Goldman Turns Outright Bearish: Says To “Sell” Stocks Over Next 3 Months

One month after Goldman strategists downgraded equities to neutral on growth and valuation concerns back in May, the firm turned up the heat on the bearish case with a June report by Christian Mueller-Glissmann, in which the Goldman strategist said that equity drawdown risk ‘appears elevated’ with S&P 500 trading near record high, valuations stretched, lackluster economic growth and yield investors being ‘forced up the risk curve to equities.” Specifically Goldman warned to prepare for a “major drawdown.”
We, however, were skeptical, and concluded our take on Goldman’s newfound skepticism as follows: “we can’t help but be concerned that the last time Goldman warned about a big drop in the market a month ago, precisely the opposite happened. Will Goldman finally get this one right, or did the firm just say the magic words for the next leg higher in stocks? ”
Well, Goldman was right about a brief “drawdown” in stocks just a few weeks later following the Brexit swoon, which however on the back on unprecedented central bank verbal support, resulted in one of the biggest rallies yet, not to mention a historic short squeeze, and indeed led to the next leg higher in stocks, to fresh all time highs to be precise.
So for those who believe that Goldman is just another incarnation of Dennis Gartman and are still bearish, you may want to close out any remaining short positions because moments ago, the same Christian Mueller-Glissman released a new report in which Goldman has gone outright bearish, with a “tactical downgrade to equities for the next 3 months.”
Here is the reasoning behind Goldman’s creeping sense of gloom:

This post was published at Zero Hedge on Jul 31, 2016.

A Golden Rescue on the COMEX?

Once again I was wrong about this week’s Commitment of Traders Report in silver for positions held at the close of COMEX trading on Tuesday. Although the Commercial net short position in gold decreased by the expected smallish amount, there was a tiny increase in silver once again.
But under the surface in the headline gold number, was an absolutely stunning change that both Ted and I were shocked to see. But it proves Ted’s premise that one of the smaller traders in the Big 8 category most likely had its financial back against the wall – and had to get bailed out in whole or in part by one or more the Big 4 traders. More on that shortly, as first things first.
In silver, the Commercial net short position rose once again, this time by a tiny 868 contracts, or 4.34 million troy ounces of paper silver. The Commercial net short positions stands at a new record high of 535.6 million troy ounces of paper silver.
During the reporting week, the commercial traders reduced their long position by 2,264 contracts, plus they reduced their short position by 1,396 contracts. The difference between those two numbers is the change for the week. With such a small change in the commercial net short position, there wasn’t much activity in each category. Ted said that Big 4 increased their short position by a bit more than 100 contracts – and the raptors, the commercial traders other than the Big 8, added about 800 contracts to their short position, which means that the short position of the ‘5 through 8′ traders was basically unchanged. In the grand scheme of things, these changes are not even rounding errors. Ted pegs JPMorgan’s short position at around 32,000 contracts, unchanged from his estimate last week. We get a new Bank Participation Report next Friday – and that will enable Ted to calibrate their short position more precisely.
Under the hood in the Disaggregated COT Report, things were quite a bit different, as the Managed Money traders added a whopping 5,200 contracts to their already gargantuan [and record] long position, plus they increased their short position by 428 contracts, for an increase on the week of 5,200-428=4,772 contracts, which was almost six times the increase in the Commercial net short position. Of course to make up for that, the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader categories had to go short the difference – and that’s what they did. Ted was wondering out loud as to who those traders in the Managed Money might be that were piling in on the long side so enthusiastically. I mentioned those ‘unblinking long’ non-technical traders as a possibility – and I just know that he’ll have more to say about this in his weekly commentary later today.

This post was published at GoldSeek on 30 July 2016.

Should You Be Investing in Safe Haven Assets?

In the wake of recent world events, the markets have been rife with uncertainty. The Middle East has been riven by conflict, the European Union has been struck by crisis after crisis, and America is facing one of the most controversial presidential election contests in history. To add insult to injury, the existing tumult has been stirred to fever pitch in recent weeks by Britain’s vote in favour of Brexit.
This has left many investors in a quandary, wondering whether they should stick with their existing strategies, or retreat to safer ground and implement a more conservative approach to trading. For many, the latter has won out, and as a result, safe haven assets have surged.
If you’re new to the markets, however, you might not fully understand the purpose of these. Your portfolio may currently consist of only one type of investment instrument, so the thought of adding additional assets can be daunting.
In the case of safe havens, it needn’t be. Used by even the most experienced of investors during troubled times, these assets retain or even increase their value when volatility is at its peak, and are perhaps the most efficient tool in existence for limiting market losses.
If you’re considering adding them to your portfolio, then here are just three of the reasons why this is a very good idea under present circumstances…
Stability
One of the key points in favour of safe haven assets is that they have a stabilising influence in times of trouble. If you’re looking for investments that will not decrease in value in order to lessen your risks, then there are none better. From gold to the Japanese yen, even the worst tumult does not drag these assets down from their lofty perches, which makes them a wonderful portfolio addition for those seeking to create a safety net of conservative choices.

This post was published at GoldSilverWorlds on August 1, 2016.

When There Were 25 Libertarians in the Entire World

In the late 1960s, when Murray Rothbard – Mr. Libertarian – was asked how many libertarians there were in the world, he answered…
…25.
Twenty-five libertarians in the whole world.
Undeterred, Rothbard carried on, writing dozens of books and thousands of articles, editing several academic and popular periodicals, and teaching students.
Today, millions of people call themselves libertarians.
No, we’re not winning right now. But anyone who doesn’t think that’s impressive growth is a fool.
I didn’t know Rothbard had said this until I heard Professor Walter Block say so in a series of Rothbard recollections at the Mises Institute today.
As I write this, I’m listening to the brilliant Robert Murphy speak to an audience of students hanging on his every word. An audience many times larger than the entire world population of libertarians half a century ago.

This post was published at The Tom Woods Show on 29th July 2016.

‘You Can’t Listen To Your Damn Stock Broker’ – Forecaster Warns Of 70% Stock Market Crash And New Great Depression

Economic forecaster Harry Dent has been analyzing the economy and trading markets for decades. Utilizing a wide breadth of research that includes capital flows and demographics, he has accurately called market tops, turning points and asset price movements.
Dent recently joined CrushTheStreet.com to discuss his thoughts on the current economic, monetary and financial landscape and the news isn’t pretty. According to Dent, a new great depression is coming and we may well be on the cusp of a massive downturn as the the world’s numerous bubbles start bursting.
Every time in history that we’ve seen a debt bubble, we’ve seen financial asset bubbles… sometimes it’s more in real estate, sometimes more in stocks…
This time it’s everything… We’ve got bubbles everywhere and these bubbles are going to have to collapse and deleverage.

This post was published at shtfplan on July 31st, 2016.

Painful To Watch: This Is The Weakest U.S. Economic ‘Recovery’ Since 1949

Most of us have never witnessed an economic ‘recovery’ this bad. As you will see below, the average rate of economic growth since the last recession has been the lowest for any ‘recovery’ in at least 67 years. And unfortunately, the economy appears to be slowing down even more here in 2016. On Friday, I talked about how the U. S. economy grew at a painfully slow rate of just 1.2 percent in the second quarter after only growing 0.8 percent during the first quarter. And last week we also learned that the homeownership rate in the United States has dropped to the lowest level ever. This is not what a recovery looks like. Instead, it very much appears that a new economic downturn has already begun.
But don’t just take my word for how painful this economic ‘recovery’ has been. The following comes from a Wall Street Journal article that was just posted entitled ‘Seven Years Later, Recovery Remains the Weakest of the Post-World War II Era’…
Even seven years after the recession ended, the current stretch of economic gains has yielded less growth than much shorter business cycles.
In terms of average annual growth, the pace of this expansion has been by far the weakest of any since 1949. (And for which we have quarterly data.) The economy has grown at a 2.1% annual rate since the U. S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Departmentreleased Friday.
The prior expansion, from 2001 through 2007, was the only other business cycle of the past 11 when the economy didn’t grow at least 3% a year, on average.

This post was published at The Economic Collapse Blog on July 31st, 2016.

“Time’s Up – The Pain Must Begin Now”

In 2010, Social Security (OASDI) unofficially went bankrupt. For the first time since the enactment of the SS amendments of 1983, annual outlays for the program exceeded receipts (excluding interest credited to the trust funds). The deficit has grown every year since 2010 and is now up to 8% annually and is projected to be 31% in 2026 and 44% by ’46. The chart below highlights the OASDI annual surplus growth (blue columns) and total surplus (red line). This chart includes interest payments to the trust funds and thus looks a little better than the unvarnished reality.

This post was published at Zero Hedge on Jul 31, 2016.

Putting The BOJ’s Purchases In Context: Equivalent To The Fed Buying $580 Billion In ETFs In 2 Years

When it comes to the Bank of Japan’s actions (or inactivity as case may be), traditionally the market’s focus has been on whether or not Kuroda would expand QE and/or cut rates. However, while far less noticed, the central bank’s aggressive purchases of ETFs are becoming a troubling reality. Recall that in April the BOJ was revealed to already be a top 10 holder in about 90% of all Japanese stocks.
As Bloomberg reported, as of April the BOJ ranked as a top 10 holder in more than 200 of the Nikkei gauge’s 225 companies. “The central bank effectively controls about 9 percent of Fast Retailing Co., the operator of Uniqlo stores, and nearly 5 percent of soy sauce maker Kikkoman Corp. It has an estimated shareholder rank of No. 3 in both Yamaha Corp., one of the world’s largest makers of musical instruments, and Daiwa House Industry Co., Japan’s biggest homebuilder.”
The news followed the just as striking disclosure that the BOJ is already an owner of more than half of all Japanese ETFs.

This post was published at Zero Hedge on Jul 31, 2016.

The Trouble with Trade

The Flatline Economy
Angry Charts
Two Out of Three
Second Thoughts on Free Trade
Free & Fair
Maine, New York, Montana, and Iceland
‘When goods don’t cross borders, armies will.’
– Frequently attributed to Frdric Bastiat
‘Free trade agreements are trade agreements that don’t stick to trade.’
– Ralph Nader
‘The future has arrived. It’s just not evenly distributed yet.’
– William Gibson, circa 1993 in an interview (original version of the quote)
The political speech-fests are finally over. Republicans and Democrats conducted largely violence-free quadrennial conventions – but not because everyone loves each other. The disdain was palpable, both within and between the two parties.
On one topic, however, both campaigns agree: global free trade has jumped the shark. We haven’t seen this kind of protectionist rhetoric in a long time, at least from major party candidates. Globalization is taking the blame for a wide variety of ills. The trouble with all this dissing of globalization and free trade is that, like some generals, both major political parties are fighting the last war, not the ones we face today and tomorrow. And the Libertarian Party seems to think that the correct philosophy by itself will cure the problems, which it may do in the long run; but philosophy doesn’t pay the bills or create jobs in the short run.

This post was published at Mauldin Economics on JULY 31, 2016.

Saudi Banks Offered $4BN Bailout To Avoid Liquidity Crisis

In an effort to avoid a full-blown banking crisis, Bloomberg is reporting that the Saudi Arabian Monetary Agency, the Saudi central bank, has offered domestic lenders $4BN in discounted, 1-year loans to ease liquidity constraints. Banks in the kingdom are facing a cash squeeze as the government withdraws deposits and sells local-currency debt to fund the budget deficit. Monica Malik, chief economist at Abu Dhabi Commercial Bank PJSC, expects to see further easing in the coming days, saying:
“We expect to see further measures, such as possibly reducing the reserve requirement ratio or increasing the loan-to-deposit ceiling in the coming days.’

This post was published at Zero Hedge on Jul 31, 2016.

500 Years Of Stock Panics, Bubbles, Manias, & Meltdowns (In 1 Simple Chart)

From the “over-expansion of credit” leading to banking failures in 1255-62 in Italy to 2015’s “‘end’ of The Fed’s zero interest rate policy,” stock markets have risen and fallen and risen some more on the back of wars, manias, crises, and panics since The Middle Ages….
Notice anything different about the green shaded area?

This post was published at Zero Hedge on Jul 31, 2016.

‘Stock Markets Should be Down Massively,’ but Investors ‘Hypnotized that Nothing Can Go Wrong’

Bond bull Gundlach U-turns, goes ‘maximum negative’ on Treasuries
Stock investors have entered a ‘world of uber complacency,’ Jeffrey Gundlach, CEO of DoubleLine Capital in Los Angeles, explained – we assume with some bafflement.
On Friday, the S&P 500 hit another all-time high, after it was reported that the US economy grew at a painfully slow rate of 1.2% annualized in the second quarter, after a first quarter of 0.8% growth, which produced a first-half growth of 0.9% annualized, the worst in four years.
Even ‘adjusted’ ex-bad-items earnings of S&P 500 companies have declined on a year-over-year basis for four quarters in a row. Total business sales in the US have declined since mid-2014. Defaults of companies rated by Standard & Poor’s have jumped to the highest level since the Financial Crisis. Overall business bankruptcies are soaring. Yet, stocks march higher.
So Gundlach told Reuters in a telephone interview: ‘The artist Christopher Wool has a word painting, ‘Sell the house, sell the car, sell the kids.’ That’s exactly how I feel – sell everything. Nothing here looks good.’
‘The stock markets should be down massively, but investors seem to have been hypnotized that nothing can go wrong,’ he said.

This post was published at Wolf Street on July 31, 2016.

PLANETARY PONZI IMPLODING — Mitchell Feierstein

The following video was published by SGTreport.com on Jul 31, 2016
Mitchell Feierstein, author of Planet Ponzi returns to SGT Report to dissect the global economic meltdown and implosion of the planetary fiat Ponzi scheme. From $13 Trillion in bonds yielding negative interest rates to the ever-expanding criminal reach of Goldman Sachs, it’s everything for the international banking cartel and nothing but un-repayable debt for the people.

11? First Economic Recovery Since 1930 Without 3% Real GDP Growth* Despite Massive Fed Intervention And Gargantuan Federal Debt

There is little doubt (unless you listen to politicians and their sales force) that the recovery from The Great Recession has been underwhelming.
In fact, it is the first recovery since 1930 where the annual rate of growth in real GDP has not exceeded 3%. Although the brief interval between the 1981 and 1983 recessions only generated 2.6% annual growth during 1982.
And this dubious achievement of sub-3% real GDP growth was in spite of the massive intervention of the Federal Reserve in terms of the Fed Funds effective rate and quantitative easing (QE).

This post was published at Wall Street Examiner on July 31, 2016.

Why The IRS Is Probing The Clinton Foundation

“Clinton Cash” author, Peter Schweizer, recently took to the airwaves to explain why the IRS investigation of the Clinton Foundation should be a “big deal” (also see Clinton Cash: “Devastating” Documentary Reveals How Clintons Went From “Dead Broke” To Mega Wealthy“) even though he expressed some “skepticism” over the ability of Obama’s IRS to run an impartial investigation. As we we’ve reported (see “IRS Launches Investigation Of Clinton Foundation“), the IRS recently launched an investigation of the Clinton Foundation after receiving a letter signed by 64 Republicans of the House of Representative which described the Clinton Foundation as a ‘lawless ‘pay-to-play’ enterprise that has been operating under a cloak of philanthropy for years.’
Somehow we, too, are doubtful that the IRS will lead this investigation with the same kind of vigor they displayed when looking into local Tea Party organizations and religious charities during the last election cycle.
When asked why the IRS should be concerned about the Clinton Foundation, Mr. Schweizer explained:
“The big deal is that…there are international anti-bribery standards that say bribing a public official can mean giving them money, giving their family money, or giving their charity money. Just because it’s a charity doesn’t mean that it’s not important or not interesting…it constitutes bribery every bit as much as if somebody’s putting money in somebody’s pocket for a benefit.”

This post was published at Zero Hedge on Jul 31, 2016.

From Reflation To Redistribution: The “War On Inequality” Looms

The bigger picture narrative, according to BofAML’s Michael Hartnett, is that the policy baton is passing from Monetary to Fiscal stimulus in 2016/17. Simply put, central bank rate cuts are ending; and new policies to address the populist desire for a “War on Inequality” are emerging. This ‘fiscal flip’ – as Hartnett describes it – means rotation from ‘deflation’ to ‘inflation’ assets… from ‘financial’ to ‘real’ assets.
Broadly, this new policy response is likely to be a combination of:
Redistribution…stagflationary: winners – TIPS, munis, low-end consumption (retail, payments, tax services); losers – brokers, luxury, growth stocks; yield curve bear flattens;
Protectionism…deflationary: winners – government bonds, gold, volatility, high quality defensive stocks; losers – banks, multinational companies; yield curve bull flattens;

This post was published at Zero Hedge on Jul 31, 2016.

2016: Current Market Themes

A year ago almost to the day we began tracking a ‘Macrocosmic’ theme that would eventually see gold bottom and rise vs. stocks and bonds in 2016, joining its bullish status vs. commodities, which had been in place since 2014.
Nominal gold bottomed in December 2015 before silver, commodities and stocks as a counter cyclical environment birthed a new precious metals bull market. We updated the progress here, here and here in 2016.
But markets, being the product of immeasurable moving parts, are always in motion and you cannot get too hung up on any one theme, ideology or habit. When the Semiconductor sector began burping up its positive signals for the economy and for stocks, we listened intently and I for one, put my capital where my mouth was and noted as much each week in NFTRH.
Back in April, with the first improvement in the Semiconductor Equipment sector’s bookings, we went on bull alert. By June 22, we had established a trend in the rising bookings and noted the Details Behind Semiconductor Leadership and the bullish implications that this Canary’s Canaryin the coal mine carried.
With silver firmly leading gold and more recently palladium making a move as well, we had the makings of a risk ‘on’ atmosphere. The ‘buy’ point (and speaking personally, short-covering point) was the Brexit hysteria, which as NFTRH noted at the time was an (!) on the bear case and quite possibly, the deflationary case.

This post was published at GoldSeek on 29 July 2016.