Yen Soars on BOJ Disappointment

I am watching the reaction to the BOJ’s announced monetary policy moves and quite frankly, am more confused than ever, especially when coupled with today’s preliminary US Q2 GDP number. The reading was an abysmal 1.21%.
So let’s get this straight – the markets were disappointed with the BOJ and thus sent the Yen soaring higher. That was a vote of no confidence in the Bank because everyone and their dog knows that both the BOJ and especially the Abe administration desperately needs a weaker yen to stave off the deflationary spiral they are contending with. Perhaps traders are coming around to believing that the Bank of Japan has indeed reached the limits of its tools.
The surge in the Yen put pressure on the Dollar which was then further hit on account of the pathetic US growth number.
Dollar Down.

This post was published at Trader Dan on July 29, 2016,.

Market Talk – July 29, 2016

All eyes were on the BOJ, and even though they disappointed many, after a turbulent trading session the Nikkei index closed higher. No easing, no additions to the money base, no further purchases of JGB’s, commercial paper or REIT’s but they did almost double the ETF purchase programme from JPY 3.3tln to 6tln. Stocks did not know what to do and after a brief dip it rallied to close 0.5% higher on the day (worth keeping an eye on bank shares as they will prefer this BOJ action). The JPY was the star performer trading higher immediately on the announcement and closes in late US trading 3% better on the day flirting with the 102 handle. After a brief rally in the Shanghai and HSI uncertainty weighed heavily on Asian markets and slowly we drifted lower into the weekend.

This post was published at Armstrong Economics on Jul 29, 2016.

These 3 Animated Charts Capture the Economic Rise of Asia

The economic rise of Asia has been swift, but it has also been a little reckless at times.
China’s rapid spending and investment has come at a price. The country is now saddled with a massive debt bomb that could detonate at any moment. Further, economic interests have helped to create a precarious situation in the South China Sea, which many experts see as having escalating potential for armed conflict. Such actions would disrupt trade along one of the most important sea routes in the world.
To be fair, no one ever said that executing on five-year plans would be easy.

This post was published at The Burning Platform on July 29, 2016.

The Pharma-Fed Doctor

It’s true that perks from pharma companies influence doctors. But pharma dollars are nothing compared to the subsidies doled out by governments.
In his recent article ‘Feed Me, Pharma,’ ProPublica’s Charles Ornstein has been calling attention to studies showing that the prescribing decisions of doctors are linked to the amount of money that drug companies can bestow on them, usually in the form of meals, travel expenses, tuition support to attend courses, and so on.
I find nothing surprising about that, and Ornstein need not be so scrupulous when he clarifies that ‘the researchers did not determine if there was a cause-and-effect relationship between payments and prescribing.’ To deny that perks have a causal effect on physician behavior invites improbable considerations.

This post was published at Ludwig von Mises Institute on July 28, 2016.

The FOMC Butterfly That Will Ruin The World

Submitted by Eugen von Bohm-Bawer via Bawerk.net,
Imagine the financial crisis knocked you out and you did not wake up from the coma that followed until this day. Then, presented with the following three charts you were asked to guess where the federal funds rate was trading. Given the fact that
the core CPI is on a steep uptrend and currently over the arbitrarily set 2 per cent target; unemployment below what the FOMC regards as full employment and; GDP running at a rate far above the Federal Reserve’s own estimates of so-called potential; we are certain most people would say the Federal Reserve, still very much data dependent (yes, that is what they claim), would be responsible enough to have lifted the rate far above its long term average to maintain positive real rates in order to cool down the economy. This is what modern Keynesianism- and Monetarism teaches the zealous acolytes populating the world central banks after all. In short, you would say the Federal Funds rate would be in the vicinity of five per cent.

This post was published at Zero Hedge on Jul 29, 2016.

Monte Paschi Fails European “Stress Test” Meant To Restore Confidence In Europe’s Struggling Banks

Moments ago, the European Banking Authority published the 2016 bank stress test results, whose purpose – as every other year – is to inspire confidence in Europe’s struggling banks; it differs from a market-based assessment of bank stress – that particular “test” can be seen by observing the stock prices of such giant banks as Deutsche Bank and Credit Suisse, both of which recently hit all time lows.
As previewed yesterday, Italy’s 3rd largest, and most insolvent bank, Banca Monte di Siena was the worst performer in European regulators’ stress tests, and the only lender to have its capital wiped out in the exam. According to Bloomberg, Monte Paschi’s common equity tier 1 capital ratio, a key measure balance sheet strength, would to a negative 2.2% in an adverse economic scenario, the test revealed, which put lenders through a simulation of a severe recession over three years. Another Italian bank, UniCredit, would see its ratio fall to 7.1% , the second-worst result of the five Italian lenders being examined.
Needless, to say, the test – as structured – was a farce from the beginning as it did not account for negative interest rates, something Europe has trillions of, nor did it test for Brexit. Finally, the test did not include any banks from Greece of Portugal, where virtually all banks are currently insolvent.

This post was published at Zero Hedge on Jul 29, 2016.

29/7/16: Tax Regime, Apple, Fraud?

We have finally arrived: a Nobel Prize winner, former Chief Economist and Senior Vice-President of the World Bank (1997-2000) on Bloomberg, calling Apple’s use of the Irish Tax Regime ‘a fraud’: This gotta be doing marvels to our reputation as a place for doing business and for trading into Europe and the U. S.

This post was published at True Economics on Friday, July 29, 2016.

Think GLD Is Legit? Better Twice About That

Readers who have followed my work for several years know that I have been quite vocal about the illegitimacy of the GLD gold ETF. James Turk was the first analyst in 2004 to bring attention to flagrant legal loopholes which enable the GLD custodian (HSBC) to play the ‘shell game’ with GLD’s gold bars.
Certainly highly illegal activities by HSBC are de rigueur, as evidenced by its conviction for laundering drug money – for which a $1.9 billion settlement with the Justice Department failed to deter HSBC’s money laundering activities – LINK. What the heck, $1.9 billion is merely the cost of conducting a high-margin business endeavor. Just ask the big banks funding Hillary Clinton’s Presidential campaign.
In 2009 I published an extension of Turk’s 2004 GLD evisceration – one which Turk actually helped me edit – in which I concluded:
I have no problem with the concept of using GLD for daytrading to make directional bets, long or short, on the short term swings in the price of gold. But if you invest in GLD with the intent of making a long term investment in gold, please be aware that GLD is NOT an investment in actual physical gold. GLD is nothing more than a piece of paper which proclaims, but does not promise, to have gold on the other side of its highly structured legal barriers. Furthermore, for the reasons shown above, there is the possibility that you might wake up one day to find out that the price of GLD has suddenly dropped well below the spot price of gold and that GLD could even end up worthless.

This post was published at Investment Research Dynamics on July 29, 2016.

Q2 GDP Advance Estimate: A Major Downside Surprise

The Advance Estimate for Q2 GDP, to one decimal, came in at 1.2 percent, up from 0.8 percent for the Q1 Third Estimate (a downward revision from 1.1 percent). Today’s number was far below most mainstream estimates, with Investing.com posting a consensus of 2.6 percent. However, the Atlanta Fed’s GDPNow forecast was revised downward yesterday to 1.8 percent from 2.3 percent the day before. Today’s update includes data revisions from Q2 2013 to the present.
Here is an excerpt from the Bureau of Economic Analysis news release:
Real gross domestic product increased at an annual rate of 1.2 percent in the second quarter of 2016 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.8 percent (revised).

This post was published at FinancialSense on 07/29/2016.

U.S. GDP Revisions Show Dismal Growth

The new “revised” U. S. GDP numbers fit perfectly with what will be the narrative for the rest of 2016 – a global economy in decline. For now, investors seem to be confused as to whether bad news is bad news, or bad news is good news. In the next two weeks I think it will be clear that bad news is in fact bad news. The post-brexit rally has now stalled out completely. Oil has crumbled back to three month lows. And central banks refuse to offer any new stimulus or rate cuts to satiate investor thirst for fiat. It would appear that the “party” will be starting in August, and most likely accelerating to a greater degree in September…..

This post was published at Alt-Market on Friday, 29 July 2016.

European Bank Stress Test Preview: What To Expect And How To Trade It

While the main event in today’s European bank stress test was leaked moments ago, when Monte Paschi board member Turicchi said that the bank has finalized a bank consortium for a critical capital hike, suggesting that contrary to last minute jitters the bank has found the needed number of willing banks to provide 5 billion in fresh capital it needs resulting in the bank’s 3rd bailout in the past 2 years – this one courtesy of the private sector – there may still be some surprises.
The following preview explains what are the main things to watch for in today’s release.
The latest round of European banks’ stress test results today may highlight vulnerability of some of the largest banks but could also act as a trigger for much-needed reforms, analysts say.
The results, due at 9pm London time, may remind investors of Italy’s difficult banking situation, and pose downside risks for the euro, say FX strategists; Monte dei Paschi di Siena (BMPS), the ailing lender that was tested, will publish 2Q numbers after European markets close Barclays says any sign there’s progress toward fixing issues in Italy’s banks could trigger a modest euro relief rally. ABN Amro analysts say the test is a ‘missed opportunity’ to do a fuller and deeper health check of the banking system in Europe

This post was published at Zero Hedge on Jul 29, 2016.

Big Miss on US GDP; What to Watch If Things Are Heading South

The second quarter estimate for US GDP released Friday came in at 1.2%, about half of what most economists expected.
So far this year, the economy is growing at about a 1% annual rate, the worst first-half performance since 2011. GDP growth was revised down to a 0.8% pace in the first quarter from 1.1%. Growth also was revised down for the fourth quarter of 2015 to 0.9% from 1.4%.
‘The growth trend of the American economy seems on a path of dropping off significantly from its assumed 2% growth trend,’ said Conference Board economist Brian Schaitkin. (source)
Consumer spending is really what’s holding up the US economy at this point with private investment, net exports, and government outlays all coming in flat to negative.

This post was published at FinancialSense on 07/29/2016.

The Full List Of Hillary’s Planned Tax Hikes

Submitted by John Kartch and Alexander Hendrie via Americans for Tax Reform,
Hillary Clinton has made clear she intends to dramatically raise taxes on the American people if elected. She has proposed an income tax increase, a business tax increase, a death tax increase, a capital gains tax increase, a tax on stock trading, an “Exit Tax” and more (see below). Her planned net tax increase on the American people is at least $1 trillion over ten years, based on her campaign’s own figures.
Hillary has endorsed several tax increases on middle income Americans, despite her pledge not to raise taxes on any American making less than $250,000. She has said she would be fine with a payroll tax hike on all Americans, she has endorsed a steep soda tax, endorsed a 25% national gun tax, and most recently, her campaign manager John Podesta said she would be open to a carbon tax. It’s no wonder that when asked by ABC’s George Stephanopoulos if her pledge was a “rock-solid” promise, she slipped and said the pledge was merely a ‘goal.’ In other words, she’s going to raise taxes on middle income Americans.

This post was published at Zero Hedge on Jul 29, 2016.

Gold Daily and Silver Weekly Charts – Monster First Delivery Day For August Gold

Nova Scotia offered up 406,700 ounces of gold from their house account for the first delivery day in August. That is the biggest number I have seen in some time.
And they sold it at what was close to the low for yesterday at $1,332. That’s what one gets when they sell big in an active month which August is for gold. What were they thinking?
The silver deliveries were fairly inconsequential for August, so I did not bother to update them.
Uncle Buck, aka la douleur du monde, took the gas pipe on that horrible GDP number, at 1.2% versus 2.6% expected, with a downward revision to 0.8% in the prior period. No wonder the Fed balked at even a fairly symbolic rate increase this week. They may play dumb, but they know.
Gold is on the threshold of breaking out as you can see on the chart below, and silver is looking fairly positive as well.

This post was published at Jesses Crossroads Cafe on 29 JULY 2016.

Stock Pickers Throw In The Towel: “Active Manager Beta Exposure Is The Highest Ever”

Yesterday we quoted from a surprising report by Credit Suisse, according to which after surveying numerous clients, the bank had come across “almost no one who seems to have outperformed or made decent returns this year.” While not quite as extreme, the latest HSBC performance report confirms that the broader market is outperforming the vast majority of hedge funds in 2016.
But more surprising was Credit Suisse’s admission that “we have never had so many client meetings starting with statements such as ‘we are totally lost‘.” The main cited reason for the confusion is that “clients are close to being as bearish on equities as we can remember. Clients do not find equity valuations attractive enough to compensate for the macro, political, earnings and business model risks.”
And yet, with everyone “bearish” the market continues to levitate higher to record highs (on ever less volume) most recently today, when it touched a new all time high shortly after the US reported the worst annual growth in GDP since 2010, further confusing traders who as we said yesterday, in a scramble for performance have succumbed to the oldest error in the book: performance paralysis, better known as a herd-chasing panic.

This post was published at Zero Hedge on Jul 29, 2016.

Proper Planning Through Life’s Stages to Avoid Money Worries

Recently when I was talking to journalist Cameron Huddleston, we discussed retirement questions that everyone needs to be able to answer. That resulted in her article ’21 Questions to Ask Yourself Before Trying to Retire’ and a second one called ‘8 Ways to Stop Worrying About Money’. This reminded me of our recent webinar entitled ‘5 Key Retirement Decisions’ and the Retirement Resources Guide on our website. It also reminded me to finish this article that I started to write several months ago.
For this article, the goal is to help people at different stages of their life make better financial decisions and to try to take away some of the ‘Money Worries’ that we all have. These stages are ‘foundational’ and goal oriented where each level would build on each other. This guide will address each of these foundations. Don’t worry if you missed the age, just start with the beginning and work towards the end to get back on track. Through this process, my goal is to help you get your financial house in order and to help you have less stress and be in a place to start targeting and achieving financial goals.

This post was published at STA Wealth Management on Thursday, July 28th, 2016.

Blood Continues To Flow In The U.S. Oil Industry As Precious Metals Rally

The top three U. S. oil companies released their financials today and the results were completely horrible. Exxon Mobil was the only one of the three that still made a profit for the first half of the year, however it was down a stunning 62% compared to the same period last year.
Unfortunately, Chevron and ConocoPhillips results were much worse as they suffered a combined net income loss of $4.7 billion for the first half of 2016. We must remember, these are the major U. S. oil companies that are supposed to be highly profitable. I hear this all the time from politicians and folks who believe in lousy conspiracies.

This post was published at SRSrocco Report on July 29, 2016.

US Oil Rig Count Rises At Fastest Rate Since Jan 2010

With inventories once again on the rise, demand set to seasonally tumble, and production on the rise, the lagged response to the bounce in crude prices continues in the US oil rig count, rising 3 last week to 374. This is the 8th rig count rise in the last 9 weeks. The 58 rig rise ( 18% off the lows) is the fastest since Jan 2010. Oil prices had melted up all day (despite record OPEC production) as the USD weakened, and extended gains despite the rig count rise.
*U. S. GAS RIG COUNT DOWN 2 TO 86 , BAKER HUGHES SAYS *U. S. OIL RIG COUNT UP 3 TO 374 , BAKER HUGHES SAYS The lagged oil price continues to lead the rig count…

This post was published at Zero Hedge on Jul 29, 2016.