In his recent presentation, aptly titled “The Endgame”, Stan Druckenmiller put some very interesting charts summarising the state of the global economy.
One chart jumps out: the U. S. credit outstanding as % of GDP
This post was published at True Economics on May 11, 2016.
Over the past two weeks we observed two curious, vol-related phenomena.
First, it was Tom DeMark cautioning that even as stocks have surged, the amount of VXX shares outstanding has soared to record highs, a seemingly contradictory confluence of events because it suggested that investors, traditionally “going with the market flow”, are betting on a major vol reversal and furthermore the move contradicts historical shifts in VXX holdings at times of extreme market upside.
This post was published at Zero Hedge on 05/11/2016.
The importance of having a plan in place for retirement can’t be overstated. This time on Financial Sense’s Lifetime Income Series, Jim Puplava and John Loeffler discuss the changing realities for retirees, and the four big considerations they need to take into account under today’s conditions.
The Four Horsemen
There are four key issues that are having an impact on baby boomer retirement in ways that are catching many retirees off guard.
These issues are longer lifespans, growing medical expenses, financial repression and the low-interest rate environment, and the proliferation of stagnating economic conditions.
This post was published at FinancialSense on 05/11/2016.
Remember how awesome it all felt yesterday, yeah that’s all gone… Pride (in senseless uncorrelated low volume rallies) always comes before the fall…
Macy’s ate the jam out of the market rally’s donut today despite crude’s spike (and thus Energy stocks) on the DOE inventory draw… This was S&P Retail Sector’s worst day since Aug 2011…
This post was published at Zero Hedge on 05/11/2016.
The new king of foreign M&A, at peak prices, funded by state-owned banks.
Not even five-and-a-half months into the year, Chinese mergers & acquisitions in other countries have hit $110.8 billion, nearly four times as much as during the same period last year, and surpassing the total volume of the entire year 2015 ($106.8 billion).
And so China Inc. has become the number one cross-border acquirer for the first time ever, ahead of Canada with $67.7 billion in deals, and the US with $53.1 billion.
The superlatives go on: the number of deals soared 79% year-over-year to 300, according to the Nikkei. Of these, 17 were mega-deals of $1 billion or more, up from six such deals last year.
The US, where equity prices have peaked after a seven-year QE-and-ZIRP-fueled rally, and where total M&A through April has plunged 21%, according to Dealogic, and where withdrawn or collapsed deals have hit a record high as of May 4 of $378 billion – well, that market has now become the number one destination of the Chinese shopping spree.
This post was published at Wolf Street by Wolf Richter ‘ May 11, 2016.
Greece is back in the news recently with yet another round of crisis talks and measures. Here’s where we stand on the matter.
After another Eurogroup ‘talks’ this week, Greek Government is back to drawing up a new set of ‘measures’ to be presented to the Parliament. These ‘measures’ are, once again, needed for yet another Eurogroup agreement of yet more loans to the country.
The madness of this recurring annual spectacle that the EU, the Greeks and the IMF have been going through is so apparent and so predictable by now, that anywhere outside Greece itself it is simply banal.
The scenario is developing exactly along the same lines as before:
This post was published at True Economics on May 11, 2016.
All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved. Sun Tzu
This index gives one an idea of how the global economy is doing; it combines the economic information of 30 of the world’s largest companies. If it is faring badly, then it’s a signal that the global economy is not holding up well.
The one year chart illustrates that all is well on the surface and that the process of flooding the markets with hot money, in general, is working rather well. The index could drop all the way down to 7200, and the short-term outlook would remain bullish. We are fully aware that this economic recovery is illusory, but complaining and whining about this does not provide one with any extra insights into the markets. We need to focus on what is really going on and how the masses interpret that data. The truth is irrelevant if only you are aware of it; if the masses think otherwise, what appears as the truth to you could, in fact, be viewed as a lie by the crowd. The truth can set you free, but in most cases it can be detrimental to your health and wealth; at least as far as the markets are concerned.
This post was published at GoldSeek on 11 May 2016.
‘If the central bankers get what they want, the global bond market will blow up’
Lars Schall interviewed Peter Boockvar. Peter is one of those rare and informed people in the investment space who really understands the history and role of Central Banks in general, the Federal Reserve Bank in particular, and their interactions with the financial industry on (government) policy. We are very pleased to have Peter Boockvar on board this month with his first Matterhorn Interview. We recommend a good listen below.
[VIDEO/PODCAST] 24 mins
Oil stocks are at a seemingly ‘must-hold’ level within their long-term reversal attempt.
If there is one sector that best symbolizes the prospects of the post-February stock market rally, it is energy. It isn’t that energy stocks have been the only area performing well in this rally. To the contrary, we have pointed out on numerous occasions the evidence of strong breadth within the rally. As such, many segments of the market have been working, from longer-term relative strength leaders that continue to score new all-time highs to those beaten up sectors exhibiting momentous mean-reversion bounces. Oil stocks would fall into that latter category, of course. The question now is, will the bounce in oil stocks only be a mean-reverting move – or the start of a longer-term, more meaningful rally? One key index may be undergoing a test right now that could go a long way toward answering that question.
The index is the NYSE Oil & Gas Index, or XOI. We have mentioned the XOI several times in recent months as oil stocks have indeed been in the spotlight. Our main focus in those posts, including this April 13 piece most recently, has been on the lifetime (post-1986) Up trendline in the XOI, and its significance in delineating bullish prospects from bearish ones among oil stocks. This trendline is our ‘line in the sand’, as we called it, in determining the well-being of the XOI. And after dropping below the trendline in January for the first time in 30 years, the index was able to reclaim the line as we mentioned in the April post.
This post was published at Zero Hedge on 05/11/2016.
Good evening Ladies and Gentlemen:
Gold: $1,274.60 up $10.70 (comex closing time)
Silver 17.30 up 22 cents
In the access market 5:15 pm
Gold $1277.60
silver: 17.43
Today, our banker friends huffed and they puffed when they saw the latest OI figures for silver/gold. Gold OI: 579,777 and silver: 205,391. The open interest for silver is a noose around their neck. They were mildly successful in removing a small number of gold leaves. They took their temper tantrum initially on the gold/silver shares midday but that too was short lived. Gold and silver had a good day, and by closing time, the gold/silver equity shares also had a stellar day.
Let us have a look at the data for today.
At the gold comex today we had a GOOD delivery day, registering 100 notices for 10,000 ounces for gold, and for silver we had 25 notices for 125,000 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 232.13 tonnes for a loss of 71 tonnes over that period.
In silver, the open interest rose by 1476 contracts up to 205,391 as the price was silver was UP by 1 cent with respect to yesterday’s trading. Not much liquidation for us to see today . In ounces, the OI is still represented by just over 1 BILLION oz i.e. .1.027 BILLION TO BE EXACT or 146% of annual global silver production (exRussia &ex China)
In silver we had 25 notices served upon for 125,000 oz.
In gold, the total comex gold OI FELL BY 7429 CONTRACTS DOWN to 579,777 contracts AS THE PRICE OF GOLD WAS DOWN $1.90 with YESTERDAY’S TRADING(at comex closing). Again the liquidation of contracts was not to the liking of our crooked banks.
As far as the GLD, we had another huge change in tonnes (despite the gold price being down) a deposit of 2.67 tonnes into the GLD. The new inventory rests at 841.92 tonnes. I have no problem in telling you that the addition was paper gold and not physical as London is having a tough time finding real metal. We had no changes in silver inventory at the SLV. Inventory rests at 335.073 million oz..
First, here is an outline of what will be discussed tonight:
This post was published at Harvey Organ Blog on May 11, 2016.
The following video was published by X22Report on May 11, 2016
Macy’s, Gap, Old Navy and many other retailers are reporting a decline in sales. The US economy is declining rapidly and the collapse is right around the corner. Baltic Dry Index declines once again. Italian banks are struggling with bad loans and this is spreading to other European banks. Central banks and Countries are now trading their US dollars for gold, a signal we are approaching the end of the dollar reserve.
The progressive intellectual looks upon capitalism as the most ghastly of all evils. Mankind, he contends, lived rather happily in the good old days. But then, as a British historian said, the Industrial Revolution ‘fell like a war or a plague’ on the peoples. The ‘bourgeoisie’ converted plenty into scarcity. A few tycoons enjoy all luxuries. But, as Marx himself observed, the worker ‘sinks deeper and deeper’ because the bourgeoisie ‘is incompetent to assure an existence to its slave within his slavery.’
Still worse are the intellectual and moral effects of the capitalist mode of production. There is but one means, the progressive believes, to free mankind from the misery and degradation produced by laissez-faire and rugged individualism, viz., to adopt central planning, the system with which the Russians are successfully experimenting. It is true that the results obtained by the Soviets are not yet fully satisfactory. But these shortcomings were caused only by the peculiar conditions of Russia. The West will avoid the pitfalls of the Russians and will realize the Welfare State without the merely accidental features that disfigured it in Russia and in Hitler Germany.
Such is the philosophy taught at most present-day schools and propagated by novels and plays. It is this doctrine that guides the actions of almost all contemporary governments. The American ‘progressive’ feels ashamed of what he calls the social backwardness of his country. He considers it a duty of the United States to subsidize foreign socialist governments lavishly in order to enable them to go on with their ruinous socialist ventures. In his eyes the real enemy of the American people is Big Business, that is, the enterprises which provide the American common man with the highest standard of living ever reached in history. He hails every step forward on the road toward all-round control of business as progress. He smears all those who hint at the pernicious effects of waste, deficit spending and capital decumulation as reactionaries, economic royalists and Fascists. He never mentions the new or improved products which business almost every year makes accessible to the masses. But he goes into raptures about the rather questionable achievements of the Tennessee Valley Authority, the deficit of which is made good out of taxes collected from Big Business.
This post was published at Ludwig von Mises Institute on May 11, 2016.
How severe has the economic recession since 2007 been? How thin the recovery?
Enough that the birth rate, which partially reflects financial stability vs. stress, has fallen off more dramatically than at any other time in American history, and much more than experts even expected.
In fact, the nation has fallen sharply below replacement rate since the time of the 2008 crisis.
The conundrum is that it is a growing population that corresponds with economic growth, and decline inhibits the social signals that encourage more births (like feeling secure enough to afford the extra expenses and effort of a child).
Though a slight rebound shows up in the numbers, experts see no sign of things turning around in the long term… and that will continue to significantly impact our financial future.
via the Wall Street Journal:
The U. S. is experiencing a baby lull that looks set to last for years… a sharp drop in child bearing that started with the onset of the recession in 2007 […] more-worrisome signs that the U. S. may not soon return to its pre-recession average of about two babies for every adult woman. Some demographers have pared their forecasts for future births because an expected post-recession baby boom has been smaller than anticipated.
The leveling-off in births is weighing on sales at children’s stores, prompting hospitals to rework their birth wards and putting pressure on builders of single-family homes, executives and economists say.
This post was published at shtfplan on May 11th, 2016.
Following a scramble by European nations to issue ultra long-dated government paper, which saw France and Belgium sell 50-year bonds last month, while Ireland and Belgium went all the way and issued century bonds, with even Switzerland locking in 42-year paper yesterday, moments ago Spain was the latest to extend maturities all the way to 2066 when it sold 3 billion in 50 year bonds at Midswaps 50. According to MarketNews, the issue was over 3 times oversubscribed with the orderbook closing at 10.5 billion.
Here are the full details from Bloomberg:
Guidance was MS 253 area from IPT mid/high 250s. Final books over EU10b, including EU1.2b JLM interest: Leads Price 98.998 to yield 3.493% Benchmark spread: SPGB 2.9% 10/2046 63.5 Issuer: The Kingdom of Spain
This post was published at Zero Hedge on 05/11/2016.
Student loan debt continues to balloon. Data released in March revealed that46% of student loans are not currently being repaid. That doesn’t even include debt held by students still in school or those within the six-month grace period after graduation.
Clearly, this has major implications on the financial futures of Americans saddled with this debt. It could mean putting off major purchases like homes and cars, further dragging down an already sluggish economy. And what happens when these debtors begin to default? Everyday Americans are on the hook. Total taxpayer exposure to student loan debt, including government guarantees for private loans, stands at more than $1.3 trillion and is increasing at about $2,726.27 every second.
There are already pricks in the student loan bubble. As SchiffGold Precious Metals Specialist Addison Quale reported last month, a new Obama administration program could forgive more than $7.7 billion in student loan debt. That number could skyrocket even higher if federal courts ultimately decide to allow student loan debtor to discharge what they owe through bankruptcy.
This post was published at Schiffgold on MAY 11, 2016.
While it’s hard to make much sense of the market’s day-to-day movements at present, there is no such issue with what is expected to happen to Disney (DIS) and Macy’s (M) shares in today’s session. They both missed the mark in their Q1 earnings releases – Macy’s this morning and Disney after the close on Tuesday.
Even though expectations were fairly low for Macy’s to begin with, as the department store bellwether has been struggling for a while now, it missed on the top-line as well as on same-store sales and guidance for the full year. The retailer blamed continued weakness in the apparel category and ‘double-digit spending reductions by international visitors in major tourist markets where Macy’s and Bloomingdale’s are key destinations…’ Macy’s recent struggles – the stock price is roughly half of its year-earlier level – is a true reflection of the challenging environment for traditional retailers.
This post was published at FinancialSense on 05/11/2016.
There is a fervent minority that claims gold and precious metals are manipulated to keep their asset prices from reaching a free market determined valuation. They claim that the measuring stick that is gold (& silver) against which all other assets are held constant, is being distorted.
First things first, what is manipulation and what forms does it take?
Manipulation – Control or influence (a person or situation) cleverly, unfairly, or unscrupulously. Alter (data) or present (statistics) so as to mislead. synonyms – control, influence, exploit, maneuver, engineer, steer, direct, falsify, rig, distort, alter, doctor, massage, juggle, tamper, tinker, interfere, misrepresent, etc. Psychological Manipulation – social influence that aims to change the behavior or perception of others; typically through abusive, deceptive, or underhanded tactics. Social influence is generally perceived to be harmless when it respects the right of the influenced to accept or reject and is not unduly coercive. Market Manipulation – the deliberate attempt to interfere with the free and fair operation of the market and create artificial, false, or misleading appearances with respect to the price of, or market for, a security, commodity, or currency.
This post was published at Zero Hedge on 05/11/2016.
How severe has the economic recession since 2007 been? How thin the recovery?
Enough that the birth rate, which partially reflects financial stability vs. stress, has fallen off more dramatically than at any other time in American history, and much more than experts even expected.
In fact, the nation has fallen sharply below replacement rate since the time of the 2008 crisis.
The conundrum is that it is a growing population that corresponds with economic growth, and decline inhibits the social signals that encourage more births (like feeling secure enough to afford the extra expenses and effort of a child).
Though a slight rebound shows up in the numbers, experts see no sign of things turning around in the long term… and that will continue to significantly impact our financial future.
via the Wall Street Journal:
The U. S. is experiencing a baby lull that looks set to last for years… a sharp drop in child bearing that started with the onset of the recession in 2007 […] more-worrisome signs that the U. S. may not soon return to its pre-recession average of about two babies for every adult woman. Some demographers have pared their forecasts for future births because an expected post-recession baby boom has been smaller than anticipated.
This post was published at shtfplan on May 11th, 2016.
In real terms, most international fiat currencies could come to be near valueless when measured against gold and silver… And of course that climate will cause the utter collapse of the global stock markets, not to mention impact most severely our societal stability; all as direct consequence of the delusionary monetary practices employed for decades. – Safewealth newsletter
Sell please. I’m buying. There’s a lot of analysis out there with highly flawed assumptions. The biggest problem with this analysis – Seeking Alpha link – is that the author assumes the Fed will raise interest rates. That won’t happen until the entire is system is forced into a reset from a collapse. The Fed knows this and has no interest in hastening that reset.
Just like the continuous threat of raising interest rates, there’s been a continuous threat of’gold is overbought, too many longs, market is going to cliff-dive at any moment’ like this article pouring forth (click to enlarge image). Where was this story-line when gold was being hammered daily as if the market was trying to dig a hole to China for the price of gold?
This post was published at Investment Research Dynamics on May 11, 2016.
The STOXX Europe 600 is trending below declining and bearishly positioned 26 and 40-week moving averages, and as BofAML’s Stephen Suttmeier warns, ECB quantitative easing has not reversed this bearish trend.
This post was published at Zero Hedge on 05/11/2016.
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