This Is Probably The Second Worst Time In History to Own Stocks

This is a syndicated repost courtesy of The Felder Report.
This stock market is now the second most overbought, the second most overvalued and most most over-leveraged market in history.
Overbought: My friend, Dana Lyons, recently posted the chart below which shows the S&P 500 in relation to its exponential regression trend line. The only other time in history stocks were this ‘overbought’ (traded more than 90% above the long-term trend) was back at the height of the internet bubble.
Overvalued: A glance at the chart below, of Warren Buffett’s favorite valuation metric (total market capitalization-to-GDP), clearly shows that there was also only one other time in history when stocks were priced so dearly as they are today: 1999.

This post was published at Wall Street Examiner on November 25, 2014.

Gold Price Went Ballistic To $1,450 In Less Than 20 Minutes

A glitch, a game or both? It is unclear what exactly happened, but the price of gold surged from $1,200 to $1,450 in just ten minutes, at least at some charts (not all). It was brought to our attention by Nick from Sharelynx.
The USAGold.com website shows the blip and a return to reality after some 20 minutes. As readers can see, the ‘glitch’ was not erased afterwards.

The same surge was visible on bulliondesk.com, as the first chart shows. Some 20 minutes later, the price was ‘normalized’ again at the levels before the ‘glitch’ as evidenced by the second chart. Here again, the blip was not erased or corrected from the chart afterwards.

This post was published at GoldSilverWorlds on November 26, 2014.

Central Bank ‘Wealth Effects’ Doctrine At Work: Meet The $550K ‘Crap Shack’ In Culver City CA

The purpose of central bank financial repression and ZIRP is to distort and inflate asset prices. Our monetary politburo even admits that it is in the monetary scam business via its self-serving doctrine called ‘wealth effects’.
The game here is to drive the stock market averages ever higher through massive liquidity injections into the Wall Street dealer markets. This purportedly causes people to feel richer and to spend and invest more, creating a virtuous circle of prosperity, world without end.
We know by now, however, that ‘wealth effects’ money printing does not help the main street economy. And while it does produce awesome financial market gains – – these turn out to be unsustainable bubbles that inexorably crash. Since the turn of the century, most central banks have participated in this scam – either because they have embraced the Keynesian gospel or have joined the money printing party out of defensive necessity to protect against inflation of their own exchange rates. So the resulting financial bubbles have been global in scope.
During the last global boom cycle, central banks led by the Fed and the US housing bubble drove the aggregate capitalization of world stock markets from $30 trillion to $60 trillion in less than 48 months. Needless to say, the world’s sustainable wealth did not grow by even a fraction of that amount during this brief interval between 2004 and 2008.
Indeed, in much of Europe and the US real wealth was being destroyed by vast malinvestments in housing, real estate and public infrastructure; and in EM economies like China’s, similar wealth destruction was manifested in monumental, uneconomic investments in resource extraction and industrial production and transportation. Nevertheless, this central bank fueled financial bubble reached a tipping point in 2008, and then plunged violently.

This post was published at David Stockmans Contra Corner on November 25, 2014.

Silver’s Bullish Fundamentals Driven By Solar Energy

Since 1999, photography has increasingly gone digital, and as a result, silver demand in the film industry has contracted about 70 percent. But there to pick up the slack in volume is a technology that also requires silver: photovoltaic (PV) installation, otherwise known as solar energy.
For the first time, in fact, silver demand in the fabrication of solar panels is set to outpace photography, if it hasn’t already done so.

Every solar panel contains between 15 and 20 grams of silver. At today’s prices, that’s about $20 per panel. When silver was hanging out in the mid-$30s range a couple of years ago, it was double that.
Other industrial uses of silver can be found in cell phones, computers, automobiles and water-purification systems. Because the metal also has remarkable antibacterial properties, it’s used in the manufacturing of surgical instruments, stethoscopes and other health care tools. Explore and discover more about the metal’s many industrial uses in our ‘Brief History of Silver Production and Application’slideshow.
Going Mainstream
Solar energy was once generally considered an overambitious pie-in-the-sky idea, incapable of competing with and prohibitively more expensive than conventional forms of energy. Today, that attitude is changing. Year-over-year, the price of residential PV installation declined 9 percent to settle at $2.73 per watt in the second quarter of this year. In some parts of the world, solar is near parity, watt-for-watt, to the cost of conventional electricity.
According to a new report from Environment America Research & Policy Center:

This post was published at GoldSilverWorlds on November 25, 2014.

Gold Daily and Silver Weekly Charts – Refreshing Resilience

Gold and silver held their prices well today with silver actually gaining some ground. Not bad for the day after a Comex option expiration.
This Friday the December contract becomes active on first notice, so we might see some changes in open interest.
Not much to report in the delivery category, but the Comex warehouse show the continued drip, drip of bullion out of their domains.
There is a nor’easter moving up the eastern seaboard now that will be arriving in the New York metropolitan area tomorrow morning. It will be bring snow to the western and northern suburbs, which may dampen an already quiet trading day before the four day holiday weekend.

This post was published at Jesses Crossroads Cafe on 25 NOVEMBER 2014.

Something Appears To Be Going On With Gold

Something appears to be happening to gold. That something is either China finally revealing its true gold inventory, which is unlikely, or, more likely, the biggest fat finger in the history of gold, as a liquidity testing algo goes absolutely insane in the pre-open period (and loses its job on the BIS’ payroll). Or, most likely, just an ongoing bad print.

… and the algo, or the bad feed, or whatever, keeps going. $1400 now.

This post was published at Zero Hedge on 11/25/2014.

NAFTA, CAFTA & SHAFTA

Look out people, here come da SHAFT!
Aaaahhh… trade deals. An opportunity for the corporate leaders of the world to stick it to the little guys once again.
In this case the latest contender in the battle against food freedom in the form of ‘free trade agreements,’ is the TTIP, or as it should be termed, the ‘eat, breathe and drink our poison or we will sue for loss of profits’ deal.
Europe’s fears over the Transatlantic Trade and Investment Partnership (TTIP) are not abating, while America is beginning to show signs of impatience. Europe and the United States have reached a standoff in the TTIP negotiations, over the question of the Investor State Dispute Settlement.
This mechanism could give companies the opportunity to take legal action against a state whose legislation has a negative impact on their economic activity.
‘France did not want the ISDS to be included in the negotiation mandate,’ Matthias Fekl told the French Senate. ‘We have to preserve the right of the state to set and apply its own standards, to maintain the impartiality of the justice system and to allow the people of France, and the world, to assert their values,’ he added.
German opposition to the ISDS mechanism is also very strong. The German Minister for Economic Affairs has often expressed his support for the trade deal with the United States, on the condition that it does not include the ISDS…

This post was published at FarmWars on Nov 24, 2014.

Grant Williams: The Consequences Of Economic Peace

The following chart-heavy presentation from Grant Williams is among his best as he wends his way methodically from the 19th century to the present day (and into the future) examining “The Consequences of the Economic Peace.” From Keynes to Kondratieff and from Napoleon to Nixon, Williams looks at the ramifications of several decades of easy credit and attempts to draw parallels with a time in history when the world looked remarkably similar to how it does now (as he notes “that last time didn’t end so well, I’m afraid.”) The real day of reckoning (Williams notes rather ominously), when the unconscionable level of debt that has been built up during the fiat money era finally topples over under its own weight like the giant wave in The Perfect Storm, lies ahead of us.


This post was published at Zero Hedge on 11/25/2014.

“Bearish” Mark Spitznagel Profiting Strongly Since 2009, Warns “Only So Much Debt An Economy Can Take”

Mark Spitznagel, author of “Dao of Capital” and among Wall Street’s most bearish investors, is (profitably) holding out for a disaster. Despite noting that “The Fed has taken it further than it has ever taken it before,” NY Times reports that Spitznagel’s fund Universa has profited strongly even as stocks hit record highs. Large pessimistic bets usually lose a lot of money when stocks are rising, but Universa is saying that its investment strategy has been able to produce consistent gains since then, including a 30% return last year. While ackowledging Fed policy is capable of driving stock prices higher, Spitznagel warns, it will ultimately be self-defeating, “there is only so much debt that an economy can take on.”
Via NY Times Deal Book,
The stock market has been rising for years, hitting new highs almost every week. So how is it that one of Wall Street’s most bearish investors can claim to have profited strongly over this period? Universa Investments, a hedge fund founded by Mark Spitznagel, is one of the few firms that is set up with the aim of making money in an economic and financial collapse. In the market turmoil of 2008, Mr. Spitznagel earned large returns.
Large pessimistic bets usually lose a lot of money when stocks are rising, as they have ever since 2009. But Universa is saying that its investment strategy has been able to produce consistent gains since then, including a 30 percent return last year, according to firm materials that were reviewed by The New York Times. In comparison, the benchmark Standard & Poor’s 500-stock index in 2013 had a return of 32 percent with dividends reinvested.

This post was published at Zero Hedge on 11/25/2014.

France Desperate to ‘Erase US Internet Companies From Existence’

If You Can’t Beat Them, Outlaw Them …
We have previously reported on the French obsession with stifling competition to the vast detriment of the consumer, so as to protect established businesses with all sorts of legal restrictions. A prime example of this nonsense is that the French have made free shipping by Amazon illegal in France (as discussed by Mish here). Mercantilism has never died in France, and today it is imposed under the guise of the so-called ‘cultural exception’, which ostensibly aims to ‘protect French culture’ (see ‘France Threatens Trade Talks Over Cultural Exception’ for details on this). There is much about French culture that is indeed admirable and admired the world over – and it obviously doesn’t require bureaucratic ‘protection’. That is a turn-off at best.
So we are not surprised to learn that the French government is in ever greater hysterics over the success of US based internet companies. ‘There ought to be a law’, and very likely there will be a law – French consumers and their preferences be damned. A recent article at Yahoo reports on ‘One country’s desperate battle to erase Google, Netflix and Uber from existence’:
‘The French don’t play. Ever since Minitel bit dust, the continental power has been hopping mad about American domination of Internet services. And over the past weeks, attacks on U. S. giants have escalated from Paris to Lille.
Netflix is right now in the middle of an ambitious European expansion drive that started in Scandinavia and is fanning out south. Sure enough, France’s Association for the Protection of Consumers and Users has now sued Netflix for ‘malicious and illegal clauses.’ These include changing the terms of contract without informing consumers, not offering information of guaranteed minimum quality and writing contract clauses in English.
No doubt this is only the opening salvo against Netflix in France, which guards its cultural heritage jealously. The U. S. streaming service tried to preempt Gallic criticism by financing a political drama series called Marseilles, but this appears to have been ineffective.
Uber’s French launch has been, if anything, more controversial than the Netflix debut. Infuriated taxi drivers in Lille have attacked a student for trying to enter an Uber car, first attempting to block her from opening the car door, then allegedly throwing a bottle at her head. The Uber POP service is about 20% cheaper than French taxis.

This post was published at Acting-Man on November 25, 2014.

U.S. MINT: How Silver Eagles Are Made

If you are interested in how the U. S. Mint produces Silver Eagles, check out this short video. James Anderson from JM Bullion sent this video my way. What is interesting about the video is that it shows the upgrade in the manufacturing process from 2011 to 2014. You will notice in 2011, the workers were actually loading the Silver Eagles in the tubes by hand. However, by 2014 it was totally automated.


This post was published at SRSrocco Report on November 25, 2014.

Scorching Demand For 5 Year Treasurys: Indirect Bid Highest On Record

If yesterday’s 2 Year stopping through auction was best described as “blistering”, then today’s $35 billion sale of 5 Year paper, which again stopped through the When Issued 1.614% by a whopping 1.9 bps, was nothing short of a scorcher.
Oddly enough, in a time when demand considerations should be sparking a lack of primary market demand for paper, investors just can’t get enough “high quality” collateral – that or they are just more focused on the global slowdown and not big fans of the latest “US is decoupling” thesis – and as a result while the Dealer bid was quite possibly a record low 25.1%, it was the Indirects that stunned with their aggressive bid, taking down a record 65% of the auction, leaving just under 10% for Direct bidders.

This post was published at Zero Hedge on 11/25/2014.

This Is Why You Should NEVER Trust a Bank: Wells Fargo Refuses To Pay Woman What She’s Owed: ‘Practically Laughed At Me’

CBS 5 – KPHO

The recent actions of mega behemoth Wells Fargo show us just why so many people are distrustful of large financial institutions. The bank, which claims it will help you achieve what’s important, has done exactly the opposite in the case of Rosemary Ronstein.
At the height of the 2009 financial crisis Ms. Ronstein was facing a home foreclosure. After her husband passed away that same year the widow was searching through personal records when she happened across a 30-year old CD purchased by her husband in 1984 for the sum of $18,000. The CD, which offered the bearer a 10.9% interest rate and renewed automatically until it was cashed in, was originally issued by First Interstate Bank, an entity that has since been acquired by Wells Fargo.
At the time, Ronstein faced the real possibility of having her house seized for failing to pay her mortgage. The CD was like a dream come true. All her problems would be solved, which is exactly the reason why her late husband originally purchased the CD and gave it to her for safekeeping.
But when Ronstein arrived at Wells Fargo to trade in her financial instrument, she says that not only did the bank refuse to make good on the Cash Deposit, they practically laughed in her face.

This post was published at shtfplan on November 25th, 2014.

The Smiling Face of Austerity: More Welfare for Rich Landowners in the EU

The Duchess of Alba, Spain’s second richest woman, passed away this week at the age of 88. She was the head of the world’s most ennobled family, with a staggering 46 noble titles to its name. Besides the titles and the privileges and prestige that come with them, the duchess left behind an estimated wealth of somewhere between 600 million and 3.2 billion.
The reason for such a gaping discrepancy is that it’s almost impossible to put a price tag on many of her family’s most valuable possessions. They include Christopher Columbus’ first ever map of the Americas; the first edition of Cervantes’ Don Quixote; the first ever Bible translated into Spanish; three Goyas, eight Rubens, a Velzquez and 15 Rembrandts. That’s not to count the family’s castles, palaces, stately homes and tens of thousands of hectares of land, almost all of which have been passed down to her children and grandchildren.
The Duchess’ eldest son, Carlos Fitz-James, is the new head of the family. As such, he will be responsible for preserving and growing its fortune – a responsibility that will no doubt be eased by the support and assistance of the Spanish government and the European Union. As El Diario reports, the family has already benefited from preferential treatment by the Spanish tax authorities: because of its cultural importance 90% of the family’s foundation is exempt from inheritance tax. As for the remaining 10%, it is to be taxed at an average rate of 0.2%, meaning that out of a total estimated wealth of up to 3.2 billion, the Duchess’ heirs will pay a piffling 6 million in tax.
That’s just the beginning. Carlos Fitz-James will also have the option to pour some of his family’s more liquid assets into one of the super rich’s investment vehicles of choice: a SICAV fund, a topic on which I wrote the following earlier this year:

This post was published at Wolf Street on November 25, 2014.

SP 500 and NDX Futures Daily Charts – Big Wheel Keep On Turning

The GDP estimate came in on the high side revision today showing what a marvelous recovery we are enjoying.
Too bad not much else is showing growth. Maybe this is one of those recoveries that is localized to the well-to-do.
The market is drifting higher on low volumes, and do not expect tomorrow to be much different ‘unless something happens.

This post was published at Jesses Crossroads Cafe on 25 NOVEMBER 2014.

Rents Heading Up? Will the CPI Follow?

Rents are up 6.5% in San Francisco, and 4.5% in numerous other cities. Is this a leading indicator for a stronger inflation as measured by the CPI.
Please consider the Variant Perception article Higher Rents in the US are a Strong Support for CPI.
Despite the subdued nature of US CPI, some large components are turning up. Owners’ equivalent rent and rent of primary residence, which together account almost of a third of the CPI basket, are turning up strongly. A low vacancy rate and a relatively resilient US economy is helping to drive rents higher, with San Francisco seeing the greatest rent increases, at 6.4% over the last year, and with many other cities, such as Nashville, Seattle, Denver and Houston, all seeing increases of over 4.5%
Furthermore, our leading indicator for US Shelter CPI, which includes apartment vacancy rates and the growth in the working-age population among its inputs, shows that the trend should continue. Higher rents are a strong support for headline CPI in the US.

This post was published at Global Economic Analysis on November 25, 2014.

The Housing Market: Fact vs. Fiction

The homebuilders have had near-parabolic run-up in their stock prices. This is not atypical of the sector, which is twice as volatile as the overall stock market because of the extreme amount of debt embedded in homebuilder balance sheets and the relatively high short-interest in the shares. Incredibly, the homebuilder stocks can’t even get back to within 50% of their peak prices in 2005 at a time when the S&P 500 sets a new record every day. That fact alone in and of itself reflects to relatively poor fundamentals underlying the housing market.
Of course, the homebuilders continue to pile on debt and inventory just as the slightly reflated housing bubble is popping. I’ve updated the Q3 results for one of the homebuilder reports I published in October. The Company continued to burn cash despite having its best sales quarter since the big housing bubble popped. It also piled on more inventory and its cancellation rate spiked up to 20% in Q3 from 17% in Q2. Perhaps most telling is that as soon as the restricted period for insider stock transactions was lifted after the release of its earnings, 13 insiders unloaded close 150,000 shares. There were no buyers. You can access this updated and comprehensive report here – it’s the first report listed: Homebuilder Stock Reports. This company has 3.5x more debt than it had at the peak of the housing bubble. This is an even better short-sale candidate now than it was at the beginning of October. And now the Fed is no longer buying billions in mortgages every week.
Yesterday I saw an article in which the National Association of Realtors (existing home sales pimps) stated that rent increases in 2015 will outpace inflation. Funny because the NAR’s chief pimp economist clearly has not surveyed the rank and file. I know for a fact in Denver that the available inventory of both homes and apartments is rapidly escalating and rents are softening up. I expect this trend to accelerate over the next several months as several huge rental buildings come on-stream here. I have heard similar accounts from several readers all over the country.

This post was published at Investment Research Dynamics on November 25, 2014.

Gold & Silver Trading Alert: Invalidation of Platinum’s Breakout

Briefly: In our opinion no speculative positions are currently justified from the risk/reward perspective.
Yesterday was a day when the precious metals market took a breather, but it’s not true that nothing changed at all. Friday’s breakout in platinum was invalidated. Is this a ‘short again’ signal?
In short, not really, because this signal – even though it’s bearish – is not enough to make the situation very bearish on its own.
As usually, let’s start today’s analysis with the USD Index (charts courtesy of Not much changed from the short-term perspective, as the USD Index simply corrected some of its Friday’s rally and we didn’t see a breakout or breakdown from the flag pattern. Consequently, our yesterday’s comments remain up-to-date:
The USD Index moved visibly higher on Friday, breaking out of the triangle pattern. The implications are bullish but not strongly bullish, as the pattern started to resemble more of a flag than a triangle. Since the flag pattern was not broken, many traders probably thought that the situation hadn’t changed. This could explain the lack of response in the precious metals market. If we saw a strong breakout and metals didn’t react, then it would definitely be a sign of strength, but at this time, it could be the case that the market participants are still not viewing the dollar’s move as a something real.

This post was published at GoldSeek on 25 November 2014.

RUSSIA BUYS GOLD

While it is true the Russian central bank has been buying increasing amounts of gold, it is not totally clear what sorts of motivations are behind the buying. Though when one looks at Vladimir Putin’s recent statements, it does become clearer what these might be in order to leverage in an increasingly multi-polar world, moved away from the more dollar-based system.
Forbes thinks it is more likely ‘a small financial detail, a little wriggle in Russian public policy about precious metals sales.’
As Zero Hedge writes of the purchase:

This post was published at GoldSilverBitcoin on 25 NOV , 2014.

A Tale Of Two Credit Markets: New Auto Loans Highest In 9 Years As New Mortgages Slump Near Record Lows

Remember when three weeks ago, everyone was stunned as the Manufacturing ISM soared to new 3 year highs, continuing this summer’s trend of blistering manufacturing, which was largely attributed to a burst of automotive production? Now, courtesy of the latest Q3 household credit report by the NY Fed, we know just how it was funded. According to the report, some $105 billion in new car loans were issued is the third quarter, the highest amount since 2005, and just $20 billion shy of an all time high.
That’s the good news. The bad news as Equifax reported two months ago, new subprime loan origination is trending at about 31% and rising. And what’s worst, is that recently both Moody’s and Fitch joined forces in making up for their past oversights, and “slammed subprime auto bonds” suggesting this latest bout of subprime driven euphoria boosting the US manufacturing sector may not last. Or it very well may: after all the central banks are always on the lookout for new things to monetize.

This post was published at Zero Hedge on 11/25/2014.