Day: March 9, 2016

Largest Primary Silver Mine Productivity Falls To Lowest Ever

Jon

The largest primary silver mine in the world saw its average yield fall to the lowest level ever in 2015. Matter-a-fact, the primary silver mine’s yield fell nearly 16% compared to last year. This is a substantial decline in productivity from the world’s largest mine in Mexico that starting production in 1824.
Actually, the area where this mine is located – Zacatecas, Spaniards start producing silver all the way back in 1540. When initial production at the Great Fresnillo Mine started in 1824, Mexico was producing 55% of the world’s silver production. The ore grades were much higher in those days.
For example, average yields for silver production in the United States and Australia in the late 1800’s was 40-50 oz per ton (oz/tonne). However, as the world continued to consume greater amounts of silver over the next century, average yields in its primary silver mining industry fell precipitously.
Fresnillo Mine Average Yield Fell To Lowest Level Ever
Fresnillo LLC has several mines in production. Their flagship operation, is the Fresnillo Mine. In 2005, the Fresnillo Mine was producing silver at an average yield of 15.2 oz/t, but this fell 57% over the following decade. In 2015, Fresnillo’s average silver yield was a paltry 6.5 oz/t…. a loss of 8.7 oz/t:

This post was published at SRSrocco Report on March 9, 2016.

NIRP Kills Off All Money Market Funds in Japan

Jon

And the Bitter Irony?
All 11 Japanese asset managers that offer money market funds have stopped accepting new investments into them and are planning to scuttle them after returning their remaining assets to investors. This marks another big accomplishments of negative interest rates.
After years of zero-interest-rate policy, and after gobbling up every Japanese government bond that wasn’t nailed down, the Bank of Japan decided in January to go beyond what had already failed and introduced its negative-interest-rate policy.
As a result of QQE, as it calls its asset-buying program, and the new NIRP, even the 10-year JGB yield is now negative, and yields on shorter maturities are sinking deeper into the negative. Money market funds, which invest in commercial paper and government debt with maturities of less than one year, are at risk of seeing these negative yields eat into their principal.
Money market funds, unlike bank deposits, do not guarantee the principal, but due to their reliance on short-term paper with high credit ratings, they’re considered one of the safest investments, and falling below par value is considered bad form and can trigger runs on the offending fund and neighboring funds by spooked investors.

This post was published at Wolf Street by Wolf Richter ‘ March 9, 2016.

The “Terrifying Prospect” Of A Triumph Of Politics Over Economics

Jon

The Triumph of Politics
All of life’s odds aren’t 3:2, but that’s how you’re supposed to bet, or so they say. They are not saying that so much anymore, or saying that history rhymes, or that nothing’s new under the sun. More and more theys seem to be figuring out that past economic and market experiences can’t be extrapolated forward – a terrifying prospect for the social and political order.
Consider today’s realities:
Global economies have grown to their current scale thanks to a glorious secular expansion of worldwide credit – credit unreserved with bank assets and deposits; credit extended to brand new capitalists; credit that can never be extinguished without significant debt deflation or hyper monetary inflation
Economies no longer form sufficient capital to sustain their scales or to justify broad asset values in real terms

This post was published at Zero Hedge on 03/09/2016.

“Dust Off The Tail-Risk Hedges” MKM Warns US Equities Are Entering A “High Volatility Regime”

Jon

“Dust off the systematic hedging strategies, and get re-acquainted with the concept of tail-risk,” is the ominous conclusion from MKM Partners’ Jim Strugger’s latest report. Despite every effort from central banks to maintain a low-volatility environment, the magnitude of the August 2015 ‘shock’ not just for U. S. equities but across asset classes, was great enough for Strugger to conclude that a transition into a high-volatility regime had begun. Given the length of the economic cycle, bull market, and the rise in financial stress globally, Strugger warns a transition to a high-vol regime leaves ultimate damage in the &P 500 averaging 53%.
There have been seven distinct volatility regimes since the inception of the Chicago Board Options Exchange (CBOE) VXO implied volatility index in the mid-1980s, Strugger points out. The average duration of a volatility regime has lasted five years, with the most recent regime from late 2012 to August of 2015 lasting just 2.75 years.

This post was published at Zero Hedge on 03/09/2016.

The Economy Is Contracting As Americans Are Laid Off For Part-time Jobs – Episode 914a

Jon

The following video was published by X22Report on Mar 9, 2016
UK retail sales growth slows in Jan-Feb. There is no spending growth, the overall picture of retail is contracting. Deflation is coming to the auto industry and the auto bubble is popping. Wholesale trade gap indicates we are back in a recession. Obama is peddling fiction, most of the economic sectors are showing bubbles, contraction as we head into the collapse. The smart money is now leaving the market as it is propped up before it declines rapidly.

This Will Make the Next Stock Market Crash as Bad as 2008

Jon

We’re facing the prospect of a stock market crash as bad as the one we suffered through eight years ago – and it’s the fault of governments the world over.
The 2008 financial crisis chopped about 56% from the Standard & Poor’s 500 Index. And in an effort to stop the bleeding, governments simply laid the groundwork for a 2016 stock market crash.
Recall what they did. In the United States, Congress spent over $800 billion on a stimulus package. Between the increased government spending and the reduced tax receipts from the Great Recession, the annual budget deficit swelled to more than $1 trillion.
That borrowed money, both by the U. S. government and by governments the world over, has accumulated into an enormous mountain of debt. Excessive sovereign debt is already undermining global economic growth.
And it’s setting up to become the accelerant that will turn the next bear market into a 2008-style stock market crash.
I’ll show you how as we take a closer look at what’s going on…

This post was published at Wall Street Examiner by David Zeiler ‘ March 9, 2016.

The Sabine Slam: Court Decision Threatens Midstream Sector

Jon

A federal bankruptcy judge ruled that Sabine Oil & Gas could withdraw from its contract obligations with pipeline companies to ship a certain volume of oil and gas through their pipelines.
The court decision may seem arcane, but it could have major ramifications for both producers and midstream companies. Under the contracts, a company like Sabine Oil & Gas promises to ship a certain volume of hydrocarbons through the pipeline at a set fee. If they fail to do so, they still have to pay the pipeline company for the use of the pipeline capacity.
Sabine Oil & Gas, a struggling producer, says that it can no longer ship enough volume to meet the contractual agreement and it wanted to be let out of the contract. The company went to a bankruptcy judge in Manhattan, who ruled in Sabine’s favor.

This post was published at Zero Hedge on 03/09/2016.

The $9.2 Billion Bet Against OPEC Dominance

Jon

The $9.2 billion investors paid to snap up new equity offerings from U. S. oil companies in 2016 proves those investors are indeed ready for more punishment.
The amount is in line with the pace of such equity offerings in 2015 even as the mood in the oil markets has grown increasingly dour. In June of last year I wrote:
New investors in U. S. oil company shares must believe they are catching the bottom and will have a very profitable ride up from here. This demonstrates that OPEC’s work is not done and accounts in part for the decision to leave production quotas unchanged. OPEC’s next task is to convince those making new investments in oil that, rather than catching a bottom in oil prices, they have caught a falling knife.
A lot of investors did end up catching a falling knife as oil careened downward from about $60 a barrel last summer to Friday’s close of about $36. Investors this year may still find that the knife is falling, though it admittedly doesn’t have as far to fall this time around. Still, it seems they misunderstand OPEC’s strategy or believe that that strategy will fail. As I said in the same piece:

This post was published at Wolf Street by Kurt Cobb, Oilprice.com ‘ March 9, 2016.

COLLEGE STUDENTS NOW HAVE TO PROSTITUTE THEMSELVES TO PAY TUITION

Jon

There’s no doubt that the cost of college is one of the biggest issues in America today. Hell, it practically fueled the Occupy movement in 2011, and it has helped propel Bernie Sanders to the national spotlight. You may not agree with either of those movements, but they do reveal how much anger and frustration there is over the cost of tuition.
This is no small matter. We have an entire generation of young adults who followed the rules, and it practically ruined their lives. They were told that going to college was the only way they would amount to anything, so they did what was expected of them. And all they have to show for it is their parent’s basement and a mountain of debt that can’t be paid off or excused. Financially speaking, we have a lost generation on our hands that is pretty much screwed for life.
Of course, anytime people are in a desperate situation, they often turn to desperate measures to keep their lives on track. And sometimes, those measures include selling their bodies. College students are no different. In fact, it’s become increasingly common for students to become ‘sugar babies’ in an effort to pay down their soul crushing debts.

This post was published at The Daily Sheeple on MARCH 9, 2016.

The “Smart Money” Is Quietly Getting Out Of Dodge: Sells For A Sixth Straight Week As Buybacks Soar

Jon

One week ago, when looking at the latest BofA client flow trend monitor, we noticed something strange: despite the S&P’s surge higher due to either a record short squeeze or because it is merely another bear market rally, the smart money was selling.
In fact, as BofA’s Jill Hall calculated, the three groups that make up the so-called “smart money” basket, hedge funds, BofA’s institutional clients as well its private clients, had been selling aggressively every week for the prior five. As she explained on March 1, “last week, during which the S&P 500 climbed 1.6%, BofAML clients were net sellers of US stocks for the fifth consecutive week, in the amount of $1.5bn. This was the biggest weekly outflow since mid-December.” Someone clearly was very grateful for the selling opportunity that this squeeze was providing.
Well, we can now add one more week to the total: in BofA’s latest note, “last week, during which the S&P 500 rallied 2.7%, BofAML clients were net sellers of US stocks for the sixth week.”
She explains that “similar to the prior week, hedge funds, institutional clients, and private clients were all net sellers, though sales last week were led by private clients (vs. hedge funds the week prior). Our hedge fund clients remain the biggest net sellers of US stocks year-to-date.”
The full breakdown below:

This post was published at Zero Hedge on 03/09/2016.

Gold Daily and Silver Weekly Charts – And Now the Movie, Folks…

Jon

‘A crowd whose discontent has risen no higher than the level of slogans is only a crowd. But a crowd that understands the reasons for its discontent and knows the remedies is a vital community, and it will have to be reckoned with.”
Wendell Berry
Gold and silver gave up a little of their rather impressive gains for the year today.
I heard this was the strongest yearly start for gold since the 1970’s.
There was little to no precious metals action in The Bucket Shop and its environs yesterday.
Watching the crestfallen faces of the MSNBC media muppets last night when Sanders stunned Hillary in Michigan was priceless. Almost as good as watching Debbie Wasserman Schultz trying to silence Sanders supporters. It reminded me of the fraternity board hearing in Animal House.
Most traders are watching what the European Central Bank, aka the Sons of Anarchy, Brussels Originals, will deliver in the way of stimulus tomorrow, most likely in the form of additionally negative interest rates, and how much.

This post was published at Jesses Crossroads Cafe on 09 MARCH 2016.

Kiwi Plunges As New Zealand Announces “Surprise” Rate Cut, Warns On China

Jon

They don’t call it a “currency war” for nothing.
Moments ago, the RBNZ cut rates by 25 bps to 2.25% in the latest shot across the bow in what is now a years-long race to the bottom.
Here are the bullets:
NEW ZEALAND CUTS KEY INTEREST RATE TO 2.25% FROM 2.50% RBNZ SAYS FURTHER EXCHANGE RATE DEPRECIATION IS APPROPRIATE RBNZ SEES INFLATION REACHING 2% IN 1Q 2018 VS 4Q 2017 RBNZ SEES 4Q 2016 ANNUAL INFLATION AT 1.1% VS 1.6% Cue the kiwi plunge:

This post was published at Zero Hedge on 03/09/2016.

MAR 9/THE BUMS ORCHESTRATE A GOLD AND SILVER RAID/CIRCUIT BREAKERS CALLED INTO EFFECT IN JAPAN AFTER YIELD ROSE FROM NEGATIVE .10 TO -.015/ NEW ZEALAND ENTERS THE CURRENCY WARS BY CUTTING ITS INT…

Jon

Gold: $1,256.60 down $5.50 (comex closing time)
Silver 15.36 down 2 cents
In the access market 5:15 pm
Gold $1253.00
silver: 15.30
The open interest at the gold comex is extremely high at almost 500,000 contracts. We are now at multi year highs despite the lower price of gold. For comparison purposes, the last time we had OI this high was in 2013 with gold at $1700.00. The crooks will try anything to cause the spec longs to liquidate their positions. Normally the bankers flood the comex with massive non backed paper tripping many longs with stop losses. The crooks who have our longs as clients know what these stop loss levels are and thus it is easy for them to drive the price down tripping these losses which in turn causes a greater downfall in price. Once the price is lower they cover their shorts and make a profit. Rinse and repeat. This has been going on for the past 10 years. What he need is for the physical market to overtake the paper gold market leaving the bankers with a commercial failure to deliver..
At the gold comex today, we had a poor delivery day, registering 0 notices for nil ounces and for silver we had 7 notices for 35,000 oz for the active March delivery month.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 212.04 tonnes for a loss of 91 tonnes over that period.
In silver, the open interest rose by 1507 contracts to 169,875. In ounces, the OI is still represented by .849 billion oz or 122% of annual global silver production (ex Russia ex China). Generally as we go into an active delivery month the liquidation is much bigger.
In silver we had 7 notices served upon for 35,000 oz.
In gold, the total comex gold OI rose by 938 contracts to 499,110 contracts despite the fact that the price of gold was down $6.70 with yesterday’s trading.(at comex closing). We are now at multiyear highs in OI. Actually the last time OI was at 500,000 contracts gold was trading around 1700.00 USA in 2013.
We had a rather large change in gold inventory at the GLD, a withdrawal of 2.38 tonnes of gold from the GLD/ thus the inventory rests tonight at 790.74 tonnes. If the GLD folks received any gold in the past few months, this gold would be headed over to Shanghai. 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 again had a major change in inventory/this time another huge deposit of 2.856 million oz and thus the Inventory rests at 322.632 million oz
First, here is an outline of what will be discussed tonight:

This post was published at Harvey Organ Blog on March 9, 2016.

What Matters Most?

Jon

Today we engage in a simple thought experiment: what 3 pieces of information would you need to confidently call the 2016 end-of-year level on the S&P 500? A brief survey of senior Convergex traders yielded this list: year-end worldwide central bank rates, Chinese GDP growth in 2016, actual 2016 US corporate earnings, the winner of the U. S. presidential race, and the pace of increases in the Fed Funds rate for the year.
When we posed the questions to analyst friends, they added: 2016 U. S. wage growth, 2017 consensus corporate earnings (in December 2016) and any information about a significant geopolitical event. Everyone agreed oil prices were on the list.
All this pushes two other questions to the fore. First, what’s on your list, and why? And second, what’s not on any of these lists? Because maybe that’s what will actually move markets…
The 1920s were a period of immense technological innovation, but that didn’t stop many prominent thinkers of the age from believing that the living could speak to the dead. Sir Arthur Conan Doyle, creator of the deeply rational Sherlock Holmes, wrote more than a dozen books on the topic. French Nobel Prize winning physiologist (awarded 1913) Charles Richet was the original ‘Ghostbuster’, coining the term ‘ectoplasm’ decades before Bill Murray ever got slimed. Even Thomas Edison thought about building a telephone to reach into the next world.

This post was published at Zero Hedge on 03/09/2016.

WMT Stock Price Just Received This Major Bearish Warning for 2016

Jon

The WMT stock price is down 18.11% in the last year, and we just found another major bearish warning for the stock.
You see, Wal-Mart Stores Inc. (NYSE: WMT) is falling behind rivals in the explosive e-commerce marketplace despite heavy spending.
Over the past two years, Wal-Mart’s e-commerce growth has steadily dropped. The company posted e-commerce growth of just 8% in its most recent quarter, down from 22% in last year’s fourth quarter and 30% two years ago.
The decline came even as Wal-Mart began aggressive spending to improve customers’ online shopping experience. The company has also been spending on developing ways to integrate online and in-store shopping for a seamless shopping experience. Its mobile app has been another key area of focus.

This post was published at Wall Street Examiner by Diane Alter ‘ March 9, 2016.

The U.S. Economy Is Headed Into A Deep Recession

Jon

It has not been a seven-year ‘bull market’ in stocks or housing prices, it has been the biggest bull market in money printing and credit creation in history.
While the media clowns and Wall Street shills celebrate the seven year ‘bull market’ in stocks, the fundamentals underlying the U. S. economic and financial system continue to deteriorate – quickly.
The most recent economic activity ‘end zone’ dance was over February’s domestic auto sales, which seem to be occurring at an all-time high when viewed on an ‘annualized rate’ basis. Of course, no one wanted to discuss the fact that Ford’s sales would have been flat or negative if their huge jump in rental fleet deliveries were stripped out of their numbers. GM’s sales were down slightly, and dealer inventories continue to balloon.

This post was published at Investment Research Dynamics on March 9, 2016.

Forget “Ghost Cities”, China Turns To “Ghost Screenings” To Boost Box Office

Jon

As the world came to depend increasingly on China for growth in the wake of the financial crisis, scrutiny around the economic numbers emanating from Beijing began to build.
Despite the contention from the NBS that Chinese data ‘reflect the real situation,’ virtually no one trusts the numbers and as we’ve documented extensively, it’s not even clear, when it comes to GDP at least, that the misleading numbers are all China’s fault. Estimating the deflator in an economy of that size in the absence of robust statistical systems is a virtual impossibility, which, in layman’s terms, means that when input prices are tumbling, GDP is overstated.
In any event, handicapping Chinese economic data has become something of a sport for analysts, pundits, and commentators even as everyone, on paper anyway, pretends to believe the ‘official’ numbers.
As WSJ reports, the blurry line between what’s real and what isn’t in China isn’t confined to the macro level. Even microeconomic data may be wholly fabricated or, to use an apt metaphor, a ‘Hollywood’ illusion.
Box office ticket sales in China topped $1 billion last month, easily besting North American sales which came in more than 25% lower. But how much of the total is ‘real’ is up for debate. For instance, ‘Ip Man 3′, starring Mike Tyson as a corrupt real estate developer somehow raked in $72 million in its opening weekend. That reportedly prompted Chinese regulators to ‘investigate whether the distributor tried to boost the movie’s box office by buying tickets for ‘ghost screenings,” WSJ writes.

This post was published at Zero Hedge on 03/09/2016.