JPMorgan’s Four Catalysts For Chaos In 2016

The tape faces four big catalysts/events between now and probably the end of the year according to JPMorgan:
1) The Fed. Do they move in June or Jul? The former has the Brexit problem on June 23 (although the odds of an ‘out’ vote have declined enormously) and the latter lacks a press conf. Will two hikes this year (one in the summer and another ostensibly in Dec after the elections) spark another steep rally in the USD or will currency markets stay calm?; 2) China FX – the CNY hit a high of ~6.60 vs. the USD earlier in the year, rallied to ~6.45 as of the end of Mar, and has since rebounded to ~6.58. It isn’t so much the absolute level that investors watch (although that is clearly important) but instead the pace of weakness that is most important (Aug saw a sharp devaluation and that repeated around the end of Dec/early Jan). The messaging from Chinese officials suggests they will avoid additional sudden 1x devaluations but further CNY weakness should be expected (JPM is assuming 6.63 by the end of Q3 and 6.75 by the end of the year);
3) Japan policy – the surprise adoption of NIRP on 1/29 was a major negative not only b/c it drove a global sell-off in bank stocks but also as it undermined central bank confidence in general. The BOJ is likely gearing up additional action (at either its 6/16 or 7/29 meeting) and it will be important for it avoid a repeat of 1/29;
4) US elections – the consensus expectation right now assumes a Clinton victory but current trends suggest such an outcome is far from certain. Hillary hasn’t even secured the Democratic nomination and appears headed for a very acrimonious convention. The GOP meanwhile is quickly unifying behind Trump and recent polls are pointing to a very close election in Nov. Note that control of the Senate is very much up for grabs this year too (the House seems safely in Republican hands).

This post was published at Zero Hedge on June 1, 2016.

Utopia Meets Reality in the EU

EU leaders obsessed with the idea of a federal Europe are losing touch with their populations and are fueling nationalist and Euroskeptic sentiment across the Continent. At least, this is how Donald Tusk, European Council president, summarized the situation in Europe during a May 30 European People’s Party summit. According to Tusk, EU leaders create “all kinds of utopias – a utopia of Europe without nation states, a utopia of Europe without conflicting interests and ambitions,” even though “the citizens of Europe do not share our Euro-enthusiasm.” Tusk is not the first EU representative to question the future of Continental integration (EU Commission President Jean-Claude Juncker recently made similar statements). But Tusk’s choice of words is notable. EU integration has often been described as a goal, an aspiration or even a dream – all concepts that involve a degree of hope to achieve a possibility. But by definition, a utopia is an imaginary place that exists only as an ideal; the word itself comes from the Greek “ou-topos,” meaning “nowhere.” Tusk has therefore admitted that a fully integrated Europe, however ideal, is impossible.
Read What the Greek Deal Does and Does Not Do
That the statement came from the head of the European Council may seem shocking. After all, EU institutions were designed to propagate more and deeper Continental integration, and Tusk is from Poland, a country that embraced EU membership just 12 years ago. Nonetheless, the European Council comprises the heads of government of EU member states, and today many European governments – and their constituencies – share Tusk’s view.

This post was published at FinancialSense on 06/01/2016.

State Department Admits It Deliberately Cut Video Confirming It Lies To The Public

Three weeks ago a mini scandal erupted, when the State Department was accused of purposefully altering a briefing video to remove a portion of a discussion about the Iran nuclear talks. The missing clip involved then spokeswoman Jen Psaki, who was asked in 2013 whether officials ever lie to the public to protect national security interests. Psaki indirectly confirmed that this happens. “James, I think there are times where diplomacy needs privacy in order to progress. This is a good example of that,” Psaki replied to Fox News reporter James Rosen. Or, as Jean-Claude Juncker would openly admit, “when it gets serious, you have to lie.”
When it was revealed that the video had been edited to remove those comments, the State Department quickly restored the entire video, and blamed the missing video on a “glitch.”
Well, as market participants know too well, any time a “glitch” is used as an excuse, it is to protect one or more guilty parties who have enough power and/or money to blame their action on a technical error, usually in the passive voice.
This is what happened this time as well.

This post was published at Zero Hedge on June 1, 2016.

Coming Destruction? Alan Greenspan Warns ‘Venezuela Under Martial Law and America Is Next’

The potential for a truly devastating economic collapse has been real for some time.
And it is coming to America.
Though most Americans are accustomed to having shelves full of food and goods, and enough money to keep going, this sense of security is quite false.
The real economy is bottoming out, and the experts have been warning about the extreme stress in the system for some time.
Job growth has stagnated, personal and institution debt is teetering on edge and the central bank policies of the Federal Reserve have been widening the gap between artificially-boosted corporate interests… and all the rest who have been stymied by low-interest cash flowing to the top of the pyramid at zero interest (and failing to trickle down).
While the United States seems miles apart from the implosion taking place in Venezuela, looks can be deceiving. Even former Federal Reserve chairman Alan Greenspan is admitting it.

This post was published at shtfplan on June 1st, 2016.

Liquidity Panic? A $90 Million Sell Order Crashed China’s Futures Market

Seemingly missed by the mainstream media on Monday, Chinese equity futures crashed over 12.5% – the biggest drop since 1995 – only to soar back to unchanged within seconds. This was not a ‘fat-finger’ trade, and as one trader noted, “liquidity in the market is really thin right now,” which is borne out by the evidence. Thanks to government rules disabling “hedging” accounts from holding more than 10 contracts a day, volume (and liquidity) has become practically non-existent since September and so the 12.5% flash crash was driven by just 3 trades totalling just 646 contracts which means a mere $92 million sell order collapsed Chinese equity markets by the most on record.
A shocking move…

This post was published at Zero Hedge on June 1, 2016.

Claudio Grass Interviews Felix Zulauf

Government Intervention is Making Things Worse
Our good friend and frequent contributor Claudio Grass, the CEO of Global Gold, has recently interviewed legendary Swiss fund manager Felix Zulauf. A wide range of topics was discussed, including monetary policy, the market outlook, investment decisions and precious metals.


This post was published at Acting-Man on June 2, 2016.

How We’ll Know When to Buy This Hated Commodity

Commodities Rout Not Quite Over Just Yet
We have not been true believers in the recent oil rally. And we still aren’t. Oil made a huge move, at one point nearly doubling in three months, but it’s still not at levels where US shale oil producers or Canadian tar sands producers can thrive, or even survive for long. We think the pain isn’t over.
We have seen this play out in US natural gas. Every major rally brought new production on line followed by an even greater natural gas glut – along with a subsequent crash in prices. The process has been going on since 2009 – six full years – and it is destroying the industry. But because the industry is now being sufficiently destroyed, with creditors busy licking their wounds and many stockholders wiped out, we feel the bottom for natural gas is in. Not for drillers – but for the price of US natural gas.
That’s not yet the case with oil.
Other commodities have rallied too, such as copper, only to swoon again. Agricultural commodities, after having gotten sacked, are struggling to creep higher. The S&P GSCI Agriculture index is up 12% from its February low, but it too appears to be out of breath. Corn is up 18% since the beginning of April, but at just over $4.14 a bushel, it’s still at beaten-down levels.

This post was published at Wolf Street by Wolf Richter ‘ June 1, 2016.

WTI Slides Back To $48 Handle After Surprise Build In Crude Inventories

With oil traders playing headline-hockey ahead of tomorrow’s OPEC meeting, tonight’s API data may not be quite as consequential as usual. With sizable draws expected overall and at Cushing, API reported a shocking 2.35mm build (2.5mm draw expected) which, despite a bigger than expected 1.1mm draw at Cushing (twice the expected) sent WTI Crude prices tumbling. Gasoline and Distillates both saw draws with the latter’s 7th consecutive week – the longest streak since oct 2015.
API
Crude 2.35mm (-2.5mm exp) Cushing -1.1mm (-500k exp) Gasoline -1.48mm Distillates -1.15mm Following last week’s bigger than expected draw in crude, this week’s build was a big surprise (2nd biggest build in 2 months) and we see 7th consecutive draw in distillates,

This post was published at Zero Hedge on June 1, 2016.

Gundlach Was Right About The Short Squeeze; Warns Of “Massive Anxiety” About The Market

Jeff Gundlach has reason to celebrate: as of today, his DoubleLine capital, founded less than 7 years ago, now manages $100 billion in assets, a key milestone for the fund – recall that Pimco’s Total Return Fund made major headline when it sunk under $100 billion just last September. As Reuters reports, the DoubleLine open-end mutual funds collectively posted a net inflow of $1.48 billion in May, bringing the 2016 net inflow to $9.05 billion. The DoubleLine Total Return Bond Fund, the largest fund by total assets of DoubleLine, had a net inflow of about $919 million in May, for a year-to-date net inflow of $7.20 billion.
Which is perhaps surprising: unlike most other bond managers, DoubleLine has not hidden his skepticism of the market, and has not been generally unsupportive of the path central bankers have taken since the financial crisis. However, that has not prevented him from getting numerous key calls right, leading to substantial outperformance among his peer group. In fact, only recently he said the he is “sticking with my ‘2 percent upside and 20 downside’ prediction on U. S. stocks…. it’s working, I can see it going to 1,600.” He reiterated his caution in his latest interview today with Reuters when he said on Wednesday that financial markets are extremely vulnerable to a “pretty good cocktail” of three factors: The Federal Reserve raising interest rates, the labor market weakening and Republican presidential candidate Donald Trump.
“You’re going to have the Fed raising rates, the labor market is already softening and you’ll see ‘scare’ articles about Trump that read, ‘If you vote for this guy, we will go into depression’,” Gundlach said.

This post was published at Zero Hedge on June 1, 2016.

JUNE 1/ANOTHER HUGE GOLD NOTICE FILING AT THE COMEX FOR 228,100 OZ./ATTEMPTED RAID ON GOLD AND SILVER TODAY A FAILURE/TERRIBLE PMI FIGUES THROUGHOUT THE GLOBE: JAPAN, CHINA, EUROPE AND USA/JAPAN …

Good evening Ladies and Gentlemen:
Gold: $1,211.90 DOWN $2.90 (comex closing time)
Silver 15.91 down 6 cents
In the access market 5:15 pm
Gold $1213.00
silver: 15.98
i) the June gold contract is an active contract and the second biggest delivery month of the year following December. Friday night, the bankers first day delivery issuance to our longs to be settled on June 1 was huge: the number was 3,508 gold notices for 350,800 oz or 10.9 tonnes of gold. On day two, we had another huge number of gold notices filed at 2281 for 228100 oz or 7.09 tonnes of gold. Thus in two days a total of 5789 notices have been filed for 578900 oz or 18.00 tonnes. There is no question that the bankers have uttered these words to one another: ‘Houston, we have a problem’ in gold.
Let us have a look at the data for today.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 265.13 tonnes for a loss of 38 tonnes over that period
In silver, the total open interest FELL by only 1554 contracts DOWN to 198,118 DESPITE THE FACT THAT THE PRICE OF SILVER WAS DOWN by a considerable 28 cents with respect to YESTERDAY’S trading. In ounces, the OI is still represented by just under 1 BILLION oz i.e. 0.990 BILLION TO BE EXACT or 141% of annual global silver production (ex Russia &ex China)
In silver we had 0 notices served upon for nil oz.
In gold, the total comex gold OI rose by a tiny 1241 contracts up to 44,321 as the price of gold was UP $1.10 with YESTERDAY’S trading(at comex closing).
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With respect to our two criminal funds, the GLD and the SLV:
We had a good size deposit in gold inventory at the GLD at 2.08 tonnes. The inventory rests at 870.74 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 June 1, 2016.

SP 500 and NDX Futures Daily Charts – Schools for Scandal – Collaborators par Excellence

‘Tale-bearers are as bad as the tale-makers.’
Richard Brinsley Sheridan, The School for Scandal
“Life is a school of probability.”
Walter Bagehot
And the Fed is one of the modern schools for scandal. Or at the least, an academy in service to their owners. This seems to be the dernier cri of our professional class, a mark of status being whom you serve and how well.
Tale-bearers they may claim to be, just doing what needs be done, and at the behest of the powerful few. They only serve the needs of the money men, and their fellow valets in the credentialed class of whatever needs to be said or done in service to the powerful status quo.
Insiders never speak ill of insiders, and so the public is held stagnant by their comfortably smug complacency. And this is the heart of the problem, and the credibility trap.
However, their complicity in a long standing series of egregiously self-serving policy errors will be very hard to overlook and forgive when the tails of probability come lashing out again.

This post was published at Jesses Crossroads Cafe on 01 JUNE 2016.

What Happens When Thousands Of Chinese Cab Drivers Get Pissed At Uber

Ride-hailing services such as Uber and Didi are a deflationary, VC-funded blessing and convenience to consumers (and lately, to Goldman Sachs). But to cab drivers, the services provided by the Ubers and Didis of the world are a mortal threat: in the past we have seen troubling images from many corners around the world, most notably Europe, when the taxi industry, threatened by the new service, take arms – in some cases literally – against ride-hailing apps.
But in this latest example from the central Chinese city of Xi’an, courtesy of Tech In Asia, we see what happens when thousands of Chinese cab drivers take aim at consumer convenience. As you can see in the images below (which come via some Xi’an-based Sina Weibo users), taxi drivers congregated in a central area near the city’s ancient bell tower and made themselves into a massive traffic jam.

This post was published at Zero Hedge on June 1, 2016.

Gold Daily and Silver Weekly Charts – The Lesser of Two Evils – Non Full time Payrolls

There was another rather large set of gold deliveries on the Comex for the new June contract period yesterday.
Non-farm Payrolls (or should that be Non-full time Payrolls) on Friday.
It would not surprise me if this entire election was as well scripted as a professional wrestling event. It certainly has most of the elements of one of those dramas. And the participants are comparably qualified.
Hillary’s brand amongst Democrats is that she deserves this election, that it is her turn. And to independents the pitch is that she represents the ‘lesser of two evils.’
Or perhaps the less indictable.
That is certainly how one prefers to decide most things. Of these two selections of fish, which is less rotten?
Perhaps we should just have the salad instead.
When, when will we have had enough of this?

This post was published at Jesses Crossroads Cafe on 01 JUNE 2016.

A Glimpse Into The Future Of What The Economic Collapse Might Look Like – Episode 986a

The following video was published by X22Report on Jun 1, 2016
Eurozone crisis continues, 16 million people are in poverty or on the edge. Auto sales decline, this is being blamed on the weather, shorten months or any other excuse the US government & corporate media can come up with. Construction spending collapses, but new construction according to the government has increase?? Manufacturing continues its decline. Nations are stockpiling gold. Venezuela has been hit hard by inflation, food, medical supply and basic necessities shortages. This is a small glimpse of what a collapse will look like. Russia and Saudi Arabia continue to dump US assets.

8 Reasons Why It Is So Hard To Find Someone Decent To Marry

It is not easy to be single in America today. If you are a man, it can be exceedingly difficult to find a good woman to marry. If you are a woman, it is literally a miracle if you can find a good man to marry. So is it just our imaginations, or has the process of finding a mate become much more challenging in recent years? Well, it is a fact that fewer people are getting married these days. For the first time in our history, there are more single adults in our country than married adults, and Time Magazinesays that 25 percent of Millennials will never get married even once in their entire lifetimes. And of course those that do get married are taking far longer to do so than previous generations. Just recently, I wrote about how the average American woman is getting married 7.0 years later than she did in 1956, and the average American man is getting married 6.7 years later than he did back at that time.
So why is this happening?
Why has finding love become so challenging?
Below, I would like to share 8 reasons why it has become so hard to find someone decent to marry…
#1 The Me-Centered Society
We live in a ‘me-centered’ society in which tens of millions of us are literally in love with ourselves. When pleasing self becomes the highest priority, that doesn’t leave a lot of room for the kind of self-sacrificial love that marriage requires. An astounding24 billion ‘selfies’ were uploaded to Google last year, and that says a whole lot about where we are at as a nation. So many of us are inclined to stay with our ‘partners’ for only as long as they make us happy, and the instant that ends many of us wish to dispose of them. And that is a lot easier to do if you are ‘living together’ instead of being legally married.
#2 It Has Become Much More Difficult To Find Someone With Good Values
The moral collapse of America is something that I write about extensively. As a society, we have rejected the values of previous generations, and today most people generally do whatever they feel like doing. But this can become a major problem when you are looking for someone ‘that shares your values’ to get married to. According to the Pew Research Center, more than half of all Americans that belong to the ‘Silent Generation’ attend religious services weekly, but less than 30 percent of all Millennials do. With each passing generation, we have become less Christian, less ‘conservative’, and less moral. Unfortunately for young single adults, these trends do not seem likely to change in a major way any time soon.

This post was published at The Economic Collapse Blog on June 1st, 2016.

The Great Hollowing Out Of The Middle Class: New Business Formation Collapses

For a country that prides itself (or used to at least) on the success of the entrepreneur and small business creation, a disturbing trend has developed. According to according to a new analysis by the Economic Innovation Group, fewer new businesses were created in the last five years than any other period since at least 1980.
“It’s hard to put into scale the collapse of new business formation. We have no precedent for that rapid and steep of a decline. It will have a ripple effect in the economy. You’re going to feel that impact five, 10, 15 years in the future” said John Lettieri, co-author of the report and co-founder of EIG.

This post was published at Zero Hedge on June 1, 2016.

No Kidding – Hope Is Not a Viable Investment Strategy for Twitter

I just about fell out of bed last week when I rolled over to scan the first of hundreds of headlines I look at when my day starts, and saw this from IBTimes:
… ‘Hope Is Not a Strategy’ for Twitter
Not that I’m surprised somebody else finally caught on and called the one-time media darling for what it is, only that it’s taken so long for everybody to glom on to what we’ve been discussing since the company IPO’d in 2013… and used almost the exact language I have to describe the situation since.
But, there’s something else you should know.
It’s a shocking ‘secret’ that most investors will never understand: The numbers have never lied, and when it comes to much bally-hooed companies like TwitterInc. (NYSE: TWTR), they never do.
That’s what we’re going to talk about today.
As always, I’m going to give you a viable alternative and suggestions on the tactics you need to make the jump.

This post was published at Wall Street Examiner by Keith Fitz-Gerald ‘ May 31, 2016.

Currency Manipulation by the United States Is Alive and Well

Last month, central bankers and finance leaders from the Group of 7 (G-7) advanced economies met in Sendai to discuss the global economy at large. As expected, the United States cautioned Japan, a US currency watchlist country, to refrain from taking further steps to manipulate its currency. This warning came as a result of finance minister Taro Aso hinting that his country was ‘prepared to undertake intervention’ in the foreign exchange market in order to weaken the yen.
The hypocrisy of US Treasury Secretary Lew’s injunction is laughable. He might as well have told Japan, ‘We’re America, we’re powerful, and we’re allowed to make rules that we’re allowed to break,’ because that was certainly the implication of his words.
Historically, the US has been the world’s leading cheerleader for currency manipulation. Not only has the US encouraged and aided Japan in its quest to keep the yen’s value low, but it has also mimicked Japan’s own export-friendly monetary policy in times of panic.
What Is Currency Manipulation? Currency manipulation is essentially when a country artificially weakens the value of its currency to increase its net exports. This can be done in one of two ways:
By purchasing foreign currencies in the exchange market to increase their buying power. By using dovish monetary policy to increase inflation, cut interest rates, and reduce domestic purchasing power.

This post was published at Ludwig von Mises Institute on June 1, 2016.

Dismal Global Data Sparks VIXtermination-Driven Ramp To S&P 2,100

As if by magic, a boring Beige Book was all the algos needed to slam VIX and lift stocks to the magical unicorn level of 2,100 for the S&P 500… Because why not dump protection ahead of OPEC, ECB, and Payrolls – makes perfect sense really…Sadly, the machines just couldn;’ hold it there for the close

Simply put, today’s ubiquitous V-shape recovery in stocks is yet another example of the only way to win…

This post was published at Zero Hedge on June 1, 2016.

Greece To Manufacture Kalashnikovs For Russia… On One Condition

Amid rising social unrest as yet another bailout is negotiated to pass-through Greek government hands to the banks, this week brought some potentially good news for the Greek economy. Following Tsipras and Putin’s meetings this week, ekathimerini.com reports that Defense Minister Panos Kammenos unveiled a newpartnership with Russia to manufacture Kalashnikov rifles “ending the prospect of Greece’s defense industry shutting down.” There’s just one small condition for this growth-enhancing, job-creating program to begin –Europe must end its embargo with Russia (and break with its Washington vassal status).
As KeepTalkingGreece.com explains,
Defense Minister Panos Kammenos was proud to announce a joint Greek-Russian project: the co-production of Kalashnikov riffles in a factory in Aigio in northern Peloponnese. But the manufacture will not start tomorrow.

This post was published at Zero Hedge on June 1, 2016.