Market Talk – July 1st, 2016

The first day of the second half of 2016 and it starts with a whimper. Yes, The Nikkei and Shanghai were marginally better bid (China PMI marginally lower 50 v’s 50.1 previously) but with the Hang Seng closed there was really not that much to write home about. The Japanese data was a little better and we saw a small sell-off in JPY but despite a breach of the 103 handle it is late in US trading and the Yen has moved back to roughly where Tokyo left it (102.50). China300 and HSI have edged forward a touch (0.45%) but the Nikkei has returned the 0.5% made as the currency strengthens.

This post was published at Armstrong Economics on Jul 1, 2016.

The Economics Of Perversion

Discretion will guard you, understanding will watch over you, to deliver you from the way of evil, from the man who speaks perverse things; from those who leave the paths of uprightness, to walk in the ways of darkness; who delight in doing evil, and who rejoice in the perversity of evil; whose paths are crooked, and who are devious in their ways (Proverbs 2:11-15, New American Standard Version).
British economist John Maynard Keynes is most famous for his quip, “In the long run we are all dead.” This was his response to any criticism of his work that argued that the long-run consequences of his policies would be disastrous.
Keynes was the primary apologist for the economic policies that created today’s world of high debt, fiat currencies, and a search for an internationally managed monetary system. He and Harry Dexter White designed the International Monetary Fund, which came out of the now-defunct Bretton Woods agreement of 1944. It was Keynesian economics that dominated the academic world in the post-World War II era.
Why did Keynes design a system–or better put, why did he recommend a series of disjointed policies–that would fail in the long run? Because he was committed as a way of life to the short run. This is understandable, for he was a dedicated homosexual.
Lewis Lehrman, the businessman-scholar-politician who has defended the traditional gold standard so eloquently, once remarked that the reason why he favors a free market economy based on gold, and Keynes didn’t, is that he has a large family. He wants his children to inherit something. Keynes had no children to inherit anything.

This post was published at Gary North on July 02, 2016.

“EU Wants An Empire” – Brussels Plans To Expand Into Middle East, Africa

Submitted by Joseph Jankowski via,
The latest EU foreign policy document, titled ‘A Global Strategy for the European Union’s Foreign And Security Policy’, calls for an extension of the Union’s influence in regions as far as Central Asia and Central Africa.
It also outlines ‘gradual synchronisation and mutual adaptation’ between different member states’ individual defence strategies.
The executive summary of the document reads:
It is in the interests of our citizens to invest in the resilience of states and societies to the east stretching into Central Asia, and to the south down to Central Africa. Under the current EU enlargement policy, a credible accession process grounded in strict and fair conditionality is vital to enhance the resilience of countries in the Western Balkans and of Turkey. Under the European Neighbourhood Policy (ENP), many people wish to build closer relations with the Union: our enduring power of attraction can spur transformation in these countries.

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

Clinton Is Spending $500k A Day On TV Ads While Trump Spends Nothing

It’s well known that throughout the GOP campaign and into the general election, Donald Trump has done things his own way, and for the most part it has worked out favorably. Most recently Trump made it known that at the GOP convention, there would be more than just traditional politicians to interact with, as the likes of Bobby Knight, Mike Tyson and Mike Ditka have been invited to attend.
What is also known, and has sent the mainstream media and everyone else into a frenzy, is the fact that Trump’s cash levels were dwarfed by Clinton at the start of June. Trump wasn’t the least bit concerned with the levels of funding, saying “There could be unlimited cash on hand, as I would put up my own money, as I have already done through the primaries, spending over $50 million dollars.”
As it turns out, Clinton is going to need all of that cash the campaign is generating because as Bloomberg reports, the Clinton Campaign has run 9,781 ads from June 15-27 at an estimated cost of $6 million, or nearly $500,000 a day.

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

The Invisible Hand Of The Disogranized Masses

Submitted by JC Collins via Philosophy Of Metrics blog,
The comments this week coming from the so-called elite referencing the ignorant masses have manufactured an aggressive response. The mainstream media have not picked up on these comments but the alternative media have been on the cultural front lines with well strategized talking points.
It should be noted that I have often referenced the disorganized masses in previous posts. This phrase stands in contrast to what is being referenced with the term ignorant masses. Disorganized would suggest non-ignorance with a lack of focus and intent. Ignorant simply means that the masses are too intellectually inferior for advanced comprehension.
While it cannot be denied that there is a vast component of ignorance maintained within the disorganized masses, this ignorance, for the most part, is not willful and is the product of massive cultural and socioeconomic conditioning. Being that all people are not intellectually equal, it can be assumed that there are varying degrees of comprehension when it comes to socioeconomic trends and directions.
The one common trait which is shared by all demographics is the expression of self-interest. The term ‘Invisible Hand’ was first used by Adam Smith in the lead up years to the French Revolution. The invisible hand described the unintended social benefits of individual actions. It was reasoned that individuals’ efforts to pursue their own interest may frequently benefit society more than if their actions were directly intending to benefit society.

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

July 1/Silver advances close to $1.00/Advances further in the access market closing at $19.70/Front month of July sees amount of gold standing rising to 15.50 tonnes/Another Italian bank is sent …

Good evening Ladies and Gentlemen:
Gold: $1,336.70 UP $18.30 (comex closing time)
Silver 19.54 UP 96 cents
In the access market 5:15 pm
Gold: 1342.00
Silver: 19.76
And now for the July contract month
For the July gold contract month, we had a huge 3000 notices served upon for 300,000 ounces (9,33 tonnes)
In silver we had 0 notices served upon for nil oz
Yesterday, the big news was the fact that silver broke its last resistance line at $18.50 and then it immediately shot up to $18.78. The bankers must be terrified as they are massively short and they had no time to cover their comex short contracts. Today comex silver finished at 19.54, at its zenith hitting $19.89. I just cannot wait until I see the OI numbers (for gold/silver) on Tuesday for today’s trading!

This post was published at Harvey Organ Blog on July 1, 2016.

Why Trump Is Routing The ‘Free Traders’

Submitted by Patrick Buchanan via,
In Tuesday’s indictment of free trade as virtual economic treason, The Donald has really set the cat down among the pigeons.
For, in denouncing NAFTA, the WTO, MFN for China and the Trans-Pacific Partnership, all backed by Bush I and II, Mitt Romney and Paul Ryan, Trump is all but calling his own party leaders dunderheads and losers.
And he seems to be winning the argument.
As he calls for the repudiation of ‘globalism’ and a return to ‘Americanism,’ a Republican Congress renders itself mute on whether it will even vote on the TPP this year.
On trade, Bernie Sanders is closer to Trump. Even Hillary Clinton has begun to renounce a TPP she once called the ‘gold standard’ of trade deals.

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

Weekend Reading: Bre-lief?

Submitted by Lance Roberts via,
Quite a week.
Last week, the markets rallied in anticipation Britain would ‘Remain’ in the European Union which reversed the sell-off from the previous week. Despite a variety of polls and betting sites showing rising odds of Britain remaining in the EU, the ‘inconceivable’ occurred last Thursday proving everyone wrong.
But this week, the markets proved everyone ‘wrong’ again. I suggested on Tuesday that Central Banks would come to the rescue once again, that happened yesterday as both the BOE and ECB made announcements hinting at more QE this summer. To wit:

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

Breuphoria – Stocks Explode Higher On Biggest Short Squeeze In 7 Years

We hope this helps…
Quite a week!!!
S&P 3.3% – best week since Oct 2014 Bullard Bounce “Most Shorted” stocks =10.1% in last 4 days – biggest squeeze since May 2009 Financials 3% – best week in 3 months 30Y Treasury yield to record low – best week in 3 months Silver 11.25% – best week since Aug 2013 Gold up 5 weeks in a row Oil 3.2% – best week in six weeks Copper 5.5% – best week in 3 months Since Brexit, bonds and bullion remain best and stocks tried their best to scramble back to unch…

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

With 5 Million Unemployed, Spain Still Can’t Find Workers

With soaring youth unemployment, and close to 5 million people out of work overall, one would assume that the last problem Spain would encounter would be that it can’t find workers to fill open jobs.
However, as Bloomberg reports, Spain is facing labor shortages as employers struggle to find capable employees. “We were looking for people for two months. We managed to find one in Spain. We turned to Argentina for others” explains Samuel Pimentel, a headhunter who was searching for specialist consultants for a client.
Pimentel’s client asked for a list of candidates trained in”Agile” project management techniques for helping companies boost their productivity by using more IT systems. The client was even willing to pay $220,000 a year, almost 10 times the average salary in Spain, but Pimentel had a difficult time identifying candidates.
The main reason for this issue according to Valentin Bote, head of research at Randstad, a recruitment agency, is that the unemployed lack the skills to fill the available positions.
“It’s a paradox. The unemployment rate is too high. Yet we’re seeing some tension in the labor market because unemployed people don’t have the skills employers demand.” Bote said.

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

1/7/16: Sunday Night Bailout: Italy

As I have noted on Twitter and in comments to journalists, Brexit has catalysed investors’ attention on weaker banking systems. As opposed to the UK banks, that are doing relatively well, given the circumstances, the focal point of the Brexit fallout is now Italian banking system, saddled with excessively high non-performing loans risks and with assets base that is, frankly, toxic, given their exposure to Italian debt and corporates.
Take a look at Kamakura Corporation’s data on default probabilities across European financial institutions:

This post was published at True Economics on Friday, July 1, 2016.

Long bond at new all time high; silver soars

There seems to be a huge rush into both gold and silver overnight, but especially into silver. This is occurring along side of a massive rally in the long bond which has taken it above 174 and into a brand new all time high.

The catalyst for all of this seems to be growing fears over the well-being of Deutsche Bank.
The IMF labelled the bank as the ‘riskiest financial institution in the world’. Not exactly a soothing nomenclature.
Additionally the IMF said that ‘among the globally systemically important banks, Deutsche Bank appears to be the most important net contributor to systemic risk, followed by HSBC and Credit Suisse’.

This post was published at Trader Dan on July 1, 2016.

US And EU Banks Crash And Burn (And Has Nothing To Do With BREXIT!)

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
Let’s take a look at a handful of large US and EU banks. They have all crashed and burned since the financial crisis, well before the UK’s decision to leave the European Union.
This is in spite of Central Bank low interest rate policies. Here are Central Bank asset purchases since 2000. I threw in the Bank of Japan and their failed Central Bank policies for color.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ July 1, 2016.

The subprime bubble grew by $1.4 trillion in just one month [video]

[Editor’s note: You can watch Simon’s video podcast of today’s notes byclicking here.] In the late 12th century while the rest of Europe was choking on feudalism, Venice was rapidly becoming the most advanced power on the continent.
At that point Venice had already created a free society where anyone, regardless of origin or class, could work hard and prosper. It was truly the America of its day.
The Venetians were very forward thinkers. They established a very crude type of limited partnership called a commenda that formed the basis for the modern corporation.
And starting in the late 1100s, the Venetian government began issuing a unique type of sovereign debt called prestiti.
Prestiti were among the earliest form of institutionalized government bonds.

This post was published at Sovereign Man on July 1, 2016.

“Giant Meteor For President” In Virtual Tie With Trump & Hillary Among Independents

Submitted by Claire Bernish via,
In what has become a presidential race based almost solely on scorn for the candidates, the establishment, fraud at the polls – and, hell, the entirely stale and wholly rigged electoral process – it’s clear no one will win in the traditional meaning of the word.
While third party candidates have experienced growing success in the dearth of acceptable duopoly offerings, a dark horse has emerged.
According to Public Policy Polling, ‘Giant Meteor for President’ now ranks as a serious contender – garnering’far more support than the third party candidates actually on the ballot.’
No, this most certainly is not the Onion.

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

Gold And Silver Investors Smell Central Bank Blood

The mainstream narrative that gold/silver moves inversely with stocks because the metals are a ‘risk off’ trade has imploded. Since late January, when the S&P 500 began to ‘recover’ from its 11% New Year’s plunge, the precious metals and the stock market have been rising in correlation, with the precious metals significantly outperforming the stock market since mid-February:

This post was published at Investment Research Dynamics on July 1, 2016.