Former Reagan Administration Official Warns That Financial Disaster Is Dead Ahead

Why won’t the American people listen to the warnings? David Stockman was a member of the U. S. House of Representatives from 1977 to 1981, and he served as the Director of the Office of Management and Budget under President Ronald Reagan from 1981 to 1985. These days, he is running a website called ‘Contra Corner’ which I highly recommend that you check out. Stockman believes that a global ‘debt super-cycle’ that has been building for decades is now bursting, and he is convinced that the consequences for the U. S. and for the rest of the planet will be absolutely catastrophic. His findings are very consistent with what I have been writing about on The Economic Collapse Blog, and if Stockman is correct the times ahead of us are going to be exceedingly painful.
But right now, most people don’t seem to be in the mood to listen to these types of warnings. Even though there is a mountain of evidence that the global economyhas already plunged into recession, U. S. stocks had a great month in October, and so most Americans seem to think that the crisis has passed.
Of course the truth is that the stock market is not an accurate barometer of the economy and it never has been. Back in 2008, almost everything else started to go downhill before stocks did, and the same thing is happening once again. In a recent article, Stockman explained that stocks are surging to absolutely ridiculous levels even though corporate earnings are actually way down…
At this point, 75% of S&P 500 companies have reported Q3 results, and earnings are coming in at $93.80 per share on an LTM basis. That happens to be 7.4% below the peak $106 per share reported last September, and means that the market today is valuing these shrinking profits at a spritely 22.49X PE ratio.
And, yes, there is a reason for two-digit precision. It seems that in the 4th quarter of 2007 LTM earnings came in at 22.19X the S&P 500 index price. We know what happened next!
Why do so many refuse to see the parallels?

This post was published at The Economic Collapse Blog on November 4, 2015.

Corporate Profits Are the Stock Market’s Foundation. What Will Break Them?

The daily flow of economic statistics misleads even sophisticated analysts into watching the short-term trends while forgetting the long-term basics that often determine events – as we see today, with analysts chattering about beats of quarterly earnings and expectations for Friday’s employment report.
The first plays a pointless manipulated game. The second concerns an impossible-to-accurately-predict, heavily revised, slow-changing metric (non-farm payroll growth has been 1.7% – 2.2% year-over-year for the past 15 months).
Larger factors drive the stock market, creating the macroeconomic foundation for bull and bear markets. One of the most dramatic trends of the past generation has been the rise in corporate profits. It has helped reshape America, powering a three decade long bull market. What created it? What will end it?
This was America during the summer of the Middle Class (1990=100):

This post was published at Wolf Street By Larry Kummer, editor of the Fabius Maximus website ‘ November 4, 2015.

What Blackout Period? Corporate Buybacks “Are Above Last Year’s Levels”

It is now widely understood that the biggest “buyer” behind the vicious snapback rally since late September was not a buyer at all, but sellers rushing to cover their shorts (See “It’s Not A Risk-On Rally, This Is The Biggest Short Squeeze In Years” Says Bank Of America). And, as we reported last week, someone has been happy to take advantage of this covering scramble: “Smart Money” Sold Stocks For Third Consecutive Week To Scrambling Shorts.
But it is not just shorts buying and insiders selling. One other, quite persistent force has reemerged and contrary to the speculation that corporations are currently in an stock repurchase blackout period, the reality is anything but.
Here is Bank of America:

This post was published at Zero Hedge on 11/04/2015.

Could Silver Test Its Lows?

This article was first posted on Crush The Street:
We see a bearish evolution in precious metals. It is evidenced mostly by the price action in silver, combined with the COT report in the silver futures market COMEX.
First and foremost, our key indicator when it comes to the short and medium term outlook for precious metals, is the rate of change of net short positions from commercial traders. Note that we are referring to ‘rate of change’, not the net position per se.
If the rate of change is high, then it serves as ‘stopping power’ to a rally. Alternatively, with a low rate of change of net shorts, the rally is not capped by commercial traders, and there is room to the upside.
The first chart makes the point, specifically the black circle at the right. It shows the fast accumulation of net short positions by commercial traders (red bars).

This post was published at GoldSilverWorlds on November 4th, 2015.

Walmart Ex-CEO Makes Emergency Parachute Landing On Freeway

Ripped from the scenes of the latest Bond movie, former Walmart CEO Bill Simon, piloting a small plane over Fayetteville, was forced to pop the aircraft’s emergency parachute, to slow its landing, as a severe loss of oil pressure sent the plane plunging. No one was severely injured, but as the following clip shows, while things could have been a lot worse, the parachute-slowed plane still took a beating upon ‘landing’.
As 5NewsOnline reports,
A small plane piloted by former Walmart CEO Bill Simon made an emergency landing on Martin Luther King Junior Boulevard Tuesday morning (Nov. 3), near Fayetteville High School and the University of Arkansas. The plane started having oil pressure issues immediately after take off from Bentonville Municipal Airport at 9:35 a.m., Stout said. They attempted to land at Drake Field in Fayetteville, but after a severe loss of oil pressure, they popped the emergency parachute and made a slow landing. The plane was on its way to Waco, Texas. Simon is an adjunct professor at Baylor University in Waco.

This post was published at Zero Hedge on 11/04/2015.

BANKSTER MANIPULATION VS. CYCLES

The following video was published by SGTreport.com on Nov 4, 2015
Bo Polny from Gold Forecast2020 joins me for a debate about market cycles VS. Bankster manipulation. Bo firmly maintains that “the cycles ARE the manipulation” while I continue to argue that the cycles are controlled by the BANKSTER manipulation. And despite Bo’s call for 3-digit silver in 2016 – and Clif High’s web bot prediction for silver to explode higher when Bitcoin retakes $408-$420, I argue that silver and gold will remain capped until the Bankster manipulation stops – or is stopped – once and for all. Thanks for tuning in.

4/11/15: Irish Services & Manufacturing PMIs: October

Irish manufacturing and services PMIs have been released by Markit, covering October.
On Manufacturing PMI side, there has been some improvement in growth conditions in the manufacturing sector, with faster growth in new business, offset by softer production growth. IrishManufacturing PMI posted a reading of 53.6 in October, down marginally on 53.8 in September. Per Markit: ‘Business conditions have now strengthened in each of the past 29 months. The rate of expansion in manufacturing production continued to ease in October, the third successive month in which a slowdown has been recorded. The latest rise was the weakest since February 2014, but higher sales, in a number of cases from export markets, supported continued output growth.’ In other words, MNCs activity is once again the suspect key driver for continued growth in the sector, not that Markit would say so outright.
On a 3mo average basis, 3mo average for the period through October stood at 56.1 – a hefty rise on the 3mo average through July 2015 that registered 53.7 and almost in line with 56.5 3mo average through October 2014. Over the last 6 months through October, the index average was down 1.5 points on the 6mo average through April 2015.

This post was published at True Economics on November 4, 2015.

Global Trade In Freefall: China Container Freight At Record Low; Rail Traffic Tumbles, Trucking Slows Down

Over the past year we have regularly contended that a far greater threat to the global economy than either corporate earnings, currency devaluations, rate cuts (or hikes), reserve outflow, or even the stock market, is the sudden, global trade crunch which has been deteriorating rapidly since late 2014 and has seen an even more dramatic drop off as 2015 is winding down. Actually, that is incorrect: global trade is merely a manifestation of the true state of the above listed items.
First, there was ships.
Back in March, we reported that “Global Trade Volume Tumbles Most Since 2011; Biggest Value Plunge Since Lehman.”
Then in August when we first pointed out a dramatic slowdown in the Baltic Dry index which had peaked just a few weeks earlier and we said that “should the dead cat bounce in shipping rates indeed be over, and if the accelerate slide continues at the current pace, not only will shippers mothball key transit lanes, but the biggest concern for global economy, the unprecedented slowdown in world trade volumes, which we flagged a week ago, will be not only confirmed but is likely to unleash yet another global recession.”

This post was published at Zero Hedge on 11/04/2015.

NOV 4/OPEN INTEREST ON GOLD COMEX FALLS APPRECIABLY BUT NOT SILVER/BANKERS CONTINUE TO RAID GOLD/SILVER/HUGE TROUBLES FOR VOLKSWAGEN CONTINUES WITH NEW SCANDAL WITH RESPECT TO C02 EMISSIONS/MARKE…

Gold: $1106.50 down $7.70 (comex closing time)
Silver $15.06 down 18 cents
In the access market 5:15 pm
Gold $1108.00
Silver: $15.08
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 3 notices for nil oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 208.30 tonnes for a loss of 95 tonnes over that period.
In silver, the open interest fell by only 801 contracts despite silver being down 27 cents in Tuesday’s trading. The total silver OI now rests at 166,942 contracts In ounces, the OI is still represented by .835 billion oz or 119% of annual global silver production (ex Russia ex China).
In silver we had 3 notices served upon for 300 oz.
In gold, the total comex gold OI fell by a rather large 6684 contracts to 443,900 contracts as gold was down $21.60 yesterday. We had 0 notices filed for nil oz today.
We had no change in gold inventory at the GLD / thus the inventory rests tonight at 686.30 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, no change in silver inventory / Inventory rests at 313.817 million oz.
We have a few important stories to bring to your attention today…

This post was published at Harvey Organ Blog on November 4, 2015.

Extreme And Blatant Gold Futures Manipulation: Bad Jobs Report Ahead?

These guys are seriously overplaying their hand so something must be up. – John Embry email to me in reference to the blatant intervention in the stock and gold futures markets
The Cliff’s Notes explanation to John’s comment: The Fed knows the economy is technically in a recession and will be forced to take Fed Funds negative sometime in early 2016. Yellen floated that trial balloon earlier today. That’s an event that should launch gold.
First, in reference to the extreme degree of anti-gold propaganda currently being vomited by the western media – see this article from Mark Hulbert LINK and this article from the new Jon Nadler LINK – here is what is going on in the physical gold market:
Reuters has reported that the China Gold Association has announced that Jan/Sept gold production was up 1.48% to 356.9 tonnes and consumption was up 7.83% to 813.89 tonnes. This is the biggest gap between production and consumption growth that JBGJ can remember. The huge Chinese output growth has been going on for well over 10 years and with the early mines getting old sustaining the trend must be getting increasingly difficult. A leveling off or even more a decline in Chinese gold output could increase import demand dramatically. – John Brimelow from his Gold Jottings report
Typically when there’s bad news coming, the Fed/banks engage in an extreme degree of market intervention to keep the stock market aloft and a heavy lid on the price gold. After all, they can’t have a rising price of gold alert the world to the degree to which the U. S. system is one big fraud.

This post was published at Investment Research Dynamics on November 4, 2015.

US Gross National Debt Jumps $340 Billion in One Day

The US Gross National Debt, that monster that keeps ballooning so much faster than our infamously slo-mo economy, just jumped by $340 billion in one day.
The debt ceiling was hit in March, and from that point forward, the Gross National Debt was stuck at about $18.15 trillion, give or take a couple of billion. But the government continued spending the money that Congress had told it to spend, though Congress also told the government not to issue more debt to pay for this spending. If this sort of debt-ceiling fight looks like a Congressional charade to the world outside the Beltway, it’s because it is a charade.
So instead of issuing new debt, the Treasury relied on ‘extraordinary measures,’ taking the money it needed from other government accounts, robbing Peter to pay Paul so to speak, and ended Fiscal 2015, on September 30, with a total Treasury debt outstanding of, well, the same $18.15 trillion.
That remained the Gross National Debt until just now. In late October, Congress agreed to raise the debt ceiling and end the charade, days before the out-of-money date, as everyone knew it would. The Treasury then embarked on a flurry of activity, undoing these ‘extraordinary measures’ and going on a debt-sales binge. Now it made the accounting entry – adding $340 billion in one day to the Gross National Debt, bringing it to the new phenomenal level of $18.492 trillion.

This post was published at Wolf Street by Wolf Richter ‘ November 4, 2015.

FED Pushing Negative Rates As The Economy Collapses Further – Episode 809a

The following video was published by X22Report on Nov 4, 2015
ADP employment slows further and manufacturing declines. Subprime auto loans are being packaged just like the real estate loans in 2008. Baltic Dry Index is now hitting all time lows. Freddie and Fannie need a bailout because of losses. Yellen wants to introduce negative interest rates and ban cash if the outlook on the economy turns down, forget turning down its collapsing. China wants to stop computerized trading. Presidential candidates skirt the real issues. Obama trying to circumvent Judges ruling on giving amnesty to illegal aliens.

It’s Just Not Saudi Arabia’s Year: First Oil Prices, Now This…

Last week, in the latest sign of Saudi Arabia’s deteriorating financial condition, S&P downgraded the kingdom to AA- negative citing ‘lower for longer’ crude and the attendant ballooning fiscal deficit.
To be sure, we’ve covered the story extensively and it was almost exactly one year ago that we flagged the quiet death of the petrodollar and explained the significance to a market that hadn’t yet woken up to just what it means when, thanks to plunging crude prices, producing nations cease to be net exporters of capital.
With more than $650 billion in SAMA reserves, Riyadh does have a sizeable cushion. However, there are a number of factors (in addition to low oil prices) that are weighing heavily including, i) financing the war in Yemen, ii) maintaining the lifestyle of everyday Saudis, and iii) preserving the riyal peg. Here’s a look at the breakdown of government expenditures:

This post was published at Zero Hedge on 11/04/2015.

4/11/15: BRIC Manufacturing PMI: October Blues

BRIC Manufacturing PMIs by Markit for October were out earlier this week, so here is the summary of latest changes:
Russia: Russian manufacturing PMI posted a reasonably significant improvement, rising from 49.1 in September to 50.2 in October, and marking the first month since November 2014 of above 50 readings. That said, the indicator is statistically indistinguishable from 50.0 and the level of activity uplift is weak. Per Markit release, ‘new orders placed with manufacturing companies in Russia grew for the second successive month in October. The rate of expansion was the sharpest since November 2014, despite being modest overall. The increase in new business was driven by stronger demand from the domestic market, however, as new export orders declined. … Workforce numbers at Russian manufacturers contracted in October. However, the latest reduction in headcounts was the weakest for seven months. The sharpest drop in employee numbers was registered by consumer goods producers, according to sector data.’ On a 3mo average basis, 3mo average through October stood at 49.1, somewhat better than 48.2 3mo average through July 2015, but still below 50.6 reading in 3mo through October 2014. Overall, Manufacturing reading for Russia confirms weak stabilisation in growth trend with PMIs rising for the second consecutive month. At this stage, it is too early to call recovery based on these readings, but a positive sign is that Manufacturing sector is no longer a negative factor in determining growth in the economy.
India: Indian Manufacturing PMI posted weaker reading in October, falling to 50.7 from 51.2 in September. This is the weakest reading in the index since December 2013 (when it stood at 50.7 as well).

This post was published at True Economics on November 4, 2015.

Here’s Which Mid-East Oil Producers Are Going Broke In The Face Of The New “Crude” Reality

A few weeks ago, the IMF said something that, although it should have been obvious, seemed to surprise quite a few people. Here’s the quote from a recently released study:
Bahrain, Oman, and Saudi Arabia have medium-term fiscal gaps of some 15 – 25 percentage points of non-oil GDP, while conflict-torn Libya has a gap of more than 50 percent of non-oil GDP. In, contrast, CCA oil exporters have at least 15 years’ worth of available financial savings,1 while GCC countries are split evenly between countries with relatively large buffers (Kuwait, Qatar, and the United Arab Emirates – more than 20 years remaining) and countries with relatively smaller buffers (Bahrain, Oman, and Saudi Arabia – less than five years).
In other words, the Saudis, Oman, and Bahrain are going to go broke in ‘less than five years’ if something doesn’t give in terms of either oil prices, budgeting, or both.

This post was published at Zero Hedge on 11/04/2015.

Yellen Signals a Fed Tilt Toward December Rate Increase

When Fed Chair Janet Yellen talks, people listen. Except for California Congressman Brad Sherman (D) who said ‘God’s plan is not for things to rise in the autumn, that is why it is called fall. If you want to be good with The Almighty, you might want to delay until May.’
I think market participants are listening to Yellen rather than Brad Sherman.
(New York Times) – WASHINGTON – Janet L. Yellen, the Federal Reserve chairwoman, reiterated Wednesday that the Fed could raise its benchmark interest rate in December.
‘It could be appropriate’ to act at the Fed’s final policy-making meeting of the year, Ms. Yellen told the House Financial Services Committee. She said the economy was ‘performing well,’ suggesting that if growth continued apace, the Fed was inclined to start raising interest rates. She added the cautionary note, however, that ‘no decision has been made.’

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ November 4, 2015.

Drugged Into Oblivion: Nearly 60 Percent Of All U.S. Adults Are On Prescription Drugs

If you have a health problem, even if it is just an imaginary one, some giant pharmaceutical company out there is probably making a pill for it. According to shocking new research published in the Journal of the American Medical Association, 59 percent of all U. S. adults are on at least one prescription drug, and 15 percent of all U. S. adults are on at least five prescription drugs. These numbers have never been higher, and they tell us that the United States is the most drugged nation on the entire planet. And it turns out that pushing these drugs on the American people is extremely profitable. For instance, Americans spent 100 billion dollars on cancer drugs alone last year. That isn’t ‘million’ with an ‘m’ – that is ‘billion’ with a ‘b’. The profits that some of these pharmaceutical companies are making are absolutely obscene, and it is our pain and suffering that is making them rich.
So why is prescription drug use rising so rapidly? As noted above, 15 percent of us are now taking 5 or more of these drugs on a regular basis, but back in 1999 that number was sitting at just 8.2 percent.
This newly released report blames much of the problem on obesity…
The population is getting older, but that doesn’t explain it, Kantor said. The pattern looks more related to obesity, which is steadily rising, More than two-thirds of the adult U. S. population is overweight or obese, and many suffer the heart disease, diabetes and other metabolic disorders that go along with being too heavy.
And without a doubt, we have an epidemic of obesity in the United States. The following facts on American obesity come from from my recent article entitled ‘America #1? 36 Facts That Prove That The United States Is An ‘Exceptional’ Nation’…

This post was published at End Of The American Dream on November 3rd, 2015.

Yellen Says Negative Rates On The Table “If Outlook Worsened”

As the market now diligently calculates the suddenly surging odds of a December rate hike, here’s Yellen with a preview of what will happen once the rate hike cycle is aborted…
YELLEN SAYS IF OUTLOOK WORSENED FED MIGHT WEIGH NEGATIVE RATES YELLEN SAYS NEGATIVE RATES COULD HELP ENCOURAGE BANKS TO LEND … just as it was aborted in Japan in August of 2000 when the BOJ also decided to send a signal how much stronger the economy is by hiking 25 bps, only to cut 7 months later and to proceed to monetize not only all net Japanese debt issuance a decade later, but to hold half of all equity ETFs.

This post was published at Zero Hedge on 11/04/2015.

Gold Daily and Silver Weekly Charts – Smackdown

“But he saw too that in America the struggle was befogged by the fact that the worst Fascists were they who disowned the word ‘Fascism’ and preached enslavement to Capitalism under the style of Constitutional and Traditional Nativist American Liberty.”
Sinclair Lewis, It Can’t Happen Here
Gold and silver were taken lower in further programmed selling in New York today.
Gold is testing the 1100 support level and silver is trying to hang on to the 15 handle.
What was most impressive is that they managed this selloff on a day when the rest of the markets could not make up their minds what to think. And there are now trial balloons being floated about ‘negative interest rates’ and ‘killing cash.’
There was intraday commentary on gold and silver here.
Nothing much in the way physical activity happened in The Bucket Shop. Just the usual slow leakage of bullion.
Non-Farm Payrolls on Friday.

This post was published at Jesses Crossroads Cafe on 04 NOVEMBER 2015.

U.S. Manufacturing and China Trade Breaking Bad Records

The U. S. goods and services trade deficit sank by more than 15 percent on month in September, but new monthly records were set by the gaps with China and in manufacturing – which generates an outsized share of the economy’s high-wage employment and typically leads in productivity growth and innovation. China goods and high tech products imports rose to record monthly highs in September, too.
Although the domestic energy production revolution helped drag the current-dollar petroleum deficit to a near-14 year low, the September figures revealed that the policy-influenced portion of U. S. trade flows has reduced growth during the current economic recovery by nearly 20 percent in real terms – or more than $400 billion.
Here are selected highlights of the latest monthly (September) trade balance figures released this morning by the Census Bureau:
>Although the combined U. S. goods and services trade deficit shrank in September from a downwardly adjusted $48.02 billion to $40.81 billion, the U. S. shortfalls in manufacturing ($74.69 billion) and in goods with China ($36.28 billion) set new monthly records. In addition, in current-dollar terms, the U. S. petroleum deficit sank to its lowest monthly level ($5.58 billion) since December, 2001.

This post was published at Wall Street Examiner by Alan Tonelson ‘ November 4, 2015.