What Unilever just Said About Consumers Around the World: ‘It’s Really Tough out There’

What is it with these consumer-products companies that need to sell a lot of cheap stuff to a lot of consumers around the world? Over the last few days, one after the other reported what are more or less unvarnished quarterly revenue and earnings debacles.
At McDonald’s, global revenues fell 5% and net income plunged 30%. At Coca-Cola, international volume was up a measly 1%, but in the US, volume declined 1%. Revenues were down fractionally for the quarter and 2% year-to-date. Net income in the quarter dropped 14%. Revenues at third largest beer-giant Heineken, which brews its stuff in 70 countries, dropped 1.7%. People are scratching their heads: are consumers actually cutting back on beer? Other companies too have reported disappointing results.
On Thursday it was Unilever, the Anglo-Dutch giant maker of shampoos, deodorants, laundry detergents, ice cream… that warned in its quarterly report about what it looks like ‘out there,’ not in the stock market, but in the real economy around the world.
‘It is really tough out there,’ said CFO Jean-Marc Hut. ‘We have been at pains to say that for a long period of time.’ Consumers are in trouble and are cutting back across key markets, leaving the company with price pressures and crummy sales.
Revenues fell 2%. ‘Underlying sales,’ which are adjusted for a variety of things, rose 2.1%, but it was the worst growth since Q4 of crisis-year 2009, and down from 3.8% in the prior quarter.

This post was published at Wolf Street on October 24, 2014.

Shanghai Delivers 51.5 Tonnes of Gold For the Week: How Long Can the Gold Pool Be Sustained

“For ’tis the sport to have the engineer Hoist with his own petard: and it shall go hard But I will delve one yard below their mines, And blow them at the moon.”
William Shakespeare, Hamlet
The Shanghai Gold Exchange, where investors actually take delivery of bullion rather than just play liar’s poker with multiple paper claims for the same ounces, delivered 51.5 tonnes of gold bullion in the latest week.
The trend of deliveries has been rising the last 12 weeks.
To put this in perspective, if there are 32,150.75 troy ounces of gold in a metric tonne, then the Comex has a total of just under 28 tonnes of registered (deliverable) gold in all of its warehouses.
What is that, about three days supply in Shanghai? Not to mention the other gold bullion markets around the world.

This post was published at Jesses Crossroads Cafe on October 24, 2014.

The New Homes Sales Report Is A Complete Farce

Gyrating wildly month-to-month, as seen also with the extreme and unstable monthly reporting of the housing-starts series headline August new-home sales rose by an incredible 18.0% for the month. Even more incredible – as to why the Census Bureau even bothers to publish the current detail – a headline monthly gain of that magnitude was not statistically-significant. – John Williams, Shadowstats.com.
Well guess what? The Census Bureau reported new home sales for September and revised the original number for August down by 38,000, or 7.5%. Recall, the same thing happened in June, when May’s unbelievably high number reported was pole-axed by almost 10%. The data collection and seasonal adjustment algorithms produce a monthly statistic that is vomited out by both the Census Bureau and the National Association of Realtors (existing home sales). Then they compound this grotesque abortion by reporting an ‘annualized rate’ for each month. It’s a complete and utter farce.
I review this month’s statistical aborticide in this article published by Seeking Alpha:September New Home Sales.
One thing to keep in mind: the data both the NAR and the Census Bureau collect are just samples.

This post was published at Investment Research Dynamics on October 24, 2014.

The World Series Of Real Estate

With The Royals and The Giants flip-flopping scores like an HFT-trader on FOMC day, we thought a glance at the two teams’ local real estate markets might give some context for who comes out the weekend the winner… As RealtyTrac notes, the San Francisco Giants may have one of the most Equity Rich real estate regions, but the Kansas City Royals hit a home run with home prices.

This post was published at Zero Hedge on 10/24/2014.

Bullish Silver Stealth Buying

Battered silver remains deeply out of favor, recently plumbing miserable new lows after drifting sideways for most of 2014. This metal’s relentless and oppressive weakness continues to break the wills of long-suffering contrarians. But professional investors are taking advantage of the epically-bearish psychology plaguing silver. They’ve been steadily accumulating positions all year long in massive stealth buying.
Silver certainly wasn’t always a loathed market pariah. Back in early 2011, silver blasted up above $48 on widespread enthusiasm from investors and speculators. It was one of the 2000s’ greatest bull markets, up an astounding 1105% during a 9.4-year span where the benchmark S&P 500 limped to a 20% gain. The brave contrarians fighting the herd to buy silver low in the early 2000s greatly multiplied their wealth.
But in spring 2011, silver was getting very overbought and euphoric. As I warned at the time, it needed to suffer a sharp correction to rebalance sentiment. And it did, plummeting in a near-crash which is typical for this exceptionally-volatile asset. But that left silver very oversold so it soon stabilized. This white metal averaged about $35 in 2011 and $31 in 2012, and contrarian investors maintained sizable positions in it.
But silver’s primary strength and weakness is it has always been slaved to gold’s fortunes. Silver traders look to gold for their trading cues, so the white metal leverages the yellow metal’s upside and downside. And unfortunately due to a major support failure and mind-boggling gold-ETF liquidations, gold suffered its worst quarter in 93 years in 2013’s second quarter. Silver was sucked into this maelstrom of gold selling.
By late June 2013, silver had plummeted 39% year-to-date! And that happened while the S&P 500 was able to surge 13% higher thanks to the Federal Reserve’s third quantitative-easing campaign. Investors and speculators alike abandoned silver in droves after this horrendous performance. Bearishness was off the charts, and silver essentially just drifted sideways near the summer of 2013’s lows until this past month.
Then lingering precious-metals bearishness combined with a surging US dollar and levitating US stock marketsto motivate American futures speculators to borrow and sell gold futures at extreme levels. But while gold’s strong support since the summer of 2013 held, silver’s failed. Silver is gold’s best sentiment gauge, amplifying both greed and fear in the yellow metal. And the latter emotion has been suffocating lately.
So with silver now super-low and despised, it seems like no one wants anything to do with it. There is a widespread belief that silver is no longer cyclical, that it is doomed to spiral lower forever. Not even the majority of contrarian investors, who claim they like buying out-of-favor assets cheap, will touch silver with a ten-foot pole. It has been left for dead, starved for capital in a parched wasteland of hyper-bearish sentiment.
But provocatively, such extremes are exactly what major bottoms are made of. Bearishness is finite, at some point everyone susceptible to being scared into selling low has already dumped their silver. And there are only so many futures speculators willing to make leveraged short bets against it near 4.5-year lows. Once bearishness and selling inevitably peak, a major new upleg is born as bargain hunters start returning.

This post was published at ZEAL LLC on October 24, 2014.

Gold Daily and Silver Weekly Charts – Plus C’est la Mme Chose

Gold and silver were stopped in their tracks, as the price dominant Comex continues to exert its inordinate influence over the real world economies.
There was apparently little activity in the Comex delivery and so they did not bother to issue a report yet today. In silver there was a rather large deposit of silver bullion of about 2,258,516 ounces into the HSBC warehouse as you can see below.
Next week is a Tuesday precious metal option expiration on the Comex. There is also an FOMC rate decision on Wednesday.
The big changes always take longer than we expect. And once they start, they come much more quickly than we had imagined.
So the most fruitful perspective for the precious metals is that of a long term investor. Short term traders may find little to interest them here. And when they do, it may be too late to climb on board.
So we must take the markets as they are. There is no sense to criticize a lifeboat for not being a motorcycle.
Do we need lifeboats? Do you trust the central banks and the politicians to safeguard your wealth and the integrity of the money and the financial system?
Only you can provide the answers for your own peace of mind. But it is hard to think back to the overwhelming wave of global goodwill that the States were riding in the aftermath of 9/11, and compare that with how things are now. How are the mighty fallen.

This post was published at Jesses Crossroads Cafe on October 24, 2014.

Danger of Conspiracy Theories

If you want to hide something in plain view, exaggerate it to the point it becomes extreme and convert it to a conspiracy theory. This is a very standard in how to create propaganda and if you keep saying a lie, its becomes the truth to many without ever having to prove anything. To uncover the truth, takes digging. This I have discovered both in politics as well as market fundamentals.
The two big conspiracy theories to be exaggerated that cover up the truth are the 911 WTC Attack and the Kennedy Assassination. With the former, people take it to the extreme and claim there was not even an attack by terrorists and the whole thing was made up. Sorry, there was an attack and the government knew it was coming and allowed it to for three purposes
(1) eliminate the evidence on many cases in WTC7 including all my evidence that documented EVERY market manipulation up to 1999 by the investment banks et al for which they are getting fined all the time today (2) wipe out the evidence that would have exposed the missing $2 trillion in the Pentagon budget, and (3) generate more power for government by allowing Americans to be victims as originally proposed in Operation Northwoods.

This post was published at Armstrong Economics on October 24, 2014.

Spanish Tenants Wake Up To The Horror Of A Wall Street Landlord

Having grown weary of reality in America (after becoming the biggest landlord in the land of the free to borrow cheaply), Wall Street moved into the distressed property purchase ponzi in Spain (as we noted here) and, surprise, the Spanish are not happy with their new slumlords. After Madrid’s local government sold 5,000 rent-controlled apartments to Goldman and Blackstone, having told tenants their rental conditions would remain the same, dozens of people have received demands for higher rent, been told their rents will increase dramatically, been threatened with eviction or moved out to escape the insecurity as old contracts expire.

This post was published at Zero Hedge on 10/24/2014.

5 Things To Ponder: To QE Or Not To QE

Over the last few weeks, the markets have seen wild vacillations as stocks plunged and then surged on a massive short-squeeze in the most beaten up sectors of energy and small-mid capitalization companies. While “Ebola” fears filled mainstream headlines the other driver behind the sell-off, and then marked recovery, was a variety of rhetoric surrounding the last vestiges of the current quantitative easing program by the Fed. As I have shown many times in the past, there is a high degree of correlation between the Fed’s liquidity programs and the advance in the markets.

This weekend’s reading list is a compilation of views on whether the Fed will end the current QE program at next weeks FOMC meeting or not. In the past, the extraction of their monetary interventions has led to market declines that were halted only once a new program was started. Are the markets, and the economy, finally strong enough to stand on their own? Or, will the end of the current QE program be the start of a bigger correction?
Here is something to consider if you believe that the Fed will end their monetary purchases next week. The chart below shows the recent sell-off and rebound matched to the Fed’s current monetary interventions.

This post was published at StreetTalkLive on 23 October 2014.

Gold Rebounds but Gold Miners Struggle

Several weeks ago the entire precious metals space was extremely oversold and due for at the least, a reflex rally. Gold was down in nine of twelve weeks with Silver down in eleven of those twelve weeks. The miners experienced a nasty September and were down five consecutive weeks. With Gold rallying from $1185 to $1255, we would expect Silver and the mining stocks to rebound strongly in percentage terms. However, those markets have lagged Gold badly. The mining stocks are essentially back to their lows and Silver hasn’t fared much better. The recent stark underperformance of Silver and the mining stocks especially is a warning sign of further downside.
The weekly candle chart below plots Gold and Silver. We can see how Gold has rallied for a few weeks following its weekly close below $1200. Yet over the past two weeks Gold has tested $1250 and failed to close above it. This week Gold will close near the low of the week and below its 50-day or 10-week moving average. Gold is sitting less than 3% above important weekly support and remains below key short-term moving averages. Meanwhile, Silver has not touched $18 yet, let alone rallied back to previous support.

This post was published at GoldSeek on 24 October 2014.

Goldman and Blackstone Enter Spanish Real Estate – Pain and Suffering for Poor People Immediately Ensues

Last year Madrid’s city and regional governments sold almost 5,000 rent-controlled flats to private equity investors including Goldman Sachs and Blackstone. At the time, the tenants were told their rental conditions would remain the same.
But as old contracts expire, dozens of people have received demands for higher rent, been told their rents will increase dramatically, been threatened with eviction or moved out to escape the insecurity. Thousands of Spain’s poor now depend for their homes on the generosity of private equity.
– From today’s Reuters article: Why Madrid’s Poor Fear Goldman Sachs and Blackstone
Less than a month ago, I warned the people of Spain that U. S. financial oligarchs had their sights set on the nation. The post was titled, Your Wall Street Slumlord Arrives in Europe – Goldman and Other Financial Firms Launch ‘Buy to Rent’ in Spain, and in it I wrote:
Now that the financial oligarchs have had their way with the U. S. property market, to the point that average citizens can’t even afford to own a home (Zillow recently showed that 1 in 3 homes are unaffordable), it appears they have turned their sights overseas. What better market for bailed-out bankers to feast on than Spain, with its 50% youth unemployment rate and a continued depressed real estate market.
It didn’t take long for the results to be felt. Reuters published an article on the topic today. Here are some excerpts:

This post was published at Liberty Blitzkrieg on Oct 24, 2014.

Stocks Shrug Off Ebola, Surge Most Since 2011, Still A Red October

Ebola in NYC, no problem. Crappy housing data, all good. School shooting in WA, buying opportunity… and that is how the S&P 500 broke back above its 100-day-moving-average (proving the world is fixed again), and had its biggest low-to-high swing since Dec 2011. It wasn’t all great BTFD news today though as small caps underperformed – though still green (just like last Friday), and only Trannies and Russell are green in October. Despite equity exuberance, Treasuries rallied modestly today (ending the week up 8-9bps on the week). HY credit slightly underperformed stocks but compressed 27bps – the biggest weekly drop in spreads since July 2013. The USD rose for the first time in 3 weeks led by JPY and EUR weakness. Oil fell once again, copper rose (since China data), gold and silver mirrored USD’s gains. VIX closed down 5 from last week’s close just above 16, but like small cap, and JPY carry, decoupled this afternoon.

This post was published at Zero Hedge on 10/24/2014.

SP 500 and NDX Futures Daily Charts – V Bottom From Fed/ECB Jawboning Back To 50 DMA

The Fed and the ECB were able to reverse last week’s market plunge to key support through the generous application of jawboning about stimulus.
The Fed made happy talk about possibly extending QE. That will be tested in their announcement from their latest meeting next Wednesday.
And as for the ECB buying corporate debt, I will be interested to see the meetings between Signor Draghi and the stern German bankers.
The cash SP 500 has made it all the way back to its 50 DMA and some key resistance. If they can break that and hold a couple daily closes above, they may have a shot at making a decent fourth quarter for their bonuses.
The Banks and their minions care little for the real economy. The poor results from consumer staples are a glaring alarm in the financialised economy.
There will be more earnings reports and more geopolitical drama next week. Let’s see if the Fed can deliver, and if traders’ memories will last more than a week. This is doubtful.

This post was published at Jesses Crossroads Cafe on 24 OCTOBER 2014.

Why The Market Kept Breaking Yesterday

When markets broke on Wednesday, XIV soared, stocks followed and the volumeless levitation was praised by all as evidence that the world was once again fixed. Yesterday we also saw NYSE Euronext ‘break‘ into the European melt-up close, and later that day, as Ebola headlines hit, the market once againbroke numerous times with various exchanges declaring self-help against one another as stocks tumbled on heavy volume. If you are wondering how it is that “the great stock markets in the world” can break so often (and be so ignored by financial media), Nanex exposes the act… as massive quote spamming yesterday sent OPRA to full capacity (broke the efficient flow of data in markets) 13 times…

This post was published at Zero Hedge on 10/24/2014.

Egon von Greyerz on the Swiss Gold Referendum – A Yes Vote Would Be A Shock in the Gold Market

Dan Popescu exclusive interview with Egon von Greyerz (Founder and Managing Partner of MAM / Member of the Board of Directors of Goldbroker.com) on the Swiss Gold Referendum (November 30) :
– Recent poll on the Swiss Gold Initiative – A Yes vote would be a shock in the gold market – The Swiss people and their relation to gold – China’s official gold reserves

This post was published at Gold Broker on Oct 23, 2014.

COT Gold, Silver and US Dollar Index Report – October 24, 2014

Gold COT Report – Futures Large Speculators Commercial Total Long Short Spreading Long Short Long Short 207,129 99,145 30,768 139,429 244,327 377,326 374,240 Change from Prior Reporting Period 13,549 -9,020 733 -1,208 24,867 13,074 16,580 Traders 141 99 75 51 54 221 203 Small Speculators Long Short Open Interest 33,731 36,817 411,057 128 -3,378 13,202 non reportable positions Change from the previous reporting period COT Gold Report – Positions as of Tuesday, October 21, 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].
Large & Small Speculators
The word ‘speculator’ implies that the person is simply making a bet on the way he thinks the price of the item is going to move. In essence, he is a gambler. A trader might be this, but then again he might be an Arbitrageur, buying in one market and selling in another to capture the price difference between the two. He wants to deal as fast as possible so as to minimize his risk of a price movement while he is exposed. We would not put him in the same category as a speculator.

This post was published at GoldSeek on 24 October 2014.

GLD Drained Again Yesterday – 33% of JPM’s Comex Gold Is Drained

Another 2 tonnes of gold was removed from the GLD trust yesterday. The last time thereported amount of gold in GLD was this low was November 18, 2008. The price of gold was $738. Despite the fact that the price of gold is up about 2% YTD, 6% of GLD’s reported amount of gold has been removed by the bullion banks. I predicted in 2009 in a report I wrote about GLD’s legal structure that GLD would eventually suffer the same fate as Enron. In fact, our entire is system is one giant Enron/Madoff Ponzi scheme.
To compound the removal of the ‘visible’ physical stock of gold from our western system, nearly 10 tonnes of gold was removed from JP Morgan’s Comex gold vault:

This post was published at Investment Research Dynamics on October 23, 2014.