Not the ‘Death of the Dollar’ but ‘Death of the Euro?’

The rise of the Chinese yuan as an international currency is not only unstoppable but is advancing in leaps and bounds, according to SWIFT. It comes at the expense of other currencies, though it’s not triggering the long-awaited ‘death of the dollar.’ On the contrary. Yet the euro has stumbled into the line of fire.
SWIFT is in a position to know. The member-owned organization, based in Belgium, provides among other things a network that enables financial institutions around the globe to send and receive information about financial transactions in a standardized environment. It also cooperates with various intelligence and law enforcement agencies around the world, including the US Treasury, the CIA, and others. The NSA is likely to get what it wants without asking.
In its latest RMB Tracker, SWIFT is relentlessly effusive about the rise of the yuan. In August, global payments in renminbi rose once again, achieving another milestone: it edged out the yen to become the fourth largest payments currency with a share of, well, 2.8% of global payments – ‘reflecting RMB’s huge potential and staggering momentum as a major currency,’ the report gushes.

This post was published at Wolf Street on October 6, 2015.

Economists Chase Tails and Tales, Cut GDP Estimates Again

Tail Chase
In the wake of recent economic data, economists at the IMF and Deutsche Bank lowered their growth estimates.
IMF Cuts Forecast Again
Like a dog running in futile circles hoping to catch its tail, the IMF does the same thing with its perennially over-optimistic assessment of everything from emerging markets to the G7 economies.
Reuters reports the IMF cuts global growth forecasts again, citing commodity and China worries.
The International Monetary Fund cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China and warned that policies aimed at increasing demand were needed.
The Fund, whose annual meeting starts in Peru this week, forecast that the world economy would grow at 3.1 percent this year and by 3.6 percent in 2016.
Both new forecasts are 0.2 percentage point below its July forecast and are 0.4 percentage point and 0.2 percentage point below its April outlook, respectively.

This post was published at Global Economic Analysis on October 06, 2015.

A “Heroic” Ben Bernanke Blames Congress For Poor Economic Recovery

Make no mistake, Ben Bernanke is a ‘courageous’ guy.
When the world was on the verge of collapse in 2008 thanks in no small part to the post dot-com bubble policies of his predecessor, the former Fed chair wants you to know that he did what was needed to save the world and he will tell you all about it in his new memoir ‘The Courage To Act’, which can be yours on Kindle for the weird price point of just $16.05 (or, in unconventional monetary policy terms, about a QE millisecond).
Of course perhaps more than any other post-crisis DM central banker, Bernanke has a lot of explaining to do. That is, it isn’t immediately clear why, if Ben wants to contend that the Keynesian dominoe effect he set off in 2008 is such a success, that inflation expectations are still mired in the deflationary doldrums in Japan and Europe and why global demand and trade are stuck at stall speed.
Of course what you do if you’re a Keynesian central planner in today’s low-growth world is blame lawmakers because after all, when monetary policy fails to bring about the promised defibrillator shock to global demand, you can always pin the whole debacle on an ineffective legislature. Here’s FT with Bernanke’s take:

This post was published at Zero Hedge on 10/06/2015.

Commodity Trading Giants Unleash Liquidity Scramble, Issue Record Amounts Of Secured Debt

Earlier today, in its latest attempt to restore confidence in its brand and business model after suffering a historic stock price collapse, Glencore – whose CDS recently blew out to a level implying a 50% probability of default – released a 4 page funding worksheet which was meant to serve as a simplied summary of its balance sheet funding obligations and lending arrangements to equity research analysts who have never opened a bond indenture, and which among other things provided a simplied and watered-down estimate of what could happen if and when the company is downgraded to junk.
Meanwhile, in a furious race to shore up as much liquidity as possible, Glencore – which a month ago announced a dramatic deleveraging plan – and its peers have been quietly scrambling to raise billions in secured funding. Case in point none other than Glencore’s biggest competitor and the largest independent oil trader in the world, Swiss-based, Dutch-owned Vitol Group, whose Swiss unit Vitol SA earlier today raised a record $8 billion in loans.
It is not alone.
As Bloomberg reports, another name profiled previously here, privately-held (but with publicly-traded debt) Trafigura “won improved terms on a $2.2 billion loan refinancing deal on Oct. 1 via a group of 28 banks. Swiss commodity traders Gunvor Group Ltd. and Mercuria Energy Group Ltd. are also marketing credit facilities totaling $2 billion.”

This post was published at Zero Hedge on 10/06/2015.

China’s Yuan Is Now Number Four In Most Used Global Currencies – Episode 784a

The following video was published by X22Report on Oct 6, 2015
German factory orders are down and these don’t include the Volkswagen fallout. Consumer confidence varies greatly between the government sponsored agency and a Gallup people poll. More and more people are being moved over to the not in the labor force section to keep the number manipulated. Homes paid in cash increased in 2014 but now falling. The Chinese yuan now moves into the 4th spot surpassing the yen for global currency trade. IMF cuts global outlook.

Faith in Central Banks Dwindles

Even Bloomberg Notices that Something is Amiss
As anyone who hasn’t been in a coma knows, assorted central bank interventions have failed to achieve their stated goals over the past several years. A recent article at Bloomberg focuses on their failure to reach their ‘inflation’ targets.
Of course, this particular failure is actually reason to celebrate, as it means that consumers have at least been spared an even sharper decline in their real incomes than has been underway in spite of relatively tepid increases in consumer prices (whereby it should always be kept in mind that whether or not such price increases are considered ‘tepid’ depends on on the composition of the basket of goods and services relevant to each individual).

This post was published at Acting-Man on October 6, 2015.

Two Charts That Gold Bulls Will Love

Presented with almost no comment:
First, the U. S. dollar is taking quite some time consolidating. With a U. S. Fed kicking the can down the road when it comes to hiking interest rates, the market has clearly understood that the dollar cannot rally, at least not in the short to mid term. The strongly declining volume on the chart suggests interest in the dollar is waning (see red line below).

This post was published at GoldSilverWorlds on October 6, 201.

How Developed Markets Become Banana Republics: “Debt Is A Much Easier Way To Gather Consensus”

Perhaps the most dangerous thing about where the world seems to be headed now that central bankers have not only lost credibility in the minds of investors, but in their own minds as well, is that it’s not entirely clear what will happen to society if credit suddenly dries up.
That is, if the central bank put finally disappears and the market is once again free to purge speculative excess and correct the rampant misallocation of capital, the days of easy money will quickly come to an end as rational actors begin to make decisions based on prudence and fundamentals rather than on the assumption that because the cost of capital is effectively zero, and because central planners will never ‘allow’ the system to fail, credit can safely be extended to unworthy borrowers.
We’ll likely get an early indication regarding the market’s tolerance for a return to some semblance of normalcy in the coming months as capital markets become less forgiving towards the exceedingly uneconomic US shale space. But as mentioned above, the truly interesting question is what happens when everyone else starts to get the bankrupt shale driller treatment because after all, in a world where everybody is living on cheap credit, metaphorically speaking we’re all just broke US oil producers, surviving on debt and the willingness of our neighbors to finance that debt.
It’s against that backdrop that we bring you the following excerpts from RBS’ Alberto Gallo, whose latest note takes a look at the history and proliferation of the fiat regime.

This post was published at Zero Hedge on 10/06/2015.

6/10/15: BRIC Quarterly Economic Activity & PMIs: 3Q 2015

Now, as promised, the summary of 3Q 2015 BRIC PMIs and the insights these give us into global growth trends. Note: series history refers here to data from 1Q 2006, since some countries in the group only started collecting PMI data from that period.
Brazil:
Brazil’s Manufacturing PMI averaged poorly 46.7 in 3Q 2015, which is… drum roll… an improvement on disastrous 46.1 recorded in 2Q 2015. All in, Brazil manufacturing sector contraction is now 6 consecutive quarters-long. Over the last two consecutive quarters, Brazil posted the worst Manufacturing sector performance of all BRIC economies. Meanwhile, Brazil Services PMI tanked to 41.9 on 3Q 2015 average basis from already abysmal 42.3 reading in 2Q 2015. This means that Brazil Services sectors are in a deep contraction over the last 6 months and the rate of contraction accelerated in 3Q 2015. This is the worst quarterly reading in all BRIC economies for Services sector for the second consecutive quarter running and the fourth consecutive quarter of recession in Brazil’s Services. While Manufacturing PMI in 3Q 2015 was the fifth lowest in history of the series, Services PMI hit its lowest level in history. In brief, Brazil is in deep trouble and is currently the worst performer across both manufacturing and services sectors of all BRIC economies. Brazil recorded now four consecutive quarters of sub-40 readings in both indices – the only economy in the BRIC group to have done so (in Russia case, such coincident sub-50 readings have occurred for the duration of only two quarters) in post-Crisis period.

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

Prominent Permabull Says Correction Not Over Yet, Expect “Final Capitulation”

Back in January 2012, all was well with the centrally-planned world: Gluskin Sheff’s David Rosenberg was staunchly bearish, while his arch-nemesis, Wells Capital’s Jim Paulsen, was the opposite. This rivalry culminated with Rosenberg writing an extensive breakdown of his showdown with “bullish strategist” Paulsen at a CFA event (see “David Rosenberg Explains What (If Anything) The Bulls Are Seeing“) in which he said that the one thing that he could “identify as market positive” was valuations, to wit: “we do understand that P/E ratios at current low levels do serve up a certain degree of confidence that there is some downside protection to the overall market here.”
Fast forward three years, and the world, while still centrally-planned more so than ever now that the BOJ has and the ECB is about to join the massive monetization fray, has been thrown into conventional wisdom turmoil. The reason is that while David Rosenberg infamously flip-flopped from bear to bull (although supposedly he may be contemplating turning bearish again, though who knows after the last 3-day rally) three years ago, none other than permabull Jim Paulsen has come out with a very uncharacteristic and skeptical assessment of the market, in which he does not urge readers of his monthly letter on economic and market perspectives to yet again go all-in and BTFD, but to instead realize that the correction is not yet over and that he expects “a more fearful investment culture suggesting a final capitulation and more importantly, a lower stock market valuation level able to withstand a less hospitable recovery.”
First, Paulsen’s take on the torrid market rally unleashed by the worst jobs report in years:

This post was published at Zero Hedge on 10/06/2015.

Silver Coin Premiums Soar Above 50%

Courtesy of Sharelynx’ Nick Laird who tracks precious metal premium by vendor, we continue our recent series showing the discrepancy between paper and physical metals, in this case silver. As Nick notes, APMEX price premiums are a lot higher than the Monex. And as can be seen in the charts below, premiums rose above 50% for 1-19 coins & above 40% for 500 plus coins.

This post was published at Zero Hedge on 10/06/2015.

Gold Daily and Silver Weekly Charts – Slow Bleed in Quiet Times

Gold and silver had some nice follow through today, while the dollar showed weakness within a recent trading range.
We have some potential formations on the charts, but so far nothing seems to complete its development and ‘work’ as we might normally expect.
Let’s see if the metals can keep their price rally going.
The Bucket Shop was quiet, and the warehouses continue their slow loss of bullion.

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

Biotechs Butchered As Oil Orgasms In Otherwise Uneventful Day

Update: both YUM and ADBE are crashing at this moment, the first down 16%, the second down 11%, after both admitted they had been “overoptimistic” and cut and guided lower. YUM Q3 revenue was $3.43bn, vs Exp. $3.66bn and EPS was $1.00 vs Exp. $1.06, while ADBE said it now expecteds EPS of $2.70 vs previous expectations of $3.20, on revenue of $5.7bn vs $5.94bn prior.
***
After soaring some 100 points since the terrible Friday payrolls data, and nearly 6% in the past week…

This post was published at Zero Hedge on 10/06/2015.

OCT 6/CONTINUAL BANK RUNS AT THE GOLD COMEX AND SILVER COMEX/PREMIUMS ON SILVER REACH 50% AS WE ARE IN SEVERE BACKWARDATION IN LONDON/ALSO GOLD IN BACKWARDATION IN LONDON/HUGE INCREASE IN REVERSE…

Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1146.80 up $8.70 (comex closing time)
Silver $15.98 up 28 cents.
In the access market 5:15 pm
Gold $1147.10
Silver: $15.90
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a very poor delivery day, registering 0 notices for nil ounces Silver saw 0 notices for 10,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 212.80 tonnes for a loss of 90 tonnes over that period.
In silver, the open interest fell by a considerable 2654 contracts despite the fact that silver was up 44 cents on yesterday. We thus must have had considerable short covering by the bankers. The total silver OI now rests at 155,397 contracts In ounces, the OI is still represented by .777 billion oz or 111% of annual global silver production (ex Russia ex China).
In silver we had 0 notices served upon for nil oz.
In gold, the total comex gold OI rose to 421,702 for a gain of 196 contracts. We had 0 notices filed for nil oz today.
We had no change in tonnage at the GLD thus the inventory rests tonight at 688.98 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 no change in silver inventory at the SLV / Inventory rests at 318.395 million oz.
We have a few important stories to bring to your attention today…

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

Barry Diller: “If Trump Wins I’ll Move Out Of The Country”

IAC/Interactive Chairman Barry Diller spoke with Bloomberg’s Erik Schatzker about many things including the state of the TV industry, Tinder, and Jack Dorsey at the Bloomberg Markets Most Influential Summit in New York today. However, the one thing that caught our attention was the prominent Democrat’s characterization of what he would do if Donald Trump wins the presidential election.
His quote:
“If Donald Trump doesn’t fall, I’ll either move out of the country or join the resistance. I just think it’s a phenomenon of reality television as politics and I think that that is how it started. Reality television, as you all know, is based on conflict. All he is is about conflict and it’s all about the negative conflict. He’s a self-promoting huckster who found a vein, a vein of meanness and nastiness.”

This post was published at Zero Hedge on 10/06/2015.

Someone Is Lying: Consumer Confidence Is Somehow Both “Highest” And “Lowest” For The Year

To those keeping tabs on the government’s propaganda, it doesn’t get any more laughable than this.
One week ago, the Conference Board, a “tax-exempt non-profit business membership and research group organization” released a ridiculous number which made even the permabullish “strategists” on Wall Street blush: a consumer confidence print which soared to a level of 103: a number just shy of the January high which in turn was the highest such print going back all the way to August 2007. In short, according to this “impartial” organization, consumer confidence was the highest it has been in 2015.

This post was published at Zero Hedge on 10/06/2015.

6/10/15: BRIC Services & Composite PMI: September 2015

BRIC Services PMIs and Composite PMIs are in for September. I covered Manufacturing PMIs for BRTIC economies earlier here.
Unlike Manufacturing sector, BRIC Services sector did much better, posting overall a shallow, but positive growth.
Russia Services PMI was covered in detail in this post. Overall, in the end Russia Services PMI reading for September ended up being tied for the highest position in the entire group alongside India’s India’s Service PMI came in at 51.3, down from 51.8 in August and marking third consecutive month of above 50 readings. The rate of growth singled by the Indian PMI is, however, relatively weak. China Services PMI came in at 50.5, the second weakest reading for a BRIC economy and down on 51.5 in August. Statistically-speaking, just as with Russian and Indian Services indicator, Chinese Services PMI was not distinguishable from zero growth 50.0 marker. For the economy that never posted below 50 reading in its Services PMIs, however, current reading for China is probably consistent with a sector growth plummeting sharply. This is the lowest rate of activity since July 2014. September reading was also second lowest on record.

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