‘Once-in-a-lifetime opportunity’ Sinks Hedge Funds

Energy Markets Are Testing Some Big Investors.
Plummeting oil prices have beaten down the share prices of energy companies across the board, with some going out of business while others are struggling to hang on.
With valuations of E&P companies a mere fraction of what they were from a year or two ago, big-time energy investors see a massive opening to scoop up investment positions on the cheap. The CEO of Avenue Capital Group, an investment firm focused on distressed securities, sees a ‘once-in-a-lifetime opportunity’ in distressed energy companies.
Marc Lasry spoke at the Reuters Global Investment Outlook Summit in New York on November 17, where he discussed his firm’s big gamble on energy right now.

This post was published at Wolf Street on November 18, 2015.

Did Goldman Sachs Just Find The Smoking Gun In Today’s FOMC Minutes?

The market’s reaction to today’s FOMC Minutes was, to some, a little odd given the “December is on” hawkish narrative being sold to the public. Stocks rallied, longer-dated bonds rallied, gold managed gains, and the US Dollar sold off… not exactly the reaction one would expect from a ‘hawkish’ Fed statement. But there is one thing that would explain those moves… and it appears Goldman Sachs found it buried deep inside the 12 pages of Minutes…

This post was published at Zero Hedge on 11/18/2015.

Middle-Aged White Males Left for Dead

Like Asking Yourself for a Date
NORMANDY, France – ‘The Decline and Fall of America’s Working Class’ is a subject that draws much interest.
Semi-skilled labor isn’t what it used to be. From our own simple calculation, last week, it appeared that in order to afford a typical new house and new car, a working stiff today would have to put in about twice as much time on the job as he would have 40 years ago.
‘How come?’ is the question most people ask. But we’ll come back with a different question in just a moment. First, a look at the markets: Investors decided to leave their worries on the doorstep on Monday. They crossed to the sunny side of the street, with the Dow up 237 points.
On Monday, traders woke up and said to themselves: what could be a better reason for buying stocks than a bloody terror attack? That Keynesian genius Professor Roubini already told us it will be good for the euro zone economy! War, death and destruction are the fathers of all things after all! – click to enlarge.
How much of that buying comes from serious investors, carefully analyzing the real value of the companies they buy? Probably not much.
A report at Zero Hedge tells us that since 2010, U. S. corporations have added, net, more than $4 trillion in debt. What did they do with all that money? They used almost all of it to buy their own stock.

This post was published at Acting-Man on November 19, 2015.

Oil Approaching $40 Deepens Investor Pessimism on Recovery

Yes, the Mr. Obvious award goes to Bloomberg News for discovering that $40 oil is a sign of increased pessimism in the US (and global) economies.
(Bloomberg) Hedge funds have turned more pessimistic on oil as prices flirted with $40 a barrel for the first time since August.
‘The speculators keep trying to pick the bottom and keep getting burned,’ Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone.
Money managers’ short bets in West Texas Intermediate crude surged 21 percent in the week ended Nov. 10, according to data from the Commodity Futures Trading Commission. The net-long position dropped 16 percent. The release of the figures was delayed because of Veterans Day on Nov. 11.
West Texas Intermediate Crude Oil prices started to decline in a serious way in July 2014 as the US Dollar began its acceleration.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ November 18, 2015.

RBS Lays Out 10 Key Points For 2016, Warns “Political Risk” Will “Break” QE-Infinity Equilibrium

As the global economy limps into 2016, the prospects for a sustained pickup in worldwide trade and/or a return to robust growth are decidedly grim.
Global trade growth has lagged the already tepid pace of global output expansion for three years running, averaging just 3% per year. That’s half of the rate witnessed from 1983 to 2008.
Meanwhile, inflation expectations in developed economies have not rebounded, despite the best efforts of DM central bankers. And yet housing costs have soared in tandem with round after round of policy rate cuts and the global proliferation of QE, reflecting two things, i) central banks have learned nothing from the US housing bubble (that is, when you artificially suppress borrowing costs, housing prices soar), and ii) when you intentionally inflate bubbles in the assets most likely to be concentrated in the hands of the wealthy (i.e. financial assets), those bubbles spill over into other asset classes like real estate and high end art.
What should be apparent from the above is that all the Mario Draghis and Haruhiko Kurodas of the world are doing at this point is blowing bubbles on the way to creating more inequality and embedding ever greater amounts of risk into capital markets not only by driving up prices, but by sucking out liquidity.

This post was published at Zero Hedge on 11/18/2015.

Corporations Are Liquidating Themselves, One Buyback At A Time

In every bubble there are trends so obviously crazy that it’s hard to see how anyone, let alone mainstream money managers, can buy in. And yet buy in they do.
This time around there are almost too many such trends to count. But perhaps the most obvious is corporate share repurchases. Though already a well-known and much lamented practice, it has yet to send hot money running for the exits or spawn a regulatory backlash. But it has generated some good analysis from mainstream news organizations, which might be a sign that we’re near the end. Consider this from Reuters:
The Cannibalized Company: As stock buybacks reach historic levels, signs that corporate America is undermining itself When Carly Fiorina started at Hewlett-Packard Co in July 1999, one of her first acts as chief executive officer was to start buying back the company’s shares. By the time she was ousted in 2005, HP had snapped up $14 billion of its stock, more than its $12 billion in profits during that time. Her successor, Mark Hurd, spent even more on buybacks during his five years in charge – $43 billion, compared to profits of $36 billion. Following him, Leo Apotheker bought back $10 billion in shares before his 11-month tenure ended in 2011.
The three CEOs, over the span of a dozen years, followed a strategy that has become the norm for many big companies during the past two decades: large stock buybacks to make use of cash, coupled with acquisitions to lift revenue.
All those buybacks put lots of money in the hands of shareholders. How well they served HP in the long term isn’t clear. HP hasn’t had a blockbuster product in years. It has been slow to make a mark in more profitable software and services businesses. In its core businesses, revenue and margins have been contracting.

This post was published at DollarCollapse on November 18, 2015.

NOV 18/OPEN INTEREST RISES FOR BOTH GOLD AND SILVER/BASE METALS FALL FOR THE 11TH STRAIGHT DAY/GLENCORE RISES/OIL BREAKS INTO THE 39 DOLLAR COLUMN/FOMC BEIGE BOOK INDICATES RATE HIKE A GO IF DATA…

Gold: $1068.80 up $0.10 (comex closing time)
Silver $14.08 down 9 cents
In the access market 5:15 pm
Gold $1071.00
Silver: $14.18
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 205.20 tonnes for a loss of 98 tonnes over that period.
In silver, the open interest surprisingly rose by a huge 1686 contracts despite silver being up by only 2 cents in yesterday’s trading (and gold battered). The total silver OI now rests at 170,721 contracts In ounces, the OI is still represented by .853 billion oz or 122% 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 surprisingly rose by 368 contracts to 435,376 contracts despite gold being down by $15.00 in yesterday’s trading. It seems the modus operandi of the bandits is to try and liquefy gold/silver OI as we approach first day notice on Monday, November 30. It does not seem to work. 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 18, 2015.

“We Should All Be Afraid” Of The ‘Brutal’ Commodity & Credit Volatility

“The signals across asset classes are diverging incredibly,” warns Macro Risk Advisors’ Dean Curnutt, “and we should all be afraid.” All of that volatility is rolling back into corporate credit and that, inevitably will dramatically impact equity markets (explicitly through higher funding costs weighing on earnings or implicitly through lower buybacks and higher risk premia), “the illiquidity and implied defaults that we are seeing in credit markets are not at all priced into a 2060 S&P.”

This post was published at Zero Hedge on 11/18/2015.

Australia Considers Paperless Passports Based on Fingerprints, Face Recognition, Eye Scans; We Know Who You Are!

Australia, New Zealand Consider Paperless Passports
In the wake of fake passports and people smuggling in the EU refugee crisis, here’s a potential solution from Australia: The Cloud Could Soon Let Aussies Travel Without a Passport.
Australians could soon leave their old paper passports at home if a new proposal endorsed by Foreign Affairs Minister Julie Bishop goes ahead.
The digital passport would include identity and biometrics data, according to the outlet, meaning Australians could easily be recognised at the border without showing any documents.
“We’re in discussions with New Zealand and if we’re able to put in place the appropriate requirements, including security, then it’s something we’d like to trial and implement,” Bishop told the media on Thursday.
She also advised new technologies could assist in making passports even more secure. “Australia prides itself on having one of the most secure passports in the world, but by embracing and harnessing new technologies, we might be able to do better,” she said.

This post was published at Global Economic Analysis on November 18, 2015.

Gold Daily and Silver Weekly Charts – Why Don’t You Do Right

“And finally, in our progress towards a resumption of work, we require two safeguards against a return of the evils of the old order.
There must be a strict supervision of all banking and credits and investments. There must be an end to speculation with other people’s money.”
Franklin Delano Roosevelt, First Inaugural Address, 4 March 1933
Today was another boring day in the Homeland.
There were no deliveries at The Bucket Shop yesterday.
The usual dribbles of bullion went in and out of the warehouses.
Gold and silver prices generally oscillated around their current price levels.

This post was published at Jesses Crossroads Cafe on 18 NOVEMBER 2015.

Stocks Remain Red Post-October-FOMC As Minutes Spark “Policy Error” Signs In Bonds

Perhaps notably, despite an initial kneejerk higher, US equities remain below the levels seen when The FOMC Statement was released in October. Gold, The USDollar, and bonds are all modestly higher post-FOMC Minutes… Some might suggest the long-end is pricing in a “policy error” as on the day 30Y is down 2bps while 2Y is up over 2bps.

This post was published at Zero Hedge on 11/18/2015.

PAPER GOLD DOESN’T GLITTER

Today when gold in US dollars is making a new correction low, the paper shorts are elated. They believe they can win this game of frightening every gold investor to sell their holding. But this elation is likely to soon turn to desperation.
Supply tight in gold and silver
As I have discussed many times, the physical market in gold and silver is very tight. Bullion banks have stocks are low and central banks have leased or sold a major part of their gold. But since they refuse to be properly audited they are desperately trying to hide the real position. China and India are continuing to buy more than the annual production of gold by the miners. And the supply situation from the refiners is tight with delivery delays for bigger orders.
Dollar strength is ephemeral
So gold seems very week. But that is only in US dollars. In virtually every other currency gold is holding well. That includes the Euro, the Pound, the Canadian dollar, the Aussie dollar, the Yen, even the Swiss Franc and of course weaker currencies like the Ruble as well as most others.

This post was published at GoldSwitzerland on November 18th, 2015.

These Are The 7 “Risks” That Bulls Are Banking On Not Happening

…or to put it another way, here is what Deutsche Bank believes are the only two “upside risks” for markets – “a smooth start to Fed tightening” and “eurozone growth surprises to the upside.” Other than that, hope that The Fed reverts to old norms and eases, un-tightens is the last best hope for this decoupled, divergent equity market…

This post was published at Zero Hedge on 11/18/2015.

Gold (Silver) Is The Most Manipulated Market In History

Our fractional reserve financial system is just a gigantic Ponzi scheme. It can only survive as long as it expands, which is to say, as long as new debt is flushed through the system to finance old debt. But like all Ponzi schemes, the larger it grows the more unstable it becomes. Eventually, it collapses of its own weight. -James Sinclair in 2009
The western Central Bank/bullion bank paper gold manipulators have become obvious. The reason is that the there is nothing stopping them from manipulating the market. Eventually the physical demand from Asia will undermine their paper gold manipulation activities, but big buyers of physical who demand delivery have no reason to stop the price capping, obviously.
James Turk discussed the various factors driving the manipulation in a King World News interview. I’ve created a graphic to illustrate the manipulation of the gold market as it occurred from Sunday into Monday:

This post was published at Investment Research Dynamics on November 18, 2015.

Fed Minutes Preview: Is The FOMC As Hawkish As It Sounded In October?

Well, we’re less than one hour away from the release of the October Fed minutes. Who’s excited?
Despite the fact that the October NFP print came after the FOMC meeting, market ‘bird watchers’ will still be keen on parsing every last word for hints around what the very ‘data dependent’ Fed may or may not announce next month.
More specifically, it will be interesting to see if the minutes confirm the notion that Janet Yellen is leaning hawkish (to the extent that we can call a symbolic 25 bps hike ‘hawkish’) and whether the statement might have come across as more committal than the Fed actually is vis-a-vis a 2015 liftoff.
For their part, Deutsche Bank thinks the market may have read too much into the October statement. ‘Remember that the hawkishness of the statement that followed that meeting was the start of a big swing in December liftoff expectations. In fact, prior to that meeting December hike expectations were sitting at around 35%, before rising to 50% or so immediately after the statement. Currently we’re sitting at 66% which is just shy of the 69% high point earlier this month,’ Deutsche notes, adding that the minutes could be ‘more balanced and much less committed to a December hike than what was inferred from the October communiqu.’

This post was published at Zero Hedge on 11/18/2015.

SP 500 and NDX Futures Daily Charts – Policy Errors, Bubbles, and Other Peoples’ Money

What we have freed ourselves of, however, is any genuine consciousness of how we might look to others on this globe. Most Americans are probably unaware of how Washington exercises its global hegemony, since so much of this activity takes place either in relative secrecy or under comforting rubrics.
Many may, as a start, find it hard to believe that our place in the world even adds up to an empire. But only when we come to see our country as both profiting from and trapped within the structures of an empire of its own making will it be possible for us to explain many elements of the world that otherwise perplex us.
Chalmers Johnson
Let’s see if they can keep this bubble rolling.
As long as the volumes stay light and the Fed and the regulators stay loose, I suspect that they can.

This post was published at Jesses Crossroads Cafe on 18 NOVEMBER 2015.