The Dow Has Already Fallen Nearly 900 Points From The Peak Of The Market

In an eerie repeat of what we witnessed in 2008, U. S. stocks are steadily sliding throughout the summer as we head toward the month of September. From August 1st, 2008 to September 1st, 2008 the Dow fell by nearly 700 points. And of course we all remember what happened the following month. Right now, we are watching a similar thing happen. The Dow has plummeted nearly 700 points since July 16th, and it is down nearly 900 points from the peak of the market back in May. At this point the Dow has now fallen for six days in a row and eleven of the last thirteen. Of course most of the talking heads on television are still insisting that everything is going to be just fine and that a repeat of 2008 is not possible. So what do you think? Should we trust them?
Personally, I find that I put a lot more faith in cold, hard numbers than in what the talking heads on television have to say. And at this moment, the cold, hard numbers are telling us that another financial crisis in imminent.
This is one of the reasons why I am such a fan of Zero Hedge. Nobody stays on top of the hard financial numbers like Zero Hedge does. And according to Zero Hedge, market internals are absolutely screaming that a U. S. stock market crash is right around the corner…

This post was published at The Economic Collapse Blog on August 6th, 2015.

Oil Trading “God” Loses $500 Million In July On Commodity Rout

Back in December 2014, when crude oil first crashed into a bear market and traders were desperately looking under nook and cranny for the first casualty of the commodity collapse, they found it in the face of oil trading “god”, Andy Hall, best known for seeking $100 million in compensation in 2008 from Phibro’s then-owner Citigroup, who would leave his long-term employer Phibro by the end of 2014 for the simple reason that after 113 years of operation, Phibro would liquidate in the US, having been unable to find a buyer (with rumors circulating that Hall’s trading P&L did not exactly help the company’s long or short-term prospects).
While Hall did sever his relationship with the liquidating Phibro (and may have accelerated its collapse with his bullish oil bets), he would keep running his own personal hedge fund, the $3 billion Astenbeck Capital, which may have been Hall’s Phibro bearish oil “hedge” and emerged largely unscathed from the 2014 commodity rout because “Hall curtailed bets and shifted to holding cash.”

This post was published at Zero Hedge on 08/06/2015.

The Sweet, Sickly Stench Of QE ‘Success’

Six years ago, hardly anybody outside financial circles had any idea what Quantitative Easing was – hell, many within financial circles had no idea what QE entailed.
The Fed, and the BoE did the heavy lifting in explaining it to Western audiences (Japan had been doing it so long that its citizens were bored of it and paid little attention when iterations 16, 17 and 18 were rolled out in recent years) with then-Chairman of the Federal Reserve, Ben Bernanke, leading the way as only he could:
(Jackson Hole Speech, 2010): The channels through which the Fed’s purchases affect longer-term interest rates and financial conditions more generally have been subject to debate. I see the evidence as most favorable to the view that such purchases work primarily through the so-called portfolio balance channel, which holds that once short- term interest rates have reached zero, the Federal Reserve’s purchases of longer-term securities affect financial conditions by changing the quantity and mix of financial assets held by the public.
Specifically, the Fed’s strategy relies on the presumption that different financial assets are not perfect substitutes in investors’ portfolios, so that changes in the net supply of an asset available to investors affect its yield and those of broadly similar assets. Thus, our purchases of Treasury, agency debt, and agency MBS likely both reduced the yields on those securities and also pushed investors into holding other assets with similar characteristics, such as credit risk and duration. For example, some investors who sold MBS to the Fed may have replaced them in their portfolios with longer-term, high-quality corporate bonds, depressing the yields on those assets as well.
Yeah, I know.
Others took a swing at explaining QE in terms more accessible to the layman (and woman):

This post was published at Zero Hedge on 08/06/2015.

6/8/15: Irish Services PMI: July Mirage of Growth

Today, Markit released Services PMI for Ireland. Note: I have covered details of the Manufacturing PMI release link here.
On Services side, headline index reading in July was 63.4, which is marginally ahead of 63.3 registered in June. July reading was the highest in 109 months, after June posting the highest reading in 108 months.
Per Markit, “Panellists mainly linked the latest increase in activity to improving economic conditions.” As I have shown in the past, the index is only now starting to re-couple with actual services activity indicators, suggesting that much of the PMI reading is biased by the specific, concentrated MNCs-led activity. Still, the PMI has now reached dizzying heights.

This post was published at True Economics on August 6, 2015.

Gold Daily and Silver Weekly Charts – The Decline and Fall of the Gold Trade on the Comex

BLOOMBERG, the print news and not The View division, had an article this morning noting that the stiff decline in trading and volatility in gold shows a lack of interest in it.
The fly in their ointment is that they consider the Comex to be ‘the GOLD MARKET.’
I had a little fun with that with an intraday commentary which you may read here.
I know. Be kind and understanding. No one can expect a global news organization that generally reports all of the world’s markets to bother to look at a simple chart of the Shanghai GOLD TRADING volume which continues to climb every month.
Or any of the other reports about the volume of bullion going into India, and the swelling river of bullion flowing through the refineries of Switzerland from West to East.
We are all aboard the gold negativity express here, doing our part for the cause. Of whom and for whom, let’s allow time to answer that one conclusively as I am sure that it will. Maybe.
As they like to say, ‘who could have seen it coming?!’

This post was published at Jesses Crossroads Cafe on 06 AUGUST 2015.

Which Countries Have The Highest Default Risk: A Global CDS Heatmap

We hardly need to expound on Greece’s near-death economic state: if anyone has missed the surreal tragicomedy of the pas 5 years all we can say is we envy you. Of all countries around the globe, if there is one nation where everyone by now knows is, or should have defaulted long ago, it is the Hellenic Republic.
But when it comes to default risk implied by government bond prices and their inverse “hedge”, credit default swaps, few may be aware that Venezuela’s default probability is orders of magnitude higher. Of course, our readers will be well aware of this: back in December, when its CDS was trading at “only” 2300 bps (or whatever points upfront equivalent it was back then) we said Venezuela CDS are going much, much wider. Little did we know that in just about 8 months they would more than double, and as of last check, Venezuela CDS are just shy of 5000bps suggesting a default is virtually guaranteed.
So aside from these two socialist utopias, who else is on the default chopping block? The CDS heatmap below lays out all the countries which according to the market, are most likely to tell their creditors the money is gone… it’s all gone.

This post was published at Zero Hedge on 08/06/2015.

AUGUST 6/ATLANTA FED STATES THAT 3RD QUARTER GDP WILL BE ONLY 1%/SILVER PRODUCTION FROM MAJOR MINES FELL OFF A CLIFF THESE PAST FEW MONTHS/HUGE INCREASE IN NPL’S IN CHINA/BRAZIL ALSO FELL OFF A C…

Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1090.20 up $4.50 (comex closing time)
Silver $14.67 up 12 cents.
In the access market 5:15 pm
Gold $1090.00
Silver: $14.67
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a poor delivery day, registering 8 notices for 800 ounces Silver saw 27 notices for 135,000 oz
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 235.44 tonnes for a loss of 67 tonnes over that period.
In silver, the open interest fell by 1637 contracts despite the fact that silver was unchanged yesterday. The total silver OI continues to remain extremely high, with today’s reading at 184,211 contracts In ounces, the OI is represented by .9210 billion oz or 131% of annual global silver production (ex Russia ex China). This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end as they continue to raid as basically they have no other alternative.
In silver we had 27 notices served upon for 135,000 oz.
In gold, the total comex gold OI rests tonight at 432,301. We had 8 notices filed for 800 oz today.
We had no change in gold leaving the GLD today / thus the inventory rests tonight at 667.93 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. I thought that 700 tonnes is the rock bottom inventory in GLD gold, but I guess I was wrong. However we must be coming pretty close to a level of only paper gold and the GLD being totally void of physical gold. In silver, we had no changes in silver inventory at the SLV, / Inventory rests at 326.209 million oz.
We have a few important stories to bring to your attention today…

This post was published at Harvey Organ Blog on August 6, 2015.

The Economic Carnage Continues Layoffs 34% Higher Than Last Year – Episode 736a

The following video was published by X22Report on Aug 6, 2015
Greek banks are collapsing. Tax revenue in Greece is evaporating. IMF will not participate in the Greek bailout until the fall, which means Greece will most likely default on the payment in August. Most Americans believe their children will be worse off in the future. GDP forecast of 1% for the 3rd Quarter which signals recession/depression. The economic carnage continues layoffs 34% higher than last year. Russia overtakes Saudi Arabia as the largest oil producer. The TPP is dead, it is losing steam as more and more countries realize what it is.

Analysts Give Up On “Man-Made” China Data: It’s “A Fantasy” That “No One Believes”

When China reported that its economy grew 7% in Q2 – spot-on Beijing’s target – virtually no one believed it.
The veracity of the country’s economic data has long been the subject of debate and when FT called out the country’s National Bureau of Statistics for employing what we called “deficient deflator math” on the way to understating inflation and overstating output, China’s statistics bureau responded, saying that although there was “room for improvement,” the deflator wasn’t underestimated, GDP growth wasn’t overstated, and “both reflect the real situation.”
One could certainly be forgiven for insisting that the NBS is simply lying, because after all, the “real situation” looks like this:

This post was published at Zero Hedge on 08/06/2015.

GDP Shocker: Atlanta Fed Sees Q3 Growth At A Laughable 1%

The Atlanta Fed’s Q1 and Q2 GDP forecasts were virtually spot on with what the BEA ultimately reported. Which is why if its accuracy persists, not only the Fed, but Wall Street strategists suddenly have a very big headache on their hands.
Moments ago, the Atlanta Fed just released its much anticipated first estimate for Q3 GDP. It was a doozy, at just 1.0%, or more than 2% below the consensus sellside estimate.
If this is confirmed, not only are all rate hike bets off, but one may as well start the countdown to the recession, and more importantly, QE4.
From the Atlanta Fed:

This post was published at Zero Hedge on 08/06/2015.

6 Months Of Ignorance – You Are Here

In early 2007, market internals began to weaken dramatically. Talking heads and asset gatherers said fears were overblown, risk was contained, Fed has it under control, stay the course. Six months later, the equity markets began to collapse and then accelerated lower. Today, in an eery case of deja vu all over again, it has been six months now since US equity market internals began to decouple from the manipulated index levels that manufacture wealth and happiness across America… what would you do?

This post was published at Zero Hedge on 08/06/2015.

6/8/15: Irish Services Activity Index: June’s Belated Sell-in-May

In previous post (link here) I covered Services PMI for Ireland for July.
To remind you: we are witnessing a massive boom (according to the PMI data) in Services, with overall sector activity readings at 108 and 109 months highs in June-July. In addition, based on quarterly averages, Services in Ireland should have been expanding at a break-neck speed non-stop from 2Q 2014 through 2Q 2015, with 2Q 2015 marking small acceleration in an already formidable speed on 1Q 2015. Effectively, over the last 3 quarters, PMIs have been signalling very high rate of growth in activity, with rate of growth being relatively stable over time.
Now, let’s take a look at the latest quarterly data from CSO covering actual activity in the Services sector through June 2015.
Overall Services Sector activity index for 2Q 2015 rose 2.3% y/y, which is markedly down on 9.6% y/y growth recorded in 1Q 2015 and marks the slowest speed of Services sector expansion since 1Q 2014. This simply does not correspond to the PMI data readings. In fact, growth has been quite volatile over the last 5 quarters, and again, not consistent with the PMI signals.

This post was published at True Economics on August 6, 2015.

Emerging Market Mayhem: Gross Warns Of “Debacle” As Currencies, Bonds Collapse

Things are getting downright scary in emerging markets. Just ask Bill Gross:
Gross: Emerging Market currency debacle. Deflationary winds becoming stronger. Risk assets at risk.
— Janus Capital (@JanusCapital) August 6, 2015

Or have a look at this week’s headlines:
UK rate hike fears recede, emerging markets on edge EMERGING MARKETS-Currencies retreat on talk of a Fed rate hike Lost Decade in Emerging Markets: Investors Already Halfway There Some Greek Lessons for Emerging Markets Currencies in Freefall Handcuff Bankers From Chile to Colombia And on, and on.
One particularly alarming case that we’ve been keen to document lately is that of Brazil which, you’ll recall, is “up shit creek without a paddle” both figuratively and literally. For one thing, as Goldmanrecently noted, there’s not a single period in over a decade “with a strictly-worse growth-inflation outcome than that of 2Q2015.” In other words, “since 1Q2004 there has not been a single quarter in which we had simultaneously higher inflation and lower growth than during 2Q2015.”

This post was published at Zero Hedge on 08/06/2015.

Puerto Rico Debt Crisis ‘a Cautionary Tale’ for Misled U.S. Taxpayers

A Puerto Rico debt crisis of epic proportion is officially underway. The U. S. territory defaulted Aug. 3, handing over only 1% of the $58 million owed. It owes $72 billion in total – a debt load that’s by far larger per capita than any of the 50 states.
But Puerto Rico’s default is nothing compared to what’s in store for American taxpayers – who have been misled by Washington into thinking the government’s unfettered borrowing can go on forever…
A Puerto Rico debt crisis of epic proportion is officially underway. The U. S. territory defaulted Aug. 3, handing over only 1% of the $58 million owed.
Puerto Rico owes $72 billion in total – a debt load that’s by far larger per capita than any of the 50 states, and an amount that’s $52 billion more than Detroit’s bankruptcy two years ago.
But Puerto Rico’s default is nothing compared to what’s in store for American taxpayers – who have been misled by Washington into thinking the government’s unfettered borrowing can go on forever…

This post was published at Wall Street Examiner by Tara Clarke – August 6, 2015.

The Biggest Losers From Today’s Rout

It is unclear what catalyzed today’s dump. Futures were briefly green at the open, then as if all hell broke loose and without an explicit catalyst (although the technical collapse of numerous “story stocks” which had been market leaders for months, both today and in recent weeks has not helped) the E-mini, and individual stocks, just took out level after level of bids and at last check the Dow has dropped to 6 month lows, the S&P is just barely green for the year, while the biggest pain is in the Nasdaq which has dropped as much as 2% intraday.
So who are the biggest losers?
Below we lay out some of the most prominent investors, whose ownership as a % shares outstanding in today’s biggest market casualties is shown in round brackets (). We look at the biggest mid ($2-$10BN market cap) and large caps ($10BN and higher) losers of the day, which we lay out in order of redness, and some of the most prominent holders of the various stocks:

This post was published at Zero Hedge on 08/06/2015.

CNN Money Talks to Peter Schiff: Puerto Rico the Next Singapore?

‘Let’s say you want to start a business. Just start it in Puerto Rico. Why would you start it anywhere else?’ This is what Peter Schiff told CNN Money in anarticle published yesterday. Peter and John Paulson are two of many successful investors CNN mentions as moving their businesses – and eventually themselves – to Puerto Rico.
CNN floated the idea that Puerto Rico could become the next Singapore by continuing to attract businesses with the tax advantages. Peter was the focus of their article:
Peter Schiff moved his asset management firm from Newport Beach, Calif., to San Juan in 2013. Schiff has bought a house in the Ritz Carlton compound just outside San Juan and water is not a problem for him. He plans to move there once his son graduates from high school. Individuals must live in Puerto Rico for 183 days a year to qualify for tax breaks.

This post was published at Schiffgold on AUGUST 6, 2015.

RANsquawk Video: Focus turns to NFP as the September Rate Decision looms

US Change in Nonfarm Payrolls (Jul) M/M Exp. 225K (Low 140K, High 310K), Prev. 223K, May. 280K US Unemployment Rate (Jul) M/M Exp. 5.3% (Low 5.2%, High 5.4%), Prev. 5.3%, Apr. 5.5% US Average Hourly Earnings (Jul) M/M Exp. 0.2% (Low 0.1%, High 0.3%), Prev. 0.0%, Apr. 0.3% July’s nonfarm payrolls will be in strong focus following the FOMC rate decision last week with comments that an increase in interest rates will occur following ‘some further’ improvement in the labour market. The consensus is looking for a small increase on the previous figure at 225K with unemployment forecast to remain unchanged. Unemployment previously fell which was attributed to employees leaving the workforce. Furthermore, both the monthly and yearly average hourly earnings figures are expected to rise on their previous release.

This post was published at Zero Hedge on 08/06/2015.