Warning: Don’t Trust Goldman (Especially on Oil Prices)

An open public market requires an even playing field. Some participants may have bigger computers, or a millisecond head start on data.
But at least all investors theoretically have access to the same information and analysis.
The idea is that each participant is able to balance risk and reward to suit their own tastes, using the same data.
Unless, that is, some players are allowed to put a thumb on one side of the scales for their own advantage…
On Monday of this week, Goldman Sachs Group Inc. (NYSE: GS) issued an interesting reversal of the firm’s normal bearish stance on oil prices. The investment bank released what most are calling a mildly bullish report on theprice of crude.
Now, I normally ignore what Goldman is saying, and so should you. The reasons are simple: (1) their estimates are hardly objective; and (2) they usually miss the boat.
In this case, that’s more true than ever…

This post was published at Wall Street Examiner by Dr. Kent Moors ‘ May 19, 2016.

SaxoBank CIO Warns “Central Banks Can Do Nothing”

2016 has seen a popular reaction against zero-bound policies Political elites are struggling to preserve an unfruitful status quo ‘The world has become elitist in every way’: Jakobsen Political middle has become crowded, stagnant; new spectrum of ideas needed Investment in education and research needed; zero rates are a dead end Saxo chief economist remains ‘very positive’ overall In April 2015, Saxo Bank chief economist Steen Jakobsen said that zero rates, zero growth, zero productivity, and zero reforms have left a great many countries adrift in a ‘new nothingness’.
The products of this nothingness, said Jakobsen, include apathy, stagnation and ‘an economic outlook based more in peoples’ heads than in reality’. On the cultural level, he continued, the widespread lack of dynamism and new ideas has empowered a political class that is ‘mainly interested in maintaining the status quo’, even as that status quo provides sharply diminishing returns.
US GDP growth, for instance, is hugging the zero line:

This post was published at Zero Hedge on 05/19/2016.

‘There Will Be Banker Blood’: Why JPM Is Afraid Of “Quiet Trading Floors”

With banker bonuses set to drop this year, it should be no surprise that things are not all sunshine and roses on Wall Street. After 30 years of dramatically outperforming Main Street, Wall Street wages may be set for some mean-reversion as JPMorgan analysts take an ax to the biggest global investment banks’ earnings. As Bloomberg reports, “quiet trading floors” are set to depress global investment banks’ second-quarter revenue 24 percent, with weakness across equities, interest rates, currencies, with aregionally-driven weakness from Asia.

This post was published at Zero Hedge on 05/19/2016.

MAY 19/GLD ADDS 4.45 TONNES OF GOLD WITH THE PRICE OF GOLD DOWN $19.50?/CHINA FIRES ANOTHER SHOT ACROSS THE BOW BY DEVALUING THE YUAN BY THE MOST SINCE LAST AUGUST/VICIOUS RAID AGAINST GOLD AND S…

Good evening Ladies and Gentlemen:
Gold: $1,254.20 DOWN $19.50 (comex closing time)
Silver 16.48 DOWN 64 cents
In the access market 5:15 pm
Gold $1254.70
silver: 16.51
Yesterday I wrote the following:
‘No doubt that the entire trading of gold and silver today was orchestrated by our crooked banks. They were massively selling paper gold throughout the night and early morning. Even the one billion dollar bid for gold early this morning did not spook the crooks. At 2 pm they released the beige book report and the Fed stated that it is likely that they will raise rates in June. The USA should raise rates but the problem will be China who has threatened to lower dramatically the yuan and in so doing would absolutely kill Japan, South Korea and the emerging markets. Besides no Fed would be stupid enough to raise rates three months before a USA election.’
China wasted no time firing another shot across the bow by devaluing the yuan further today, and this put tremendous pressure on global markets.
The amount standing for gold in May is simply outstanding at 6.504 tonnes, remaining constant by from yesterday. The previous May 2015, we had only .08 tonnes standing so you can certainly witness the difference as the demand for gold by investors/sovereigns is on a torrid pace. This makes the excitement for June gold that much more intense as more players are refusing fiat and demanding only physical metal. I will be reporting daily as to how which is standing for delivery through the active month of June. June is the second largest delivery month after December.
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 3 notices for 15,000 oz for the non active May delivery month.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 240.39 tonnes for a loss of 63 tonnes over that period.
In silver, the open interest FELL by 2,465 contracts DOWN to 204,929 as the price was silver was DOWN by 11 cents with respect to yesterday’s trading. NOT NEARLY THE LIQUIDATION THAT THEY HAVE BEN LOOKING FOR. In ounces, the OI is still represented by just over 1 BILLION oz i.e. .1.024 BILLION TO BE EXACT or 146% of annual global silver production (ex Russia &ex China)
In silver we had 1 notice served upon for 5,000 oz.
In gold, the total comex gold OI fell by a CONSIDERABLE 4,377 contracts down to 590,700 as the price of gold was DOWN $2.50 with yesterday’s trading(at comex closing).
As far as the GLD, THE FOLLOWING MAKES NO SENSE AT ALL: WE HAD A HUGE DEPOSIT OF 4.42 TONNES in inventory at the GLD WITH GOLD DOWN $19.50. The inventory rests at 860.34 tonnes. 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 19, 2016.

The Federal Reserve is Not Going To Raise Rates and Destroy Gold

Yesterday the stock market and gold prices fell into their closing bells after the release of minutes of the Federal Reserve’s April meeting.
The Federal Reserve did not raise interest rates at that meeting, but the minutes showed that some Federal Reserve Board members hope to raise interest rates in June.
Back in December the Federal Reserve raised interest rates and predicted that it would raise rates four times in 2016.
Then the stock market dumped in January and banks in Europe showed signs of stress so the Federal Reserve got scared and was unable to raise rates at any of its meetings so far this year.
Fed fund futures contracts also pushed out any rate hikes to the Fall.
After the release of yesterday’s minutes though CNBC talking heads began to talk as if the economy were about to boom in the United States in the coming weeks and rates could go up in June or July.
However, the Fed fund futures contracts are still pricing in only a 28% chance of a June interest rate hike.
The thing is though that the media news and quick price drop in gold has scared a lot of people out of gold.
I’m hearing from people in a pure panic over gold.

This post was published at GoldSeek on 19 May 2016.

Republicans, Democrats Agree On A Bill To Bailout Puerto Rico

It turns out that Puerto Rico’s plan to default on its debt and beg congress for help is working out as planned.
After a slight delay, House Republicans have reached an agreement with the Obama administration to provide a path to restructure Puerto Rico’s $70 billion debt load. The bill would offer the island a legal out similar to bankruptcy and wouldn’t commit any federal money according to the WSJ.
All of the political talking heads are supportive of the bill, with House Speaker Paul Ryan saying that “the stability of the territory is in danger. Today, Republicans and Democrats came together to fulfill Congress’s constitutional and fiscal responsibility to address the crisis”, and Treasury Secretary Jacob Lew called the proposal “a fair, but tough bipartisan compromise.”

This post was published at Zero Hedge on 05/19/2016.

Unintended Consequences, Part 1: Easy Money = Overcapacity = Deflation

Somewhere back in the depths of time the world got the idea that easy money – that is, low interest rates and high levels of government spending – would produce sustainable growth with modest but positive inflation. And for a while it seemed to work.
But that was an illusion. What actually happened was textbook, long-term, surreally-vast misallocation of capital in which individuals, companies and governments were fooled into thinking that adding new factories, stores and infrastructure at a rate several times that of population growth would somehow work out for the best.
China, as with so many other things, was the epicenter of this delusion. In response to the 2008-2009 financial crisis it borrowed more money than any other country ever, and spent most of the proceeds on infrastructure and basic industry. It’s steel-making capacity, already huge by 2008, kept growing right through the Great Recession, and now dwarfs that of any other country.

This post was published at DollarCollapse on MAY 19, 2016.

IMF Makes A Push To Take Control Of Iran’s Banking System – Episode 975a

The following video was published by X22Report on May 19, 2016
Gold slammed down again to try to control the price and give the illusion that the economy is fine. Initial jobless claims trend is now up. Walmart surges 9% from stock buy backs, food stamp purchases. Caterpillar reports 41 months of negative sales. Philly Fed crashes back down. IMF now warning Iran not to depend on oil sales, look other places to bring in revenue. IMF would like to inspect Iran’s banking system to take control to sell their oil using the dollar and to spread debt to Iran

Greek Pipeline Breakthrough To Challenge Russian Gas Dominance In Europe

Greek Pipeline Breakthrough To Challenge Russian Gas Dominance
After years of debate, political jockeying and acrimony, a major pipeline project to bring natural gas to Southern Europe has broken ground.
The Trans-Adriatic Pipeline (TAP) will connect the Caspian Sea to European markets, providing Europe with another large source of natural gas that will help the continent diversify away from Russia. The route begins at the Caspian Sea in Azerbaijan, where the South Caucuses Pipeline will carry Caspian gas from the large Shah Deniz-2 gas field, delivering it to the border with Turkey. From Turkey the gas will tie into the Trans Anatolian Pipeline (TANAP), which will take the gas across Turkey to the border with Greece where it will meet up with the aforementioned Trans-Adriatic Pipeline. The Caspian gas will then travel through TAP across Greece, beneath the Adriatic Sea and onto Italy.

This post was published at Zero Hedge on 05/19/2016.

Mickelson Responds To Insider Trading Scandal: Will Return All Illegal Profits, “Move On”

Following today’s surprising SEC charge that alleged Phil Mickelson violated securities laws and illegally profited from insider trading to the tune of almost $1 million, here is the response his lawyers just sent out.
The SEC has now completed its investigation into that investment and has concluded that Phil Mickelson did not engage in any wrongdoing. The SEC has filed a civil complaint against certain individuals, including an acquaintance of Phil’s, but that complaint does not assert that Phil Mickelson violated the securities laws in any way. On that point, Phil feels vindicated. At the same time, however, Phil has no desire to benefit from any transaction that the SEC sees as questionable.

This post was published at Zero Hedge on 05/19/2016.

“What The Hell Just Happened” – To Gartman “Yesterday Was Our Worst Day Of The Year Thus Far”

Some abnormally amusing market commentary from everyone’s favorite “commodity guru”, Dennis Gartman.
[W]e are reminded of a day many, many years ago when as a member of the Chicago Board of Trade we had come home, beaten and thoroughly exhausted as the bond futures had traded both limit up and limit down only to have closed the day unchanged. The trading activity was violent; random and huge, and our wife at the time… with whom we are still very good friends… having seen on the television that the bond market had closed unchanged on the day greeted us at the door by saying ‘It must have been a boring day.’ It was anything but boring! It was almost life changing. To many on the floor with us, it was life threatening; to very, very few it was life affirming. To everyone it was frightening.

This post was published at Zero Hedge on 05/19/2016.

THE EPA HAD TO PAY A CONVICTED CHILD MOLESTER 55K TO RETIRE

Everyone knows that it’s very hard to fire a government employee, and that’s just as true in the US as it is anywhere in the world. It doesn’t matter if they’re a lowly cop or post office worker, or if they’re a Harvard educated bureaucrat, governments always give some degree of impunity to their workers. But sometimes the things these workers get away with are downright jaw dropping.
The EPA for instance, has been struggling to fire a convicted child molesterin their employ. According to a recent House Committee on Oversight and Government Reform hearing, the EPA tried to fire the employee, but their own Merit Systems Protection Board stepped in and overturned the decision. Eventually the EPA had to cut him a $55,000 check in exchange for his retirement.

This post was published at The Daily Sheeple on MAY 19, 2016.

Jeff Gundlach Warns That “Something Changed” At The Fed

Something has changed according to Jeff Gundlach. After claiming that a rate hike is “inconceivable” asrecently as a month and a half ago, a stance which he softened somewhat in recent days, Gundlach said that the Fed has changed the conditions required for a potential interest-rate hike this year.
Cited by Bloomberg, Gundlach believes that the Fed’s thinking has shifted from, ‘if the data pattern improves we will have the green light to hike,’ to ‘unless the data pattern weakens we have the green light to hike.’”
Perhaps, but surely only as long as the S&P, pardon the “economy” remains above 2,000. The second theS&P, pardon the “economy” slides back under that critical for the Fed level, one can forget all about any rate hike for the foreseeable future as the Fed will never risk crushing the wealth effect it has built up over 8 years of careful micromanagement and market manipulation.
And that is precisely what the market, which understand the reflexive relationship with the Fed much better than the group of career academics locked up in the Marriner Eccles building ever could, is going for: pushing the S&P, pardon the “economy” back under 2,000 so that any hiking ambitions Yellen may have are promptly pushed back by another three months.

This post was published at Zero Hedge on 05/19/2016.

Russia Frets about Risk of ‘Recession’ in China

What do they see that we don’t?
Russia’s economy has been shrinking five quarters in a row, though in the first quarter of 2016, it contracted at an annual rate of ‘only’ 1.2%, after having contracted 3.7% in 2015, the longest recession in two decades. The budget deficit has swollen to 8.6% of GDP in April – way beyond the 3% the government is projecting for the year. It might require additional and unpopular budget cuts.
So the jump in oil prices recently, while not nearly enough, is a huge economic relief for the world’s largest oil & gas exporter.
The surge in oil prices has boosted the ruble, which had plunged late last year and early January. Now it’s back at 69 rubles to the dollar, where it had been in November, and there’s a sense that a currency crisis has been averted.
Putin’s pivot to the east with his energy policy has led to mega-contracts and projects with China, largely to supply oil and gas to the energy-hungry nation. Already, exports of crude oil to China soared 28% in 2015, which elevated Russia to China’s second largest supplier, behind only Saudi Arabia. China has become Russia’s biggest trade partner, accounting for 12.8% of Russia’s total trade.

This post was published at Wolf Street by Wolf Richter ‘ May 19, 2016.

Gold Daily and Silver Weekly Charts – No Substance

There were no noteworthy deliveries of gold or silver on the Comex yesterday.
That is one thing that it has in common with the Fed’s economic policy, and the two leading presidential candidates come to think of it: a lack of substance.
There will be a stock option expiration tomorrow and a June gold option expiration on the Comex next week.

This post was published at Jesses Crossroads Cafe on 19 MAY 2016.

Phil Mickelson Charged In Insider Trading Scam, Accused Of Illegal $931,000 Profit

Having denied any investigation as “inflammatory and speculative” when the Phil Mickelson insider-trading brouhaha initialy erupted two years ago, it appears the golfer’s lawyers may have to shift from the “deny deny deny” defense to “let’s make a deal.” Having been unable to pin anything on Wall Street insider Carl Icahn, Vegas sports gambler Billy Walters, and pro-golfer Mickelson with regard their trading in Clorox (during Icahn’s takeover bid); the SEC has arrested Walters and announced criminal charges against Dean Foods’ Chairman Thomas Davis (who stepped down after suspicions of leaking insider tips)and after generating nearly $1million in profits from the Dean Foods trading tip Phil Mickelson is charged with insider trading and wilb be forced to disgorge ill-gotten gains.

This post was published at Zero Hedge on 05/19/2016.

Bloomberg Markets on the Return of the Gold Standard

A recent article in Bloomberg Markets by Michelle Jamrisko brings welcome news. ‘The gold standard is one of the oldest ideas about money, but the hardest of hard-money hawks sense an opening to breathe new life into it.’ Unfortunately, those in search of information about the gold standard and its supporters will find little of use in the article.
Most obviously, the article omits one item of no slight significance. It never explains what the gold standard is. The closest the article comes to an explanation is this: ‘Decades ago, the amount of cash circulating in a country was often limited by the stash of bullion held in its coffers.’ According to this account, under a gold standard, the government cannot issue an unlimited amount of money: its ability to create money is limited by the amount of gold on hand. Shortly after, Jamrisko says, ‘Of course, full restoration of the system that reigned in the U. S. for a century through the 1970s is almost inconceivable.’ By her reference to ‘the 1970s’, it’s apparent that she is talking about the arrangement in place until Nixon closed the ‘gold window’ in 1971.
I hesitate to shock Michelle Jamrisko, but that system was not the ‘gold standard’ that today’s ‘hardest of hard-money hawks’ want to restore. In What Has Government Done to Our Money?, Murray Rothbard, a foremost defender of the gold standard, characterized it in this way: ‘The total stock, or supply, of money in society at any one time, is the total weight of the existing money-stuff. Let us assume, for the time being, that only onecommodity is established on the free market as money. Let us further assume that gold is that commodity (although we could have taken silver, or even iron; it is up to the market, and not to us, to decide the best commodity to use as money). Since money is gold, the total supply of money is the total weight of gold existing in society.’

This post was published at Ludwig von Mises Institute on May 19, 2016.

Starving Venezuelans Fed Up With Maduro: ‘We Want Food!’

Venezuela’s problems are sure to get worse before they get better.
Right now the nation, at the hands of socialist dictator President Nicolas Maduro, is headed for the bottom.
Weeks of rationed food and electricity, a shortage of basic necessities and spiraling inflationis taking its toll, and the regime is quickly descending into all out hell.
Now, people are beyond fed up with the conditions and are moving towards support for Maduro’s ouster… that, and they want to eat… food.
It is no laughing matter. Shortages have already prompted poaching animals and looting has become widespread.
The black matter trade of goods, which stores have struggled for more than a year to keep in stock and which are rationed tightly, is an important stabilizing factor for increasingly desperate people in Venezuela.
Long lines have been the norm. Food has been in short supply. But now a new degree by Maduro is forcing people to take ration delivers at their home, door-to-door, in order to curb black market transactions.
As AFP reports:

This post was published at shtfplan on May 19th, 2016.