The Power Elite: Bumbling Incompetents

Geniuses in Charge
BALTIMORE, Maryland – Is there any smarter group of homo sapiens on the planet? Or in all of history? We’re talking about Fed economists, of course.
Not only did they avoid another Great Depression by bold absurdity…giving the economy more of the one thing of which it clearly had too much – debt. They also carefully monitored the economy’s progress so as to avoid any backsliding into normalcy.
And where do we get this penetrating appraisal? From the Fed economists themselves, of course. Bloomberg:
‘The U. S. Federal Reserve’s decisions to delay interest-rate hikes helped cushion the economic shocks caused by rapidly rising borrowing costs for U. S. companies from late last year through early 2016, according to economists at the New York Fed.
‘By maintaining the federal funds rate lower, the FOMC managed to substantially offset the effect of tightening financial conditions on the economy,’ the authors, referring to the rate-setting Federal Open Market Committee, wrote in a blog post on the bank’s website on Wednesday.’
They’re geniuses. No doubt about it. That’s why they’re in charge and we’re not. They’re the elite. They run the Deep State. They may not pay the piper, but they call the tune anyway. And good on them! Who knows what prices we might discover if we were left on our own?

This post was published at Acting-Man on May 28, 2016.

6 Giant Corporations Control The Media, And Americans Consume 10 Hours Of ‘Programming’ A Day

If you allow someone to pump hours of ‘programming’ into your mind every single day, it is inevitable that it is eventually going to have a major impact on how you view the world. In America today, the average person consumes approximately 10 hours of information, news and entertainment a day, and there are 6 giant media corporations that overwhelmingly dominate that market. In fact, it has been estimated that somewhere around 90 percent of the ‘programming’ that we constantly feed our minds comes from them, and of course they are ultimately controlled by the elite of the world. So is there any hope for our country as long as the vast majority of the population is continually plugging themselves into this enormous ‘propaganda matrix’?
Just think about your own behavior. Even as you are reading this article the television might be playing in the background or you may have some music on. Many of us have gotten to the point where we are literally addicted to media. In fact, there are people out there that become physically uncomfortable if everything is turned off and they have to deal with complete silence.
It has been said that if you put garbage in, you are going to get garbage out. It is the things that we do consistently that define who we are, and so if you are feeding your mind with hours of ‘programming’ from the big media corporations each day, that is going to have a dramatic affect on who you eventually become.
These monolithic corporations really do set the agenda for what society focuses on. For example, when you engage in conversation with your family, friends or co-workers, what do you talk about? If you are like most people, you might talk about something currently in the news, a television show that you watched last night or some major sporting event that is taking place.
Virtually all of that news and entertainment is controlled by the elite by virtue of their ownership of these giant media corporations.
I want to share some numbers with you that may be hard to believe. They come directly out of Nielsen’s ‘Total Audience Report’, and they show how much news and entertainment the average American consumes through various methods each day…

This post was published at The Economic Collapse Blog on May 26th, 2016.

A Few Charts for the Road

Yellen Looms
We’ve got a bit of a double whammy going on today in that it’s the last session before the long weekend plus Yellen is scheduled to speak late in the day. So it’s probably fair to say that few of us are going to be doing much on the trading front and I wouldn’t be surprised if most of you are already on the way out.
Best to call it a week – quite frankly I could use a few days off myself as I have been working hard behind the scenes over the past few few weeks. However it’s become a long standing tradition here at the evil lair to send you guys off with a few charts of interest and I would hate to disappoint. In no particular order:
Stocks:

This post was published at Acting-Man on May 27, 2016.

Unintended Consequences, Part 2: Easy Money = Overcapacity = Trade Wars

It’s unclear what China was thinking when it was borrowed all those trillions to quadruple its capacity to make steel, cement and other basic industrial products. There’s no record of it checking in with the other countries that have such industries to see if a sudden surge of cheap imports was okay with them.
Turns out that it’s not. The US in particular seems to lack a sense of humor where the death of its steel industry is involved:
US hits China and others with more steep steel duties
(CNBC) – The U. S. Department of Commerce has imposed more duties on corrosion-resistant steel imports from China and elsewhere in an effort to protect its industry from a glut of steel imports from around the world. On Wednesday, the department’s International Trade Administration, which has conducted an investigation into the ‘dumping’ of steel products into U. S. markets, said it had found the ‘dumping of imports of corrosive-resistant steel (CORE) products from China, India, Italy, Korea and Taiwan’ by various steel producers that it named within those countries.
As a result, the department said that Chinese corrosion-resistant steel would be subject to a final anti-dumping duty of 210 percent and anti-subsidy duty of between 39 percent and up to 241 percent.
China’s low-cost metal producers have been widely cited as the main culprit for a glut in global steel production that has pushed down prices. Last week, the U. S. slapped tariffs of more than 500 percent on Chinese cold-rolled steel, which is used mainly in car production and appliances.
China has been accused by the U. S. and leading figures in the steel industry of ‘dumping’ that cheap steel on to global markets due to a slowdown in domestic demand and a bid to gain global market share at any cost.
China has conducted a ‘war’ – not trade – with steel, experts say.
China’s Commerce Ministry said yesterday that it was extremely dissatisfied at what it called the ‘irrational’ move by the United States, which it said would harm cooperation between the two countries, Reuters reported. ‘China will take all necessary steps to strive for fair treatment and to protect the companies’ rights,’ it said, without elaborating, according to the news agency.

This post was published at DollarCollapse on MAY 27, 2016.

MAY 27/NEWEST DATA STATES THAT LONDON IMPORTED 119 TONNES OF GOLD IN MARCH AND APRIL!! WHY? BECAUSE AS MYLCREEST SUGGESTS, THEY RAN OUT OF UNALLOCATED GOLD/WITH ONE DAY TO GO WE HAVE A HUGE 39,52…

Good evening Ladies and Gentlemen:
Gold: $1,213.80 DOWN $6.60 (comex closing time)
Silver 16.25 down 9 cents
In the access market 5:15 pm
Gold $1213.00
silver: 16.22
i) the May gold contract is a non active contract. Yet we started the month with 5.67 tonnes of gold standing and it has increased every single day (EXCEPT ON TWO DAYS)and today ends at 6.889 tonnes of gold standing:
The amount standing for gold at the comex in May is simply outstanding at 6.886 tonnes. 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 much is standing for delivery through the active month of June. June is the second largest delivery month after December.
Despite the whacking of silver, it’s OI refused to decline like gold. Our bankers and the CFTC are ‘quite baffled’ by this. We are now in our 6th year of high open interest in silver with a low price. This has never happened before.
If I am a betting man, it looks to me like China is the long taking delivery in gold and they are the longs waiting patiently to strike in silver.
Let us have a look at the data for today.
At the gold comex today we had a FAIR delivery day, registering 19 notices for 1900 ounces for gold, and for silver we had 552 notices for 2,760,000 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 263.13 tonnes for a loss of 39 tonnes over that period.
In silver, the open interest FELL by 1563 contracts DOWN to 200,326 DESPITE THE FACT THAT THE PRICE OF SILVER WAS UP by 8 cents with respect to YESTERDAY’S trading.. In ounces, the OI is still represented by just over 1 BILLION oz i.e. .1.002 BILLION TO BE EXACT or 143% of annual global silver production (ex Russia &ex China)
In silver we had 552 notices served upon for 2,760,000 oz.
In gold, the total comex gold OI fell by a CONSIDERABLE 17,134 contracts DOWN to 507,960 as the price of gold was DOWN $3.25 with yesterday’s trading(at comex closing). They certainly got the liquidation in gold but not silver. However what is surprising is the fact that we have still an extremely high OI for the front June contract month (active)
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With respect to our two criminal funds, the GLD and the SLV:
We had no change in gold inventory at the GLD The inventory rests at 868.66 tonnes. .
We had no change in silver inventory at the SLV/Inventory rests at 335.739 million oz.
First, here is an outline of what will be discussed tonight:

This post was published at Harvey Organ Blog on May 27, 2016.

How Elon Musk Helps Fools to Part Ways with Their Money

Tesla Goes Fishing
Tesla Motors is up to something remarkable. But what it is, exactly, is unclear. According to the Tesla Motors website, the company’s mission is: to accelerate the world’s transition to sustainable transport.
This all sounds quite brilliant, indeed. Though we must admit, we’re not really sure what sustainable transport is…or why the world’s transition to it should be accelerated. Nonetheless, we assume it is a noble cause.
Tesla’s bold CEO, Elon Musk, certainly thinks it is. In fact, the twelve billion dollar man is so sure of merits of the endeavor, he keeps upping the ante. The company is now on the hook to expand production of its electric vehicles to 500,000 a year by 2018.
They have got their work cut out for them. Production of 500,000 Tesla cars per year represents an increase of nearly 1,000 percent from the 50,580 electric vehicles the company delivered last year. Is this even remotely achievable?
Wall Street certainly thinks it is. For while Tesla is on the hook to deliver 500,000 electric vehicles per year by 2018, the big investment banks and the savvy investors they serve just bought the story, hook, line and sinker.

This post was published at Acting-Man on May 28, 2016.

Bank of America’s Winning Excuse: “We Didn’t Mean To”

Back in the late-housing-bubble period, in 2007, Countrywide Home Loans, which was then the largest mortgage provider in the country, rolled out a new lending program. The bank called it the ‘high-speed swim lane,’ or HSSL, or, even more to the point, ‘hustle.’ Countrywide, like most mortgage lenders, sold its loans to Wall Street banks or Fannie Mae and Freddie Mac, two mortgage giants, which bundled them and, in turn, sold them to investors. Unlike the Wall Street banks, Fannie and Freddie insured the loans, so they demanded only the ones of the highest quality. But by that time, borrowers with high credit scores were getting scarcer, and Countrywide faced the prospect of collapsing revenue and profits. Hence, the hustle program, which ‘streamlined’ Countrywide’s loan origination, cutting out underwriters and putting loan processors, whom the company had previously deemed not qualified to answer borrowers’ questions, in charge of reviewing loan applications. In practice, Countrywide dropped most of the conditions meant to insure that loans would be repaid.
The company didn’t tell Fannie or Freddie any of this, however. Lower-level Countrywide executives repeatedly warned top executives that the mortgages did not fulfill the requirements. Employees changed data about the mortgages to make them look better, sometimes increasing the borrower’s income on the forms until the loan looked acceptable. Then, Countrywide sold them to the mortgage giants anyway.
At one point, the head of underwriting at Countrywide wrote an alarmed e-mail, with a list of questions from employees, such as, does ‘the request to move loans mean we no longer care about quality?’

This post was published at Zero Hedge on 05/27/2016.

Silver Mining CEO: Triple-Digit Silver Prices Coming in the Near Future

The head of a major silver mining company says he thinks we will see triple-digit silver prices in the near future.
Keith Neumeyer serves as CEO of First Majestic Silver Corp. The company ranks as the second largest silver producer in Mexico – the world’s leading country in silver production. Neumeyer told Bloomberg a major Japanese electronics maker approached the company last month seeking to lock in future silver stock. This is a sign that supply concerns could significantly boost the price of the white metal – perhaps as much as nine-fold:
For an electronics manufacturer to come directly to us – that tells me something is changing in the market I think we’ll see three-digit silver.’
Neumeyer said he believes the price of silver could surge to $140 per ounce as early as 2019.

This post was published at Schiffgold on MAY 27, 2016.

Gold Juniors’ Q1’16 Fundamentals

The smaller gold-mining and exploration stocks have enjoyed an amazing year, soaring with gold’s new bull market. Many have more than doubled since mid-January, and some have more than tripled at best in that short span. Are such spectacular gains fundamentally-justified, or merely the result of ephemeral sentiment that could vanish anytime? The gold juniors’ recently-reported Q1’16 results offer great insights.
The junior gold miners and explorers play a critical role in the world gold market. They bear the major costs and risks associated with discovering and sometimes developing new economically-viable gold deposits. They painstakingly find the new gold reserves to offset the constant depletion of the world’s existing gold mines, acting as the headwaters feeding the global mined-gold-supply pipeline vital to this industry.
The larger gold miners rely extensively on the juniors’ crucial exploration and early-development work to maintain and replenish their own operations. While the majors certainly do their own exploration, it is far from sufficient to offset existing gold mines exhausting. So gold juniors are constantly targeted by the larger miners, which acquire these companies outright, buy their projects, or partner with them for development.
These smaller gold miners and especially explorers are far riskier than the major gold miners. Gold juniors usually only have one operating mine or one major high-potential exploration project. With all their eggs often in one basket, they lack the major miners’ diversification across mines, projects, and their geopolitical jurisdictions. And naturally bearing much more risk, juniors must have higher potential returns.

This post was published at ZEAL LLC on May 27, 2016.

Another Bubble Has Burst: The Miami Luxury Condo Market Is A “Ticking Timebomb”

Last year we warned that the luxury condo market in Miami was cooling down, and we also noted that one of the mail culprits was the fact that foreign buyers (especially Brazilians) were seeing their buying power crushed by the appreciating dollar.
Today, the bubble has officially burst and the Miami luxury condo market is a complete trainwreck. There are 3,397 condominiums available in the downtown Miami area, and at current prices it is estimated that it would take 29 months to sell those. A strong US Dollar has continued to force South American investors to unload recently built condos, adding inventory to an area where 8,000 units are under construction and nine towers have already been completed since 2013.

This post was published at Zero Hedge on 05/27/2016.

Hedge Fund Billionaire Slams Democracy, Says The “Tyranny Of The Majority Is An Unhealthy Development”

In his latest letter to investors, OakTree Capital’s Howard Marks goes political (slamming Trump’s tariffs and Bernie’s minimum wage machinations), shedding some blinding light on the economic reality of America, the dismal failure (and increasing impotence) of central bankers, and the ongoing “tryanny of the majority” warning that if everyone wants to tax-the-rich, soon there will be no rich to tax. As he concludes, short-term fixes simply cannot create wealth out of thin air (see Venezuela), as Churchill once said “for a nation to try to tax [or stimulate or devalue] itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
The billionaire investor highlights eight current policies and proposals by governments, central banks, and potential presidents; and exposes their dismal failures to adhere to the basics of economics:
Central Bank Monetary Stimulus: “In the old days, when cars often failed to start, there were fluids we could squirt into the carburetor to get them going. But they weren’t fuel for long-term operation.” Increasing Entitlements and Benefits: “Governments can’t create out of thin air the means with which to make disbursements.”

This post was published at Zero Hedge on 05/27/2016.

BTFVIX?

With Goldman suggesting VIX should be in the upper teens based on ‘fundamentals’ and event risks galore on the horizon (FOMC, Brexit, Spain elections, US elections, etc.) Geneva Swiss Bank suggests it is time to BTFVIX…
Goldman’s research indicates that changes in the unemployment rate, ISM new orders and consumer spending are three macro variables with explanatory power for modeling S&P 500 realized volatility and VIX levels across the business cycle. Although the VIX is often considered a ‘sentiment indicator’, a regression of average calendar month VIX levels on these three factors explains 58% of the variability in VIX levels back to 2000. The economic data currently suggests VIX levels of 18.5, about 4 points higher than the average VIX level in April and May.
VIX Scenarios: The exhibits below show simple two-factor models that predict average VIX levels using yoy change in the unemployment rate under our forecasts and the level of either the ISM manufacturing…

This post was published at Zero Hedge on 05/27/2016.

The SEC’s Cracking Down on All This Adjusted Earnings B.S.

For the past several months, the Securities and Exchange Commission (SEC) has been working to crack down on the use of adjusted earnings practices.
They’re threatening to tighten regulations and force companies to be more transparent.
That word always comes with a sting. Regulations – the dreaded ‘R’ word. It’s perhaps the most hated word in all of finance.
Indeed, new regulations could pose a major problem for thousands of U. S. companies. Investors might finally realize the emperor has no clothes.
Last week, The Wall Street Journal published an article stating that the SEC will continue to expand its recent policy. Beyond the increased use of adjusted earnings per share, companies have also been relying on non-GAAP measures of accounting. The SEC realizes that’s got to stop.
GAAP stands for ‘generally accepted accounting principles.’ So, non-GAAP basically stands for ‘free-for-all.’

This post was published at Wall Street Examiner by John Del Vecchio ‘ May 26, 2016.

Death By A Theta Cuts

Death by Theta
Even the most skeptical among us have to be impressed by the rip higher in U. S. equities over the past week. Absent an obvious positive catalyst, the S&P 500 Index (SPX, 2090.10) jumped 2.5% after flirting with lows since March and a potential test of the 200-day moving average.
More broadly, the SPX is just revisiting the top end of its range back to late 2014 while equity volatility has shifted back to a trough though importantly without having descended to a level that suggests a structural change in the high-volatility regime.
Still, there is little doubt that if stocks do manage to break out and sustain fresh highs than the broad swath of volatility metrics will collapse to levels more indicative of a low-volatility cycle. The period dating back to last August will have been an anomaly relative to historical regimes that have lasted upwards of five years.

This post was published at Zero Hedge on 05/27/2016.

Tom Woods: Rothbard Changed My Mind About War

The following video was published by misesmedia on May 27, 2016
It’s Memorial Day weekend, a time when we (hopefully) reflect on war rather than celebrate it. So, it’s the perfect opportunity to revisit an inspiring antiwar talk from our own Senior Fellow Tom Woods. You may not know it, but Tom was once a neocon who considered the libertarian position of noninterventionism unrealistic and naive. But his mind was changed by none other than the late Murray Rothbard, who convinced Tom that peace and liberty cannot be severed, that empire abroad leads to socialism at home, and that foreign policy should be front and center in a libertarian worldview.

Alibaba’s SEC Probe: What’s Missing From This Disclosure?

Alibaba’s SEC Probe: What’s Missing From This Disclosure?
Analyst Summary: On 24-May-2016, Alibaba Group disclosed what appears to be an informal SEC investigation. This is the first time this matter has been disclosed. Details are scant, leaving the investor unable to adequately assess the risk it poses. Using the template of who/what/where/when/why, we will examine what is missing. Our conclusion is you are left with a risk that management views as material but you cannot analyze. We generally recommend avoiding such scenarios.
Facts of Interest or Concern: The following is Alibaba Group’s disclosure from the 20-K filed 24-May-2016 –
Earlier this year, the U. S. Securities and Exchange Commission, or SEC, informed us that it was initiating an investigation into whether there have been any violations of the federal securities laws. The SEC has requested that we voluntarily provide it with documents and information relating to, among other things: our consolidation policies and practices (including our accounting for Cainiao Network as an equity method investee), our policies and practices applicable to related party transactions in general, and our reporting of operating data from Singles Day. We are voluntarily disclosing this SEC request for information and cooperating with the SEC and, through our legal counsel, have been providing the SEC with requested documents and information. The SEC advised us that the initiation of a request for information should not be construed as an indication by the SEC or its staff that any violation of the federal securities laws has occurred. This matter is ongoing, and, as with any regulatory proceeding, we cannot predict when it will be concluded. [emphasis added] We’ve not researched Alibaba Group in the past. Therefore we have no history or documents in our database on this company.

This post was published at Zero Hedge on 05/27/2016.

Breaking News And Best Of The Web

US debt becomes an issue. Bill Gross starts shorting corporate bonds. Great interviews with James Rickards and Helen Chaitman. Yesterday’s strong US economic reports are called into question. China plans to borrow even more. Oil stabilizes and gold continues to correct. Look for next week’s COT report to be a lot less bearish. Bitcoin gets a serious cryptocurrency competitor. Trump clinches the nomination.

This post was published at DollarCollapse on MAY 27, 2016.

Advice for young people: Make it count.

Very few people know this about me.
But, despite me being 37 years old, I actually have a little sister who recently turned 18 and just graduated from high school.
Technically she’s my half-sister – after my parents got divorced, my father remarried and had another child when I was 19.
We have a great relationship, and I visited her last week when I was in the US to discuss the inevitable dilemma that all young people face: what’s next?
Naturally, the dominant expectation for her is to go to university where the average young person in the Land of the Free walks away with $50,000 in debt.
And, by the way, that student debt is almost impossible to discharge.
So even if you’re forced to declare bankruptcy later in life, your student debt will continue to haunt you forever.
Student debt is really nothing more than a fancier form of indentured servitude.
It keeps people chained to jobs they hate where they have little prospect of personal or professional growth all so that they can keep making those monthly payments.

This post was published at Sovereign Man on May 27, 2016.

Why Stocks Keep Rising Despite Another Rate Hike On The Horizon: One Explanation

With Janet Yellen due to speak in under an hour (in a speech that will be a big dud because as SocGen notes, “little emphasis on the monetary policy outlook is expected at this event”), a recurring question is why does the market remain so nonchalant about the possibility of a rate hike as soon as one month from now.
One of the better explanations on the matter comes from Citi’s Steven Englander, according to whom it boils down to the market’s sentiment about what happens with the Fed’s hiking path after the first hike. As the Citi strategist points out, this is merely the latest feedback loop the Fed has found itself trapped in:
Asset markets have done very well since the fed funds market began pricing in a summer hike. The question is why? We think that investors are trading the equation
an extra 2016 hike but very little else better Q2 growth data = stronger asset markets
The question is whether this is a sustainable equation. Better growth, if sustained, is likely to induce more hikes. If we go from ~2.5% GDP in Q2 to 1.5-2% subsequently, we are likely to unwind the recent optimism.

This post was published at Zero Hedge on 05/27/2016.