IPO Mania Collapses in Germany

There has been a series of debacles on the German IPO market, including Chinese companies that listed there. But Zalando is a precursor of a different kind. It’s the largest German online shoe and fashion retailer. It’s known for its no-holds-barred marketing. It’s one of the stars of the vibrant Berlin startup scene. It’s going to change the world. Founded 6 years ago, it went public on Wednesday with enormous hoopla, hype, and hope.
The front of the stock-exchange building in Frankfurt was decorated in the style of a Zalando box. Ten mannequins lined the entrance to the building. Inside, before trading started, six models strutted Zalando’s stuff, circling once around the trading floor where Zalando managers, bankers, traders, and journalists jostled for position. This IPO was a big event.
Instead of just ringing the bell amidst a round of wild applause, the way it is done traditionally and shown on TV around the country, board members Robert Gentz (CEO and cofounder), David Schneider (cofounder), and Ruby Knight took the bell out of a signature Zalando box and then rang it. It was a fabulous PR stunt: showing that branded box on TV to millions of people, for free, under these glorious circumstances.
So it’s just a retailer with thin margins in an ultra-competitive industry with no barriers to entry and a lot of big established players whose key markets are in the possibly toughest retail environment in the world – the Eurozone which can’t seem to get out of its long-term recession. And its largest market, Germany, is famous for its dreary retail sales (here’s my chart for annual retail sales 1995 – 2013; it may be better to avert your eyes).

This post was published at Wolf Street on October 3, 2014.

COT Gold, Silver and US Dollar Index Report – October 3, 2014

Gold COT Report – Futures Large Speculators Commercial Total Long Short Spreading Long Short Long Short 171,075 106,205 27,803 145,396 206,125 344,274 340,133 Change from Prior Reporting Period 693 -293 -2,735 -3,219 -6,809 -5,261 -9,837 Traders 115 89 61 52 48 193 175 Small Speculators Long Short Open Interest 35,600 39,741 379,874 -653 3,923 -5,914 non reportable positions Change from the previous reporting period COT Gold Report – Positions as of Tuesday, September 30, 2014
The COT reports which we look at each week provide a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. The weekly reports for Futures-and-Options-Combined Commitments of Traders are released every Friday at 3:30 p.m. Eastern time. The short report shows open interest separately by reportable and Non-reportable positions. For reportable positions, additional data is provided for commercial and non-commercial holdings, spreading, changes from the previous report.
Futures and Options Combined
What does this title mean? A future is a standardized contract traded through regulated exchanges where an investor buys or sells a contract at a specified price for a specific date in the future. The price includes the interest charge due to the seller by the buyer from the date of the contract to the due date. An option is the ‘right to buy or sell’ a contract at a fixed date in the future at a specific [strike] price. The difference is that a futures contract is an agreement to buy or sell, whereas an option gives the holder the right to buy or sell. An option holder can decide not to take up that right and will only lose the cost of buying the option. His loss is therefore definable at the start of his investment, while the potential profit has not limit to it. A futures contract is usually leveraged [a loan provided] up to 90% of the contract. However, with the owner liable to top up his ‘margin’ to maintain this 10% his potential losses can rise far higher than his investment. A ‘long’ [buying] contract limits its loss to the full price of the item, whereas the short’ [selling] contract has no limit except the height that the price of the item can rise to.
The Commitment of Traders report [COT] is therefore a report on the overall position of the Commodity Exchange [COMEX or NYMEX].

This post was published at GoldSeek on 3 October 2014.

SD Metals & Markets: Gold & Silver Finish Brutal Week Rolling Over into the Close

The following video was published by SilverDoctors on Oct 3, 2014
After a brutal trading week which saw silver close at 4 year lows and gold only $10 from summer 2013 lows, GATA Chairman Bill Murphy joins the show discussing:
1. Silver closes under $17 & gold rolls over into the close- is a waterfall capitulation collapse coming on Sunday night’s Globex open? 2. Murphy explains why this is the Gold Cartel’s Final Campaign- The Biggest Move in the History of All Markets is Coming (but at what level will it start from?) 3. Why haven’t the miners fought back? Murphy explains why the World Gold Council is against precious metals miners 4 . The Doc examines the gold & silver take-down from the perspective of the bullion banks- what is the ultimate game-plan? 5. Where will the pain end? Murphy explains why there is No such thing as oversold in a manipulated market, & that This is an effort to completely decimate the gold & silver markets & industry by driving them into oblivion- the banksters are attempting to corner the global physical and mining markets! 6. The Final End Game- Why the probability of a Grand Reset currency collapse is increasing

The Crash Course – Chapter 16 – National Failure to Save & Invest

The following video was published by ChrisMartensondotcom on Oct 3, 2014
As detailed in earlier chapters, the US’ debts and unfunded liabilities far exceed its assets. But making matters worse, the country is suffering from a prolonged failure to save and invest — both at the personal and national level.
Being over-indebted and under-capitalized is a recipe for hardship as we move into the future, especially if economic growth is going to be harder to come by (which we forecast in the upcoming chapters on net energy). Each year we continue this deficit makes us less able to withstand systemic shocks (a 2008-style financial crisis, an energy shock, the outbreak of war), some number of which lie undoubtedly ahead at some point.
How did we get to this point? Do we really want to pass these problems along to future generations? Questions like these should be front and center in the national debate, but sadly, are not. We need to work to change that — and in the interim, lead by example at the individual level.

Market Breadth Has Collapsed Around The World

The 100-day moving average of the advance/decline ratio for the MSCI World Index has collapsed to its lowest level since November 2008.

Out of the 46 MSCI country indices, we count 20 countries where the 100-day moving average of the advance/decline ratio is at its lowest level since 2008 or below it.
Below are charts for the MSCI World Index and MSCI Emerging Markets Index as well as our top 10 worst advance/decline country charts.

This post was published at Zero Hedge on 10/03/2014.

“Off The Grid” Indicators Suggest US Economy Anything But On Solid Ground

Summary: Every quarter we take a break from all the standard economic indicators to look at a range of alternative data. The purpose here is to pose the question: ‘Does the consensus view of the U. S. economy square with what real people do in their day to day lives?’ Consider one example: do consumers believe inflation is below 2% when the raw materials for a bacon cheeseburger are up 5.8% year-over-year? Economists would say that’s apples and, well, burgers, but the question stands. Or look at food stamp participation rates, which look to be on the rise again to the tune of 400,000 Americans in just the last four months. Other news is better – used car pricing remains robust, people are quitting their jobs more often than being terminated, and pickup truck sales (mostly small business purchases) are still increasing. Overall, though, the news from ‘Off the Grid’ challenges the notion that the U. S. economy is on solid ground and accelerating. Inching forward, yes… But not much more.

This post was published at Zero Hedge on 10/03/2014.

Manipulated Unemployment Rate Drops As The Economic Collapse Accelerates – Episode 483

The following video was published by X22Report on Oct 3, 2014
Euro zone business growth is the weakest this year. Unemployment rate dropped to 5.9% as the labor participation rate drops to a 36 year low. US housing prices are rolling over. The US Government is pushing the fear on Ebola to remove the peoples rights. An additional 1,000 troops is now being sent to Liberia bringing to the total to 4,000. U. S. Government admits they are funding the protests in Hong Kong. The people in the middle east are taking their countries back and the U. S. waived the sanctions for children in the armed forces to issue these countries millions of dollars. Turkey just voted for a buffer – no – fly – zone exactly what the U. S. wanted.

Low-Volume Melt-Up Fails To Stall Small Caps Worst Streak In Over 2 Years

Despite a low-volume melt-up in stocks off yesterday’s European close lows, US equities closed lower on the week with small caps once again the laggards. Even as stocks closed red, the costs of protection in credit and equity markets tumbled as the last 2 days volumeless liftathon in stocks took place against the background of very modest Treasury selling – this has the stench of high-yield bond exposure being significantly reduced (and synthetic hedges being lifted) – something we saw Wednesday into the close. The USDollar rose the most in 15 months today (up for the 12th week in a row – longest streak since Bretton Woods) led by Cable and EUR weakness. Jobs data losses in bonds today were largely reversed with TSY yields ending the week down 7-9bps. Commodities were ugly with silver and oil (under $90) joined at the hip and gold closing below $1200 for first time this year. The Russell 2000 closed lower for the 5th week in a row, the worst streak since Aug 2011.

This post was published at Zero Hedge on 10/03/2014.

Gold Seeker Weekly Wrap-Up: Gold and Silver Fall Over 2% and 4% on the Week

The Metals:
Gold fell $23.77 to as low as $1190.03 by early afternoon in New York before it bounced back higher at times, but it still ended with a loss of 1.81%. Silver slipped to as low as $16.73 and ended with a loss of 1.7%.
Euro gold fell to about 953, platinum lost $41 to $1223, and copper remained at about $3.00.
Gold and silver equities fell about 4% by midday and remained near that level for the rest of the day.

This post was published at GoldSeek on 3 October 2014.

September Jobs: Some Numbers Bubblevision Didn’t Mention

The September establishment survey showed a 248k job gain, but that was the seasonally maladjusted, preliminarily guesstimated version which will be revised in October and November, and then re-benchmarked several more times in the coming years. So let’s take a pass on the enthusiasm with respect to this fleeting monthly delta and consider a couple of trend points evident in this morning’s release – -data points which aren’t going to get revised away and which actually provide some fundamental insight about the actual ‘employment situation’ and the true condition of the US economy.
My favorite number is right at the top of the BLS table and it’s 155.9 million. That is the civilian labor force number for September and it compares to 154.9 million reported for October 2008 way back when the financial crisis was just erupting. The reason that rather tepid gain of 1 million labor force participants over the course of six years is important is that during the same period the working age civilian population (over 16 years) rose from 234.6 million to 248.4 million – -or by 14 million in round terms.
That’s right, the labor force grew by only 7% of the gain in adult population. That explains, of course, why the labor force participation rate of 66.0% back at the time of the crisis has plunged to a 36-year low of 62.7% in September. Or to put it another way, the employment-to-population ratio of 59.0% last month compared to just under 62% six years ago and 64.2% in the year 2000.
Needless to say, that huge 500 basis point decline in the true jobs ratio is dramatically more important than the monthly jobs delta – even if the later did trigger a run-the-stops burst by the robo traders within seconds of the release. The fact is, the plummeting rate of employment among the adult population means that the effective rate of taxation on labor hours worked has risen sharply, and will continue to do so as the baby boom ages.

This post was published at David Stockmans Contra Corner on October 3,.

Oct 3.2014?GLD remains constant/SLV declines by 152,000 oz/big raid on gold and silver with the phony jobs report/Hong Kong riots continue/More updates on Ebola/.

Gold closed down $22.00 at $1192.20 (comex to comex closing time ). Silver was down 22 cents at $16.78
In the access market tonight at 5:15 pm
gold: $1192.00
silver: $16.87
GLD :as of 5 pm est no change at the GLD (inventory now at 767.47 tonnes. I will update GLD figures tomorrow hight.
SLV : as of 5 pm tonight we have a small change in inventory. We lost 152,000 oz and this small sale generally pays for fees. (inventory now 349.934 million oz)
Today we have an update on the Ebola entry into the USA. We also have stories on the farcical jobs report. We will also provide an update on the Hong Kong riots.
As I warned you yesterday night:
“Tomorrow is the jobs report so you know the crooks will be busy.”
they did not disappoint us with the criminal activity.
We will discuss these and other stories
So without further ado………………
Let’s head immediately to see the data has in store for us today.
First: GOFO rates/
All months basically moved slightly towards the negative needle. On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates
London good delivery bars are still quite scarce.
Oct 3 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
.105000% .1125000000% .122500% .14500% .222500%
Oct 2 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
11500% .12000% .125000% .14500% .222500%
end
Let us now head over to the comex and assess trading over there today,

This post was published at Harvey Organ on October 3, 2014.

Risky Asset Outflows Surge Again As “Up-In-Quality” Rotation Accelerates

Market weakness, as BofAML reports, has taken a toll on mutual fund and ETF flows, with stocks (-$9.56bn), HY bonds (-$1.56bn) and levered loans (-$1.17bn) all reporting significant outflows last week (ending on October 1st). There is a clear “up in quality” and “up in capital structure” rotation among investors as investment grade bonds saw huge inflows. Notably, most PIMCO funds, including the Total Return Funds, do not report flows weekly, and hence the bulk of this outflow was not reflected in the last week’s data. In a statement PIMCO said that outflows from the Total Return Fund totaled $23.5bn in September, so we will have to see just where that outflow hit.

This post was published at Zero Hedge on 10/03/2014.

SP 500 and NDX Futures Daily Charts – Big Bounce Off Support

Stocks in the US came off support with a sharp rally based on ‘better than expected’ headline job additions number from the Non-Farm Payrolls Report.
The actual number of jobs estimated to have been added exceeded expectations at 248,000 vs. a consensus of 210,000.
The jobs that were added were weak, being low paid jobs being taken primarily by older people in the 55 category service industry.
Wage growth fell short at “zero” as in stagnant, and losing ground in real terms.
There is no recovery. The financial sector continues to skim the life off the American economy.

This post was published at Jesses Crossroads Cafe on 03 OCTOBER 2014.

Student Loan Bubble Blowback: Morgan Stanley Warns Average Debtor Can’t Get A Mortgage

Amid rising tuition costs, an increasing share of students rely on debt to fund their education. Student loan delinquent balances have been on the rise since the early 2000s and those with student loans are likely to be less credit worthy than those without (Exhibit 50 & Exhibit 51). As a result, consumption for the student debt-laden population may be depressed. To be sure, the share of consumption driven by college age consumers has been in decline since 2003.

This post was published at Zero Hedge on 10/03/2014.

What Do Treasury Yields Say About Job Expectations, Inflation Expectations, and thae Recovery?

Curve Watcher’s Anonymous notes some interesting reactions in the treasury bond market following a string of good job reports.
Today the jobs numbers once again beat expectations: Nonfarm Payrolls Rose by 248,000 and the unemployment rate fell to 5.9%.
In seven out of the last eight months, jobs rose by over 200,000. Last month was the exception, but even then, the initial job report was revised up 69,000 to 180,000.
In light of such purportedly strong data, especially with the Fed tapering ending this month and expectations across the board of fed hikes, yield on the long bond should be rising.
The yield curve also should be steepening, at least if one believes in the recovery. Let’s take a look to see what is actually happening.
30-Year Treasury Yield

This post was published at Global Economic Analysis on October 03, 2014.

5 Things To Ponder: Motley Cognizance

It has been an interesting week in the financial markets as the current correction process has continued. As shown in the chart below, the correction has primarily occurred in the mid, small and international equities as money has rotated into mega-large cap stocks for safety.
The chart above suggests a couple of things:
1) Portfolios that have been allocated outside of a large cap domestic stocks have performed substantially worse than market headlines would suggest, and;
2) The leadership of the market has narrowed markedly in recent months which historically has been an indicator of late stage “bull-market” cycles.
The current correction in the S&P 500 has taken the index into very oversold territory on a short-term basis as shown below. (As an aside, I do find it somewhat humorous to see the “panic” of individuals over a 3.4% dip. When a real correction occurs the “stampede for the exits” could be far greater than currently imagined.)

This post was published at StreetTalkLive on 03 October 2014.

Gold Daily and Silver Weekly Charts

Gold and silver were hit hard today in honor of the Non-Farm Payrolls Report.
China is on holiday for National Week.
Nothing of particular interest happened in the Comex or its warehouses yesterday.
The sheer arrogance of the NY Fed still has me taken aback. They really do not see what is coming.
Today is one of those absolutely charming ‘Indian Summer’ days in October that are far too nice to spend much time listening to ‘financial journalists’ spinning puerile tales about the economy in the style of The View.
So I am out of here.
The markets will always be there. Well perhaps not all of them. The Comex seems to have diminishing value and a shorter half-life than some.

This post was published at Jesses Crossroads Cafe on 03 OCTOBER 2014.