Day: March 14, 2016

Today’s Tracking…

Jon

Ohio: Kascich and Trump both 38%, Cruz 16%. Watch the SE counties; they’re rural and Appalachian, and Trump swept them in Kentucky just over the border. If the turnout is good there the odds go way up that he wins, and being smaller counties they’ll report early.
Florida: Trump 46% (!), Rubio 22% (!!!), Cruz 14%. As I have repeatedly pointed out Rubio is smoked up here in the Panhandle, and without the non-urban areas west of Tallahassee voting for you as a Republican you cannot win this state. I’ve seen a decent number of Cruz signs around these parts, but zero Rubio ones, and nobody I know is voting for him here. He’s done.
Note that Cruz is third in both of the most-recent polls in these two states. Anything other than first is worth zero in these two contests.
North Carolina isn’t looking good for Cruz either: 45% Trump (!), 33% Cruz, 11% Kascich and dead last 7% for Rubio. Both Cruz and Trump gained equally from a collapse in Rubio’s numbers; Cruz did not get his votes by majority in any way.

This post was published at Market-Ticker on 2016-03-14.

Options Signal Short-Term Complacency, Medium-Term Terror

Jon

With one central bank meeting down, but two to go, VIX and VSTOXX (Europe’s VIX equivalent) have plunged to 2016 lows discounting any ‘events’ upsetting the complacency anytime soon. However, as Goldman’s options strategists note, the medium-term skew (3M to 1Y) are at or near record highs as traders prepare for turbulence amid ‘Brexit’, US elections, and of course the inevitable ‘Fold or No Fold’ Fed decisions later in the year.
Last week, the ECB delivered a predominantly constructive policy package. Over the next three days, the BoJ and the Fed will convene too. We expect the Fed to keep the rate unchanged, but also to signal that second rate hike is likely before too long.
VIX: From ‘Red Zone’ to ‘Dead Zone’
Despite some post-ECB market jitters, risky assets enjoyed a healthy rally and volatility fell sharply on both sides of the Atlantic. The VIX is at ytd lows, suggesting that the equity market is expecting no imminent rate hikes, and is pricing in the recent uptick in U. S. economic data.

This post was published at Zero Hedge on 03/14/2016.

Four signs the dollar hit its peak in January

Jon

Maybe it’s greed. Or fear. Or blatant irrationality. But there’s something inside human nature that makes us think unsustainable situations can last forever.
One of those has been the meteoric rise of the US dollar, particularly over the last year. The dollar became king once again in 2015, towering over oil prices, gold prices, and just about every other currency on the planet.
The South African rand, the Colombian peso, the Canadian dollar, the Australian dollar, the Singapore dollar, the euro, the pound. Each of these has reached a multi-year, multi-decade, or even all-time low against the US dollar within the last several months.
This, clearly, is not sustainable.
As I’ve written several times in this letter, the dollar has become the most overvalued currency in the world.
I gave an example last summer of a round-the-world airline ticket, which when priced in US dollars cost about $14,164.60.
The exact same ticket, when priced in South African rand was 81,395 rand, which back then was just barely over $6,000.
It’s such an amazing difference – the exact same ticket costs over twice as much when priced in US dollars… an obvious sign that the dollar is overvalued.
I also noticed this as I traveled where countries like Australia, Canada, Singapore, and the UK were suddenly ‘cheap’.
None of this made any sense.

This post was published at Sovereign Man on March 14, 2016.

Here’s How The Establishment Will Steal The GOP Nomination From Trump

Jon

The political establishment in America is terrified.
Donald Trump gets closer to securing the GOP nomination with each passing month and his rivals on both sides of the aisle are in disbelief.
Worse – or ‘better’ if you enjoy entertainment – Trump has seemingly given up any attempt to be anything other than… well… than Donald Trump. He recently offered to pay the legal fees of a supporter who punched a protester, shouted almost maniacally about ‘Bernie guys’ at a recent rally, and frankly seems to have gone punchdrunk with his newfound political clout.
That’s not necessarily a criticism. Heaven knows it’s funny and obviously there’s something highly satisfying about watching the establishment squirm.
All the same, no one – not even Trump’s staunchest supporters – really know what to expect from a Trump presidency. And virtually no Washington veterans want to find out. In fact, as we reported last week, a group of GOP and tech execs recently made stopping Trump the topic of the American Enterprise Institute’s annual World Forum, a secretive affair held on Sea Island, Georgia.
And although everyone now jokes about just how unstoppable the Trump ‘juggernaut’ has become, the establishment isn’t called ‘the establishment,’ for nothing. Trump may have proven remarkably adept at whipping certain sectors of the electorate into a veritable frenzy, but he himself will tell you that he’s no politician. In fact, he prides himself on being “outside the political fold,” so to speak.
He may know quite a few tricks in the boardroom, but he doesn’t know all of the tricks of the political trade, and as Bloomberg outlines below, he could still have the nomination ‘stolen’ from him, if the party pulls out all of the stops.
Below, find excerpts from ‘How To Steal A Nomination From Donald Trump’.

This post was published at Zero Hedge on 03/14/2016.

Trump-Endorser Marc Faber Warns “Central Banks Will Create Global Socialism”

Jon

Central banks around the globe are pursuing strategies that will put all financial assets into government hands, Marc Faber explains to CNBC this morning, taking the opportunity to endorse Donald Trump’s bid for the U. S. presidency. As CNBC reports, Faber expects that asset buying by global central banks will only increase, even though he believes those policies aren’t working to stimulate the economy.

This post was published at Zero Hedge on 03/14/2016.

Jim Rogers Calls Gaeseong Park Shutdown a Mistake

Jon

SINGAPORE – Legendary investor Jim Rogers called for South Korea to put a greater focus on taking measures to help North Korea open and reform its economy rather than holding war games every year.
Rogers said that unification will become a breakthrough for Korea to overcome various economic challenges.
‘All you have to do is to take down the demilitarized zone. Stop spending money on defense. You had those war games every year for 50 years,’ said Rogers, chairman of Rogers Holdings, in an exclusive interview with The Korea Times in his residence in Singapore.
He said Seoul needs to take steps to expedite the opening of North Korea, instead of further isolating the country.
Rogers expressed skepticism about the effect of President Park Geun-hye’s decision to shut down the Gaesong Industrial Complex.

This post was published at Lew Rockwell on March 14, 2016.

Tax Refund Tumble Tells Tale Of Tumultuous Recovery

Jon

As we detailed previously, the growth of federal income and employment tax withholdings, the broadest and most timely read on the health of the job market “has been sinking at an alarming rate.”What is worse, as ConvergEx’s Nick Colas notes, IRS and Treasury data show refunds tracking 2-3% below last year’s levels – not good news for companies that focus on the low-end consumer, the cohort that tends to spend (rather than save) their refunds.
The Daily Treasury Statement is essentially America’s checkbook, and offers a read on two important issues: the pace of tax refunds and growth in wages.
We’re right in the middle of the January – May refund season, when the U. S. Treasury pays $270 billion in lump sum payments to 100 million American households. Those remittances, which this year average $3,164, are an underappreciated fillip to Q1 consumer spending and household debt reduction. Through the end of February, both IRS and Treasury data show refunds tracking 2-3% below last year’s levels – not good news for companies that focus on the low-end consumer, the cohort that tends to spend (rather than save) their refunds.
On the wage growth side, it’s the proverbial half empty/full glass. Income tax/withholding payments to Treasury are up an average 3.6% over the last three months (half full), but thatrun rate is noticeably lower than the 6.0% growth at the same time last year (half empty).
Death and taxes may be inevitable, but they also seem to inspire great art. Pondering one’s own mortality inspires the creative mind to produce something that outlasts the mortal coil, of course. And, oddly enough, the need to ‘Render unto Caesar’ his provides a similar impetus.

This post was published at Zero Hedge on 03/14/2016.

Low Cost Vault Storage: A Solution for International Clients

Jon

This article was written by Dickson Buchanan, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.
For international customers who want to invest in physical gold and silver, taking delivery of metals can be an irksome situation.
The cost of shipping isn’t the problem. Shipping and insuring gold internationally is actually quite affordable, and SchiffGold offers low international shipping rates to over 60 different countries.
However, the real problems occur at the border of the receiving country. Despite international customs regulations which allow .9999 pure gold to remain free from value added taxes or duties, many customs officials will charge a fee to have the metals released. Sometimes this fee is as large as 20% of the total value of the package. This is particularly a problem in Central and South America where corruption at the border is rampant.
This is unfortunate as it keeps a lot of investors from being able to comfortably invest in internationally recognizable gold and silver bullion products. This is especially true if there is not a robust local market for such investments, which is the case for countries in Central and South America and in many countries in Europe.
However, all is not lost. There is hope for international clients who run into these problems. The solution is 100% allocated and segregated vault storagewhere the client has complete access and control over his or her metals every step of the way. This is exactly the kind of storage that we offer here at SchiffGold. With vaulted storage, clients can be the full owner of precious metals without having to worry about the costly risk of getting metals through customs agencies. The vaults we work with are located in select regions of the globe where there is mutual respect for property rights and rule of law is still adhered to. The jurisdictions offer a stable environment where political and counterparty risk is minimized. Currently this includes several locations in the US, Canada, Switzerland, and Singapore.

This post was published at Schiffgold on MARCH 14, 2016.

Watch for the Change in Narrative

Jon

Not that long ago, one of the main storylines in the market narrative was that the US economy was headed for a recession. With a string of some better than expected economic data of late, that storyline has been re-written and now the narrative suggests the US economy is not headed for a recession.
Surging oil prices and a surging stock market have been huge factors contributing to the shift in the narrative and to the dramatic turn in market sentiment that has resulted in a 10.1% gain for the S&P 500 over the last month.
With the way things have been going, though, it probably won’t be long now before the narrative shifts again, only the next shift is apt to have that concerning tone to it again.
Why? Because many of the factors that were touted as ultimate sources of support for the economy and the market during the downturn earlier this year are morphing into ultimate sources of resistance for the economy and the market in the wake of the recent upturn.
Oil
How long have we been hearing that falling oil prices and falling gas prices are ultimately a good thing? They are a cost savings for many companies using oil and its derivatives for production inputs and a de facto tax cut for consumers.
Well, as we have discussed in past posts, profit margins have been coming down for many companies despite the lower oil prices and consumers have been slow to step up their discretionary spending, opting instead to pay down debt and/or to save their gas price savings.

This post was published at FinancialSense on 03/14/2016.

The Shoe Keeps Dropping: CLOs With Negative Equity Soar By 30% In February To Record 453

Jon

One month ago, we noticed the latest “shoe to drop” in the global credit rout, when as a result of soaring downgrades to energy companies’ credit ratings, the Collateralized Loan Obligations (CLO) market went into a state of frozen animation, leading to a standstill in new CLO issuance.
As we previously wrote citing S&P, the credit quality of CLO assets is deteriorating, the result of 45 energy borrower downgrades in February. S&P said that the credit ratings of around 1.4% of assets held by US CLOs have been downgraded or placed on credit watch with negative implications this year. Worse, the sudden repricing means that the negative total returns of US CLO BBs and single-Bs in January have already been more severe than those realized in the entire year of 2015.
As Chris Flanagan, head of US mortgage and structured finance research at Bank of America Merrill Lynch in New York, said “people are definitely trying to get their heads around what [increased CCC holdings] says about the credit cycle. The market has changed dramatically in just six weeks.’
We noted that the biggest implication from the ongoing rout to the CLO 2.0 product is that the lower issuance of CLOs, the main buyers of leveraged loans, will make it harder for companies to issue new debt in the already-challenged US$870bn US leveraged loan market which provides junk loans to companies including retailer Dollar Tree and countless near-distress shale companies.
Indeed, we have already seen the flipside of this when as reported previously, the vast majority of “use of proceeds” from energy equity offerings has been to repay secured debt and energy revolvers.
As a way of keeping tabs on the not so quiet selling in the CLO space, we noted that as of the end of January, the median CLO 2.0 equity NAVs tumbled by 9 percentage points, or by 85%, and according to Morgan Stanley calculations, a whopping 348 US CLO 2.0 deals’ equity tranches had NAV below zero as shown in the chart below.

This post was published at Zero Hedge on 03/14/2016.

What the World’s Leading Energy Sector Insiders Fear Most

Jon

Last week, you saw what the annual Windsor gathering of energy executives, ministers, and ambassadors agreed on were the most important ‘shifts’ in the energy sector today.
But one topic got more attention during my briefing than any other.
And I wasn’t the only one talking about it, either. You see, there’s a crisis brewing…
It’s already started, right here in America’s oil fields. Soon, it’s going to spread to the rest of the world. And the fallout is not going to be pretty…
In fact, we might be looking at something similar to the credit crunch of 2008. That’s what has so many global energy insiders worried.
But don’t worry, because this time, you’ll be prepared.
In fact, you’ll even be able to play it for some gains…
The Days of Easy Energy Credit Are Over
There were a number of interesting discussions during our three days at Windsor Castle. One involved the currently accelerating energy debt crisis. In fact, it was one of the main points in my briefings and was reflected in the presentations of others.
The bottom line is simply this.
Regardless of where the crude oil price moves from here, there is little likelihood that any rise in the level will be large (or happen soon) enough to save most companies mired in a vicious cycle of ever more debt.

This post was published at Wall Street Examiner on March 14, 2016.

Was Chicago The First Skirmish In An Inevitable Civil War?

Jon

The Twitter-incited mob that shut down last week’s Donald Trump rally at the University of Illinois’ Chicago pavilion was the first skirmish in what is shaping up to be a civil war between a political Left that has lost its mind and a political Right that has lost its mind and its soul. The tensions between these two camps are so contorted and dishonest that even trying to unpack the issues puts the un-packer in jeopardy of being branded as one kind of thought-criminal or another.
The Left has lost its mind in a climax of zealotry over the new religion of social justice, with its sacred ‘victims’ (blacks, LBGTQs, etc), its sacred tenets (‘diversity,’ ‘inclusion’), and its endless charges of blasphemy (renamed ‘micro-aggressions’) against heretics (‘racists,’ ‘homophobes’) who object to absolutist thought policing. This was nicely described by Jonathan Haidt, social psychologist and Professor of Ethical Leadership at New York University in a recent podcast with author Sam Harris. (Skip to 1 hour 30 minutes in the long discussion.)
The religion got started on the campuses, where social science careerists ginned up an elaborate doctrine to justify the self-importance of their new departments in so-called race, gender, and privilege studies – the main point of which was to create new categories of sacred victims suffering spiritual torments (‘traumas’) that could never be healed. These crypto-religious ‘studies’ led to a multiplication of demons that had to be exorcized by an equal multiplication of diversity deans and committees aimed at punishing blasphemies – such as arguing against affirmative action (‘racist’), or wearing a Mexican sombrero at a tequila party (‘cultural appropriation’ ‘racist’), which happened recently at posh Bowdoin College.

This post was published at Zero Hedge on 03/14/2016.

Growing Market Deficit and Other Silver News

Jon

The Silver Institute has released its latest issue of Silver News. This edition spotlights a growing silver market deficit that is expected to widen further in 2016 due to increased demand and shrinking supply.
The silver market deficit (total supply less total demand) is expected to widen in 2016, drawing down on above-ground stocks. The larger deficit is expected to be driven by a contraction in supply.’
In what would represent the first reduction in global silver mine production since 2002, mining output is projected to fall by as much as 5% year-on-year in 2016. Scrap supply is also expected to weaken further in 2016. It has been on the decline for the last several years.

This post was published at Schiffgold on MARCH 14, 2016.

How To “Pre-Trade” FOMC Days

Jon

The biggest movers on FOMC days are the Dollar Index, Investment-grade credit, Homebuilders and Real Estate, according to Goldman Sachs’ options strategists.
We analyze the median 1-day moves on FOMC release days across broad based US equity indices, sectors, and country ETFs over the last year, and also back to January 2010, to rank the assets by their sensitivity to Fed’s announcements. To this end, we take absolute values of 1-day returns on the day of FOMC announcements, and scale them by average 1-day absolute returns over the preceding 3-month period in order to control for a prevailing level of market volatility. Next, we look for a median move within a period of interest – last year, or since January of 2010 – to identify assets that, on average, have moved the most (in either direction, due to the use of absolute returns), and thus are likely to be the assets that have been the most sensitive to Fed’s announcements over the period of interest(see Exhibit 7).
UUP, LQD move the most on FOMC days. Among broad-based US indices, the largest relative moves were registered by UUP (PowerShares DB US Dollar Index Bullish Fund) and LQD (IShares Iboxx Investment Grade Corporate Bond ETF), both over the last year and over the longer time period. In particular, the Dollar index’s median return over the last year was 70% higher than average (in absolute terms) following FOMC announcements.

This post was published at Zero Hedge on 03/14/2016.

Physical Gold Demand Strong In Emerging Markets and Limited Supply Leading To Higher Gold Prices

Jon

Consumers are lapping up physical gold at a time supply is declining, helping underpin a rally in gold prices.
Demand from emerging markets in particular is strong as currencies such as the Indonesian rupiah, the Malaysian ringgit and the Vietnamese dong has fallen sharply in the last 12 to 18 months against the U. S. dollar, prompting consumers in these markets to buy physical gold, which is seen as a haven in times of tumult according to CNBC.

This post was published at Gold Core on March 14, 2016.

SWOT Analysis: Gold’s Latest Rally Could Have Durability

Jon

Strengths
The best performing precious metal for the week was palladium with a gain of 3.48 percent. Both palladium and platinum surged early in the week on speculation that infrastructure spending in China would boost demand for the metals used in auto pollution control devices. Gold investors are on the longest buying spree in five years, reports Bloomberg, with holdings of the precious metal in exchange-traded funds expanding for 18 days in a row. BCA Research agrees that now is the time to buy gold stocks too, stating in a recent report that while gold has had several false starts in recent years, a number of factors suggest that the latest rally will have durability. On Monday Silver Standard Resources announced its agreement to buy outstanding common shares of Claude Resources, with the offer valuing Claude at C$337 million. According to Bloomberg, the price is about a 25 percent premium to the 20-day weighted average price of Silver Standard, and a 30 percent premium to Claude’s closing price on March 4. Weaknesses
While platinum did participate early in the week on hopes of China spending, it finished the week down 1.72 percent, predominately driven by a near 2 percent drop on Friday, making the metal the worst performing precious metal for the week. Price sensitivity is showing up in the gold market. China reportedly raised its central bank gold reserves by the smallest amount since July 2015, reports Bloomberg. In India, February inbound shipments of gold fell to around 40 tons from 54.9 tons a year earlier, according to a group familiar with provisional Finance Ministry data.

This post was published at GoldSeek on 14 March 2016.

Will Donald Trump End Up Like JFK?

Jon

Bumpy, Lumpy and Slumpy The inability of democratic assemblies to carry out what seems to be a clear mandate of the people will inevitably cause dissatisfaction with democratic institutions. Parliaments come to be regarded as ineffective ‘talking shops,’ unable or incompetent to carry out the tasks for which they have been chosen. The conviction grows that if efficient planning is to be done, the direction must be ‘taken out of politics’ and placed in the hands of experts – permanent officials or independent autonomous bodies.
– Friedrich Hayek
AIKEN, South Carolina – Last night, we sat on the porch of the old Willcox Hotel. The sky was clear. The temperature was perfect. The sun sank in the West… just as it should. But today, we’re leaving town. Saying goodbye to Aiken. Probably not a moment too soon. We’ve heard the local sheriff has collected a posse of architects and is looking for us…

This post was published at Acting-Man on March 14, 2016.

Suing the FED for FRAUD – Is it Time?

Jon

Why this post?
From time to time it comes up that someone thinks that the FED has debased the currency, which is fraud and theft, and therefore thinks it is a good idea to lawyer-up and sue the FED or its mouthpieces such as Ben Bernanke, or Ole’ Yellen. The legal theories of recovery stretch from the mundane (fraud/theft) to the extremely creative (Qui Tam). So, what’s the problem? They CAN be sued, right? Well, yes, technically, they CAN be sued. But ultimately, the lawsuits will be dismissed upon motion, which motion to dismiss will be granted, and whoever decided to sue will be stuck paying the costs of the ill-fated adventure into the hallowed marble edifices of the regime, known more commonly as United States Federal Court.
Any fraud or theft lawsuit against the FED have, and will, all share a common element: they ALL have zero chance of recovery, for many reasons, philosophically, practically, and more importantly, factually and legally. The only exception I am aware of is for a Freedom of Information Act lawsuit, which can, and has been successfully done. See here: But, this is not a post about getting documents under a FOIA request from the FED.
This is a post about the propriety, or really, the absurdity, of suing the FED for harm that they ostensibly cause from their operations itself.
An attempt to sue the FED, or Bernanke, or Yellen, or any of the FED Governors, will be met with swift opposition, an order granting the dismissal motion, then certain consequences against the attorney who foolishly tries to embark on such a lawsuit (Rule 11 Sanctions, State Bar ethics complaint, etc.)
So, thinking about suing the FED? Is it a good idea?
The short answer is NO, not now, not ever.
Instead, do something productive. Focus on accumulating tangible resources and assets, shed liabilities and debts, prepare and help others.
There is a reason why attorneys are not filing these cases, at least here in the USA (one brave Chinese attorney is pioneering a case in China. I’ll take long odds against him that the case goes nowhere, but I won’t go so far as to say they execute the poor lawyer for having the temerity to sue! See here: )
The short answer to the question why the FED cannot be successfully sued is simple. And, it is unlikely to change anytime soon, so move on to more productive things to think about.
The FED is an ‘instrumentality’ of the Federal Government. It enjoys sovereign immunity. It, and its people, like Bernanke and Yellen are represented by the deepest pocket attorneys on the planet, the US Justice Department. U. S. Department of Justice represents the Federal Reserve Board of Governors in civil litigation: see, e.g., TCF National Bank v. Bernanke, 643 F.3d 1158 (8th Cir. 2011); McKinley v. Board of Governors of the Federal Reserve System, 647 F.3d 331 (D. C. Cir. 2011); Fox News Network, LLC v. Board of Governors of the Federal Reserve System, 601 F.3d 158 (2d Cir. 2010). They will certainly oppose any lawsuit, swiftly, and the Federal Judge will inevitably grant the motion to dismiss, ending the foolish lark. Don’t do it.

This post was published at TF Metals Report on March 11, 2016.