Black Swan Event Would Seize Up The Silver Market

Investors tend to forget that the situation in the market can change on a dime. The last time this occurred was in 2008, as the entire U. S. Investment Banking Market went into crapper. Few of the Investment Banking turds that survived the first flush, were absorbed by Commercial Banks.
This created an even weaker U. S. Commercial Banking system which has only survived due to the massive liquidity injections by the Federal Reserve. While the majority of Americans believe the propaganda put out by the Mainstream Media and Financial Networks, a small percentage of investors continue to purchase a record amount of silver bullion.

This post was published at SRSrocco Report on October 13, 2015.

HSBC Is Now “Highly Risk Averse” Amid Growth Worries, Loss Of Central Bank Put

Earlier today, we brought you one graphic from HSBC which shows that based on at least one metric, the world is already in recession:

That graph is part of a larger thesis HSBC has developed about how a confluence of circumstances have conspired to make asset allocation a somewhat vexing task. The so called ‘tricky trinity’ is comprised of the following three factors:
Global growth is decelerating The absence of a policy put Risk premia offers a limited buffer These are all ideas that we have of course discussed at great length.
As for decelerating global growth, here’s what we said earlier:

This post was published at Zero Hedge on 10/13/2015.

Central Bankers Are Now Preparing Aggressive Measures To Ban Cash – Episode 790a

The following video was published by X22Report on Oct 13, 2015
More layoffs are headed our way. Retail sales fall in the first week of October. Baltic Dry Index declines to its lowest level in 29 years. Central bankers are preparing for a series of crisis. Central bankers are now preparing aggressive measures to ban cash . HSBC warns we are already in a global recession and its going to get much worse. FATCA has now started the next phase and it is failing. Tennessee school district needed to shutdown because of Obamacare.

The Numbers Say That A Major Global Recession Has Already Begun

The biggest bank in the western world has just come out and declared that the global economy is ‘already in a recession’. According to British banking giant HSBC, global trade is down 8.4 percent so far this year, and global GDP expressed in U. S. dollars is down 3.4 percent. So those that are waiting for the next worldwide economic recession to begin can stop waiting. It is officially here. As you will see below, money is fleeing emerging markets at a blistering pace, major global banks are stuck with huge loans that will never be repaid, and it looks like a very significant worldwide credit crunch has begun. Just a few days ago, I explained that the IMF, the UN, the BIS And Citibank were all warning that a major economic crisis could be imminent. They aren’t just making this stuff up out of thin air, but most Americans still seem to believe that everything is going to be just fine. The level of blind faith in the system that most people are demonstrating right now is absolutely astounding.
The numbers say that the global economy has not been in this bad shape since the devastating recession that shook the world in 2008 and 2009. According to HSBC, ‘we are already in a dollar recession’…
Global trade is also declining at an alarming pace. According to the latest data available in June the year on year change is -8.4%. To find periods of equivalent declines we only really find recessionary periods. This is an interesting point. On one metric we are already in a recession. As can be seen in Chart 3 on the following page, global GDP expressed in US dollars is already negative to the tune of USD 1,37trn or -3.4%. That is, we are already in a dollar recession.

This post was published at The Economic Collapse Blog on October 13th, 2015.

And Now The Bad News: Millennials Will Need To Withdraw $270K Per Year From Their Retirement Accounts

Which profile fits a money manager’s ideal customer – a ‘Mass affluent’ 50-year old or a dead broke 20-something? The wealth management industry would do well to run the numbers, because it is the latter that will generate a larger fee stream over time. How can that be? The short answer is that millennials will live longer, require far more in retirement savings, and use more high margin investment products for longer than their parents’ generation.
This simple calculus seems beyond the reach of an industry that still commonly features high minimum balances for advisory services and does little in the way of outreach to younger customers. So called ‘Robo-advisors’ have begun to gather up this group of younger investors, but there is still plenty of time for the traditional money management industry to service this next, much larger, wave of customers.
Note from Nick: I am 51; Jessica is 21. I have a lifetime of savings, equity in a house, and disposable income to invest. Jessica has a lot of talent and a few thousand dollars saved from her 2 years of full time work. And when I see advertisements for money managers, they all clearly target me. Turns out that is a bad strategy, because the industry will make a lot more money from Jessica than they ever will getting my hard earned shekels to manage. Read on for the whys and wherefores…. And just how much more valuable millennials are than old folks like me.
Are you more afraid of death or poverty? This may seem like an odd question with an obvious answer: the Grim Reaper should engender more fear than an overdraft charge. Surveys, however, surprisingly suggest that poverty weighs heavily indeed on many people’s psyches in light of longer life expectancies and uncertainty about Social Security payouts. Consider these findings:

This post was published at Zero Hedge on 10/13/2015.

Junk-Rated, Money-Losing, Revenue-Challenged Dell Tries to Pull off Largest Tech Buyout Ever

Peak desperation.
When Standard and Poor’s downgraded Dell to junk in September 2013, it cited the slump in the PC business, the pricing pressures in the sector, and the proposed buyout of the company by founder Michael Dell and private equity firm Silver Lake Management. They’d heap new debt on the company whose sales at the time had dropped 8% from a year earlier, and whose net profit had plunged 32%. But at least it still had a profit.
Today the PC industry is still in trouble. HP has been laying off people in big mega-waves, so have Microsoft, Intel, and others.
But OK, instead of investing in cutting-edge products and services that could move the company forward, it’s the perfect time for Dell and its investors to embark on the largest tech deal ever, a masterpiece of financial engineering, the $67 billion buyout of data-storage company EMC.
Standard and Poor’s, which affirmed Dell’s current junk rating of BB but put EMC on CreditWatch negative, figured that the deal would be funded through a mix of debt issuance, including perhaps $40 billion in leveraged loans, equity from current owners and the Singaporean wealth fund Temasek, some cash on hand, and the issuance of a flimsy tracking stock – similar to issuing old bicycles – to track VMware’s stock price. Details have not been disclosed.

This post was published at Wolf Street by Wolf Richter ‘ October 13, 2015.

Gold Daily and Silver Weekly Charts – Memento Mori

‘The mythological Narcissus rejected the advances of the nymph Echo and was punished by the goddess Nemesis. He was consigned to pine away as he fell in love with his own reflection – exactly as Echo had pined away for him. How apt. Narcissists are punished by echoes and reflections of their problematic personalities up to this very day.
Narcissists are said to be in love with themselves. But this is a fallacy. Narcissus is not in love with himself. He is in love with his ‘reflection’…
In the narcissist’s surrealistic world, even language is pathologized. It mutates into a weapon of self-defence, a verbal fortification, a medium without a message, replacing words with duplicitous and ambiguous vocables.”
Sam Vaknin, Malignant Self Love: Narcissism Revisited
‘There’s a reason narcissists don’t learn from mistakes and that’s because they never get past the first step which is admitting that they made one. It’s always an assistant’s fault, an adviser’s fault, a lawyer’s fault. Ask them to account for a mistake any other way and they’ll say, ‘what mistake?’
Jeffrey Kluger, The Narcissist Next Door
Gold and silver managed to nudge up a little tighter into the overhead resistance at 1166 gold and 16 for silver.
The Bucket Shop was dead quiet on precious metal deliveries yesterday. No surprise there. And no surprise that the bullion continues to slowly leak out of the warehouses as shown in the reports below.

This post was published at Jesses Crossroads Cafe on 13 OCTOBER 2015.

JPMorgan Misses Across The Board On Disappointing Earnings, Outlook; Stealthy Deleveraging Continues

Maybe we now know why JPM decided to release results after market close instead of, as it always does, before the open: simply said, the results were lousy top to bottom, the company resorted to its old income-generating “gimmicks”, it charged off far less in risk loans than many expected it would, and its outlook while hardly as bad as it was a quarter ago, was once again dour.
First, the summary results, in which JPM saw $23.5 billion in non-GAAP net revenues, because yes, JPM has a pre-GAAP “reported revenue” item which was even lower at $22.8 billion…

This post was published at Zero Hedge on 10/13/2015.

Bond Market Breaking Bad – Credit Downgrades Highest Since 2009

Despite The Fed’s best efforts to crush the business cycle, the crucial credit-cycle has reared its ugly head as releveraging firms (gotta fund those buybacks) and deflationary pressures (liabilities fixed, assets tumble) have led to a surging market cost of capital.
As WSJ reports, softening U. S. corporate fundamentals have been largely overlooked but the markets for riskier debt have become snarled with rising downgrades and an increase in U. S. corporate defaults indicate ‘some cracks on the surface’ of the domestic-growth outlook. In fact, in the latest quarter, the ratio of upgrades-to-downgrades is its weakest since the peak of the financial crisis in 2009.
Falling profits and increased borrowing at U. S. companies are rattling debt markets, a sign the six-year-long economic recovery could be under threat.
Credit-rating firms are downgrading more U. S. companies than at any other time since the financial crisis, and measures of debt relative to cash flow are rising.

This post was published at Zero Hedge on 10/13/2015.

Fed Minutes Are A Waste of Time

I will no longer comment on the bulk of the FOMC minutes. They focus on the Fed staff’s and FOMC members’ views of the economy and the markets. Why bother with that? The Fed makes policy on an ad hoc basis based on whatever happened in the markets in the weeks immediately prior to the meeting. Forward guidance is therefore meaningless and so analyzing the propaganda about the Fed’s decision process is a waste of time.
We have known for years that the Fed is clueless in forecasting the direction of the economy, and in even correctly identifying its current status. The Fed’s process has been to repeatedly revise its forecasts to attempt to hit, what is for them, an elusive moving target, which they never do. It is pointless to parse their words on this process because if the markets crack or if problems crop up in Europe or China which the Fed did not foresee, which it never does, then it will make its policy decision on that basis.
The market’s appearance of front running the Fed is a mirage anyway. The US markets rise and fall on the basis of actual liquidity flows, not what some players imagine those flows might be by trying to imagine what Fedheads would imagine might be coming. It’s a case of imagining the imaginary imaginings of the imaginary. It’s mystical fantasy all around. What’s more, the Fed’s descriptions of the process are pure propaganda designed to manipulate investor behavior. Attempting to attach meaning to the Fed’s propaganda on its mystical fantasies is an exercise in futility, and I won’t engage in it.
I will review the minutes for any discussion of exactly how they intend to exercise their present and future policy decisions, with a particular focus on how they intend to influence interest rates and any changes in the size of the Fed’s balance sheet. These are the issues that matter. But they will only really matter when the Fed actually begins to implement them.

This post was published at Wall Street Examiner by Lee Adler ‘ October 13, 2015.

Keiser Report: Avatars Will Replace Humans (E822)

The following video was published by RT on Oct 13, 2015
In this episode of the Keiser Report, Max Keiser and Stacy Herbert ask whether we can trust the algo and bot owners to share some of the wealth after they’ve looted every last penny from all the pension funds and savings accounts on Earth. They look at the cartels at the heart of each and every so-called ‘free trade’ deal being forced upon previously sovereign nations in the global economy. In the second half, Max interviews Irish MEP Luke ‘Ming’ Flanagan, about TTIP, TiSA, Brexit, the Troika, the Anglo-Irish bailout and a shillelagh stick.

Silver Bullion Coins on Allocation at Major National Mints

Retail investors in recent months have seized the opportunity to significantly increase their holdings of silver bullion coins and, to a lesser extent, bars. Due to strong demand, the U. S. Mint, the Royal Canadian Mint, Australia’s Perth Mint, the Austrian Mint and the British Royal Mint have put their silver bullion coins on allocation, where the volume of distribution of coins is controlled due to bottlenecks in the manufacturing process. This is an unprecedented industry-wide phenomenon. In recent history, putting bullion coins on allocation has only occasionally been done by the U. S. Mint. The practice points to considerable tightness in the silver coin business at the moment.
Globally, silver bullion coin sales reached an all-time high of 32.9 Moz in the third quarter of this year, according to GFMS Thomson Reuters data. This volume was a 74% quarter-on-quarter and 95% year-on-year increase. Sales in North America, Europe, Japan and other Asian countries (predominantly China) saw quarter-on-quarter growth of 74%, 72%, 95% and 202%, respectively.

This post was published at GoldSilverWorlds on October 13, 2015.

Psst… The Word Starts With A “D”

What do you say the economy looks like when the housing disposable income, that is, the amount the average family can spend on housing, falls 26% over the space of 10 years?
Is it “Recession”?
Or is it another word that starts with a “D”?
Yes, you can hide that for a while. You can hand out “free money” from the government to the point that millions of people exit the workforce including prime working-age folks that would simply rather not work (because the deal is better for them to sit on their ass), you can hand out even more in “disability” to those who simply “feel bad”, you can replace soup kitchens with “prepaid debit cards” that literally work anywhere (including the liquor store, whether they should or not) but none of that changes the underlying economic picture.
Nor do all the shenanigans with share buybacks; J&J just crapped the bed this morning despite a large reduction in number of shares their EPS fell, which means that on a constant-share basis it was much worse than reported.
Oh, and then you can top all of this off with a ridiculous increase in mandatory health insurance shoved down everyone’s throats with, I remind you, double-digit percentage increases that will be hitting everyone’s mailbox right around the end of the month.
Good luck.

This post was published at Market-Ticker on Oct. 13, 2015.

These Are The 50 “Most Hated” NYSE And Nasdaq Stocks

While many will debate if the S&P500 correction “scare” bottomed in late September, and as a result of another round of abysmal economic data, and a historic short squeeze, the lows for the summer swoon are now in as a Fed rate hike has been all but written off and “hope” for more central bank intervention is back on the table, one thing is clear: for a brief moment good news was good news, and bad news was bed news as the role of the suddenly discredited Fed seemed disturbingly fleeting, and stocks were evaluated on a metric they have not been held accountable to for a long time: their own fundamental merit.
As such, the dramatic moves in the second half of September briefly removed the opium clouds built up from seven years inhaling excess liquidity vapors, and presented a sober and untainted look at the true fundamental situation.
This is why we were curious to observe what the traditionally far more rational, and skeptical, bearish community had to say about the real “quality” of the worst stocks on both the NYSE and the Nasdaq in those two brief weeks when things seemed to be getting back to normal: the stocks which if and when the Fed does lose control, would be the first to “go.”
To do that, we pulled the Factset data listing the 50 “most hated” names on the two exchanges, as ranked by short interest as a % of total float.
Here are the answers, starting with the 50 most hated NYSE stocks…

This post was published at Zero Hedge on 10/13/2015.

Analysts Try To Predict Future Earnings, Comedy Ensues

While everyone’s attention is focused on the earnings deluge set to be unleashed in the third quarter (and if the handful of companies reporting so far is any indication, this may be one of those quarters when companies underperform already drastically lowered EPS estimates, which at last check are set to tumble -5.5% Y/Y according to consensus), the big surprise is what has quietly taken place to Q4 consensus estimates.
First, a reminder of where Q3 stands from FactSet.
At the start of the peak weeks of the Q3 2015 earnings season, the blended earnings decline for the third quarter stands at -5.5%. Factoring in the average improvement in earnings growth during a typical earnings season due to upside earnings surprises (see page 2 for more details), it still appears likely the S&P 500 will report a year-over-year decline in earnings for the third quarter. If the index does report a year-over-year decline in earnings for the third quarter, it will mark the first time the index has reported two consecutive quarters of year-over-year declines in earnings since Q2 2009 and Q3 2009. Actually, make that three quarters in a row, because as of this past week, EPS in the fourth quarter, which on June 30 were triumphantly expected to post a solid 4.3% rebound, went from 0.2% to negative 0.4%.

This post was published at Zero Hedge on 10/13/2015.

Slowing Sales Point to Slowing Economy

If the Federal Reserve is truly ‘data dependent,’ then the data just keeps undermining its case for an interest rate hike this year. Wholesale inventories rose in August, and sales fell, flashing a recessionary warning sign.
According to the Associated Press, the Commerce Department reported wholesale inventories rose 0.1% in August, while sales fell a full 1%.
The dip in sales follows a general year-long trend, with the number dropping 4.7% over the past 12 months.
Meanwhile, inventories have increased 4.1% over the last year. Wholesale inventories currently stand at a seasonally adjusted $583.9 billion.
Reuters reports the rise in wholesale inventories was higher than expected. It was the largest increase in the last seven months:
Inventories for durable goods climbed 0.3 percent, with computers up 1.9 percent. At August’s sales pace it would take 1.31 months to clear shelves, up slightly from 1.30 months in July.’

This post was published at Schiffgold on OCTOBER 13, 2015.

“There’s No More Fat To Be Cut:” Desperate Oil Producers Cut Salaries To Save Mission Critical Jobs

Early last month, Citi ‘exposed’ what it said was shale’s ‘dirty little secret.’
In a nutshell, the entire business model is uneconomic and thus the only reason a lot more drillers aren’t bankrupt is because capital markets are still wide open. ‘Capital markets plugged shale’s ‘funding gap’ from 2009 through the first half of 2015, but they are now tightening, reducing access to liquidity for some producers and shaping their ability to drill,’Citi said, adding that ‘with eight bankruptcies already announced this year, weaker producers may live or die by the whims of capital providers.’
Well, yes. When free cash flow is negative, you’ve dug yourself a hole (no pun intended) and it has to be filled somehow, so you turn to capital markets. It’s just that simple.
But when rates are at zero and when the hunt for yield generates a perpetual bid for anything the provides investors with any semblance of income, the market never gets to punish uneconomic business models by putting them out of business. Therefore, these same producers just produce, and produce, and produce some more, driving prices ever lower, rendering their business models even more economic than they already were. What you end up with is a collection of zombie companies desperately trying to stay afloat any way they can.
Of course the perpetually low prices that this dynamic engenders affect the entire space, which is why you’ve seen capex cuts and layoffs even among the industry’s stronger players. Now, it would appear that all of the proverbial fat that can be trimmed, has been trimmed which means that, as WSJ reports, further cost cuts will now have to come from salary cuts because going forward, cutting jobs altogether would imperil companies’ ability to operate.
Here’s more:

This post was published at Zero Hedge on 10/13/2015.

The Cases of The Disappearing Fed Funds Market and the Reappeared Half Trillion

The Fed’s liabilities fluctuated wildly last week while total assets were little changed. The wild changes in liabilities were a direct result of the Fed actually supporting, promoting, and encouraging banks to dress up their quarter end balance sheets.
What a sordid spectacle. It confused many observers into thinking that something drastic was going on in the financial system. It was actually just a Fed shell game of moving bank deposits from regular reserve deposits to the Fed’s Reverse Repo Accounts, and then back, over a couple of days between the end of the third and beginning of the fourth quarter.
There has been essentially no change in the total size of the balance sheet since QE officially ended a year ago. And there will be no material change going forward until the Fed either decides to start shedding assets (not gonna do it) or until it restarts QE (somewhat more probable than shrinking the balance sheet).

This post was published at Wall Street Examiner by Lee Adler ‘ October 12, 2015.

Buy The Fear (And You Will Be Protected From The Horror)

The rise of central banking is the death of empiricism. The Federal Reserve is arguably the most powerful organization on the planet and is the economic rudder of the global economy. The decisions made by its members effect anyone touched by capitalism from the garment worker in Bangladesh all the way to the investment banker in London. By design, board members are not democratically elected and independent from the oversight of the executive and legislative branches of the US government. The voting membership of the Federal Open Markets Committee is dominated by members with predominantly academic or policy backgrounds (Yellen, Evans, Fischer, Lacker, Williams, Brainard, Tarullo, and Powell) with the remaining deriving their experience as Wall Street economists (Dudley, Lockhart)(32). This means the most powerful economic body on earth has little diversity in its intellectual ranks.
No FOMC board member knows what it means to be an entrepreneur. No FOMC board member has a record of accomplishment as a great investor. No FOMC board member has started or run a successful global business. No FOMC member has led a corporation through a crisis. It may be time to consider whether economic leadership dominated by academic theory as opposed to empiricism is making things worse. I don’t claim to have the answers, but the empiricist knows what they do not know, and this is more than I can say for policymakers today.
Global central banks have made a Faustian bargain with our economic soul selling our future for a false stability today. At this stage, absent continuous intervention, a large deflationary crash in the global economy is inevitable. The greatest risk is that if central banks continue a policy of competitive devaluation and hyper-asset bubbles the end result will be an even more devastating crash, followed by sovereign defaults, and then class warfare. The next Lehman brothers will be a country. The real ‘shadow convexity’ will not come from markets but political unrest or war. Never forget that Hitler rose to power by harnessing the anger of a humiliated German middle class and abusing constitutional authority granted from a decade of economic devastation and money printing.

This post was published at Zero Hedge on 10/13/2015.

By This Metric, We Are Already In A Global Recession,” HSBC Warns

One of the things you might have noticed if you follow trends in global growth and trade, is that the entire world seems to be decelerating in tandem with China’s hard landing (which most recently manifested itself in another negative imports print).
For evidence of this, one might look to the WTO, whose chief economist Robert Koopman recently opined that ‘it’s almost like the timing belt on the global growth engine is a bit off or the cylinders are not firing.’ And then there’s the OECD, which recently slashed its global growth forecasts. The ADB joined the party as well, citing China, soft commodity prices, and a strong dollar on the way to cutting its regional outlook. Even Citi has jumped on the bandwagon with Willem Buiter calling for better than even odds of a worldwide downturn.
Indeed, virtually anyone you talk to will tell you that the world looks to have entered a new era post-crisis that’s defined by a less robust global economy. Those paying attention will also tell you that this dynamic may well end up being structural and endemic rather than transitory.
Earlier today, we noted that Credit Suisse’s latest global wealth outlook shows that dollar strength led to the first decline in total global wealth (which fell by $12.4 trillion to $250.1 trillion) since 2007-2008.
Interestingly, a new chart from HSBC shows that when you combine the concepts outlined above, you learn that when denominated in USD, the world is already in an output recession.

This post was published at Zero Hedge on 10/13/2015.