Wonderland

‘If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn’t. And contrary wise, what is, it wouldn’t be. And what it wouldn’t be, it would. You see?’ -Alice in Wonderland
Silver out performs gold as both rise with Treasury bonds, which are in turn rising with stocks, as Junk bonds hit new recovery highs while USD remains firm as inflation expectations are out of the picture. This is highly atypical, maybe even unprecedented.
Some, deeply dug into their particular disciplines and biases, might say it is dysfunctional, as this backdrop simply does not make sense using conventional methods of analysis. Why again did I name this service Notes From the Rabbit Hole?
When the S&P 500 was robo rising month after month, year after year as it did from 2011 to 2015, you did not need the market report with the funny name because all was linear and as it should be. The same actually, could be said for gold. It was linear and as it should be in its relentless downtrend. Casino patrons simply ride the trends!
But today things are making sense simply because we don’t have a need to make them make sense as linear thinkers would do; we go with the indicators and charts.
As I watch the macro burp up all kinds of paradoxes and inconsistencies, I can’t help thinking back to the day that the ‘Hero’ announced Operation Twist, which in turn got me announcing ‘they are painting the macro’. When Ben Bernanke took the bold step into the great unknown of extreme and unconventional policy I felt the markets had been disconnected from commonly accepted wisdom maybe not for good, but for as long as the system and its current modes of operation are in effect.

This post was published at GoldSeek on 11 July 2016.

Seattle Is Hiring: “A Race And Social Justice Manager To Achieve Racial Equality”

This is how the government appartus operates: first it creates a “problem”, then it creates (well-paid) jobs to “fix” said problem. Case in point: a posting on governmentjobs.com according to which “the City of Seattle’s Race and Social Justice Manager will provide leadership and vision to ensure innovative, effective strategies to achieve racial equity in the City of Seattle.” The job will pay anywhere between $90,000 and $115,000.
Don’t have a university degree? Fear not: clearly geared at millennial candidates, the posting seeks “any combination of education, experience and measurable performance that demonstrates the capability to perform the duties of this position.”

This post was published at Zero Hedge on Jul 11, 2016.

“Something Big” Indeed Came – Bernanke’s Japan Visit Unveils “Helicopter Money”, Sparks Monster Rally

When we first heard this past Thursday that private blogger and Citadel employee Ben Bernanke was going to “secretly” meet with both the BOJ’s Haruhiko Kuroda and Japan PM Abe, we warned readers that “something big was coming.”
As noted late last week, “Bernanke will be in Japan next week. It has been arranged for him to meet officials including Abe and Bank of Japan Governor Haruhiko Kuroda, according to a government official speaking on condition of anonymity. Bernanke is expected to discuss Brexit and the BOJ’s negative interest rate policy with Abe and Kuroda, the official said.” Reuters also added that “some market players speculate Kuroda might decide, in a surprise, to provide “helicopter money.”
We concluded as follows:

This post was published at Zero Hedge on Jul 11, 2016.

My Kuroda! Tokyo Welcomes Treasury Investors to ‘World of Japanification’

You can see former Federal Reserve Chairman Ben Bernanke at the Washington Nationals baseball games. He sits behind the Nationals dugout on the first baseline and wears an ill-fitting Nats cap and jaunty shorts. He has made the news by visiting Japan, allegedly to meet with Japan’s Prime Minister Abe and Bank of Japan Governor Haruhiko Kuroda to discuss desperate measures to salvage Japan’ stagnant economy. And probably attend a baseball game as well.
(Bloomberg) – Japan’s biggest bond bulls, seasoned by two decades of economic stagnation, say the plunge in yields below zero in Tokyo foreshadows record-breaking gains for U. S. Treasuries.
Mitsubishi UFJ Kokusai Asset Management says U. S. 10-year yields will drop to 1 percent as soon as this month. Sumitomo Mitsui Trust Asset Management says it’s likely in 2017, and Mizuho Asset Management predicts the figure may go even lower. The yield, a benchmark for everything from U. S. mortgages to dollar bonds in developing nations, plunged to a never-before-seen 1.318 percent last week. A surging jobs report wasn’t enough to derail the rally.
‘Welcome to the world of Japanification,’ said Hideo Shimomura, the 49-year-old chief fund investor at Mitsubishi UFJ Kokusai in Tokyo, which oversees about $119 billion. ‘One percent is inevitable.’

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ July 11, 2016.

Tax Collection Numbers for June Show The Economy Is Not Improving – Episode 1019a

The following video was published by X22Report on Jul 11, 2016
US consumer can longer afford to eat out. Fed’s labor market index tumbles. BLS jobs report is completely manipulated, when looking at the tax collection numbers it show the economy is sinking and sinking fast. It is 2007-2008 all over again. Japan is being used as a test environment for helicopter money. Cameron is stepping down, but 1000 law makers are asking to take control of article 50 and place the control with parliament. IMF cuts Euro zone growth for 2016 and 2017. The bailout begin in Europe

Seagate Fires 6,500, Or 14% Of Workforce, Stock Soars

Moments ago computer-memory specialist Seagate, in a preliminary financial report, announced that its Q4 revenue would be $2.65 billion, beating expectations of $2.34 billion, and up from the $2.3 billion guidance given previously. The company also reported gross margin of 25% and non-GAAP gross margin of approximately 25.8% for the fiscal fourth quarter 2016, up from the previous 23% forecast.
Good news, and the stock is up 12% after hours as a result.
The only problem is that when companies preannounce good news up front, there is usually some not so good news hidden toward the back. And sure enough, for a company which is guiding higher, the narrative promptly fell apart when we read that for STX management the future is so bright that it just had to lay off 14% of it workforce, or some 6,500 people. This too was a “beat” to expectations: in late June, the company announced it planned to cut “only” 1,600 jobs as a cost-saving measure.

This post was published at Zero Hedge on Jul 11, 2016.

How Alcoa Just Converted A Half A Billion LTM Loss Into Half A Billion Profit

Some companies are notorious for buying back billions in stock in order to mask the decline in their earnings by reducing the number of shares outstanding. Alcoa, which still has a major debt overhang from the last financial crisis, is unable to do that as it simply does not have the free cash flow to dedicate to shareholder friendly activities: in fact, in the second quarter Alcoa’s Free Cash Flow tumbled to just 55 million down from $205 million a year ago.
Instead, Klaus Kleinfeld’s company is forced to resort to an even more primitive form of EPS fudging: massive quarterly EPS addbacks.
And as we showed last quarter, and the quarter before that, and the one prior, and so on, AA’s addbacks continue to be the gift that keeps on giving.
Last quarter we were curious if as a result of this “bathwater” quarter, Alcoa would finally cease this deceptive practice.
The answer: not even close.

This post was published at Zero Hedge on Jul 11, 2016.

CONDITION RED: Important Silver Threshold Line Broken… What Next??

The important silver threshold line was broken briefly last week and continues to bump up against it in early trading today. If the silver price closes above this threshold line by a significant margin, it could mean big trouble for the bullion banks who hold record silver short contracts.
I wrote about this in my article, WATCH OUT if Silver Breaks Through This Threshold Next Week. The important silver threshold line is the 50 (MA), or what is known as in technical terms, the 50 month moving average line. Because I used a 20 year monthly chart, the 50 (MA) line refers to the moving average in monthly terms. If the chart is shown in weeks, then its a weekly moving average… and if it is a daily chart, then it is a daily moving average.
Here is an updated 20 year silver chart which now shows a 50 (MA) of $20.35:

This post was published at SRSrocco Report on July 11, 2016.

The Taming of the Shrew

The Taming of the Shrew is perhaps the most well known comedy ever penned by William Shakespeare, adapted time and again over the years due to the many plot twists and turns that appeal to an increasing sophisticated and demanding audience. So here’s another, Janet Yellen, the present personification of the Federal Reserve, and the protagonist, has tricked the American (and global) population (the Shrew) into believing that they are ‘important’, which is why they go to such great lengths and theatre to do so; when all the while what they are really doing is imposing psychological torments until compliance and obedience become mandatory (financial repression) – the ‘taming’ of the debt serfs if you will. It’s been a long road from Jekyll Island to negative interest rates (NIRP) (it’s coming), however the story remains the same, at least for now.
As process unfolds however, the negative impact(s) of NIRP continue to ripple through economy(s), setting the stage for what will likely be looked back on by historians as the ultimate irony of this comedy – that in fact the Fed is the ‘unwitting shrew’, and tamed by its’ protagonist – Mother Nature. Because at some point, earthly constraints associated with the perversely profound impact of negative rates will become germane on a systemic basis, bring down pension funds and insurance companies alike, and then the larger financialized economy. Thing is, if NIRP is not enough to satisfy the protagonist, not matter who, then what’s going to happen to the de-industrialized West when the decentralization process accelerates, the dollar($) (all fiat currencies) begin to fall on a real basis (against commodities – especially precious metals), and interest rates need to rise?
The answer to this question is – nothing good – if you are a ‘status quo’ beneficiary – right from the oligarchs to the bureaucrats – up and down the line. What’s worse, once the market(s) realize the Fed is actually impotent, with all credibility finally lost (the signal hyperinflation is on the way – think Venezuela), all hell could (should) break loose, with outsized moves in rates (bonds), $, and equities. Of course this does not mean stocks would go down – no – no – no. On the contrary, and if history is a good guide, they will go up – way up. And this is especially true of precious metal shares – and anything else with the word gold in its name. Because hyperinflation is just ‘hidden collapse’, where the price of everything goes through the roof – but everybody is priced out of existence.

This post was published at GoldSeek on 11 July 2016.

Why Gundlach Thinks It’s Going To Get Worse, And Why He Is “Pretty Sure That Trump Will Win”

Yesterday, when referring to the latest interview Jeff Gundlach gave Barron’s, we presented the bearish DoubleLine “bond king’s” portfolio which he broke down as follows: “high-quality bonds, gold, and some cash.” He promptly added the following rhetorical response to inbound inquiries: “People say, ‘What kind of portfolio is that?’ I say it’s one that is outperforming everybody else’s. I mean, bonds are up more than 5%, gold is up substantially this year [28%], and gold miners have had over a 100% gain. This is a year when it hasn’t been that tough to earn 10% with a portfolio. Most people think this is a dead-money portfolio. They’ve got it wrong. The dead-money portfolio is the S&P 500.”
Today, the market is doing its best to prove Gundlach wrong, with the S&P breaking out to new all time highs while gold takes a modest leg lower.
But while the market remains entirely reliant on the actions of central banks, and as we noted earlier, the latest push higher appears to have come from Bernanke whispering in Abe and Kuroda’s ear about the fringe benefits of helicopter money, Gundlach does not see the gains in the market trickling down into the broader economy. Just the opposite, because in another part of the same Barron’s interview, when asked if things are going to get worse – both in the economy and society – Gundlach responds as follows:

This post was published at Zero Hedge on Jul 11, 2016.

JULY 11/GOLD FALLS ON A BANKER RAID BUT SILVER REMAINS POSITIVE/ THE EU REFUSE TO LET ITALY DO A BANKING BAILOUT/HELICOPTER MONEY TO COMMENCE IN JAPAN/DEUTSCHE BANK’S COCO BONDS ARE NOW YIELDING …

Good evening Ladies and Gentlemen:
Gold: $1,355 DOWN $1.60 (comex closing time)
Silver 20.27 UP 21 cents
In the access market 5:15 pm
Gold: 1355.50
Silver: 20.30
And now for the July contract month
For the July gold contract month, we had 18 notices served upon for 1800 ounces. The total number of notices filed so far for delivery: 4,065 for 406,500 oz or 12.643 tonnes
In silver we had 55 notices served upon for 275,000 oz. The total number of notices filed so far this month for delivery: 1110 for 5,550,000 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 296.777 tonnes for a loss of 6 tonnes over that period
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In silver, the total open interest ROSE BY 2594 contracts UP to 211,873, AND STILL CLOSE TO AN ALL TIME RECORD. THE OI ROSE IN SYMPATHY TO THE PRICE OF SILVER RISING BY 26 CENTS IN FRIDAY’S TRADING. In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.059 BILLION TO BE EXACT or 151% of annual global silver production (ex Russia &ex China).
In silver we had 55 notices served upon for 275,000 oz.
In gold, the total comex gold ROSE BY 1108 contracts with gold’s FALL in price on FRIDAY to the tune of $3.50. Since most of the gain in price occurred after the comex closed on Friday expect tomorrow’s OI to be also higher. The total gold OI stands at 655,955 contracts, CLOSE TO THE all time record SET last THURSDAY.(656,000 contracts)
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With respect to our two criminal funds, the GLD and the SLV:
GLD
we had non changes in gold inventory./
Total gold inventory rest tonight at: 981.20 tonnes
SLV
NO CHANGE IN SILVER INVENTORY TO THE SLV
Inventory rests at 341.453 million oz.
First, here is an outline of what will be discussed tonight:

This post was published at Harvey Organ Blog on July 11, 2016.

Behind The IEX Crusade To Fix The Market, In Its Own Words

First, congratulations to IEX on their approval as a US stock exchange, against Nasdaq’s and the rest of the industry’s best efforts. In June the SEC said IEX’s proposal to launch a national exchange had been approved. The SEC determined that IEX’s “speed-bump”, or the delay a longer wire would introduce when connecting traders to the matching engine, “will not prevent investors from accessing stock prices in a fair and efficient manner consistent with the goals of the Order Protection Rule.”
IEX has taken a lot of risk to stand up and actually build something that would help break down the wall that was created around the high-powered and well-funded cabal of insiders who have chopped-up and staked-claim to various market centers. As Brad Katsuyama, CEO of IEX, says in the video below “this was mostly going to be my last job on Wall Street. You know, you can’t fight the system and fail and expect the system to accept you back.” That comment comes as a video plays of then Direct Edge CEO William O’Brien losing his mind in a then-live debate as he realized his “good faith effort” to explain market structure was failing in the midst of Kasuyama’s cool demeanor and ability to clearly explain a complex topic such as how a trade is made in the US equity market.

This post was published at Zero Hedge on Jul 11, 2016.

Foreign Buyers Avoid Poor, Tailing 3Y Auction With Lowest Bid to Cover Since 2009

It had been an ugly day for bonds all day, with 10Y yields rising to day’s highs moments ago, rising as much as 1.427%, and as such it was hardly a surprise that today’s Treasury sale of $24 billion in 3 year paper was anything but impressive. In fact, it was downright ugly.
The high yield of 0.765%, while a steep drop from last month’s 0.93%, tailed the When Issued 0.761% by 0.4 bps.

This post was published at Zero Hedge on Jul 11, 2016.

Hungry Venezuelans Feed on Stray Dogs and Cats: ‘Pets May End Up in Cooking Pots’

How far would you go to eat?
The economic crisis in Venezuela, which has made food scarce, has become so sharp that many people are now being forced to turn on their pets in order survive.
The mounting cost of imported staple foods used to make dog and cat foods has proven to be prohibitive for many pet owners, who have trouble enough feeding themselves and their children and have been forced to release their pets to fend for themselves.
As a consequence, there has been a sharp increase in stray animals on roadsides and city areas, and along with them, people desperate enough to turn to these once-beloved companions as a source of food.
According to USA Today:
Household pets are the latest casualty in a country where food and other essential goods are becoming ever scarce, inflation is rampant, looting is escalating and electric blackouts occur regularly.
Pet food is one of the staples in short supply in a country that imports about 70% of its food. … The high prices mean many can give their animals only table scraps, vegetable peelings, rice shards or cooked bananas. Like their human owners, many pets are noticeably underweight.

This post was published at shtfplan on July 11th, 2016.

Gold Daily and Silver Weekly Charts – Stock Option Expiration This Friday

Since the mining stocks are some of the premier gainers for the Year-To-Date, I would expect them to be presenting some fat targets for shenanigans this week for the stock option expiration.
There will be the August metals contract option expiration on July 26th.
Gold was off a bit today, while silver held its gains.
Gold is treading water above support while it waits for silver to catch up a bit it seems

This post was published at Jesses Crossroads Cafe on 11 JULY 2016.

US Consumers No Longer “Eating Out” – Restaurant Guest Counts Tumble To Three Year Lows

If one follows the government’s retail spending data for “retail food and services sales” segment, the data is not bad. Yes, the annual pace of increases is declining as shown in the following St. Louis Fed chart, but at 2.5% Y/Y, it hasn’t moved much over the past two years, suggesting flat overall spending trends.

This post was published at Zero Hedge on Jul 11, 2016.