Freight Rail Traffic Plunges: Haunting Pictures of Transportation Recession

292 Union Pacific engines idled in Arizona Desert
Total US rail traffic in April plunged 11.8% from a year ago, the Association of American Railroads reported today. Carloads of bulk commodities such as coal, oil, grains, and chemicals plummeted 16.1% to 944,339 units.
The coal industry is in a horrible condition and cannot compete with US natural gas at current prices. Coal-fired power plants are being retired. Demand for steam coal is plunging. Major US coal miners – even the largest one – are now bankrupt. So in April, carloads of coal plummeted 40% from the already beaten-down levels a year ago. The AAR report:
Rail coal traffic continues to suffer due to low natural gas prices and high coal stockpiles at power plants. Coal accounted for just 26% of non-intermodal rail traffic for US railroads in April 2016, down from 36% in April 2015 and 45% as recently as late 2011.
Only five of the 20 commodity categories saw gains. Of the decliners, coal was the biggest. But petroleum products also plunged 25%, and grain mill products dropped 7%. Even without coal, carloads were down 3% year-over-year.

This post was published at Wolf Street by Don Quijones ‘ May 4, 2016.

Odds Are Stacked Against Equity Investors

While there is no doubt that patience is a virtue for investors, exercising prudence is equally important. In our prior article ‘Limiting Losses’, we examined how taking prudent measures, at certain times, can enhance your ability to create wealth over the long-term for your clients. Despite basic math and historical evidence proving its usefulness, investors typically ignore prudence, especially when it is required most. The siren’s song of a rallying market inevitably proves too compelling for many investors.
On the heels of the first quarter’s GDP release we share our concern that the probability of a recession continues rising while stock prices remain at historically high valuations. Now may be a good time to heed history’s warnings. The focus of this article rests on one simple fact- recessions are not good for stock prices.

This post was published at Zero Hedge on 05/04/2016.

Citi Asks: “Are Investors Beginning To Price In QE4?”

While many investors and analysts are asking when the Federal Reserve will decide to hike rates again, Citi’s Global Head of FX Strategy Steven Englander asks a rather different question: Are investors beginning to price in QE4?
He points out that economic data in the U. S. hasn’t been very good (sans unemployment headline data), and that for every one positive data release, a series of disappointments follow. He points to the fact that Citi’s economic surprise indicator has been dropping since mid-April as reflecting that reality.

This post was published at Zero Hedge on 05/04/2016.

MAY 4B/OPEN INTEREST RISES AN ASTONISHING 17,000 CONTRACTS AND 65,000 CONTRACTS IN 4 DAYS/CHINA AGAIN REISSUES WARNING TO THE USA NOT TO RAISE INTEREST RATES OR ELSE THEY WILL HUGELY DEVALUE/ THA…

Good evening Ladies and Gentlemen:
Gold: $1,273.30 down $17.40 (comex closing time)
Silver 17.28 down 19 cents
In the access market 5:15 pm
Gold $1281.80
silver: 17.38
Let us have a look at the data for today.
At the gold comex today we had a POOR delivery day, registering 0 notices for NIL ounces for gold, and for silver we had 143 notices for 715,000 oz for the non active April delivery month.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 228.04 tonnes for a loss of 75 tonnes over that period.
In silver, the open interest fell by 1022 contracts down to 198,237 as the price was silver was down by 19 cents with respect to yesterday’s trading. In ounces, the OI is still represented by just under 1 BILLLION oz i.e. .991 BILLION TO BE EXACT or 141% of annual global silver production (exRussia &ex China) We are now within spitting distance of all time highs for OI with respect to silver
In silver we had 143 notices served upon for 715,000 oz.
In gold, the total comex gold OI ROSE BY AN EARTH SHATTERING 17,273 CONTRACTS UP to 565,774 contracts DESPITE THE FACT THAT THE PRICE OF GOLD WAS DOWN $4.00 with YESTERDAY’S TRADING(at comex closing).
We had a small addition in tonnes of gold inventory at the GLD at .6 tonnes; thus the inventory rests tonight at 825.54 tonnes. . 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’s SLV, we had a large withdrawal of 1.553 million oz in silver . Thus the inventory rests at 337.261 million oz..
First, here is an outline of what will be discussed tonight:

This post was published at Harvey Organ Blog on May 4, 2016.

Will The (Falling) Buck Stop Here?

The recent decline in the U. S. Dollar has people wondering where it might stop; its chart suggests right here is as good a spot as any.
Increasingly, the talk surrounding financial markets lately has centered around the U. S. Dollar (USD). Specifically, the focus is on the 5-month decline in the USD. Obviously, as much as any asset, the behavior of the USD has an impact, directly or indirectly, on many other assets within the financial markets. Thus, with the USD falling as it has recently, it has received much of the blame (or credit) for the unwanted (or welcomed) consequences on the behavior of other assets.
Therefore, market participants are wondering where is the drop in the USD going to stop?Today’s Chart Of The Day takes a peek at the chart of the U. S. Dollar Index (DXY) to identify potential areas of support. As it turns out, probably the most convincing level in terms of its likelihood in providing support is right where the DXY is currently trading, near 92.50.

This post was published at Zero Hedge on 05/04/2016.

Spot The Odd Car Maker Out

If ever one was in doubt about whether or not a brand can still command a premium price in the market, look no further than the recent global auto OEM valuation comparables produced by JPM.
One look at the comparable charts and you’ll quickly notice that Ferrari is commanding a staggering brand premium from investors.

This post was published at Zero Hedge on 05/04/2016.

Podcast: Easy Money From China, Japan and Europe Has Failed. What’s Next?

China’s most recent borrowing binge didn’t work. Japanese and European negative interest rates resulted in their currencies going up rather than down. Global growth is slowing. Inflation is nonexistent and debt keeps rising. Only gold and silver are looking strong. Calls are being heard for bigger deficits. The world’s governments are about to panic.
PLEASE CLICK HERE TO LISTEN

This post was published at DollarCollapse on MAY 4, 2016.

India’s Silver Imports Up Almost 200% In March

India’s silver bar imports jumped by nearly 200% in March according to data published by India’s Gems and Jewelry Export Promotion Council – LINK. On a trailing twelve month basis (April 2016 – March 2016), India’s silver imports jumped 33% over same period a year earlier.
John Brimelow (Brimelow’s Gold Jottings) commented in his early a.m. report that: ‘This suggests silver fabrication may have continued during the jeweler’s strike. Silver is not subject to the disputed duty. Silver was also almost unprecedentedly cheap compared to gold in March.’

This post was published at Investment Research Dynamics on May 3, 2016.

A Very Bearish Stanley Druckenmiller Blows Up At The Fed; Reveals His Biggest “Currency” Position

If anyone had wondered if Stanley Druckenmiller’s recent bearishness had dissipated, or transformed into at least modest bullishness as a result of the market meltup, we have bad news.
Moments ago at the Sohn Conference, Druckenmiller raged at the Federal Reserve’s dire monetary policies, saying that low interest rates have caused an environment where “not a week goes by without someone extolling the virtues of the equity market.” The obsession with short term stimulus contrasts with the monetary reform of 80’s which led to the bull market, he added.
The Fed bashing continued when Druck said that “by most objective measures, we are deep into the longest period ever of excessively easy monetary policies. Despite finally ending QE, the Fed’s radical dovishness continues today. By most objective measures, we are deep into the longest period ever of excessively easy monetary policies. In other words, and quite ironically, this is the least ‘data dependent’ Fed we have had in history.”

This post was published at Zero Hedge on 05/04/2016.

Breaking down Warren Buffett’s rosy outlook for America

There’s something about being insanely rich that people will believe every word that comes out of your mouth no matter how bizarre.
And no, I’m not talking about Donald Trump. Warren Buffett is an even better example.
As one of the richest men in the world, Buffett’s opinions carry almost Biblical impact, even when they might be completely ridiculous.
Just a few days ago, for instance, he quipped that drinking Coca Cola is better for him than eating broccoli.
He’s also famously expressed contempt for owning gold, suggesting instead that people should simply own a US stock market index fund (like the S&P 500) and hold it for 50 years.
Curiously, though, gold has vastly outperformed both the S&P 500 and Dow Jones Industrial Average over the past half-century.
While the S&P 500 index is up 24.3x in that period and the Dow Jones Industrial Average is up 18.2x, gold has appreciated 36.6x.

This post was published at Sovereign Man on May 4, 2016.

This Incredibly Reckless Policy Is Gaining Momentum

I was sure I misread the title, because everyone instinctively knows this policy is a bad idea… right?
But I didn’t misread it. And it was far from the only article in support of it.
The title was ‘Get Ready to be Showered by Helicopter Money.’ And the voices behind this policy are growing.
Free money to your bank account
The idea is relatively simple: give people money… watch them spend it to stimulate the economy. This kind of behavior modification is usually done through tax cuts or spending programs.
Helicopter money, however, would take it a step further and deposit money directly into people’s bank accounts. What’s a better way to spur spending? Inject funds straight into the economy instead of trying to influence bond yields or sentiment.
Consumption makes up 70% of the US economy. So increased spending would no doubt boost the economy, including wages and jobs.

This post was published at Zero Hedge on 05/04/2016.

As UK Housing Bubble Bursts, Barclays Unleashes 100% LTV Mortgages Again

Just a month after the UK’s luxury housing bubble burst, it appears the nice friendly bankers at Barclays are looking for some scapegoats to flip their condos to.
In London, as Bloomberg reported, demand has slumped so badly that developers are offering discounts of up to 20% for their newly constructed homes. And just as the case was in Manhattan, it’s a result of the UK putting in a speed bump. The UK recently increased taxes on those deemed to be purchasing a second home, specifically designed to slow the pace of overseas investment.
According to Bloomberg, the U. K. government’s plan to increase sales taxes on second homes in Britain will also apply to people who live abroad.
From April, buyers of second homes and buy-to-let properties in the U. K. will be subject to stamp-duty sales tax that’s 3 percentage points higher than those who are buying a home to live in, U. K. Chancellor of the Exchequer George Osborne announced in November. In deciding whether an individual is purchasing an additional home, the government will also consider assets outside the U. K., according to a consultation document published on Monday. ‘This means that if someone is purchasing their first or only property in England, Wales or Northern Ireland, they may pay the higher rates if they own property outside these areas,’ the document shows.
Demand from overseas buyers has contributed to a jump in London house prices, and off-plan sales abroad helped developers finance projects including Battersea Power Station. House prices in the city rose 7.7 percent in the year through October, according to the Office for National Statistics.

This post was published at Zero Hedge on 05/04/2016.

Weak ADP Number Shows Slowing Labor Market

Today’s weaker-than-expected April ADP jobs report likely adds to the global growth worries. The US labor market has been a source of consistent strength and stability in an otherwise uncertain economic backdrop. Even as a number of other key US economic indicators showed weakness and loss of momentum over the last two quarters, the labor market continued to chug along, with all labor market readings like weekly jobless claims, the ADP survey and the monthly non-farm payroll report from the government’s Bureau of Labor Statistics (BLS) showing consistent gains month after month. Today’s ADP report is the first weak showing on the labor market front, which, if confirmed by the Friday government jobs report, will represent a notable deterioration in the US economic outlook.


This post was published at FinancialSense on 05/04/2016.

WAR ON CASH: E.U. TO PHASE OUT 500 EURO BANKNOTE

The governments of the world loath paper currencies, almost as much as they hate gold backed currencies. They tell us that paper money enables terrorists, criminal enterprises, and tax evaders, all of which is true to an extent, but it’s not the real reason why they hate cash. They just don’t like the idea of you having any savings that they don’t know about. They don’t want you to have money that they can’t confiscate on a whim.
That’s why the European Union has recently decided to stop producing the 500 euro note by 2018. Though the merits of the bill have been debated for some time, calls to eliminate it grew after the Paris terror attack last November. As usual, terrorist attacks are always the government’s best excuse to limit our freedoms.

This post was published at The Daily Sheeple on MAY 4, 2016.

How Taxation Kills Entrepreneurship

A popular fallacy considers entrepreneurial profit a reward for risk-taking. It looks upon the entrepreneur as a gambler who invests in a lottery after having weighed the favorable chances of winning a prize against the unfavorable chances of losing his stake. This opinion manifests itself most clearly in the description of stock-exchange transactions as a sort of gambling. From the point of view of this widespread fable, the evil caused by confiscatory taxation is that it disarranges the ratio between the favorable and the unfavorable chances in the lottery. The prizes are cut down, while the unfavorable hazards remain unchanged. Thus capitalists and entrepreneurs are discouraged from embarking upon risky ventures.
Every word in this reasoning is false. The owner of capital does not choose between more risky, less risky, and safe investments. He is forced, by the very operation of the market economy, to invest his funds in such a way as to supply the most urgent needs of the consumers to the best possible extent. If the methods of taxation resorted to by the government bring about capital consumption or restrict the accumulation of new capital, the capital required for marginal employments is lacking and an expansion of investment which would have been effected in the absence of these taxes is prevented. The wants of the consumers are satisfied to a lesser extent only. But this outcome is not caused by a reluctance of capitalists to take risks; it is caused by a drop in capital supply.

This post was published at Ludwig von Mises Institute on 04 MAY 2016.

The War On Paper Currency Officially Begins: ECB Ends Production Of 500 Bill

Following the denial in February that this action is in any way about reducing cash, The ECB has made its decision on the EUR500 Bill:
*ECB ENDS PRODUCTION AND ISSUANCE OF 500 BANKNOTE *ECB SAYS ISSUANCE OF EU500 NOTE TO STOP AROUND THE END OF 2018 *ECB SAYS OTHER EURO BANKNOTES WILL STAY IN PLACE *ECB: EU500 CAN BE EXCHANGED AT CEN BANKS FOR UNLIMITED TIME And just like that the second highest denominated European bank note in circulation (after the CHF1000 Bill) is dead…

And so now, everyone rushes into the CHF 1000 note.

This post was published at Zero Hedge on 05/04/2016.

Strong US Jewelry Sales and Other Silver News

This Silver Institute has released its April issue of Silver News. This edition highlights exceptionally strong silver jewelry sales in the US.
Silver jewelry sales in the United States were solid in 2015 with 60% of jewelry retailers reporting increased sales, according to a survey conducted on behalf of the Silver Institute’s Silver Promotion Service (SPS). This marked the seventh consecutive year of growth for silver jewelry sales and confirmed that silver jewelry is an increasingly important category for many retailers’
The average growth in jewelry sales for 2015 was 15%.
The April issue of Silver News also features some fascinating technological developments relating to silver.

This post was published at Schiffgold on MAY 4, 2016.

Crude Slumps On Big Inventory Build Despite Biggest Production Plunge In 10 Months

Overnight exuberance sparked by lower than expected Cushing build reported by API is fading on the heels of June OPEC headlines of no production limits (and rising Saudi production) heading into DOE inventory data. Crude inventories printed a significantly higher than expected 2.78mm build but Cushing saw a smaller than expected build of 243k. Gasoline surprised with a 536k build (API 1.17m draw) and Distillates saw a smaller than API build of 1.26m barrels.
The biggest news was the biggest plunge in US production since July 2015, and yet inventories still rose suggesting that fundamentally this is and has been as much a demand story as one of supply (even as OPEC countries are happy to offset declining US output).
API:
Crude 1.265m ( 750k exp) Cushing 382k ( 1.3m exp.. Genscape 821k) Gasoline -1.17m Distillates -2.6m

This post was published at Zero Hedge on 05/04/2016.

Kasich Out: Trump Challenger To Make 5PM Statement Suspending Campaign

BREAKING: John Kasich to suspend his campaign for president, senior campaign adviser says – @mitchellreports pic.twitter.com/Au1WIMqTIP
— NBC Nightly News (@NBCNightlyNews) May 4, 2016

Update: as expected, Kasich’s announcement will be that he is indeed suspending his campaign, and with that Trump is the official presidential candidate of the Republican party.
It appears that less than one day after Ted Cruz announced he is quitting the race, the last hurdle to Donald Trump becoming the official GOP candidate instead of just the “presumptive” one, is about to fall: according to CNN’s Phil Mattingly the republican challenger has just cancelled a press conference in Virginia and will make a statement in Ohio this afternoon at 5pm. We assume it is to announce he too is withdrawing from the race.

This post was published at Zero Hedge on 05/04/2016.