Two Reasons The ‘War On Terror’ Will Always Fail

Technically, the third quarter earnings season is not exactly over: 2% of companies are still left to report. Untechnically, it is, and with 98% of S&P500 companies now in the history books, 74% of the companies in the index have reported earnings above the mean estimate but 45% of the companies have reported sales above the mean estimate.
But while gaming analyst estimates is the oldest trick in the book (and even so more than half of companies are failing to beat on sales), a truly dire picture is revealed when one steps back and looks at the data in historical basis.
That is precisely what Ellington Management did recently in their note looking at the last stretch of the junk bubble. This is what they said.
Corporations are now running out of steam in terms of their ability to generate earnings. As of Q2 2015, the year-over-year change in annual corporate earnings dropped to -$8.21 per share for the S&P 500 and to -$4.79 per share for the Russell 2000. The previous three times this metric fell that far into negative territory on the S&P 500 were Q1 1990, Q1 2001, and Q4 2007, coinciding with the start of each of the last three high yield default cycles. According to a recent article in The Economist, in the most recent quarter less than half of S&P 500 companies recorded increasing profit year-over-year.

This post was published at Zero Hedge on 11/29/2015 –.

The Problem With “Rules-Based” Monetary Policy

The phrase ‘rules-based monetary policy’ has frequented conservative circles a lot lately. Republican presidential candidate Ted Cruz expressed his deep passion for implementing a monetary policy rule in a handful of presidential debates this year, including both October’s and November’s debates. House Republicans have introduced bills that would require the Federal Reserve to follow a ‘rule.’ Even the conservative intellectual class has waved its flag of approval for these efforts. In February, theHeritage Foundation remarked that a monetary policy rule will ‘greatly improve transparency and predictability,’ a conviction echoed loudly and frequently at the November monetary policy conference hosted by the Cato Institute.
The most cited, respected, and widely-known monetary policy rule today is known as the Taylor Rule. While following this rule may, in some isolated cases, generate marginal improvements to economic data, we need to ask ourselves if we want the economy to progress or to be cured; and we need to ask ourselves if we want an economy that is better overall or better for everyone.
The philosophical reasoning of the Taylor Rule goes as follows: At its best, the Federal Reserve kick-starts the economy with low interest rates, creating maximum employment and growth. At its worst, the central bank stimulates too much economic activity, generating excessive demand, malinvestment, and unemployment.

This post was published at Ludwig von Mises Institute on NOVEMBER 30, 2015.

Strong Markets Weak Metals

A great week for markets and leading stocks who are set to breakout higher and finish off 2015 strongly anytime now.
There is easy money out there, just not in the metals who continue to be battered as we near the major support areas I’ve taken so much flak for talking about, but I’ve been right so the flak has diminished considerably.
I have no problem admitting when I’m wrong, unlike the trolls who hide on the internet.
We are still on track to see major support areas tested in 2015 for gold and silver and then we may slowly begin to see the dominant downtrend end.

This post was published at GoldSeek on Monday, 30 November 2015.

HUI & Gold …Who’s Leading Whom?

The Key Principle of this market analysing discipline we call Chartology : What makes the markets go up and down and sideways is investor’s and trader’s emotions.
From the little guy trading on his laptop to some big hedge fund manager that has an office full of people telling him what to do. The sum total of everyone’s psychology and conviction is what creates the many different chart patterns we are constantly searching for. Take for example the principle of Reverse Symmetry , how a stock goes up is often how it comes back down. Something one needs to look for when you’re analyzing a chart for the purpose of discerning the next probable move . It doesn’t make any difference what time frame you’re looking at either. This is the reason, when you have a parabolic rise in a stock, you’ll see a very similar decline which many times is faster than when it went up. The reason for this is because the stock spent very little time consolidating the impulse move , only taking the time to form very small consolidation patterns which don’t have the staying power of a big consolidation pattern. There is nothing to offer support once the reversal takes place. The conviction (psychology again) of the market players is not there .
The weekly chart below shows you some nice reverse symmetry on the combo chart that has the HUI on top and Gold on the bottom. Don’t pay any attention to the top chart, CDNX:Gold ratio chart. The two lower charts for the HUI and Gold are what I want to focus in on.

This post was published at GoldSeek on Monday, 30 November 2015.

Godzilla on Tiptoes

Index futures have opened quietly Sunday night, sort of like Godzilla on tiptoes. For the first time in a month, we’ll be starting the week with no short position in gold. Although the December contract did not quite reach our 1044.50 target at last week’s lows, it got close enough to warrant covering a short position that had racked theoretical gains of $12,000 per contract.
RICK’S PICKS

This post was published at Rick Ackerman on Sunday, November 29, 2015.

A Black Friday for Gold Prices

Black Friday is a big and usually good trading day for the retail sector; however, for gold prices it was a punch on the nose. Gold suffered a loss of $14.30 to close at $1056.10/oz, its lowest level since early 2010.
Background
It’s been almost 50 months since the gold traded at the dizzy heights of $1900/oz back in August 2011, to the delight of every gold bug on the planet. However, since then it has been a slow grind south with rally after rally proving to be just another head fake. Gold has now lost $845.00 or 44.47% of its value in dollar terms, since peaking back then.
Many have called the bottom for this tiny sector of the market only to discover that the bears are still in charge. The reasons for this demise in precious metals are many and varied, however, in our humble opinion; the demise can be explained in two easy to read pictures.
The US Dollar and Gold Prices
First up we have the US Dollar where we can clearly see that since gold’s peak in August 2011, when the dollar was trading at ’75’ on The US Dollar Index, it has progressed since then to close above the ‘100’ level registering a gain of 33%.

This post was published at GoldSeek on Monday, 30 November 2015.

Internal Bleeding, Cheap Tech, And Falling Angels

Think of ‘market internals’ as the blood pressure and insulin levels of the financial world. They operate below the surface, frequently unnoticed, but over time they have a big say in the health of the patient.
And right now they’re pointing to a heart attack.
Let’s start with junk bonds. These are loans to financially and/or operationally-weak companies that because of their weakness have to pay up to borrow. Such bonds have a risk/return profile that’s more akin to equities than to, say Treasury bonds, and they trade accordingly, rising and falling on the likelihood of default rather than their relative yield.
Recession means higher default rates for weak borrowers, so when the economy is slowing down or otherwise hitting a rough patch, the junk bond market is often where it registers first. Lately, junk has been tanking relative to stocks (chart created by Hussman Funds).

This post was published at DollarCollapse on November 30, 2015.

Dollar-Denominated Corporate Time Bomb Set to Blow

Hot Money Flees Mexico. By Don Quijones, Spain & Mexico, editor at WOLF STREET. Emerging economies around the world are already feeling the first pangs of withdrawal as fast yield-chasing investors send their funds back to the U. S. in anticipation of higher Treasury yields and a further appreciating dollar.
In Mexico, the central bank has just published its balance of payments data for the third quarter, 2015. The results do not make for pretty reading.
Early Signs of a Stampede Net portfolio investment – the total amount of foreign money spent on Mexican financial assets – clocked in at a paltry 933 million, down from $4.47 billion during the same quarter last year. That’s a 79% drop. It was also Mexico’s fifth successive quarterly decline and the lowest level recorded since 2002. Although the rout was across the board, it was particularly pronounced in the private sector which suffered a 241 million net outflow of funds.
Interestingly, while portfolio investment stagnated, foreign direct investment (FDI) flourished, growing by 57.6% in the first nine months of 2015. In other words, those who are investing for the long haul continue plowing funds into Mexico. Which is wonderful news – in the long term! The problem is that investors who are after the quickest of monetary fixes are frantically moving their money out. And that is bad news in the short term! Crises are made of this phenomenon.

This post was published at Wolf Street by Don Quijones ‘ November 29, 2015.

Greek Prime Minister Joins Diplomatic Scandal Between Russia And Turkey With 4 Tweets

Either Greece, having fallen off the face of the geopolitical event map now that it is a vassal state of Frankfurt and Brussels, is in dire need of media attention and as a result the Greek prime minister has decided to intervene directly in the biggest diplomatic scandal to have gripped the international community in years, the one between Russia and Turkey, or the intern manning Tsipras twitter account is about to join the roughly 25% of the Greek population that is unemployed.
1/4 To Prime Minister Davuto?lu: Fortunately our pilots are not as mercurial as yours against the Russians #EUTurkey
– Alexis Tsipras (@tsipras_eu) November 29, 2015
2/4 What is happening in the Aegean is outrageous and unbelievable #EUTurkey
– Alexis Tsipras (@tsipras_eu) November 29, 2015
3/4 We’re spending billions on weapons. You–to violate our airspace, we–to intercept you#EUTurkey
– Alexis Tsipras (@tsipras_eu) November 29, 2015
4/4 We have the most modern aerial weapons systems–and yet, on the ground, we can’t catch traffickers who drown innocent people #EUTurkey
– Alexis Tsipras (@tsipras_eu) November 29, 2015

This post was published at Zero Hedge on 11/29/2015 –.

A contrarian perspective on the short euro trade

This is a syndicated repost courtesy of Sober Look. To view original, click here. Reposted with permission.
As the euro continues to drift lower, it has become the accepted wisdom that we are headed for parity with the dollar.
Indeed it is widely expected that the ECB will expand its securities buying program in size, duration and scope (the ECB has been exploring buying municipal bonds for example). The central bank is also expected to cut the benchmark rates, pushing deeper into negative territory. The chart below shows the Euribor futures trading significantly above par as the market expects sharply lower interbank rates.

This post was published at Wall Street Examiner by Sober Look ‘ November 29, 2015.

It’s Official: Black Friday Sales Plunge 10% From Last Year

Total sales in the US on Black Friday fell 10% to $10.4bn this year, down from $11.6bn in 2014, according to research firm ShopperTrak. – The Guardian
Store-based sales dropped $1.2 billion, while online sales increased $150 million. The media is going to highlight the increase in online sales. But remember, online sales represent only 6% of total retail sales. The plunge in brick-and-mortar sales was nearly 10x greater in total dollars than was the increase in cyber sales.

This post was published at Investment Research Dynamics on November 29, 2015.

$GCZ15 – December Gold (Last:1055.90)

Subscribers were advised on Friday to cover a short position that would have produced a gain of as much as $12,000 per contract over the month it was held. The $18 selloff that ended the week fell a tad shy of our longstanding target at 1044.50. However, because I expect a strong bounce from the target or very near it, and because the intraday low coincided with the Hidden Pivot target of a lesser downtrend (see inset), it was time to cover the position rather than try to milk it for a few more drops.
As the new week begins, we’ll look to stake out a long position somewhere near these levels, but I didn’t want to attempt it by trading ahead of the weekend. (Note: The best way to stay apprised in real time is to tune to the chat room or sign up for intraday email alerts on your account page.) Earlier, I had provided explicit instructions for using GLD to leverage a possible bullish reversal. However, this vehicle looks more precarious than the futures, having breached a major Hidden Pivot target on Friday at 101.56. We’ll consider it nonetheless if it flashes opportunity.
RICK’S PICKS

This post was published at Rick Ackerman on November 29, 2015,.

Black Friday Total Sales Crash 10% (Despite Rise In Online Spend)

We can hear the mainstream media now – “Great News Everyone!! The American consumer is back” –online sales on Black Friday rose 10% to $1.7 billion which ComScore says shows “strong spending.” The only problem is – which we suspect will be oddly missing from the mainstream narrative, asShopperTrak reports total sales on Black Friday crashed 10% to $10.4 billion. While blame has been placed on early opening on Thanksgiving, that is false too since spending on that day also plunged 10%. So, the sales news is unequivocally bad – which is hardly surprising given the collapse in consumer confidence.
So to clarify… (via The Guardian)

This post was published at Zero Hedge on 11/29/2015.

December 16th: A Date Which Will Live On In Monetary Infamy

Authored by Mark St. Cyr,
Depending on how one looks at it September 17th seems both as far in the rear-view mirror as a distant memory, and yet, almost as if it were just yesterday. I believe part of the reason is the fact no one has been able to stop thinking about it in one form or another. For those of you who don’t await with bated breath for the world’s equivalent of monetary dictates, September 17th was the date The Federal Reserve punted on raising interest rates stating reasons that still have many scratching their heads.
However, as of today, by all indications put forth via a myriad of so-called ‘in-the-know’ types. This time they’re really, really, really, no fingers crossed, and Scouts honor going to ‘just do it.’ Unless you listen to Fed officials themselves. For if you have, ‘just doing it’ may indeed turn out to be: can’t bring themselves to do just about anything except to wait on doing – it. Welcome to monetary policy 21st century style. Where the meaning of ‘it’ can be just as tricky to identify as what ‘is,’ is.
Maybe you think I’m just trying to make a play-on-words type argument. Let me assure you I’m not, for I’m not that good. You can’t make this stuff up. This monetary gibberish writes itself (actually it’s spoken by Fed. officials first) which is why it’s both so laughable, as well as dangerous at the same time.

This post was published at Zero Hedge on 11/29/2015 –.

Can You Handle the Ugly Truth?

Dear CIGAs,
It has been said ‘truth’ is a funny concept. What is truth to one may not be to another because opinions vary from one person to another. ‘Truth’ in this context consists of one’s opinion or point of view. By this definition truth can be altered, changed or even ‘made’. For example, the truth believed and espoused by MSNBC is far different than that of FOX News, both by the reporters themselves and by viewers. Real truth however cannot be ‘made’, massaged or opined as it is mathematical in origin and more an issue of black and white.
The global financial system has gone awry where economic truth must be masked and hidden to cover the reality. Somehow our central planners think if the people ‘believe’ something …then it ‘is’. I am here to tell you, no it is not. A perfect example of something completely out of whack but melded into the new ‘normal’ are negative interest rates throughout much of Europe. These negative interest rates are no longer for only short dated maturities. Rates are negative in some cases out past 7-10 years!
How can this be? Investors are willing to lock in a guaranteed loss for 10 years or more? Rates have been pushed negative of course because the central planners want people to spend their money rather than save it. You see, ‘velocity’ has crashed because people have tightened their belts in a move toward austerity …something the sovereign treasuries and central banks cannot even spell. Please keep in mind whether it be euros, yen or dollars, the central banks have the ability to print as many of these currency units as they choose to. Negative interest rates guarantee less ‘units’ returned upon maturity and give less than zero risk compensation to offset the ‘printing’ that has already been promised. In essence, savers are PAYING for the privilege to lose ‘units’ even when central banks are promising to do their best to reduce the value of these units. The madness of crowds I guess?

This post was published at JSMineSet on November 29th, 2015.