERDAY’S TRADING . In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.029 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia &ex China).
    In silver we had 11 notices served upon for 55,000 oz
    In gold, the total comex gold fell 7077 contracts as the price of gold FELL BY $16.20 yesterday . The total gold OI stands at 565,896 contracts.
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    With respect to our two criminal funds, the GLD and the SLV:
    GLD
    we had a good sized withdrawal today at the GLD to the tune of 1.78 tonnes
    Total gold inventory rest tonight at: 956.59 tonnes of gold
    SLV
    we had a withdrawal of 1.899 millio oz from the SLV, / THE SLV Inventory rests at: 356.894 million oz.
    First, here is an outline of what will be discussed tonight:

    This post was published at Harvey Organ Blog on August 25, 2016.


  • Covered Bond Alert! Liquidity Losses Disrupt $450 Billion Mortgage Market in Denmark

    A few years ago, the Danish covered bond model was the darling of the mortgage markets. Washington DC area think tanks were touting its benefits and a possible replacement model for the US mortgage market. I was never convinced.
    What is a Danish covered bond, you may ask? From Realkreditrdet:
    The Danish mortgage model is regarded as being one of the best of its kind in the world.
    It consists of a unique balance principle, match funding and a market-based prepayment system. These features ensure that the Danish mortgage credit market is characterised by transparency, competitiveness and stability.
    The interest rate of a mortgage loan and the prepayment price directly reflect the price of the mortgage bonds funding the loan. The interest rates mirror the prices investors pay for the bonds. The bond rates are public and are published in the newspapers and on the mortgage banks’ web sites on a daily basis.
    The European Consumer Organisation has lauded the option of prepaying a loan on favourable terms as a smooth and efficient solution. The EU Commission singled the Danish prepayment system out in its White Paper on mortgage lending.
    The benefits are:

    This post was published at Wall Street Examiner by Anthony B. Sanders ‘ August 25, 2016.


  • Rate Hike Jitters Return In Poor, Tailing 7Y Treasury Auction

    And just like that the rate market’s perception has shifted. Following two stellar auctions earlier this week, namely a blockbuster auction of 2Y and 5Y bonds, which saw such strong demand we concluded that nobody appeared to be concerned about tomorrow’s Yellen testimony at least in the primary bond market. That, however changed moments ago when the Treasury sold $28 billion “belly”, 7Y bonds, at a yield of 1.423%, tailing the When Issued by 1.3 bps, the first tail in this tenor since February.

    This post was published at Zero Hedge on Aug 25, 2016.


  • How Central Banks Are Bleeding the Middle Class Dry

    The Western welfare states know many ways to get rid of their enormous sovereign debt – at great cost of their citizens. Once the debt burden becomes unbearable, the government simply reforms the currency. Then, the government debt will be ‘adjusted’ with the private wealth of the citizens. This is when the citizens will notice that their government’s sovereign debt is their own debt.
    But the government does not always need to make use of these large torture devices. More subtle ways, such as financial repression, are possible.
    What Is Financial Repression?
    “Financial repression” describes a set of tools with which the government can intervene in the market and keep its refinancing cost (the interest on its debt) artificially low. As a consequence, savers and investors are suffering from negative real interest rates because the nominal interest rates are below the inflation rate. The mathematical difference between the savers’ nominal interest rates and the inflation rate is the loss of wealth, the rate at which savers and investors are forced to contribute to the debt financing of their governments.
    Under normal circumstances, increasing amounts of government debt would cause a rise in interest rates. But due to the mandated artificially low interest rates, the government merely needs a small nominal growth in order to slowly get rid of its debt – at the cost of savers and investors. Using financial repression, wealth is being redistributed in a covert manner – away from the savers and investors and towards the government.
    The negative real interest rates are caused by, among other things, the politically mandated low interest rate policies of the central banks since the sovereign debt crisis, and the actions to save the euro. At the same time, investors’ money flows from the crisis countries to those states which are (still) considered to be safe, which causes their interest rates on money to decline further.
    The often-made claim that low interest rates are revitalizing growth and the business cycle has been proven to be wrong in reality.

    This post was published at Ludwig von Mises Institute on Aug 26, 2016.