The Chilling Thing Caterpillar’s President Said about China

Those good years won’t come back.
Caterpillar, one of the icons of American industrial might and a ‘bellwether’ for the global economy, has been having a hard time. It forecast that sales would drop 5% in 2016, an IBM-like fourth year in a row of declining sales, the worst such spell in its history.
Now Caterpillar threw in the towel on its formerly most promising market, China. Not for the current year, or even next year – those are already toast. But for future years. And for the entire industry.
It isn’t just CAT’s problem; the industry as a whole is getting whacked in China because of China’s economy. That’s Tom Pellette, Group President of Caterpillar Inc., with administrative responsibility for Construction Industries, told the Financial Times in an interview.
He cited some terrible industry-wide numbers for China, without disclosing Caterpillar’s own: in 2015, sales of hydraulic excavators between 10-90 tons are expected to be in the ‘23,000 range,’ he said. Back during the China heyday in 2010, the industry sold over five times as many: 120,000 excavators. This would include excavators from Japanese, German, and Chinese competitors. In March 2011, the industry sold 27,000 units – in just that month! – more than in the entire year 2015!

This post was published at Wolf Street by Wolf Richter ‘ November 17, 2015.

Baltic Dry Index Crashes Near Record Low

The Baltic Dry Index staged a recovery mid-year, hopefully rising amid promises of stability in China and an ‘escape’ velocity USA. All that centrally-planned hope and hype faith has been eviscerated on the altar of economic reality. With no ability to directly manipulate the Baltic Dry Index to ‘pretend’ everything is awesome, it remains among the best ‘real’ indicators of the state of the global economy… and it’s in the toilet…

This post was published at Zero Hedge on 11/17/2015.


Gold: $1068.70 down $15.00 cents (comex closing time)
Silver $14.22 up 2 cents
In the access market 5:15 pm
Gold $1070.10
Silver: $14.17
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 204.97 tonnes for a loss of 98 tonnes over that period.
In silver, the open interest surprisingly rose by a monstrous 3,233 contracts despite silver being up by only 2 cents in yesterday’s trading. The total silver OI now rests at 169,035 contracts In ounces, the OI is still represented by .846 billion oz or 120% 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 by a huge 7,209 contracts to 435,008 contracts despite gold being up by only $2.90 in yesterday’s trading. It seems the modus operandi of the bandits is to try and liquefy gold/silver OI as be approach first day notice on Monday, November 30. The bankers get very nervous when OI is rising despite awful prices for the metals. We had 0 notices filed for nil today.
We had no change in gold inventory at the GLD / thus the inventory rests tonight at 661.94 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, we had no change in silver inventory to the tune of / Inventory rests at 317.256 million oz.
We have a few important stories to bring to your attention today…

This post was published at Harvey Organ Blog on November 17, 2015.

Gold Daily and Silver Weekly Charts – Economic Blowback

“There are two kinds of realists: Those who manipulate facts and those who create them.
The West requires nothing so much as men able to create their own reality.”
Henry Kissinger, 1963
“But in these cases We still have judgment here, that we but teach Bloody instructions, which, being taught, return To plague the inventor: this even-handed justice Commends the ingredients of our poisoned chalice To our own lips…”
Shakespeare, Macbeth
Gold and silver are massively oversold here.
The dollar is rallying and I suspect the precious metals are being carried lower here by the kind of overreach of trends that are obtained from the momentum traders.
There were no deliveries at The Bucket Shop yesterday.
There is still the slow leakage out of the warehouses and ETFs as gold flows West to East. A good chunk of gold bullion left the JPM warehouse yesterday. Let’s see if it goes anywhere special, or just sails into the sunset.
The dollar at these valuations is choking the real economy. So we know this cannot last all that long since the economy is not robust, but is in fact than most economists would allow.

This post was published at Jesses Crossroads Cafe on 17 NOVEMBER 2015.

BofA Is A “Seller Of Risk” As Everyone Is Long The Dollar, US Stocks Never More Overvalued

There is exactly 1 month until the Fed’s December announcement at which at least practically every single economist (or 92% of them) are convinced the Fed will hike rates by 25 bps (keep in mind that over 90% of economists predicted in January that the Fed would hike by September at the latest).
What happens if they are right? Well, perhaps nothing – after all the entire Fed move and then some, is already priced in.
According to the latest Fund Manager Survey (FMS) by BofA, it may not be 92%, but at least 81% of active money managers expect the Fed to hike in December. …up from 47% last month as growth expectations bounce (in China to 15-month highs) and perceptions of market liquidity rise from 3-year lows.
What that means is that everyone is also long the dollar, and that even the smallest disappointment by Yellen will result in an epic dump in the USD. Here is how BofA puts it:

This post was published at Zero Hedge on 11/17/2015.

The 1% Is Rolling Over

Today’s financial world is a tough place for the average person but paradise for rich guys. As easy money raises asset prices, the owners of those assets make effortless profits. Then they buy expensive toys and trophy properties. Hence the recent boom in fine art, high-end real estate, yachts and private jets.
But like all financial trends, this one has a limit, and that limit is now in sight. The 1%, it seems, is rolling over:
Sotheby’s Offers Employees Voluntary Buyouts to Cut Costs (Bloomberg) – Sotheby’s is offering employees voluntary buyouts to cut costs after a drop in third-quarter revenue grabbed more attention from the company’s investors than its largest ever semiannual auction season.
The auction house told employees in an e-mail Friday that if not enough employees make use of the buyouts, it may have to resort to layoffs. Sotheby’s didn’t say how many jobs it plans to cut.
Shares of Sotheby slumped as much as 16 percent this week after the firm reported a 9 percent decline in third-quarter revenue.
‘Sotheby’s costs of doing business – increased staff, more expensive catalogue production, huge marketing and promotional costs, etc. – have to be balanced against the declining revenue from commissions,’ said David Nash, co-owner of Mitchell-Innes & Nash gallery in New York and former head of Impressionist and modern art at Sotheby’s.

This post was published at DollarCollapse on November 17, 2015.

US Secretive Closed Door TPP Policy Does Not Facilitate Asia-Pacific Growth – Episode 820a

The following video was published by X22Report on Nov 17, 2015
Cost of Healthcare and Housing is rising and tapping into peoples funds. Home builder sentiment drops and is now following the track of new construction, existing homes, home prices, which is a decline in all of it. Industrial production declines, as the Baltic Dry Index collapses. Gold tumbles for 14th of last 15 days to lowest since Feb 2010. Economic models showing the economy is beginning to collapse. Putin says a closed secretive plan will not build economic prosperity among the Asian nations

Junk Bonds Under Pressure

While the Stock Market is Partying …
There are seemingly always ‘good reasons’ why troubles in a sector of the credit markets are supposed to be ignored – or so people are telling us, every single time. Readers may recall how the developing problems in the sub-prime sector of the mortgage credit market were greeted by officials and countless market observers in the beginning in 2007.
At first it was assumed that the most highly rated tranches of complex structured products would be immune, as the riskier equity tranches would serve as a sufficient buffer for credit losses. When that turned out to be wishful thinking, it was argued that the problem would remain ‘well contained’ anyway. After all, sub-prime only represented a small part of the overall mortgage credit market. It could not possibly affect the entire market. This is precisely the attitude in evidence with respect to corporate debt at the moment.

This post was published at Acting-Man on November 17, 2015.

Recent Market Action Summarized In Four Words: “Institutions Selling, Retail Buying”

The irrational market got you seeing double again? Virtu’s algos just slammed all your bid and ask-side stops? All your shorts soaring and your longs tumbling while the market’s multiple continues to grow solely thanks to the Yen carry trade?
For some this centrally-planned trading environment is a nightmare which leads to trading paralysis, like for example Dennis Gartman:
Do we believe this rally? No, we do not. We refuse to believe that ‘terror’ is bullish. We refuse to believe that the deaths of 129 innocent people by madmen are materially supportive of stock prices. We refuse to accept the notion that the odds of a Fed tightening are reduced modestly and that that is massively supportive of stock valuations. We refuse to believe that common sense has been cast overboard entirely… We are indeed in a brave new world. It is a world we are not particularly fond of, however, if this is the new reality…. We refuse to believe that common sense has been cast overboard entirely, and so neutral we are and neutral we shall be.
Others however, are far more pragmatic. Case in point, the smart money which according to Bank of America is taking advantage of this latest rebound in stocks to sell to who else: the traditionally biggest sucker in the room – retail investors. To wit:

This post was published at Zero Hedge on 11/17/2015.

CPI Inflation Rises! (To 0.2 Percent) – Rent And Home Price Growth Exceed Inflation And Wage Growth (Damn It, Janet!)

Who said The Federal Reserve can’t generate any inflation?
The CPI YoY rose from 0% to 0.2% for October, hardly a groundswell of inflation, particularly with the Wu-Xia shadow Fed Funds target rate still below zero.

But the real story behind the CPI inflation numbers is that CPI Rent index rose 3.1% in October (compared to 0.2% CPI inflation and 2.5 average wage growth).

This post was published at Wall Street Examiner by Alan Tonelson ‘ November 17, 2015.

Economists’ Models Are Losing Their Grasp On The Real State Of The Economy

Citigroup’s – Citi Surprise Index (CSI) is a real-time model, designed to analyze the accuracy of Wall Street’s economic forecasts. A positive index value indicates that recent economic data is stronger than the consensus of economists’ expectations. A negative reading denotes economic data which is worse than expectations. Unbeknownst to most investors, the CSI also serves as a gauge of sentiment and provides unique insight into how well economists understand the current economic cycle.
Appreciation for the multitude of messages provided by the CSI allows investors to stay a step ahead of the economic models that Wall Street, and by default most investors, rely heavily on to forecast market levels and securities prices. This is more important than ever now as markets appear more concerned with economic data’s deviation from forecasts and less concerned with the absolute reading of the very same data and what it signifies for economic growth. At 720 Global, our objective is to help investment professionals outperform and differentiate themselves in many ways. We believe offering unique and substantive analysis, such as this unique way to interpret the CSI, affords insights that go well beyond the obvious and superficial.

This post was published at Zero Hedge on 11/17/2015.

New Fed Figures Show Manufacturing Recession Over but Surging Trade Deficits Still Killing Growth

The Federal Reserve’s new October industrial production show that manufacturing ended the technical recession it had suffered since last November, as the sector posted its first inflation-adjusted output gain since July. Industry’s year-on-year growth, however, remains sluggish – especially in durable goods, where annual real output increases hit their lowest level in nearly two years – suggesting that record trade deficits are suppressing production.
In this vein, real manufacturing output still hasn’t recouped all of its recessionary losses, with real production remaining 1.23 percent below pre-downturn highs. Nonetheless, October’s year-on-year non-durables after-inflation production advance continued a recent trend of annual growth pickup which actually exceeds the rates achieved by durable goods.
Here are the manufacturing highlights of the Federal Reserve’s new release on October industrial production:
>Manufacturing in October broke out of the technical recession that began last November, as monthly output recorded its first real gain (0.42 percent) since July.

This post was published at Wall Street Examiner by Alan Tonelson ‘ November 17, 2015.

Federal Reserve Admits It Has NO IDEA What It’s Doing

AP reports today:
Federal Reserve Chair Janet Yellen is stressing the need to review the unconventional monetary policies that central banks around the world deployed in response to the 2008 global financial crisis.
She said Thursday that the post-crisis period offers policymakers an opportunity to assess the effectiveness of the tools and better understand the impact of new regulation.
‘Policymakers have to carefully weigh the advantages and disadvantages of alternative monetary implementation frameworks in the presence of new policy tools,’ Yellen said in remarks at a two-day research conference sponsored by the Fed.
Translation: We have no idea what’s going on, or whether our policies are helping or making things worse.

This post was published at The Daily Sheeple on November 17th, 2015.

Hillary’s Heavy Obligations to Wall Street Money

“The wealth of another region excites their greed; and if it is weak, their lust for power as well. Nothing from the rising to the setting of the sun is enough for them.
Among all others only they are compelled to attack the poor as well as the rich. Robbery, rape, and slaughter they falsely call empire; and where they make a desert, they call it peace.”
Tacitus, Agricola
People are discouraged and disillusioned after almost thirty years of distorted governance, specially in the aftermath of the ‘Hope and Change’ which quickly became ‘Vain Hope for Change.’ Most cannot admit that their guys were in the pockets of Big Defense, Big Pharma, Big Energy, and Wall Street.
The real question about Hillary comes down to this. Can you trust her to do what she says she will do, the right things for her putative constituents and not her big money donors and paymasters, once she takes office?
Or will that poor family who left the White House ‘broke’ and then mysteriously obtained a fortune of over $100 million in the following years, thanks to enormous payments for ‘speeches’ from large financial firms and huge donations to their Trust once again take care of the hand that pays them the most?
This is not to say that there is a better alternative amongst the leading Republican candidates, who have been and are still under the same types of payment arrangements, only with different people signing the checks.

This post was published at Jesses Crossroads Cafe on 17 NOVEMBER 2015.

Keiser report: Earning by mirage (E837)

The following video was published by RT on Nov 17, 2015
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss a fictional novel called Stock Options Revisited, in which our economies have run dry and bankers and rentiers have sought to earn by mirage. In the second half, Max continues his interview with Satyajit Das, author of ‘Extreme Money.’ In this segment, they discuss China – from lung-washing tourism to the Great Southern Province of China – aka Australia – where houses and holes make an economy.

Why Twitter Plunged 18% This Month (NYSE: TWTR)

The Twitter stock price is down 18.42% over the last month and has now dipped below its 2013 IPO price of $26 – and there isn’t any indication these shares will turn around soon. Twitter Inc. (NYSE:TWTR) shares opened today (Tuesday) at $25.54.
Disappointing growth in monthly active users (MAUs), failure to make the service easier, and concerns over CEO Jack Dorsey acting as dual CEO for Twitter andSquare Inc. (NYSE: SQ) have all contributed to the plummetingTwitter stock price.
Now Twitter is being criticized for its lack of diversity…
After Dorsey let go roughly 9% of his workforce in October, Rev. Jesse Jackson sent a letter to Dorsey expressing his concerns. Jackson felt that the layoffs disproportionately affected Hispanics and African Americans.
In response, Dorsey appears ready to diversify leadership within Twitter. According to news site ReCode, three board members will step down after their terms expire between 2016 and 2017.

This post was published at Wall Street Examiner by Jack Delaney ‘ November 17, 2015.

Guest Post: “The Gold Market Isn’t Fixed, It’s Rigged”, by the late Adrian Douglas

As we just celebrated our 5th anniversary, I thought it would be fun today to go back and review one of the most comprehensive articles on gold price suppression and manipulation ever written. This piece, from the late Adrian Douglas, was written in October of 2010 and was a primary influence in prompting the start of TFMR.
Please take the time to read and study this terrific piece. Sadly, many of the same issues still plague the global gold “market” today and Adrian did not live to see the inevitable collapse of the fractional reserve bullion banking system. But he left us with this beauty of an article and I urge you to bookmark or print it for future reference as the information he details remains relevant to this day.
by, Adrian Douglas
In 1919 the major London gold dealers decided to get together in the offices of N. M. Rothschild to ‘fix’ the price of gold each day. While this was notionally to find the clearing price at which all buying interest and all selling interest balanced the possibility for market manipulation and self-dealing is inherently systemic in such a cozy arrangement. This quaint anti-competitive procedure continues to this day. In no other market in the world do the major players get together each day and decide on a price. Imagine if Intel, AMD and Samsung were to meet each day to ‘fix’ the price of microchips, or if the major oil companies were to meet each day to ‘fix’ the price of crude oil; wouldn’t there be a public outcry and a flurry of antitrust violation lawsuits? The ‘fix’ is not open to the public, there are no published transcripts of each fixing, and there is no way to know what the representatives of the bullion banks discuss between each other.
The current London Gold Fix is conducted by the representatives of five bullion banks, namely HSBC, Deutsche Bank, Scotia Mocatta, Societe Generale, and Barclays. The ‘fix’ is no longer conducted in an actual meeting but by conference call.
The London Gold Pool that was instigated in the 1960’s was incontestably established with the sole purpose of suppressing the gold price. Several central banks furnished gold to sell into the market with the aim of keeping the gold price at $35/oz. This was overt market manipulation. How was this achieved? The internet site explains here as a historical fact that ‘1961 – Gold Pool of US and main European central banks set up to defend $35 price, by selling at fixing to contain it’. So the London Gold Pool sold into the ‘fix’ to suppress the price and no doubt the bullion bankers making the ‘fix’ were party to this scheme.

This post was published at TF Metals Report on November 17, 2015.

Goldman Closes Out Its Top Trade For 2015 Which Expires Out Of The Money

Only Goldman can call the direction of the biggest FX trade of 2015 – namely the collapse in the EURUSD – and still have a complete lose on the trade.
Recall that exactly one year ago, Goldman revealed its top trade for 2015, namely betting on EUR/$ downside via a one-year EUR/$ put spread. From the bank:
Position for EUR/$ downside via a one-year 1.20/1.15 put spread for around a 4.5 to 1 potential maximum payout.
We forecast that EUR/$ will fall to 1.15 over the next 12 months, in equal parts a reflection of our Dollar bullish view and Euro bearish outlook. In particular, given that HICP inflation is unlikely to rebound in coming months, there is a chance that additional ECB easing, including possibly sovereign QE, comes sooner rather than later, setting the stage for EUR/$ to move meaningfully lower in the short term.

This post was published at Zero Hedge on 11/17/2015.