This is What’s in Store for the Real Economy

There is no escape.
The Census Bureau announced today that total business sales in January did what they’d been doing relentlessly for the past one-and-a-half years: they fell! This time by 1.1% from a year ago, to $1.296 trillion, and by 5% from their peak in July 2014.
They’re now back where they’d been in January 2013. Sales are adjusted for seasonal and trading-day differences, but not for price changes. And since January 2013, the consumer price index rose 2.8%! This is why the US economy has looked so crummy.
That’s bad enough. But it gets much worse.
Total business sales are composed of three categories: sales by merchant wholesalers (33% of total), by manufacturers (36% of total), and by retailers (30% of total).
Sales by merchant wholesalers took the biggest hit: they plunged 6.4% from January a year ago, to $433.1 billion.

This post was published at Wolf Street by Wolf Richter ‘ March 15, 2016.

“Cheerleader” Fed Loses Credibility: Big Funds No Longer Trust The ‘Dot Plot’

For the past four years, bond traders have quickly turned their focus after Federal Reserve meetings to something called the dot plot (seen as a key insight into their collective thinking on rates). The problem is, as Bloomberg exposes, the forecasts weren’t very good… and fund managers are increasingly ignoring the dot plot for investment decisions, as one strategist exclaimed “we don’t put a lot of credibility in the dots, [officials] have usually been cheerleaders for the economy, and they get turning points in the economy wrong.”
The waning influence of the Fed’s projections is showing up in derivatives markets. After the December revision to the projected path of interest rates, traders responded much less than they did earlier in the year in the market for derivatives known as overnight-indexed swaps.

This post was published at Zero Hedge on 03/15/2016.

The SEC Should Suspend VRX Trading: The Company Smells Like Enron

Valeant Pharmaceuticals (VRX) stock has plunged 86% since August 6. The latest plunge occurred today, with the stock losing 51% from its close of $78 yesterday.
The initial triggers were concerns over the Valeant’s drug-pricing policies and questions surrounding its methodology for booking revenues. However, with just a casual ‘look under the hood’ at VRX’s SEC-filed financials, there is likely a great deal of fraud lurking beneath what’s already been questioned. In fact, this is starting to smell a lot like Enron or Bear Stearns. The only component missing from this story is a CNBC rant from Cramer issuing a table-pounding buy on VRX stock. That may yet occur.
To begin with, the Company is carrying $30.2 billion in long term debt against just $9 billion of tangible assets. $39 billion of VRX’s assets is in the form of goodwill and intangibles. VRX’s self-assessed book value is $6.4 billion. But VRX’s tangible book value is negative $32.6 billion.

This post was published at Investment Research Dynamics on March 15, 2016.

These Are The Energy Bonds Most Likely To Default In The Next Six Months

Over the past several weeks, courtesy of the jump in oil prices from 13 years lows, the narrowly reopened window granting some companies the chance to sell equity and in some cases debt (and promptly use the proceeds to repay their secured lenders), and the various last-ditch extensions afforded to near-default oil and gas companies, the dire reality of the default wave about to be unleashed in the shale patch has been swept under the rug, if only briefly.
That is about to change.
In a recent interview with Bloomberg, Fitch’s Eric Rosenthal paints a very disturbing picture: the rating agency senior director predicts that about $40 billion worth of energy debt will likely default in 2016.
Here are some of the highlights behind his forecast of a 6% default rate, the highest non-recessionary rate since 2000.

This post was published at Zero Hedge on 03/15/2016.

Soros Floods Democrats With Millions, Warns Trump Of “Consequences”

Following MoveOn.org’s “success” last Friday, George Soros is back on the lips of an increasing number of Americans as Bloomberg reports, the liberal billionaire, whose effort to unseat President George W. Bush in 2004 shattered political spending records, is returning to big-ticket activism after an 11-year hiatus. Soros has spent or committed more than $13 million to support Hillary Clinton and other Democrats this election cycle and has warned Donald Trump (and Ted Cruz) of “consequences” for their words and actions. Welcome to the Oligarchy.


This post was published at Zero Hedge on 03/15/2016.

My Kuroda: Bank of Japan Lays Ground for Further Stimulus (Declining House Prices Like Puerto Rico)

Here we go again. MORE Central Bank intervention. But this time, Bank of Japan Governor Haruhiko Kuroda isn’t waiting to see if negative interest rate policies will work, he wants MORE!(Bloomberg) – The Bank of Japan has left itself room to maneuver in coming months, indicating that more asset purchases and adjustments to its negative rate remain on the table after holding fire on further stimulus Tuesday.
With inflation far from the BOJ’s 2 percent inflation goal and growth stalling, most analysts forecast another expansion by the middle of this year. Governor Haruhiko Kuroda said he doesn’t have to wait to see the full impact of the negative rate before his next move.
The stakes are rising for Kuroda, with household and corporate sentiment waning and investors questioning whether central bankers are reaching the limits with monetary policy. The language in the BOJ’s statement indicated a downgrade in its assessment of the economy, adding to expectations for a move between April and July.
‘The BOJ is laying the groundwork for a full dose of monetary easing,’ said Atsushi Takeda, an economist at Itochu Corp. ‘The BOJ probably wanted to de-emphasize the negative rate policy for now because of its poor reception among households and lawmakers, but I think the central bank knows it has to go deeper and head off talk it’s reaching the limit.’

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ March 15, 2016.

JPMorgan Corners LME Aluminum Market, Leading To Strange “Price Anomalies”

While not nearly as exciting as JPM cornering and manipulating the gold or silver markets, over the past few years Jamie Dimon’s bank appears to have cornered a very prominent commodity traded on the London Metals Exchange, aluminum, resulting in price “anomalies” which as Reuters politely puts it “mean prices do not always reflect fundamentals” and which as we put it, reflect outright manipulation, however because regulators are captured have so far completely slipped through the cracks.
According to Reuters, large amounts of aluminum traded on the London Metal Exchange over the past couple of years “have at times been in the hands of a dominant position holder.” Citing sources at commodity trading houses, warehouses, producers, brokers and banks “one such position holder is U. S. bank JPMorgan.”
Reuters adds that “other companies have done so in past” which perhaps is meant to mitigate JPM’s culpability, but merely confirms that if it isn’t one bank manipulating commodity markets, it’s another – the famous example of Sumitomo’s Yasuo “Mr. Copper” Hamanaka comes to mind.

This post was published at Zero Hedge on 03/15/2016.

We Are Being Killed On Trade – Rapidly Declining Exports Signal A Death Blow For The U.S. Economy

Exports fell precipitously during the last two recessions, and now it is happening again. So how in the world can anyone make the claim that the U. S. economy is in good shape? On my website I have been repeatedly pointing out the parallels between the last two major economic downturns and the current crisis, and I am going to discuss another one today. Since peaking in late 2014, U. S. exports have been steadily declining, and this is something that we never see outside of a major recession. On the chart that I have shared below, the shaded gray bars represent the last two recessions, and you can see that exports of goods and services plunged dramatically in both instances…

And this chart does not even show the latest numbers that we have. During the month of January, U. S. exports fell to a five and a half year low…

This post was published at The Economic Collapse Blog on March 15th, 2016.

Global Warming And Food Prices

Given that we all have to eat and that there are some concerning environmental developments out there, here’s an interesting question: has global warming led to higher or lower food prices (thus far)?
As always the answer depends on how this affects the balance between supply and demand. Assuming that demand grows steadily each year broadly in line with population (income effects aside), the major price swings should thus come from the supply side.
As we all know growing food is sensitive to variations in the climate, and since discussing future global warming scenarios usually involves some type of natural catastrophe, we speculate that most people would expect that food prices increase as the world gets warmer and vice-versa.
We decided to test this hypothesis using a very narrow set of (oversimplifying) assumptions.

This post was published at Zero Hedge on 03/15/2016.

How a Federal Reserve Interest Rate Hike Hands Over Billions to Big Banks

In another example of how Wall Street wins at America’s expense – again – Big Banks around the world are secretly rooting for another U. S. FederalReserve interest rate hike this week.
That’s because everyFederal Reserve interest rate hikecauses an immediate spike in their income.
The Big Banks already are raking in millions every year courtesy of the Fed – interest paid on the billions in reserves they have parked at the central bank. Even if the Federal Reserve Open Market Committee doesn’t raise rates at its Tuesday-Wednesday FOMC meeting, most market observers expect at least one or two rate hikes before the end of the year. That means billions more in payouts to Big Banks.
Last year the U. S. Federal Reserve paid out $6.9 billion to the Big Banks, including more than $100 million to Goldman Sachs Group Inc. (NYSE:GS) and more than $900 million to JPMorgan Chase & Co. (NYSE: JPM).
Even more appalling is that nearly half of that $6.9 billion was paid toforeign banks operating in the United States. That would include Deutsche Bank AG (NYSE: DB), UBS Group AG (NYSE ADR: UBS), and Mizuho Financial Group Inc. (NYSE ADR: MFG).
‘Please, please explain,’ Rep. Maxine Waters (D-CA) begged of Fed Chairwoman Janet Yellen at a House Financial Services Committee hearing last month.
This insanity started in 2008…

This post was published at Wall Street Examiner by David Zeiler ‘ March 15, 2016.

The Central Bankers Manipulate The Economy As It Contracts Into A Collapse – Episode 919a

The following video was published by X22Report on Mar 15, 2016
As more retail stores close the retail industry has been declining. Subprime auto delinquencies are on the rise and are at the highest since 2009. Business to inventory is signalling a major recession. Empire manufacturing surges out of know where as employment contracts. Baltic Dry Index slows and is holding around 396. BofA says clients are selling stocks and getting out of the market. ECB is manipulated the economy to help the FED and Wall street pump up the markets.

15/3/16: Times Higher Education Europe Rankings: Not Too Kind for Ireland

Times Higher education 2016 rankings for European Universities, published recently here are an interesting read.
We have:
TCD at 78th place, below TU Dresden, U of Liverpool, and a bunch of other not too ‘premier league’ schools. Average showing, given it is 78th across Europe. UCD in 88th place. Below Eidhoven UofTech, U of Konstanz, U of Barcelona et al. Good news, it is close to TCD, creating something of a cluster. Bad news is: no Irish Uni in top50 for Europe. Third highest ranked school in Ireland is apparently NUI Galway (edging out UC Cork) which is ranked somewhere between 131st and 140th places. Not in top100, thus, despite the fact these rankings are for Europe alone.

This post was published at True Economics on March 15, 2016.

MARCH 15/GOLD AND SILVER WHACKED AGAIN AS OPEN INTEREST DID NOT DECLINE AS MUCH AS BANKERS DESIRED/CHINA SIGNALS THAT IT MAY INTRODUCE A TAX ON FOREIGN EXCHANGE TRANSACTIONS AS THEY TRY AND REPEL…

Gold: $1,230.40 down $14.00 (comex closing time)
Silver 15.26 down 26 cents
In the access market 5:15 pm
Gold $1232.50
silver: 15.27
At the gold comex today, we had a poor delivery day, registering 1 notice for 100 ounces and for silver we had 8 notices for 40,000 oz for the active March delivery month.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 211.83 tonnes for a loss of 91 tonnes over that period.
In silver, the open interest fell by only 892 contracts down to 168,235 with silver down by 9 cents yesterday. In ounces, the OI is still represented by .841 billion oz or 120% of annual global silver production (ex Russia ex China).
In silver we had 40 notices served upon for 200,000 oz.
In gold, the total comex gold OI fell by 6,653 contracts to 499,710 contracts as the price of gold was DOWN $14.30 with yesterday’s trading.(at comex closing). With the OI in gold remaining quite high, it is no wonder that the bankers are relentless in their attack on gold and silver.
We had no changes in gold inventory at the GLD,/ thus the inventory rests tonight at 790.14 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 changes in inventory/ and thus the Inventory rests at 325.868 million oz
First, here is an outline of what will be discussed tonight:

This post was published at Harvey Organ Blog on March 15, 2016.

Millennials Flee “Three-Alarm” Blaze In Vancouver’s “Insane” Housing Market

Way back in June of last year, we showed you 13 cities where millennials have no hope of affording a home. They included Seattle, Boston, New York, Washington DC, San Jose, San Diego, San Francisco, and Los Angeles.
‘The bad news is that the areas that often most appeal to young adults are also the ones where homeownership is the most out of reach,’ Bloomberg remarked at the time before quoting one 28-year-old with a graduate degree as saying the following: ‘I’m making a good salary and I’m doing all these things that I’m supposed to be doing. But you’re just not able to save enough to get to that number. Housing is so inflated.’
Yes, ‘housing is so inflated’ in certain areas not the least of which is Vancouver where prices have gone full-retard. As we wrote early last month, ‘residential property sales in Greater Vancouver rose 31.7% in January, 46% above the 10-year sales average for the first month of the year and the second highest January ever according to the Greater Vancouver Real Estate Board.’

This post was published at Zero Hedge on 03/15/2016.

US recession data shows it’s a very short road to capital controls

‘Prosperity is like a Jenga tower. Take one piece out and the whole thing can fall.’
That’s a direct quote from John Williams, the President of the San Francisco Federal Reserve Bank in a speech he gave a few weeks ago.
He could have just as easily been talking about propaganda. The Fed, the White House, Wall Street, the media have a vested interest in peddling a certain narrative about the economy.
The narrative goes something like this: ‘Everything’s awesome. Stop asking questions’.
But if you look at their own data, the numbers tell a different story.
My team and I were recently studying US manufacturing indices, something that has traditionally been a strong indicator of recession.

This post was published at Sovereign Man on March 15, 2016.

Investors Pull Most Money From Oil Funds In Over 2 Years As Bears Return

Amid the last two weeks of exuberant short squeeze in crude oil (and anything energy related), investors pulled over $400 million from USO (the largest oil ETF). This week’s $348 million outflow is just shy of the record $354 million outflow in Dec 2013. As these outflows hit so bullish positions in oil ETFs have been dropping and bearish positions building once again.

This post was published at Zero Hedge on 03/15/2016.