The American Craft Brew Revolution Gets Personal

The theme: An international brewing conglomerate famous for watery beers that are losing market share buys an American craft brewer. If it’s not a brewing conglomerate, it’s a private equity firm. Big Money rules. And valuations of craft brewers have soared.
It’s a dream come true for founders, early investors, and some employees. It’s American entrepreneurialism. Guts, grit, years of hard work, luck, stick-to-itiveness, Yankee marketing, and a passion to produce the best suddenly turn into mega-dollars.
The response from beer lovers has been something close to revulsion: How could they sell out?
Now it happened to me. I love IPAs (India Pale Ales) for their complex hoppy flavors. They’re perfect when you’re just sitting there, ruminating about the rigged markets. They’re perfect with food. They’re particularly perfect with a good steak.
So today, Lagunitas Brewing Company announced that it too sold out.
The original brewery is in Petaluma, Sonoma County, about 40 miles north of San Francisco. They brew all kinds of beers, but the one that ranks on my list of favorites is their IPA.
And they’ve done an excellent job marketing the IPA. It’s broadly distributed in Bay Area grocery stores, bars, and restaurants. I drank my first Lagunitas IPA a decade ago on a ferry across the Bay. Today, our local Costco even carries it. And Lagunitas has become the sixth largest craft brewer in the US.
Four years of drought in California have been hard on the water-intensive brewing business. So it just opened a second brewery in Chicago, which has plenty of water. Both breweries combined have a capacity of 1.2 million barrels. These folks have done a lot of things right for a long time, beyond brewing beer.

This post was published at Wolf Street by Wolf Richter ‘ September 8, 2015.

“Some People Just Don’t Fit In The Economy” Buffett Explains: “We’ll Send Them Off To Afghanistan”

Not to be outdone by his partner Charlie Munger (who offended many with his comments that “gold is a great thing to sew onto your garments if you’re a Jewish family in Vienna in 1939,”), Berkshire Hathaway’s Warren Buffett – having already taken on Europe, comparing Greece to a “dog peeing on the carpet” of Europe, suggesting Germany stop “rewarding behavior you want to get rid of” – takes aim at the military. Speaking on Bloomberg TV, the octagenerian oracle of offense just unfriended every American veteran…

This post was published at Zero Hedge on 09/08/2015.

YHOO Flash-Crashes After IRS Fails To Rule On BABA Spin-Off

Well this might explain the weakness in BABA over the last couple of days as it appears ‘news’ of the IRS lack of decision on the tax-free-ness of YHOO’s BABA spin-off leaked out. It is decidely unclearhow the IRS’s decision not to issue a ruling will impact the spin-off but for now YHOO shares have flash-crashed after hours and are now hovering 5-6% lower…

This post was published at Zero Hedge on 09/08/2015.

Fed Hike Will Unleash “Panic And Turmoil” And A New Emerging Market Crisis, Warns World Bank Chief Economist

If it was the Fed’s intention to make the upcoming rate hike seem like a welcome event, one that presaged a new Golden Age in the US (and global) economy because, lo and behold, the wise Fed would never hike unless the economy is flourishing and thus create a self-fulfilling prophecy in which the rate hike itself – an event of tightening financial conditions even when inflation expectations are the lowest they have been in years – becomes a catalyst for growth, then it has failed spectacularly.
First, it was the IMF warning a rate hike would be a big mistake, then Larry Summer (who for some reason progressives thought was hawkish when it was a choice between him and Aunt Janet), then even China got into the fray saying the Fed should delay its rate hike as it could push emerging markets (such as China) into crisis.
But it wasn’t until today that we got the most glaring confirmation there had been absolutely zero coordination at the highest levels of authority and “responsibility”, when the World Bank’s current chief economist (a position previously held by such ‘luminaries’ as Larry Summers, Joseph Stiglitz and Stanley Fischer), Kaushik Basu warned that the Fed risks, and we quote, triggering ‘panic and turmoil’ in emerging markets if it opts to raise rates at its September meeting and should hold fire until the global economy is on a surer footing, the World Bank’s chief economist has warned.
While apparently the World Bank economist is unfamiliar with the concept of reflexivity, and does not understand that the only reason the global economy is not on “surer footing” is because of the 12 month , near endless pricing in of the Fed’s first rate hike since 2006, which has unleashed an unprecedented capital flight out of all emerging markets, a record series of rate cuts across the globe including NIRP in Europe, and China’s first official currency devaluation in years not to mention the first stock market correction in 4 years, what is critical is that by making this statement, Basu destroys with just two words the narrative that i) the Fed knows what it is doing and that ii) contrary to logic, a rate hike at a time when the world clearly and desperately needs, and is addicted, to global central bank liquidity, will lead to even further asset price plunges.

This post was published at Zero Hedge on 09/08/2015.

Thinking of Quitting Your Job? Wage Growth vs. Quit Rates

A Chicago Fed report investigates Job Switching and Wage Growth.
People generally switch jobs by quitting (rather than losing) their previous job. Furthermore, the vast majority of people observed quitting their job tend to move directly to a new job, rather than becoming unemployed or exiting the labor force. Therefore, estimates of worker quits provide a good measure of job switching in the U. S. economy. Data from the Job Openings and Labor Turnover Survey (JOLTS) provide an estimate of the aggregate quit rate each month for the U. S. economy since 2000. Recent research by Steven Davis, R. Jason Faberman, and John Haltiwanger has extended the JOLTS data series back to the early 1990s. Their work shows that quits are highly procyclical. That is, they rise during expansions and fall during recessions.

This post was published at Global Economic Analysis on September 08, 2015.


Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1120.40 down $0.20 (comex closing time)
Silver $14.75 up 21 cents.
In the access market 5:15 pm
Gold $1121.50
Silver: $14.78
In this commentary I have spent a lot of time discussing Quantitative tightening by China coupled with the threat of an increase in rates by the USA. Both of these countries can be viewed as in the mode of tightening ie. removing liquidity from the markets. The two entities that are increasing QE and thus adding liquidity is the ECB and Japan. The problem with the latter two entities is the fact that they are running out of bonds to monetize so they too may be finished from increasing liquidity. I have provided many important commentaries on this subject. I urge you to take your time read them. You will be glad you did.
First, here is an outline of what will be discussed tonight:
At the gold comex today we had a poor delivery day, registering 0 notices for 0 ounces Silver saw 140 notices for 700,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 219.99 tonnes for a loss of 83 tonnes over that period.
In silver, the open interest rose by 886 contracts despite the fact that silver was down in price by 16 cents on Friday. Again, our banker friends used the opportunity to cover as many silver shorts as they could but failed. The total silver OI now rests at 157,506 contracts In ounces, the OI is still represented by .787 billion oz or 112% of annual global silver production (ex Russia ex China).
In silver we had 53 notices served upon for 265,000 oz.
In gold, the total comex gold OI surprisingly rose to 419,002 for a gain of 5,125 contracts. We had 0 notices filed for nil oz today.
We had a slight change in tonnage at the GLD today/ a slight withdrawal of .24 tonnes and this was to pay for fees./ thus the inventory rests tonight at 682.59 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. It sure looks like 670 tonnes will be the rock bottom inventory in GLD gold. It looks to me that China has taken the last amounts of physical gold from the GLD. I guess the only place left for China to receive physical gold will be the FRBNY and the comex. In silver, we had a big withdrawal in silver inventory at the SLV to the tune of 1.527 million oz/Inventory rests at 323.396 million oz.
We have a few important stories to bring to your attention today…

This post was published at Harvey Organ Blog on September 8, 2015.

Investors Get Jittery As Spain Enters Whole New World of Pain

After a summer of missed opportunities, poisoned rhetoric and bitter recrimination, Spain faces what promises to be a very tumultuous autumn.
On September 27 its largest economic region, Catalonia, will hold its most important elections since Spain’s late dictator Francisco Franco passed away 40 years ago. If the pro-independence parties win a majority of seats in Catalonia’s parliament, they have pledged to declare unilateral independence from Spain.
As if that were not enough, in December the country will hold what could turn out to be its most tightly fought general election in decades.
ECB at a Loss
The inevitable result is increased fear and uncertainty – two things that financial markets generally abhor. It’s already beginning to show in the performance of Spanish bond yields. Indeed, as Bloomberg reports, the political instability gripping the nation is having such an effect on investor sentiment that even Europe’s chief financial alchemist Mario Draghi is unable to prevent gravity from taking hold:

This post was published at Wolf Street by Don Quijones ‘ September 8, 2015.

“The World Is Running Low On Interventionist Ammo” SocGen Warns “China Is The Dominant Black Swan”

When it comes to crisis, SocGen notes that there is an abundance of case studies; and against the backdrop of the uncertainty shock delivered by China and the subsequent market tumult, market participants have been looking to the history books for clues as to what could happen next. While individual crises create their own risks, SocGen warns, the overriding risk is that markets are taking less comfort today from the idea that central banks may step in with further QE-style liquidity injections to save the world.
Running low on monetary policy ammunition
Before considering the individual risk scenarios, an overriding risk is that markets are taking less comfort today from the idea that central banks may step in with further QE-style liquidity injections. We see this as a reflection of two factors.

This post was published at Zero Hedge on 09/08/2015.

Taxman Demands Sex or Threatens to Shut Woman’s Business Down

An IRS Agent was arrested by police for threatening to close a woman’s business unless she had sex with him. The IRS Agent, Samuel Garza, showed up at the business and made ‘sexual overtures’ that implied that the woman would lose the business if she didn’t cooperate. The police said Garza told the woman to wear a dress the next day. He then fondled her breasts and placed his head in her lap. Officials said when she asked Garza to stop, he refused. Garza returned again and allegedly placed his hand under her shirt, touched her breasts, and again placed his head in her lap. Police said the woman was fearful, upset, and uncomfortable. This is what happens when government agents have too much power.
The IRS is refusing to comment.

This post was published at Armstrong Economics on September 8, 2015.

The US Dollar Is Becoming Cheaper In Gold Terms

After the release of the ‘In Gold we Trust’ report, Incrementum Liechtenstein surpises gold bulls with a compendium of some of the most compelling charts in the form of a Chartbook.
Some of the key takeaways of the Chartbook:
The FED is NOT out of bullets, it is just very reluctant to use them before we are at least close to a full fledged crisis; currency swaps, QE and negative interest rates are all on the table. We therefore expect increasing market turmoil before the FED reverses course! Traditional protection for equities (puts) by now are somewhat expensive, especially in comparison to some short term interest rates (eurodollar). In our opinion it is quite a safe assumption, that the FED would reverse course if US equities sold off further 10-15%. Shorting equities is a tricky business in an increasing volatility environment but could prove to be aninteresting macro play until the FED gives in. A major deflationary event and (potentially internationally coordinated) reaction of central banks could finally be the trigger for the transition from deflation to stagflation! As far as gold’s outlook is concerned, the authors of the report repeat that things look very much in line with their ‘Scenario 1′, as described in Chapter 10 ‘Valuations, Scenarios and Price Targets’ (page 118 of the report).
Must read chart #1: Governments and corporations have increased their debt levels significantly Global debt levels have increased by USD 57 trillion since 2007. This amount is around three timesannual US economic output! New government borrowing has recorded the highest growth momentum!Difficult for us to spot the infamous deleveraging!

This post was published at GoldSilverWorlds on September 8, 2015.

SP 500 and NDX Futures Daily Charts – Paving the Way For the FOMC

The Fed would very much like to see calm and stable markets as it considers its first interest rate increase off the zero bound on September 16-17 next week.
Let’s see if they can get what they want, one way or another.
There was intraday commentary here that was prompted by the Consumer Metrics statement about the US that Among Major Economies, Only the Chinese Numbers Are More Suspect.
Either I am getting smarter as I get older, or these fellows are not bothering to hide their antics as well as they once did.
PPI might be interesting on the 11th, although it may be overlooked by the commemoration of the horrific loss of life on 911. I do not think I will ever forget it.

This post was published at Jesses Crossroads Cafe on 08 SEPTEMBER 2015.

NYPD Cops Fire 84 Shots At Murder Suspect, Miss 83 Times

Late last month, an undercover NYPD officer picked up alleged illegal weapons dealer Jeffrey Aristy – from whom he had purchased some 25 guns on 10 separate occasions – in the Bronx and drove him to meet his ‘cousin’ Samuel Ruiz in Mount Vernon.
It was either a set up or else everyone was just in the wrong place at the wrong time because just as the two men were ready to pull off, 37-year old Alvin Smothers jumped in the backseat, pointed a gun at the officer’s head, and robbed him of the $2,400 he had brought to buy the illegal guns from Aristy. Smothers then tried to run away when the officer broke cover and fired somewhere between 11 and 21 shots at the would be robber who had a tough time returning fire because as it turned out, the gun he had just put to the officer’s head was fake. Tragically, a 61-year old devout Jehovah’s Witness who was walking up the street was killed as the officer shot at the fleeing Smothers. The New York Post summed up the story quite effectively last week as follows: “A bystander was shot and seriously wounded by an NYPD cop in Westchester Friday afternoon when a suspect the officer was buying illegal guns from tried to rob him.”
Now there are obviously a number of absurd things about that story, but what shouldn’t get lost in the sheer ridiculousness is the fact that this undercover officer fired as many as 21 shots in the middle of the street at a fleeing suspect and somehow managed to hit a bystander not once, but twice in the midsection.
So while the NYPD looks to be fairly accurate when it comes to accidentally shooting senior citizens in the chest, they don’t fare as well when engaged in firefights with suspected murderers who are shooting at them.

This post was published at Zero Hedge on 09/08/2015.

Europe’s Banks – Insolvent Zombies

The Walking Dead
Now that Europe’s fractionally reserved banking system has been regulated into complete inertia, it is a good time to assess the current bottom line, so to speak. We should mention here that there are essentially two ways of dealing with the banking system. One is to introduce an unhampered free market banking system based on strong property rights and nothing else. Such a system would work best if it were based on sound money, i.e., a market-chosen medium of exchange. The regulations governing such a system would fit on a napkin.
The Euro-Stoxx bank index, weekly, over the past 10 years. Recently the index has been unable to overcome resistance in the 160-162 area. The bust and the reaction of the authorities to the bust has made zombies out of Europe’s big banks – click to enlarge.
The other way is to construct what we have now: a banking cartel administered and backstopped by a central bank, based on fiat money the supply of which can be expanded at will and involving continual violations of property rights. Fractional reserve banking represents a violation of property rights, because it is based on the assumption that two or more persons can have a legally valid claim on the same originally deposited sum of money (for an extensive backgrounder on this, see our series on FR banking – part 1, part 2 and part 3). This legal fiction is very convenient for the banks and the State, but it sooner or later renders the banking system inherently insolvent (a de facto, but not a de iure insolvency).
Given this system’s inherent insolvency, the regulations governing it obviously won’t fit on a napkin. Instead they fill several volumes the size of telephone directories and keep growing like weeds. In their infinite wisdom, Western regulators and authorities have decided to react to the crash of the banking system in 2008 by suspending the rules of capitalism. In short, they have done precisely what Japan’s authorities did after the 1989 bubble peak: They have completely zombified the banks. Amusingly, the very same people have criticized Japan’s actions sotto voce for decades.
Bank bailouts have proved to be politically unpopular. However, European and US politicians realized of course that it would be even more unpopular if depositors were to find out the hard way that the money they believe the banks to be ‘warehousing’ on their behalf doesn’t actually exist. And so they decided to go with Plan A. Bailing out the banks has of course always been Plan A. One of the main reasons why e.g. the Federal Reserve system was established in the first place was precisely that it makes it possible to privatize the banks’ profits and socialize their losses. The other reason is that fiat money and a central-bank administered fractionally reserved banking system enable governments to impose the vile ‘inflation tax’ and spend money they don’t have with both hands. This is extremely convenient for the financing of both welfare and, perhaps more importantly, warfare.

This post was published at Acting-Man on September 8, 2015.

Goldman Warns, VIX “Is Pricing In A Lot Of Economic Damage”

If the market is right, Goldman warns that current cross-asset-class volatility appears to be pricing in a lot of economic damage. As they note, VIX doesn’t just trade the economy; it also has a strong and often humbling element of risk sentiment baked in.
Goldman Sachs explains…
Mapping VIX levels back versus the economy … weaker data = higher VIX
Understanding the interplay between volatility and the economic cycle has been a core theme underlying our volatility framework. Although the VIX is often considered a ‘sentiment indicator’, a regression of average calendar month VIX levels on U. S. consumer spending, manufacturing and employment data explains 59% of the variability in VIX levels back to 2000. Updating our model to include last week’s ISM and employment data suggests that if the VIX were trading off the recent economic data then average VIX levels should be tracking at 18. The average VIX level in August was 19.4 and the average since mid-August has been 25.9, with a closing high of 40.7 on August 24.
Baseline VIX: ISM in low 50’s suggests equilibrium VIX level of 18, even after controlling for the drop in unemployment rate

This post was published at Zero Hedge on 09/08/2015.

China Now Dumping Dollar From Oil Trade For Yuan – Episode 761a

The following video was published by X22Report on Sep 8, 2015
Greek people say adopting the Euro did not benefit their country. Euro zone revised GDP higher but rating will never reach pre-level crisis. Retail contracting as more and more people slow spending. Spending is the lowest since the financial crisis in 2008. IMF Christine Lagarde says there are always bubbles in a capitalistic economy, one problem this is a fascist economy. China purchases 16 tons of gold in Aug 2015. China is now dumping the petro-dollar and will replace it with the petro-yuan.

Gold Daily and Silver Weekly Charts – Good Thing Where Has It Gone

“The woods decay, the woods decay and fall, The vapours weep their burthen to the ground, Man comes and tills the field and lies beneath, And after many a summer dies the swan.”
Tennyson, Tithonus
Among the usual suspects worth watching, there are two things that any experienced trader watches carefully: counterparty risk and liquidity.
The issue of liquidity in the physical gold market is quite easily overlooked, because its true nature, and that of counterparty risk, and kept veiled behind an opaque curtain in a market structure that might have been designed by carnies. And that is probably being unkind to most carnival folk.
There was intraday commentary titled Claims Per Deliverable Ounce’ Likely Soars to over 200:1. You may wish to read it, consider the pros and cons, and then do what you will.
I am getting a bad feeling about the markets in general. Especially with regard to the precious metals markets. Perhaps I should just blithely dismiss all these things that seem unusual as some are wont to do. Things will just continue on forever, in a downward spiral that we will keep calling ‘the new normal.’
I do think that an ounce of caution here is advisable.

This post was published at Jesses Crossroads Cafe on 08 SEPTEMBER 2015.

FANG FUBARer – NFLX Tumbles Near Black Monday’s Flash-Crash Lows

One of the founder members of the so-called FANG stocks has now fallen 7 straight days and is resting Black Monday’s flash-crash lows in today’s session. With the media darling breaking back below its 100-day moving-average, technical pressure continues to weigh on the share price,. as it is almost down 30% from its record highs…
Not pretty…

This post was published at Zero Hedge on 09/08/2015.

‘Claims Per Deliverable Ounce’ Likely Soared to over 200:1 as JPM Pulls Another Large Tranche

JP Morgan, who as I shared last month tends to move large amounts of gold into the registered (deliverable) category on the Comex just in the nick of time, took another huge tranche of gold out of that category last Friday.
Registered (deliverable) gold is now down 202,000 troy ounces or a little over 6 tonnes, a level which we have not seen there since Nick Laird started keeping track of the Comex warehouses in 2003.
A quick calculation that awaits the updated open interest figure shows that the ‘claims per deliverable ounce’ has now likely soared to over 200:1. We have never seen a ratio that high.
I will put up the ‘official calculation’ from Nick when it becomes available most likely on Aussie time later tonight. We might not see the ratio climb if there has been a plunge in open interest, however unlikely that might seem.
Not just considering the Comex, which I consider to be a atavistic pricing mechanism, a conjunction of several things trouble me in the light of Ronan Manly’s second article in his current series.
He does a meticulous estimate that indicates that the levels of unencumbered gold in the LBMA, which some of us have come to call ‘the float’ of physical bullion, are now so low that he calls it ‘a game of musical chairs’ to cover the unallocated gold accounts.

This post was published at Jesses Crossroads Cafe on 08 SEPTEMBER 2015.

Retail Sales Slump On Deck: Consumer Spending Slides To Lowest Since March After Worst August Since 2012

When it comes to exposing the disturbing, some say desperate, propaganda wave sweeping the nation, nothing has quite captured the unprecedented decoupling between policy-accepted “confidence indicators” such as the Conference Board, which in August printed at its 2015 highs and those which actually poll people such as Gallup, whose economic outlook indicator collapsed to the lowest level in one year.

This post was published at Zero Hedge on 09/08/2015.

‘Everyone Preparing for the Wrong Outcome’: Schiff Says QE4 is Coming, Not a Rate Hike!

The printing presses are firing up all over again… err, at least the digital ledgers are, anyway.
Financial expert and infamous goldbug Peter Schiff was interviewed by Fox Business from the floor of the U. S. Stock Exchange.
Schiff warned viewers that ‘everyone is preparing for the wrong outcome with the U. S. economy.’
That outcome? The financial world has been waiting with feverish anticipation for ‘the big day’ when the Federal Reserve finally raises interest rates – a quiet move big enough to shift economic tectonic plates.
But contrary to conventional wisdom about when the Federal Reserve will raise interest rates, and thus turn the page on a new era of the economy, Schiff says they can’t and won’t raise rates anytime soon – though they should have several years ago.
It didn’t happen months ago when many expected it. It won’t happen now in September, and likely not for a long time.

This post was published at shtfplan on September 8th, 2015.