Death to All Zombies!

Wait a minute. They’re already dead. Brexit just reveals that not everybody’s brains have been eaten. A viral contagion now threatens the zombified institutions of daily life, especially the workings of politics and finance. Just as zombies exist only in the collective imagination, so do these two principal activities of society operate mainly on trust, an ephemeral product of the hive-mind.
When things fall apart in stressed complex systems, they tend to fall apart fast. It’s called phase change. Too many things in 21st century life have depended on sheer trust that the people-in-charge know what they are doing. That trust has subsisted on the doling out of money-from-nothing: debt, reckless bond issuance. TARP, QEs, bailouts, bail-ins, Operation Twists, Ponzi schemes… the whole sad-ass armamentarium of banking necromancy. The politicians let it get out of hand. Things that can’t go on don’t, and now they won’t.
The politics of Great Britain are now falling apart landslide-style. Since just about everybody in or near power can be blamed for the national predicament, there’s nobody to turn to, at least not yet. The Labour party just acted out The Caine Mutiny, starring Jeremy Corbyn as Captain Queeg. The Tory Cameron gave three months notice without any plausible replacement in view. Now Cameron’s people are hinting in the media that they can just drag their feet on Brexit, that is, not do anything to enable it from actually happening for a while. Of course, that’s what the monkeyshines of banking and finance have done: postponed the inevitable reckoning with the realities of our time: growing resource scarcity, population overshoot, climate change, ecological holocaust, and the diminishing returns of technology.

This post was published at Wall Street Examiner on June 27, 2016.

Something Just Snapped In VIX

With ETF shares outstanding spiking and near-record short futures exposure in the VIX complex, something is breaking as after-hours trading is showing some significant moves higher in VIX futures and ETFs. Whether this is a short Vol margin call or, as some havs suggested, delayed dark pool prints showing up, it is sending algos scrambling…

This post was published at Zero Hedge on Jun 27, 2016.

This Will Push The Gold Market Over The Edge

This could be the year that the mainstream investor finally pushes the gold market over the edge. While a fraction of investors continue to acquire a lot of physical gold, the mainstream investor is the key to driving the gold market and price going forward.
Why? Because the diehard precious metal investors don’t have the sort of leverage as do the mainstream investors, which account for 99% of the market. I have stated several times in articles and interviews that it will be the surge of gold buying by the mainstream investor that will finally overwhelm the gold market.
This next chart shows just how much leverage the mainstream investor has on the gold market. When the Dow Jones Index fell a lousy 2,000 points during the first quarter of 2016, mainstream investors flooded into Gold ETF’s & Funds. This continued into the second quarter, including the surge in buying after the BREXIT ‘Leave Vote’ this past Friday:

This post was published at SRSrocco Report on June 27, 2016.

Over $2 Trillion ‘Wiped Out’ After Brexit: Friday Was the Biggest Single Day Loss Ever

Whatever your feelings on the victory for Brexit campaigners in the UK, and the ensuing drama in Europe, the referendum has taken a heavy toll on the economy.
There were massive losses last Friday before the markets closed, and more than $2 trillion in wealth was wiped out. Hundreds of the world’s richest lost as much as a billion dollars in just a day.
And the worst could be yet to come.
The unprecedented market chaos was even larger than that which precipitated the 2008 financial collapse.
via Reuters:
The $2.08 trillion wiped off global equity markets on Friday after Britain voted to leave the European Union was the biggest daily loss ever, trumping the Lehman Brothers bankruptcy during the 2008 financial crisis and the Black Monday stock market crash of 1987, according to Standard & Poor’s Dow Jones Indices.
Global markets skidded following the unexpected result from the June 23 referendum, in which Britons voted to withdraw from the EU by a 52 percent to 48 percent margin.
Markets in mainland Europe were hit the worst, with Milan and Madrid each down more than 12 percent for their biggest losses ever.

This post was published at shtfplan on June 27th, 2016.

Brexit Just ‘Killed’ London as the Energy Capital of the World

There was no sleep Thursday night in my global network, as it became increasingly clear the UK had voted to leave the EU. Major moves are underway in the global energy sector as players attempt to wrestle with what may be the biggest single event to jolt markets in decades. Once the dust settles, the UK will take its place as a now second-tier economy.
And after talking with my contacts in Europe and Asia, here are the immediate takeaways from the Brexit vote for you and your investments…
This Is Political Suicide
Some 80 years ago a mainstay of the Greenwich Village literary scene coined a phrase that has been with us ever since. Gertrude Stein traveled from New York to Oakland. Upon her return from the West Coast, somebody asked for her reaction.

This post was published at Wall Street Examiner by Dr. Kent Moors ‘ June 27, 2016.

The Brexit Reaction Is The Reason Brexit Happened

…the freedom to make mistakes is itself an essential component of freedom.
As a rule, people resent being saved from themselves. And if you think depriving people of their right to make mistakes makes sense, you probably never had respect for their right to make decisions at all.
This is all relevant in the wake of the Brexit referendum, in which British citizens narrowly voted to exit the European Union.
Because the vote was viewed as having been driven by the same racist passions that are fueling the campaign of Donald Trump, a wide swath of commentators suggested that democracy erred, and the vote should perhaps be canceled, for the Britons’ own good.

This post was published at Zero Hedge on Jun 27, 2016.

Brexit Blues: S&P Cuts UK Top Credit Rating To AA After 2 Days (US 10Y Treasury Yield Falls To 1.455%)

Well, ain’t that a kick in the head. S&P just downgraded UK’s top credit rating from AAA to AA after the Brexit vote. (Bloomberg) – S&P Global Ratings cut the U. K.’s top credit grade by two levels after the country voted to leave the European Union last week. S&P lowered the rating to AA from AAA, citing the risk of a less predictable, stable, and effective policy framework in the U. K. The cut also ‘reflects the risks of a marked deterioration of external financing conditions’ and constitutional issues arising from the majority of voters in Scotland and Northern Ireland having opted to remain in the EU. The rating company left the U. K. on negative outlook, reflecting the risk to ‘economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the U. K. if there is another referendum on Scottish independence.’Moritz Kraemer, S&P’s global sovereign chief ratings officer, said in an interview on Bloomberg Television on Friday that the company would be looking at the longer-term political fallout as well as the economic impact to the vote. Prime Minister David Cameron announced last week that he will step down, while the opposition Labour Party is in turmoil after the resignation of senior figures. The downgrade may just be the first as the biggest rating companies reconsider the U. K. in the light of last week’s referendum result and the resulting economic and political repercussions. Moody’s Investors Service lowered its outlook on the country to negative from stable on Friday. It has the U. K. one step below its top grade at Aa1. In the days since the vote, global markets have buckled, infecting every asset class, and sending the pound plunging the most on record. U. K. government bonds surged, pushing the 10-year yield below 1 percent for the first time, amid speculation the Bank of England will maintain an easy monetary policy to ward off the risk of recession.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ June 27, 2016.

Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard

On Friday afternoon, after the shocking Brexit referendum, while being interviewed by CNBC Alan Greenspan stunned his hosts when he said that things are about as bad as he has ever seen.
“This is the worst period, I recall since I’ve been in public service. There’s nothing like it, including the crisis – remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I’d love to find something positive to say.”
Strangely enough, he was not refering to the British exodus but to America’s own economic troubles.
Today, Greenspan was on Bloomberg Surveillance where in an extensive, 30 minutes interview he was urged to give his take on the British referendum outcome. According to Greenspan, David Cameron miscalculated and made a ‘terrible mistake’ in holding a referendum. That decision led to a ‘terrible outcome in all respects,’ Greenspan said. “It didn’t have to happen.’ Greenspan then noted that as a result of Brexit, “we are in very early days a crisis which has got a way to go”, and point to Scotland which he said will likely have another referendum on its own, predicting the vote would be successful, and Northern Ireland would ‘probably’ go the same way.
His remarks then centered on the Eurozone which he defined as a truly ‘vulnerable institution,’ primarily due to Greece’s inclusion in its structure. ‘Get Greece out. They’re a toxic liability sitting in the middle of a very important economic zone.” Ironically, the same Eurozone has spent countless hours doing everything in its power to show just how unbreakable the union is by preserving Greece, while it took the UK just one overnight session to break away. Luckily the UK was not part of the monetary union or else it would be game over.

This post was published at Zero Hedge on Jun 27, 2016.

JUNE 27/COMEX GOLD OPEN INTEREST RISES BY A HUGE 10% UP TO 619,597 CONTRACTS/GOLD OI FOR JUNE RISES BY ANOTHER 129 CONTRACTS/ A HUGE 5384 CONTRACTS STILL STANDING FOR JULY OR 16.5 TONNES OF GOLD/…

Good evening Ladies and Gentlemen:
Today’s quote from Martin Schulz, President of the European Parliament…
Schulz: ‘The British have violated the rules. It is not the EU philosophy that the crowd can decide its fate’.
Gold: $1,322.50 UP $2.30 (comex closing time)
Silver 17.74 down 5 cents
In the access market 5:15 pm
Gold: 1325.00
Silver: 17.76
The June gold contract is an active contract. Last night we had a fair sized 41 notices filed last night, for 4100 oz to be served upon today. The total number of notices filed in the first 17 days is enormous at 15,481 for 1,548,100 oz. (48.15 tonnes)
ii) in silver we had 31 notices filed for 155,000 oz.. Total number of notices served in the 17 days: 615 for 3,075,000 oz
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 278.966 tonnes for a loss of 24 tonnes over that period
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In silver, the total open interest fell by a considerable 1,533 contracts down to 217466, AND NOW CLOSE TO A ALL TIME RECORD DESPITE THE FACT THAT THE PRICE OF SILVER WAS UP 44 CENTS with respect to FRIDAY’S trading. In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.087 BILLION TO BE EXACT or 155% of annual global silver production (ex Russia &ex China)
In silver we had 31 notices served upon for 155,000 oz.
In gold, the total comex gold OI ROSE by a HUGE 50,091 contracts UP to 619,597 as the price of gold was UP $58.80 with FRIDAY’S trading (at comex closing).
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With respect to our two criminal funds, the GLD and the SLV:
GLD
A huge changes in gold inventory. a massive deposit of 18.415 tonnes into the gold inventory/
Total gold inventory: 934.313 tonnes
SLV
A tiny 570,000 oz enters the SLV inventory
Inventory rests at 332.784 million oz.
First, here is an outline of what will be discussed tonight:

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

Greece To “Name & Shame” Debtors Owing Over EUR300k To The State

Greece’s Finance Ministry is determined to collect what belongs to the state and as KeepTalkingGreece reports, since repayment settlements and other forms of arrangements have apparently failed in pushing debtors to put their hands in their pockets, the ministry will call in the internet cavalry: it will name & shame on the web the names of those debtors owing more than 300,000 euro to tax office or to social security and pension funds.
The provision that it will make mandatory the disclosure of debtors’ names will be included in the bill for ‘smuggling of tobacco products’ expected to be submitted to the Parliament soon.
The provision will affect debtors owing to the tax office more than 300,000 euro and to social security funds amounts more than this. If the debtor owes to the tax office and the social security funds the total amount of debt will be published.

This post was published at Zero Hedge on JUN 27, 2016.

Chicago Is Pushing For A Massive Bailout Of Its Public School System

It is well known that Chicago’s pension liabilities have completely decimated the city’s finances and currently stand at close to $20 billion. Faced with a significant challenge of meeting funding obligations as a result of a 2010 state law, Mayor Rahm Emanuel recently won a slight reprieve in the amount of money the city would have to contribute to fund the liabilities over the next few years, as recently Illinois lawmakers overrode Governor Bruce Rauner’s veto and will now change the legislation in order to allow the city to defer payments to fund pensions.
Under the prior legislation, Chicago was required to have its public safety workers pensions 90% funded by 2040, and called for an $834 million payment to be made in 2016 alone. The revised legislation reduces that amount to $619 million, and allows for smaller increases through 2020 while pushing the timeline for 90% funding out to 2055 – at which time the timeline will be extended once again of course, as it will never be possible for the City to come up with such funds.
Perhaps riding high on that small victory, Rahm Emanuel is now quietly asking the city to change investment rules that would allow Chicago to purchase debt from sister agencies such as the Chicago Public School system – said differently, Rahm Emanuel wants to bail out the Chicago Public School system.

This post was published at Zero Hedge on Jun 27, 2016.

These “Brexit” Market Moves Were Bigger Than Anything Seen In 2008… And What Comes Next

When the general population is asked to define a moment of paradigmatic instability in the history of financial markets, inevitably 2008 – in which there was a unprecedented divergence between risk perception
and the ultimate reality which saw Lehman fail and lead to the near collapse of the financial system – is the most cited answer. However, on Friday various markets saw volatile moves that put 2008 in the dust: in fact, the historic collapse in GBPUSD was not only far greater than any such move seen in history, but was an unprecedented 12-sigma move.
As Bank of America notes, post Britain’s vote to Leave the EU, the Euro STOXX 50 experienced its largest ever 1-day loss, GBPUSD reached 30yr lows and EURJPY, EURUSD & 10yr Bunds experienced 1d moves that were more significant than on any day in 2008. Gaps in risk perception that were evident even as recently as last week (VSTOXX-VIX spread was as wide as 20pts), may narrow further as spillover risk to global assets remains high. Indeed the Critical Stress Indicator of BofAML’s GFSITM index triggered on 13-Jun, suggesting cross asset stresses had risen by enough to lead to widespread contagion, absent policy intervention.
More details:

This post was published at Zero Hedge on Jun 27, 2016.

European Banks Get Crushed, Worst 2-Day Plunge Ever, Italian Banks to Get Taxpayer Bailout, Contagion Hits US Banks

European banking crisis jumps to the next level.
European bank stocks just experienced their worst two-day plunge ever in the post-Brexit fallout that rained down on the already blooming European banking crisis.
Healthy big banks would get over Brexit and the political turmoil it is spawning, particularly non-UK banks. But there are no healthy big banks in Europe. And non-UK banks are crashing just as hard, and some harder. This is about a banking crisis morphing into a financial crisis.
These bank stocks got crushed on Friday. And they got crushed again today. Italian banks have been reduced to penny stocks. Spanish banks are getting closer. Commerzbank, Germany’s second largest bank, and still partially owned by the German government as a consequence of the last bailout, is well on the way.
The two-day losses are just breathtaking. This table shows the largest banks by country with their percentage losses for today and for the two-day period:

This post was published at Wolf Street by Wolf Richter ‘ June 27, 2016.

Gold Daily and Silver Weekly Charts – Wizard of Finance

The Brexit continues playing out.
The professional elite are, for the most part, talking around the matter, and whistling past the graveyard of their own long coming and well deserved demise. What has been called ‘the placebo syndrome’ of mindless pursuit of power and goods.
I think if you look at the charts, particularly the gold chart, you can see the preferred levels of support that must be held to make the bullish case.
I have forecasted for some time that the pressures in the physical bullion markets, particularly in London, would be feeling the pinch this month. And I think we are seeing that, although for the most part, the response of the official powers that be is denial.
This is the nature of the credibility trap.

This post was published at Jesses Crossroads Cafe on 27 JUNE 2016.

S&P Downgrades UK From AAA To AA Due To Brexit: Full Text

That didn’t take too long: just as the rating agencies warned as part of the scaremongering campaing, the downgrades of the UK have begun. None of this is surprising: now that both S&P and Moodys are also policy tools of the “establishment”, demonstrated so vividly in the downgrade and upgrade games involving Greece and most recently Poland, this is merely another attempt to push the UK citizens to undo last week’s historic referendum.
Here is how you know S&P has gotten orders from up top to unleash the heavy artillery: “Brexit could also, over time, diminish sterling’s role as a global reserve currency.”
Odd, that language was missing in 2011 when S&P downgraded the US.
In any case, considering 10Y Gilts are trading at a record low 0.93% knowing full well this downgrade was imminent, it is quite clear just how much “credibility” with the market rating agencies still have.

This post was published at Zero Hedge on Jun 27, 2016.

“This Is A Recession” – Dallas Fed Workweek Hits 7-Year Low

The Dallas Fed Business Outlook has now been in contraction for 18 straight months. The underlying components are mixed but the average workweek has collapsed back to its lowest since Nov 2009. As one respondent noted, “This is a recession… Fed policy has us locked into a lethargic and tenuous position… We cannot have millions of people out of the workforce and be healthy economically – they are a burden not a benefit.“
The biggest drop in Dallas Fed workweek since 2009!

This post was published at Zero Hedge on Jun 27, 2016.

These Three Survey Responses Explain Everything That Is Wrong With The US Economy

There is nothing one can add to these three Dallas Fed Manufacturing Activity respondents, who in just a few brief sentences successfully explain pretty much everything that is wrong with the US economy right now.
Response #1: “the Fed, Credit Conditions and Employment”
The economy is nervous, shaky and uncertain. Fed policy has us locked into a lethargic and tenuous position. It appears the Fed doesn’t know how to get off the horse it created. The Fed talks interest rate increases but looks for every reason not to do it. Until the Fed backs out of trying to manage the economy, we will be stuck on the cusp of slow growth and a recession. Add the difficulty in getting commercial and retail financing and rising employee costs (health care, minimum wage threats and the ridiculous overtime executive order), and hiring for many of us will be minimal. We cannot have millions of people out of the workforce and be healthy economically – they are a burden not a benefit.

This post was published at Zero Hedge on Jun 27, 2016.