Portugal Is Potentially A Very Big Deal

Portugal has entered a phase change, with potentially huge ramifications.
After handing a parliamentary majority to a coalition of leftist (i.e., anti-austerity, anti-euro, anti-NATO) parties, and then trying to prevent them forming a government, the country now looks likely to stand back and let it happen. Here’s an update from today’s Wall Street Journal:
Portugal Government Ousted Amid Anger Over Austerity LISBON – A leftist alliance in Portugal’s new parliament ousted the minority conservative government on Tuesday, raising pressure on the president to appoint a Socialist prime minister at odds with the eurozone’s prevailing policies of austerity. The vote rejecting Prime Minister Pedro Passos Coelho’s governing program, 11 days into his second term, follows four years of sharp spending cuts and tax increases imposed to meet the demands of the country’s bailout lenders. While the economy is growing again, it shrank sharply between 2011 and 2013.
The parliamentary rebellion was the latest sign of how austerity has altered Europe’s political landscape during years of recession and painful recovery: It has increased the popularity of smaller parties that pledge to restore cuts in workers’ and pensioners’ income, challenging fiscal restraints set by the European Union’s executive arm.
Tuesday’s vote, 123 to 107 against Mr. Passos Coelho, brought an automatic end to his government. President Anbal Cavaco Silva had asked him to remain in office after his center-right coalition finished first in the Oct. 4 parliamentary election but lost its majority to an array of leftist parties.

This post was published at DollarCollapse on November 10, 2015.

The Rise Of Trump & Sanders – Distrust & Anger Ripples Across America

The ‘wasted generation’ may not bother voting, for good reason
One year from now, we’ll elect a new president. It’ll be the first opportunity for what I call the wasted generation to vote – not that many will bother. What do I mean by wasted generation?
I’m talking about the 15.6 million Americans born between 1995 and 1999 – the first generation of the post-World War II era to grow up in a land of diminished economic expectations, corrosive cynicism and institutional distrust.
Think about it. Born during the petty, partisan end of the Clinton era, they were barely out of their diapers when the towers fell on 9/11 and elementary, middle school and high schoolers while their country fought, at the same time, the two longest wars in its history. They came into the world just as their parents’ incomes were probably peaking – median wages, adjusted for inflation, topped out in 1998 and 1999 – and their Moms and Dads have since been squeezed by the two most devastating stock collapses since the Great Depression and a housing collapse of historic proportions. Now they’re heading off to college or already there, and can expect to rack up nearly $29,000 in debt before even graduating.

This post was published at Zero Hedge on 11/10/2015.

Biggest Silver Supply Losers For 2015

As global financial and economic systems continue to disintegrate, this will put more stress on the silver market. Why? Because elevated physical silver investment demand will likely exceed available silver supply in the future. Even though physical silver investment demand has fallen off since the huge spike starting in June, market conditions have impacted supply in a negative way.
According to the most recently released data, three of the top five silver producing countries are showing large declines in production compared to the same period last year. When I researched the mine supply figures, I came up with some conflicting data. For some strange reason, my data showed a decline in Mexican silver production, while figures from another source stated an increase.
I wrote the organization responsible for providing silver production figures to the Chile Copper Commission. You see, the Chile Copper Commission (Cochilco.cl) provides global production data on many metals. They use data from World Metal Statistics.
Here is a snapshot of their monthly world silver production update:

This post was published at SRSrocco Report on November 10, 2015.

US Gov/Central Bankers Are Running Out Of Excuses Why The Economy Is Crashing – Episode 814a

The following video was published by X22Report on Nov 10, 2015
Retail in decline, construction in decline and it is all being blamed on the weather, snowy to sunny, to cold or to warm. Freddie Mac and Fannie Mae are subsidizing new construction projects for billionaires. Global trade is collapsing at a fast pace. The Baltic Dry Index has declined once again. Moody’s reports that global leader have no room to help the economy. Fed reports that banks are not sound and they will need an influx of capital. TPP is going to hurt farming business in Canada

McDowngrade: S&P Cuts ‘Releveraging’ Junk Food Vendor’s Debt To Almost Junk

Having told the world that it will borrow billions (and cut capex) to “return all free cash to investors,” it appears ratings agency S&P just needed to remind McDonalds that Shareholder-friendly releveraging no longer comes for free…
*S&P LWRS MCDONALD’S RTG TO ‘BBB ’ ON SHR BUYBACK PLANS Who could have seen that coming?
Here’s why… (via S&P)
McDonald’s announced its intent to return an additional $10 billion to shareholders by the end of 2016, substantially funded by debt. We are lowering the corporate credit rating to ‘BBB ’ from ‘A-‘ since the company’s various credit metrics will now be measurably worse than our previous expectations.
Our assumption is that debt to EBITDA will rise to the low- to mid-3x range during 2016-2017 versus around mid-2x previously.

This post was published at Zero Hedge on 11/10/2015.

Jeopardy- This Country Was Named The Worst In The World In GDP Growth

The International Monetary Fund (IMF) has found that Venezuela will see its economy shrink more than any other country in the world this year as lower oil prices drain government coffers
‘Venezuela is projected to experience a deep recession in 2015 and 2016,’ the IMF said Tuesday in its World Economic Outlook. The country’s real gross domestic product probably will contract 10 percent this year and 6 percent in 2016, it said.
President Nicolas Maduro’s policy response to the economic crisis remains paralyzed ahead of congressional elections set for Dec. 6. The bolivar has slumped to 792 to the dollar on the black market, while the official rate remains at 6.3. The government has also maintained fixed prices for staple foods, even as supplies run out in many shops and prices for other goods soar. Inflation in Venezuela, already the fastest in the world, will average 159 percent in 2015 and increase to 204 percent next year, the IMF said

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ November 10, 2015.

For The First Time Ever, Corporate Bond Inventories Turn “Negative” – What This Means

As we noted previously, for the first time ever, primary dealers’ corporate bond inventories have turned unprecedentedly negative. While in the short-term Goldman believes this inventory drawdown is probably a by-product of strong customer demand, they are far more cautious longer-term, warning that the “usual suspects” are not sufficient to account for the striking magnitude of inventory declines… and are increasingly of the view that “the tide is going out” on corporate bond market liquidity implying wider spreads and thus higher costs of funding to compensate for the reduction is risk-taking capacity.
As Goldman Sachs’ Charlie Himmelberg notes,
Following several weeks of sharp declines, dealer inventories of long-term IG bonds and HY bonds have turned negative for the first time since the NY Fed started reporting corporates separate from non-agency mortgage MBS. While inventory levels are often negative for Treasuries, this is the first time in the available data that corporate bond inventories have ever turned negative (detailed data on corporates go back only a few years, but broader aggregates of corporates plus non-agency MBS have never gotten remotely close to zero).

This post was published at Zero Hedge on 11/10/2015.

We’re in the Early Stages of Largest Debt Default in US History

We are in the early stages of a great debt default – the largest in U. S. history.
We know roughly the size and scope of the coming default wave because we know the history of the U. S. corporate debt market. As the sizes of corporate bond deals have grown over time, each wave of defaults has led to bigger and bigger defaults. Here’s the pattern.
Default rates on ‘speculative’ bonds are normally less than 5%. That means less than 5% of noninvestment-grade, U. S. corporate debt defaults in a year. But when the rate breaks above that threshold, it goes through a three- to four-year period of rising, peaking, and then normalizing defaults. This is the normal credit cycle. It’s part of a healthy capitalistic economy, where entrepreneurs have access to capital and frequently go bankrupt.
If you’ll look back through recent years, you can see this cycle clearly…
In 1990, default rates jumped from around 4% to more than 8%. The next year (1991), default rates peaked at more than 11%. Then default rates began to decline, reaching 6% in 1992. By 1993, the crisis was over and default rates normalized at 2.5%. Around $50 billion in corporate debt went into default during this cycle of distress.

This post was published at Wolf Street by Porter Stansberry ‘ November 10, 2015.

Gold Daily and Silver Weekly Charts – Check, Check, Check

Nyet! Nyet! No More! No! Not tonight! This son of bitch, all night he, ‘Check. Check. Check.’
Teddy KGB, Rounders
Gold and silver largely marked time in place today, after the regular and rigorous pounding that they took for the last fifteen days or so, depending on how you wish to count the start of it.
The dollar seems very toppy and overbought at this point, and I have included its chart below as well.
It is a fallacy to say that the metals are declining because the dollar is moving higher. Sometimes the metals and the dollar move inversely and sometimes they move together. In this case they are clearly moving in opposite directions.
There were no deliveries to standing contracts in The Bucket Shop yesterday. And the action in the metals warehouses was more of the usual ‘weak leak’ that seems to be the order of the day, at least this month.
We are seeing the kind of clumsy, puerile commentary about ‘gold being stoopid’ from the porcine auxiliary that often appears when there is a kind of bottom developing here.
Or not. When the dealer and the house are dealing from the bottom it is hard to predict what will happen next.

This post was published at Jesses Crossroads Cafe on 10 NOVEMBER 2015.

NOV 10/GOVERNMENT IN PORTUGAL FALLS/COPPER AND NICKEL FALL PUTTING HUGE PRESSURE ON GLENCORE/ ALSO NYRSTAR SEEKING HELP FROM TRAFIGURA/DEVASTATION IN THE UK STEEL INDUSTRY AS LORD PAUL’S SON COMM…

Gold: $1088.20 up $.30 (comex closing time)
Silver $14.36 down 6 cents
In the access market 5:15 pm
Gold $1089.90
Silver: $14.42
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 notice for nil ounces. Silver saw 0 notices for nil oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 208.60 tonnes for a loss of 94 tonnes over that period.
In silver, the open interest surprisingly fell by only 1462 contracts despite silver being down 27 cents in yesterday’s trading. The total silver OI now rests at 165.289 contracts In ounces, the OI is still represented by .826 billion oz or 118% 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 fell by 1581 contracts to 438,385 contracts despite the fact that gold was only down by $0.30 yesterday. it seems the modus operandi of the bandits is to liquefy gold/silver OI. We had 0 notices filed for 100 oz today.
We had a slight addition in gold inventory at the GLD to the tune of 0.32 tonnes / thus the inventory rests tonight at 666.43 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. Our 670 tonnes of rock bottom inventory in GLD gold has been broken. 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, after they deplete the GLD will be the FRBNY and the comex. In silver, no change in silver inventory / Inventory rests at 313.681 million oz.
We have a few important stories to bring to your attention today…

This post was published at Harvey Organ Blog on November 10, 2015.

Unicorns Dropping Like Flies: First Dropbox; Then Square; Now Fidelity Cuts Snapchat Valuation By 25%

First it was Dropbox.
Two weeks ago we reported that one of the numerous “unicorns” prancing around Silicon Valley was about to have a very rude wake up call when Dropbox was warned by its investment bankers that it would be unable to go public at a valuation anywhere near close to what its last private round (which had most recently risen to $10 billion from $4 billion a year ago) valued it at.
Than it was Jack Dorsey’s “other” company, Square.
Last last week: “today another company realized today just how big the second “private” tech bubble, one we profiled first in January of 2014, truly is. That company is Jack Dorsey’s Square, which earlier today filed a prospectus in which it said that the “initial public offering price per share of Class A common stock will be between $11.00 and $13.00.” Assuming a mid-point price of $12 and applying the 322.9 million shares outstanding after the offering, it means a valuation of $3.9 billion. The problem is that in its last private fundraising round, Square was valued at about $6 billion according to ReCode.”
Today, it’s the turn of Snapchat, the fourth most highly valued private tech start up.

This post was published at Zero Hedge on 11/10/2015.

China Takes Another Step Toward Independence from US Dollar

China announced it will start direct trading with the Swiss franc. This is another step in China’s relentless march toward becoming a major player on the world financial stage and away from dependence on the US dollar.
According to a Bloomberg report, the link between the currencies will begin Tuesday. The move by the China Foreign Exchange Trade System makes the Swiss franc the seventh major currency that can bypass conversion into the US dollar and be directly exchanged for yuan.
The People’s Bank of China said it welcomed the move in a statement on its website:
This is an important step in strengthening bilateral economic and trade connections between China and Switzerland. And China and Switzerland will make further efforts to mutually promote the direct trading between the two currencies based on market principle. Development of direct trading between RMB and CHF will contribute to the formation of direct exchange rate between the two currencies. This will help lower currency conversion cost for economic entities, facilitate the use of RMB and CHF in bilateral trade and investment, promote the financial cooperation and enhance economic and financial ties between the two countries.’

This post was published at Schiffgold on NOVEMBER 10, 2015.

SP 500 and NDX Futures Daily Charts – T’was the Witch of November Come Stealin’

When suppertime came, the old cook came on deck Sayin’ Fellas, it’s too rough to feed ya At seven PM a main hatchway caved in He said, Fellas, it’s been good to know ya The captain wired in he had water comin’ in And the good ship and crew was in peril And later that night when his lights went out of sight Came the wreck of the Edmund Fitzgerald.
Gordon Lightfoot, The Wreck of the Edmund Fitzgerald
I have included the two stock index cash market charts with technicals.
There is a potential ‘island top’ forming on the NDX, and the SP 500 looks like it might be testing the 200 DMA.
Bottom line is if stocks start rolling over with some real selling, and not this tissue thin HFT shell game that has taken the place of actual price discovery, then we could be in for a very rough ride.
Let’s see how much the Fed is willing to spend to support their latest bubble. And if they can raise rates fast enough to be able to lower them again in response to another crisis which they have themselves caused.

This post was published at Jesses Crossroads Cafe on 10 NOVEMBER 2015.

University Of Missouri “Activists” Expel Media, Demand “Liberation Of Black Students”

This has been an emotionally heavy semester for us, those who support, please continue to send positive energy
— ConcernedStudent1950 (@CS_1950) November 10, 2015

Things are getting a little out of hand at Mizzou…
Following yesterday’s resignation of the President and Chancellor of The University of Missouri amid allegations from the student body of “enabling a culture of racism” on campus, the spokesperson for the black students’ “activists” has spoken up once again with some more demands…
There will be no “narrative” other than ours…

This post was published at Zero Hedge by Tyler Durden on 11/10/2015.

US Import/Export Prices Show Cross Border Deflationary Pressures

There’s a slew of US economic reports out today.
Let’s take a look starting with a look at Import and Export Prices as described by Econoday.
Cross border price pressures continue to move lower. Import prices fell 0.5 percent in October including a steep 5 tenths downward revision to September to minus 0.6 percent. And it’s not just gasoline! Nonpetroleum import prices fell 0.4 percent for the 10th decline in a row. Year-on-year, total import prices are down 10.5 percent, which is right in line with trend, with nonpetroleum down 3.4 percent for the largest drop since October 2009.
The story on the export side is the much same with export prices down 0.2 percent for a year-on-year decline of minus 6.7 percent. Excluding agricultural products, export prices fell 0.3 for a year-on-year decline of minus 6.1 percent.

This post was published at Global Economic Analysis on November 10, 2015.

Dear Striking Fast-Food Workers: Meet The Machine That Just Put You Out Of A Job

Today, U. S. fast-food workers will strike across 270 cities in a protest for higher wages and union rights that they hope will catch the attention of candidates in 2016 elections, organizers said.
The walkouts will be followed by protests in 500 cities by low-wage workers in such sectors as fast food and home and child care, a statement by organizers of the Fight for $15 campaign said on Monday.
The protests and strikes are aimed at gaining candidates’ support heading into the 2016 election for a minimum wage of $15 an hour and union rights, it said.
The strikes and protests will include workers from McDonald’s, Wendy’s, Burger King , KFC and other restaurants, the statement said.
And while we sympathize with their demands for higher wages, here is the simple reason why they will be very much futile.
Dear fast food workers of the US – presenting you nemesis: the Momentum Machines burger maker.
According to a recent BofA reported on how robotics will reshape the world, San Francisco start up Momentum Machines are out to fully automate the production of burgers with the aim of replacing a human fast food worker. The machine can shape burgers from ground meat, grill them to order with the specified amount of char, toast buns, add tomatoes, onions, pickles, and finally place it on a conveyor belt.

This post was published at Zero Hedge on 11/10/2015.

The Peril and Opportunity of China

Last week, I wrote about the massive pollution problems in China and the gigantic investment opportunity in the cleanup. However, China is a volatile, dangerous place to invest, and there is a wrong way and a right way to do so.
Where do you stand on the Chinese economic debate? Is the China economy decelerating so fast that it will pull the rest of the global economy down with it? Or do you think that the reports of China’s economic death are greatly exaggerated?
NOTE: I welcome your comments – GOOD and BAD – and encourage you to take advantage of the message forum at the end of these issues. Please!
No question, China is not growing at the breakneck pace that it has been.
China’s GDP growth slid to 6.9% in the third quarter, the slowest pace of growth since the depths of the 2009-09 Financial Crisis. That’s according to China’s National Bureau of Statistics, whose numbers are always highly massaged.
How massaged? That’s open for interpretation, but a recent Wall Street Journalsurvey of 64 economists found that 96% of them believe those GDP numbers don’t ‘accurately reflect the state of the Chinese economy.’

This post was published at Mauldin Economics on NOVEMBER 10, 2015.

A Rare Do-Over For Equity Investors?

While the market may still rally to new highs, the late August free fall in stock prices and spike in volatility served as a wake-up call for investors. In the past ten weeks, major equity indices have recovered virtually all the losses experienced during the August swoon. The recent rally gives investors a second opportunity to position their portfolio for an important inflection point in monetary policy as the Fed likely starts raising interest rates. The Merriam-Webster definition of do-over is ‘a new attempt or opportunity to do something after a previous attempt has been unsuccessful or unsatisfactory.’ How many times in life have you longed to revisit an unfortunate or unwise decision, essentially wishing for a do-over? Maybe it was that email you sent? That spicy meal you ate? With a little thought, each of us could compile a long list. This is especially true in the highly competitive and constantly evolving world of investing.
The spring and summer months were cruel to many areas of the capital markets, as commodities, the dollar, credit spreads and emerging markets began to discount the beginning of a tightening cycle by the Federal Reserve. U. S. equities were a notable exception as of mid-August, as equity valuation levels and major indices remained near all-time highs.
But in a seeming blink of an eye, equities joined the wave of de-risking that gripped many markets, with the S&P 500 tumbling a stunning 11% in the space of several days in late August. While some portfolios were reasonably well-positioned and outperformed their benchmarks, this downdraft was wholly unsatisfactory to many investors.

This post was published at Zero Hedge on 11/10/2015.