Guess How Much Americans Plan To Spend On Christmas And Halloween This Year…

It is that magical time of the year for retailers. The period between mid-October and late December can often make the difference between success or failure in the retail industry, and this year will be no exception. As you will see below, it is being projected that Americans will spend a massive amount of money this holiday season. In fact, what Americans plan to spend on Christmas this year is greater than the yearly GDP of the entire nation of Sweden. So isn’t this good economic news? Shouldn’t we be happy that Americans are opening up their wallets so eagerly? Well, it depends how you look at it. Even though our spending is increasing, our incomes are not. As I discussed the other day, 50 percent of American workers make less than 28,031 dollars a year and incomes have been stagnant for years. That means that any increases in spending must be funded by more debt, and that is not good news at all.
In 2014, approximately 70 percent of all Americans will participate in Halloween. It seems like with each passing year this dark holiday become even more popular, and before it is all said and done it is being projected that Americans will spend a whopping 7.4 billion dollars this time around…

This post was published at The Economic Collapse Blog on October 27th, 2014.

Gold Daily and Silver Weekly Charts – Spooky Janet and the American MIddle Class Zombies

Unlike the fiends of folklore fright; No coffin holds them safe for night. Our Vampires live amongst our ranks; And haunt us from their central banks.
A. S.
As a reminder tomorrow is a precious metal options expiration on the Comex.
Wednesday is an FOMC announcement.
Let’s see if the hinted extension of QE transpires. As if.
The Tories are trying to offset the subsidies for their wealthy by declaring their disabled ‘fit to work’ and slashing their benefits. And here I thought they could sink no lower. Oh, well done.
This afternoon Dennis Gartman forecast that crude oil would literally drop to ‘ten dollars’ and would, over the next twenty or so years, go the way of whale oil as it is completely replaced by fusion energy (supplied by Lockheed for example). He also urged the US government to start selling oil from the Strategic Petroleum Reserve. Looks like its time for Russia to throw in the towel.
I wonder what Dennis’ book might look like? Or whose it might be?
A technology is only as good and effective as its implementation and ‘roll out.’ This from a country that cannot even repair its bridges, or find the will to update its power grid.

This post was published at Jesses Crossroads Cafe on 27 OCTOBER 2014.

Unlike Ebola Patients, The Markets After QE Can’t Be Quarantined

Oh, that sound you hear this morning is the distant roar of European equity markets puking after the latest round of phony bank ‘stress tests’ – another exercise in pretend by financial authorities who understand, at least, the bottomless credulity of the news media and the complete mystification of the general public in monetary matters. I rather expect that roar to grow Niagara-like as US markets catch the urge to upchuck violently. Problem is, unlike Ebola victims, they can’t be quarantined.
The end of the ‘taper’ is upon us like the night of the hunter, conveniently just a week before the US election. If the Federal Reserve is politicized, the indoctrination must have been conducted by the Three Stooges. America’s central bank never did explain the difference between tapering and exiting their purchases of US treasury paper. I guess that’s because it has other interventionary tricks up its sleeves. Three-card Monte with reverse repos… ventures into direct stock purchases… the setting up of new Maiden Lane type companies for scarfing up securities with that piquant dead carp aroma. Who knows what’s next? It’s amazing what you can do with money in a desperate polity with a few dozen lawyers.
Of course, there is the solemn matter as to what happens now to the regularly issued treasury bonds and bills. Do they just sit in an accordian file on Jack Lew’s desk next to his Barack Obama bobblehead. The Russians don’t want them. The Chinese are already stuck with trillions they would like to unload for more gold. Frightened European one-percenters may want to park some cash in American paper to avoid bail-ins and other confiscations already rehearsed over there – but could that amount to more than a paltry few billion a month at the most?

This post was published at Zero Hedge on 10/27/2014.

Economy Continues To Fall Apart

Forget the ‘seasonally adjusted,’ highly massaged data released daily now by regional Fed banks, industry organizations (i.e. industry snake-oil selling entities) and of course the Government, here’s what the CEO of NCR, the largest point-sales systems to retailers, had to say after the Company’s 3rd quarter earnings were released:
Market conditions within the retail industry worsened in the third quarter, as evidenced by weak same store sales comparisons and financial results. This resulted in our retail customers spending more cautiously than anticipated and further delaying solution rollouts… In addition to our third quarter preliminary results, we now expect our 2014 results to be below our previous guidance.
Quite the different picture of the retail environment than what you hear from Wall Street and the media cheerleaders. Even with the massaged data, most current economic reports are falling below Wall Street’s forecasts.
The indicators I would point to which reflect the rotting core of economy are the price of oil and the 10yr Treasury yield. The 10yr yield is falling because it’s the only ‘safe’ place to park cash that offers some yield. Note how the yield is dropping despite the ending of QE bond buying. And oil is a function of supply and demand. The price of oil similarly collapsed in 2008 just ahead of the financial and economic collapse that occurred that year. A collapse that was diverted by the onset of an eventual $4 trillion in QE stimulus and taxpayer-funded Government spending.

This post was published at Investment Research Dynamics on October 27, 2014.

Why The Fed Will End QE On Wednesday

This week we will find out the answer to whether the Federal Reserve will end its current quantitative easing program or not (click here for more discussion on this issue). Today is the last open market operation of the current program, and my bet is that it will be the last, for now. Here are my three reasons why I believe this to be the case.
1) Much Smaller Deficit Restricts Treasury Bond Issuance Over the last few years, the Federal deficit has shrunk markedly as infighting between Republicans and Democrats has restricted government spending to a large degree while taxes were increased across a broad spectrum of American taxpayers. The good news is that the U. S. government is closer than in many years to running a balanced budget, although it is has been more by accident rather than through a logical approach of budgeting and waste reductions. The bad news is that deficit spending has been a major contributor to economic growth in the past and the reduction of such has been a drag on economic growth recently.
The chart below shows the level of federal spending, revenue and the deficit. I have added the Federal Reserve’s balance sheet which has been a major buyer of U. S. debt in recent years.

This post was published at StreetTalkLive on 27 October 2014.

Stocks End Unch As ECB Rumor Trumps Quadruple Whammy Data Miss

Despite the best efforts of ECB QE rumor-mongering, US equities could do no better than end unch (though Trannies are no rallying on lower oil prices). The early tumble on a quadruple whammy of bad macro data (misses for Service PMI, Dallas Fed, Pending Home Sales and IFO) was ramped into the European close and beyond after Reuters dropped a QE-headline. The initial jump in stocks was ignored by bonds but once they recoupled, bonds, stocks, and JPY moved in sync for the rest of the day on low volumes and extremely low liquidity. Treasuries rallied from overnight weakness to close very modestly lower in yield. Early weakness in oil (under $80) was rapidly recovered as despite USD weakness (-0.2% on the day), gold, silver, and oil ended down modestly (and copper higher after the cornering news). VIX continues its path of ignoring recent equity exuberance ending the day modestly higher.
Some final buying panic tried desparately to get The Nasdaq green for October…

This post was published at Zero Hedge on 10/27/2014.

Gold & Silver Market Morning: Oct-27-2014

Gold Today – The gold price closed at $1,231.20 down $10.30 on Friday. Asia and London held it there until the Fix which was set at. The euro is slightly stronger this morning at $1.2682. The Fix was set $1,230.50 down $10.00 and in the euro at 970.579 down 9.356, while the euro stood stronger at $1.2678. The volumes of gold traded were two sellers selling 36,000 ounces and two buyers buying 28,000 ounces before the pro-rata process kicked in. Ahead of New York’s opening, gold was trading at $1,230.60 and in the euro at 971.46.
Silver Today – The silver price closed in New York at $17.19 up 4 cents, holding as gold slipped. Ahead of New York’s opening it was trading at $17.20.
Gold (very short-term) Gold is likely to consolidate, in New York, today.
Silver (very short-term) Silver is likely to consolidate, in New York, today.
Price Drivers
In New York there were sellers of 4.485 tonnes of gold in the SPDR gold ETF but there was a purchase of 0.82 of a tonne into the Gold Trust on Friday. This did assist the fall in the gold price to $1,230, but this was off the day’s lows. It does look like we are back in consolidation mode today.

This post was published at GoldSeek on 27 October 2014.

Thoughts from the Frontline: A Scary Story for Emerging Markets

The consequences of the coming bull market in the US dollar, which I’ve been predicting for a number of years, go far beyond suppression of commodity prices (which in general is a good thing for consumers – but could at some point threaten the US shale-oil boom). The all-too-predictable effects of a rising dollar on emerging markets that have been propped up by hot inflows and the dollar carry trade will spread far beyond the emerging markets themselves. This is another key aspect of the not-so-coincidental consequences that we will be exploring in our series on what I feel is a sea change in the global economic environment.
I’ve been wrapped up constantly in conferences and symposia the last four days and knew I would want to concentrate on the people and topics I would be exposed to, so I asked my able associate Worth Wray to write this week’s letter on a topic he is very passionate about: the potential train wreck in emerging markets. I’ll have a few comments at the end, but let’s jump right into Worth’s essay.
A Scary Story for Emerging Markets
‘The experience of the [1990s] attests that international investors have considerable resources at their command in the search for high returns. While they are willing to commit capital to any national market in large volume, they are also capable of withdrawing that capital quickly.’ – Carmen & Vincent Reinhart
‘Capital flows can turn on a dime, and when they do, they can bring the entire financial infrastructure [of a recipient country] crashing down.’ – Barry Eichengreen
‘The spreading financial crisis and devaluation in July 1997 confirmed that even economies with high rates of growth and consistent and open economic policies could be jolted by the sudden withdrawal of foreign investment. Capital inflows could … be too much of a good thing.’ – Miles Kahler
In the autumn of 2009, Kyle Bass told me a scary story that I did not understand until the first ‘taper tantrum’ in May 2013.
He said that – in additon to a likely string of sovereign defaults in Europe and an outright currency collapse in Japan – the global debt drama would end with an epic US dollar rally, a dramatic reversal in capital flows, and an absolute bloodbath for emerging markets.

This post was published at Mauldin Economics on OCTOBER 27, 2014.

SP 500 and NDX Futures Daily Charts – Twitter Spanked After Hoursand NDX Futures Daily Charts – Twitter Spanked After Hours

Stocks were trading weakly most of the day, with a late day push for the green into the close.
After hours Twitter was down about 8% on a lackluster earnings report.
The US equity market is thinly traded and highly driven by technical (up) and any exogenous events which, if negative, could precipitate a violent sell off.
Let’s see how they manage the formation of this current bubble, and how soon it will be before it meets El Cliffo.

This post was published at Jesses Crossroads Cafe on 27 OCTOBER 2014.

Quantitative Easing is like ‘treating cancer with Aspirin’

[Editor’s note: This essay was penned by Tim Price, a London-based wealth manager and editor of Price Value International.] Shortly before leaving the Fed this year, Ben Bernanke rather pompously declared that Quantitative Easing ‘works in practice, but it doesn’t work in theory.’
There is, of course, no counter-factual.
We’ll never know what might have happened if the world’s central banks had not thrown trillions of dollars at the banking system, and instead let the free market work its magic on an overleveraged financial system.
But to suggest credibly that QE has worked, we first have to agree on a definition of what ‘work’ means, and on what problem QE was meant to solve.
If the objective of QE was to drive down longer term interest rates, given that short term rates were already at zero, then we would have to concede that in this somewhat narrow context, QE has ‘worked’.
But we doubt whether that objective was front and centre for those people – we could variously call them ‘savers’, ‘investors’, or ‘honest workers’.
As James Grant recently observed, it’s quite remarkable how, thus far, savers in particular have largely suffered in silence.
So while QE has ‘succeeded’ in driving down interest rates, the problem isn’t that interest rates were / are too high.
Quite the reverse: interest rates are clearly too low – at least for savers.
All the way out to 3-year maturities, investors in German government bonds, for example, are now faced with negative interest rates. And still they’re buying.
This isn’t monetary policy success; this is madness.

This post was published at Sovereign Man on October 27, 2014.

To Protect and Perve – California Cops Share Nude Photos Stolen from Citizens’ Cellphones

The new court documents describe a second incident involving a 19-year-old woman who was in a DUI crash in Livermore on Aug. 7. On Harrington’s phone, Holcombe located two photos of that DUI suspect in a bikini accompanied by a text message from the day of the arrest from Harrington to Hazelwood: ‘Taken from the phone of my 10-15x while she’s in X-rays. Enjoy buddy!!!’
A ’10-15x’ is CHP code for a woman in custody. The woman may have been at a hospital to have X-rays taken after the crash.
Hazelwood replies: ‘No f – – nudes?’
– From the San Jose Mercury News article: CHP officer says stealing nude photos from female arrestees ‘game’ for cops
The worst thing about the government’s reckless response to the financial crisis of 2008, even worse than the trillions in taxpayer bailouts and backstops granted to the financial criminals that created the disaster, is the primary lesson that it sent to American society as a whole. Some people like to call it ‘moral hazard,’ but in more pedestrian terms it really just boils down to: The Bad Guys Got Away with It.
That statement may seem childish and simplistic to many, but it’s very true and very destructive. When people with corrupt intentions and questionable moral standards see themselves as having won the day, they become energized and more encouraged, while decent people who want to do the right thing and believe in meritocracy, become demoralized and disenfranchised. This is how a civil society dies, and unfortunately, this is largely what has happened over the past six years.
While this result can be witnessed throughout all aspects of American life, it becomes most dangerous when it takes firm hold within institutions that wield considerable authority, whether that be banks, the IRS, or police departments. While I have spent countless hours documenting the impact within all of the above (and many more), this article focuses on the latest example of the abuse of authority from a domestic police force.
The San Jose Mercury News reported the following:

This post was published at Liberty Blitzkrieg on Oct 27, 2014.

Caption Contest: Bart Chilton Salutes You

When someone asks you who is the biggest sellout is in the history of the CFTC, the person who allegedly “crusaded” against gold and silver manipulation, only to blame his and his agency’s gross incompetence and conflicts of interest on lack of funding, and who tirelessly preached about the dangers of HFT to anyone who cared, only to become an HFT lobbyist and advisor, one right answer isn’t the long-haired terrorist dude but his real-life doppelganger, Bart Chilton.

This post was published at Zero Hedge on 10/27/2014.

Errors Found In The ECB’s “Confidence-Boosting” Stress Test

Just when you thought the humor out of the central bank that just released a stress test whose adverse scenario did not even assume the most likely Eurozone outcome, i.e., deflation, couldn’t get any better, moments ago we learned that the test, which was supposed to restore confidence in Europe’s banking system and in the oversight and regulatory abilities of Europe’s central bank, had “errors and inconsistencies” which forced the ECB to “briefly remove from its website” the results of Italy’s most insolvent bank, Monte Paschi, “after discovering an error in its key capital ratio”, a bank which based on the ECB’s (faulty?) failure assessment was halted countless times earlier today after crashing so hard the regulator had to ban selling it short. Again.
The WSJ tries to put some lipstick on this latest Snafu by the former Goldmanite in charge of Europe’s money printer :

This post was published at Zero Hedge on 10/27/2014.

“Will These Central Bank Morons Ever Learn?” asks Albert Edwards at Societe General

Central Banks and the Business Cycle
I like it when someone besides a few financial bloggers takes the gloves off and starts asking some hard-hitting questions.
In Cross Asset Research last week, Albert Edwards at Societe General did just that. Emphasis in italics is mine.
Fragile and vulnerable in itself, the US recovery now battles against the rest of the world, which like a horror movie is dragging it down into a hellish Ice Age underworld. The problem is that at these stratospheric valuations, the market does not need to suffer an ACTUAL recession to see a crash. Like October 1987, just the fear of recession will be enough to trigger a massive market move.
On these pages we have a very simple thesis as to what will bring an end to this grotesque, QE-fueled market overvaluation. Simply put, the central banks for all their huffing and puffing cannot eliminate the business cycle. And they should have realised after the 2008 Great Recession that the longer they suppress volatility, both economic and market, the greater the subsequent crash. Will these morons ever learn?
The problem is that most risk assets, and especially equities and corporate bonds, are very expensive and priced for a long cycle. Meanwhile, this recovery has failed to generate any cyclical upward pressure to inflation – indeed quite the reverse. The global economy resembles a knackered old V8 engine which is now only firing on one cylinder (US). Hence, any data suggesting that the US economy is now also flagging were always likely to cause a meltdown as investors feared the imminent arrival of Japanese-style outright deflation. We note with interest that US 5-year inflation expectations in 5 years’ time have not fallen anything like as quickly as 5y expectations (see chart below). This suggests to me a continued misplaced market (over)-confidence about central banks’ ability to control events.

This post was published at Global Economic Analysis on October 27, 2014.

World’s Oldest Bank Shares Suspended Twice During Trading Day

Monte dei Paschi shares were suspended twice throughout today. At one stage down 22% currently trading down 18%. Peripheral bond markets behaving themselves only Italian BTP’s were wider by 7bp’s. The European banking crisis is still in full bloom. What the ECB will not admit is that the design of the Euro lacking a single debt required banks to keep reserves in ‘riskless’ government debt of member states. To be politically correct, they spread it around.

This post was published at Armstrong Economics on October 27, 2014.