The Stock Market Veers Further From Economic Reality Each Day

Actual Monthly Change in August Payrolls Likely Was a Contraction – Though Bloated by Seasonal-Factor Distortions and Add-Factors, Annual Payroll Growth Effectively Held at a 30-Month Low – Second-Quarter Real Merchandise Trade Deficit Remained Worst Since 2007. – John Williams,
The negative economic news continues to spill out, with most economic reports reflecting an economy that is already in contraction (recession). The most interesting report out last week was auto sales for July, which showed a 5.5% drop from June overall and a 6.2% drop for domestic vehicles. These comps are based on seasonally ‘adjusted’ annualized rates. I would bet anything that the actual number of cars sold in July vs. June were a lot lower. Ford reported an 8.4% drop in sales. Ford admitted that the market was soft and that retail price incentives are at historical highs. In short, the overall auto sales report was a disaster and it’s going to get worse going forward.
With regard to the transports index, a report out on August 19th that received no attention in the financial media showed that Class 8 (heavy duty) truck orders fell 20% from June and 58% year over year. This is after hitting a four-year low in June. The big drop was blamed on a high rate of cancellations. This is consistent with regional Fed manufacturing reports out last week that showed big drops in new orders. Again, the economy is starting contract – in some areas rather quickly.
One last datapoint that you might not have seen because it was not reported in the mainstream financial media, or even Zerohedge: the delinquency rate for CMBS – commercial mortgage-backed securities – rose for the the 5th month in a row in July. The rise was attributed to ‘another slew of balloon defaults.’ Balloon defaults occur when the mortgagee is unable to make payments on mortgages that are designed with low up-front payments that reset to higher payments at a certain point in the life of the mortgage. This reflects an increasing inability of tenants in office, retail and multi-family real estate to make their monthly payments.

This post was published at Investment Research Dynamics By Dave Kranzler/ Sept 6, 2016.

USDJPY Tumbles On Sankei Article BOJ Is Struggling To Reach Policy Consensus

After having dropped all day following the latest set of poor US data making a September rate hike virtually impossible, moments ago the USDJPY snapped lower by nearly 80 pips, tumbling as much as 101.25, as stops were hit, reaching the pari’s lowest level since August 26.
Among the reasons cited for the steep drop on trading desks, is that according to an article in Japan’s Sankeipublished just over an hour ago, the BOJ is struggling to form a unified opinion on policy review. The Sankei explains, without saying who provided the information, that policy board members are struggling to reach a consensus position on comprehensive policy review to be released at Sept. 20-21 meeting.
It goes on to say that members are divided between those who support negative interest rates, prioritizing government bond purchase, and others who oppose additional easing measures:

This post was published at Zero Hedge on Sep 6, 2016.

Billionaire Elites Piling Into Gold – Jeff Berwick on Palisade Radio

The following video was published by TheDollarVigilante on Sep 6, 2016
Jacob Rothschild, Stanley Druckenmiller, George Soros, along with his associate Crispin Odey, and other billionaire elitists are moving massively into gold. In his recent semi-annual address to RIT shareholders, Rothschild announced that they are reducing their stock and currency exposure and increasing their gold holdings.

EU Launches New Power Grab, to Roaring Public Approval

A ‘Back Door’ to Fiscal Union
The Apple Tax is about a lot more than just Apple and the billions of euros inbackdated corporation tax it purportedly owes to European governments. It even goes far beyond the question of how – and how much – central authorities should tax recalcitrant multinationals that make billions of dollars in profits on their turf but share few or none of the proceeds.
What is most at stake is the question of who gets to set the fiscal rules in Europe’s foreseeable future. One thing is clear: if Brussels gets its way, it’s not going to be the national government of each member state. And that could be very bad news, at a very bad time, for a number of European economies, in particular Ireland, Luxembourg, and the Netherlands.
‘Total Political Crap’
The EU’s Competition Commission slapped Apple with a 13 billion retroactive tax bill. That money is apparently owed to the government of Ireland, its decades-long partner in one of the biggest tax-avoidance schemes of living memory. The Commission argues that the arrangement cooked up between Irish authorities and Apple’s tax lawyers and accountants represented illegal state aid, enabling the U. S. company to get away with paying an effective taxation rate on its European profits as low as 0.005%.
Naturally, Apple does not want to pay the money. Apple’s chief executive, Tim Cook, even went so far as to call the EU ruling as ‘total political crap’:

This post was published at Wolf Street by Don Quijones ‘ September 6, 2016.

As Class 8 Truck Orders Continue Collapse, VW Has A “Fix” For Navistar’s Diesel Emission Issues

Truck-related stocks have massively outperformed the broader markets this year up over 30% while the S&P 500 is up only around 7%. This outperformance has come despite abysmal Class 8 net orders which seem to just get worse each month with August 2016 net orders down over 25% compared to last year. In fact, the level of trailing 12-month net orders is the lowest since January 2011 with YoY changes now in negative territory for 18 consecutive months.

This post was published at Zero Hedge on Sep 6, 2016.

The Central Bankers Are Preparing For The Inevitable, The Entire System Collapsing – Episode 1068a

The following video was published by X22Report on Sep 6, 2016
Europe will not give another penny until Greece sells off everything and obeys. Italy wants the EU to come up with an unemployment fund. ECB spent 1 Trillion and the economy in Europe is worse than ever. ITT closes and 40,000 students are in limbo and 8,000 employees are our of work. There are now 3.3 million more leisure and hospitality workers than there are manufacturing workers. Fed own job indicator points to no jobs. Hungary kicks out the IMF.


Gold:1349.30 up $27.30
Silver 20.05 up 77 cents
In the access market 5:15 pm
Gold: 1350.05
Silver: 20.06
The Shanghai fix is at 10:15 pm est and 2:15 am est
The fix for London is at 3 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 45 minutes before London’s first fix.
And now the fix recordings:
First the Shanghai fix Sept 5
Shanghai morning fix (10:15 pm est last night): $1325.32
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$1327.81
London Fix: Sept 5: 3: am est: $1328.30 (NY: same time: $1326.20: 3 AM)
London Second fix Sept 5: 10 am est: $1326.35 (NY same time: $1326.34 , 10 AM)
Shanghai fix Sept 6
Shanghai morning fix Sept 6 (10:15 pm est last night): $1328.74
price in NY on access at the exact same time:$1325.68
Shanghai afternoon fix Sept 6(2:15 am this morning: $1329.36
price in NY on access at the exact same time: $1326.80
The two London fixes:
First fix:Sept 6 2016 am:$1330.35 (3 am est) vs Shanghai (2:15 am): 1328.74
New York access price as the same time (3 am): $1328.10
Second fix: pm Sept 6:$ 1337.25 (10 am est) 1334.70 USA gold price at 10 am
It seems that Shanghai pricing is higher than the other two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex
For gold:The front September contract month we had 0 notices filed for nil oz
For silver: the month of September we have a total of 253 notices filed for 1,265,000 oz
Generally after a 4 day weekend, the bankers always whack. This has been going on for many years. It looks like our paper gold/silver boys are in some sort of trouble e.g. Deutsche bank.
Let us have a look at the data for today

This post was published at Harvey Organ Blog on September 6, 2016.

CASH: The Most Hated Asset Class On The Planet

September 6, 2016
A version of this post first appeared on The Felder Report PREMIUM
I regularly like to ask myself, ‘what the most hated asset class on the planet?’ simply because what is most hated usually presents the greatest opportunity. For example, this time last year I answered this question by writing It’s time to get greedy in the gold market. This year gold, and more specifically the gold mining shares, have been one of the best performing asset classes on the planet.
I still like gold but it can’t be said that it’s the most hated asset class anymore. Sentiment has followed prices higher as it always does.
Today, cash has now become the most hated asset class on the planet. What makes me say this? Well, investors are willing to accept negative returns on many asset classes right now rather than hold cash. This is totally irrational.
The most obvious example of this is negative interest rates on many bonds around the world. Last I read the nominal value of these has reached $16 trillion. And now even corporations are selling short-term debt at negative yields.

This post was published at Wall Street Examiner by Jesse Felder ‘.

The One Trillion Dollar Consumer Auto Loan Bubble Is Beginning To Burst

Do you remember the subprime mortgage meltdown from the last financial crisis? Well, this time around we are facing a subprime auto loan meltdown. In recent years, auto lenders have become more and more aggressive, and they have been increasingly willing to lend money to people that should not be borrowing money to buy a new vehicle under any circumstances. Just like with subprime mortgages, this strategy seemed to pay off at first, but now economic reality is beginning to be felt in a major way. Delinquency rates are up by double digit percentages, and major auto lenders are bracing for hundreds of millions of dollars of losses. We are a nation that is absolutely drowning in debt, and we are most definitely going to reap what we have sown.
The size of this market is larger than you may imagine. Earlier this year, the auto loan bubble surpassed the one trillion dollar mark for the first time ever…
Americans are borrowing more than ever for new and used vehicles, and 30- and 60-day delinquency rates rose in the second quarter, according to the automotive arm of one of the nation’s largest credit bureaus.
The total balance of all outstanding auto loans reached $1.027 trillion between April 1 and June 30, the second consecutive quarter that it surpassed the $1-trillion mark, reports Experian Automotive.
The average size of an auto loan is also at a record high. At $29,880, it is now just a shade under $30,000.
In order to try to help people afford the payments, auto lenders are now stretching loans out for six or even seven years. At this point it is almost like getting a mortgage.

This post was published at The Economic Collapse Blog on September 6th, 2016.

Germany’s Henkel First NON-Financial Companies to Market Bonds With Negative Yields

We know that Bank of Japan and other Central Banks, as well as sovereign yield in a number of countries, have gone to negative yields. Now two German non-financial private firms are thinking about selling bonds with negative yields. (Bloomberg) – Henkel AG and Sanofi are poised to became the first non-financial private companies to sell bonds that yield below zero.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ September 6, 2016.

Investors Still ‘Frightened’ By Russia, Jim Rogers Says

Famed commodities investor Jim Rogers thinks the market is in the process of detecting the next big crisis and is still ‘frightened’ by Russia.
‘My first successful investment in Russia this year was shorting the ruble, but now I’m looking at finance, ruble bonds, opportunities in inbound tourism are all of the interest because they can provide a higher return,’ he said in an interview with business dailyKommersant published on Thursday. ‘Frankly, investors are still frightened about the prospect of investing in Russian securities,’ he said.
Rogers called the Russian market one of the most perennially undervalued in the world. He said that oil prices will recover soon, but not by much as the global economy might suffer new shocks. One is the Federal Reserve raising interest rates in the U. S. and the other is the possible election of Donald Trump. For Rogers, a Trump presidency would make markets most skittish because of his stance on trade.

This post was published at Lew Rockwell on September 6, 2016.

Household Discretionary Spending Stuck in 4-Year Quagmire

Spending the same to end up getting less.
In all the hoopla about consumer spending – which accounts for about two-thirds of the US economy – and how lethargic its growth has been, despite some months when it perked up and gave rise to hopes that ‘escape velocity’ would finally kick in, something got lost: how totally range-bound, for the pastfour years, discretionary spending has been.
This measure of discretionary spending excludes household bills and major items such as cars or homes. It hasn’t budged in dollar terms for four years, despite inflation eating into the purchasing power of the dollar.
In August, spending by American households dropped once again, according to the Gallup US Daily survey released today. As part of this broad survey, based on telephone interviews (60% cellphone, 40% landline) conducted in August of over 15,000 adults, Gallup asks how much they spent ‘yesterday’ on items excluding normal household bills and major purchases such as a home or car. Gallup calls it an ‘indication of discretionary spending.’
So in August, the tally dropped to $91 spent ‘yesterday,’ from $100 in July. Keep in mind, this includes households with more than one earner and/or more than one spender. In terms of the prior three Augusts, that was below average ($92.7):

This post was published at Wolf Street by Wolf Richter ‘ September 6, 2016.

This One Chart Should Drive Investors Into Buying Gold & Silver

The U. S. financial system is in serious trouble and this one chart confirms it. Investors who understand the negative consequences of this chart would be buying physical gold and silver hand over fist. Unfortunately, Americans have been put to sleep by the Mainstream media as they continue to report that ‘business as usual forever and everything will be okay.’
However, the opposite is the case as the U. S. economy and the financial system continue to disintegrate under the forces of massive debt, zero interest rates and a collapsing energy industry. This is not a situation that will continue for many years or decades. This will likely collapse much sooner than most Americans realize.
Why? Because of the evidence shown in the chart below:

This post was published at SRSrocco Report on September 6, 2016.

“No Reason” Why ECB Shouldn’t Buy Stocks: Peterson Institute

Last week, we highlighted a troubling Reuters article, which we classified as a quiet “trial balloon” to set the stage for an ECB launch of stock purchases. As Reuters put it, the ECB may soon be forced to follow the Bank of Japan’s example and buy equities as part of any expanded stimulus programme. Reuters recapped the familiar problem: “The European Central Bank could run out of eligible bonds for its 1.7 trillion euro bond-buying scheme, meaning alternative options are on the table should it decide to loosen policy further to lift growth and inflation across the bloc. Analysts say these could include large-scale share buying, a policy that the BOJ has already adopted after it started purchasing equity exchange traded funds (ETFs) for its own quantitative easing scheme six years ago.”
Overnight, the WSJ doubled down on this “warning”, writing that central banks have become some of the biggest investors in bond markets. Now some in the financial markets think stocks should benefit more from their largess. The amusing spin came when the WSJ cited “some economists” who say the European Central Bank, which meets Thursday to decide if it should expand its current bond-buying program, should invest in equities. The reason – one we have discussed for years, and which Reuters touched upon last week – “It is running out of bonds to buy.”
While certainly redundant, the WSJ observes that “a move by the ECB into equities would have big implications for Europe’s stock markets.” Well yeah: with equities becoming risk-free, it would mean prompt all time highs as a completely price-indescriminate buyer would now be on the verge of nationalizing yet another market, and crushing all the fundamental signals that link corporate health, the economy, or underlying industry dynamics with risk asset prices.

This post was published at Zero Hedge on Sep 6, 2016.

Chipotle Soars After Bill Ackman Reveals 9.9% Stake, Goes Activist

Many thought that having been squeezed between the terrible performance of his Valeant long and his “career” Herbalife short, that Bill Ackman would quietly fade into the sunset, facilitated by the dreadful YTD performance of his hedge fund. No such luck, and as he revealed moments ago in a 13D filing, the Pershing Square founder has just gone activist on Chipotle, revealing a 9.9% stake, and announcing he intends “to engage in discussions with the Issuer and Issuer’s management and board of directors, other stockholders of the Issuer and other interested partiesthat may relate to the governance and board composition, business, operations, cost structure, management, assets, capitalization, financial condition, strategic plans, and the future of the Issuer.“
From the report:

This post was published at Zero Hedge on Sep 6, 2016.

Gold And Silver: Good Times Are Here

Gold has a rough general tendency to decline ahead of the monthly US jobs report, gyrate wildly when the report is released, and then rally modestly higher for another one to three weeks. The cycle tends to repeat itself with varying degrees of intensity. Please click here now. Double click to enlarge this daily bars gold chart. It’s clear that gold responded to the latest jobs report in ‘textbook’ fashion. I suggested gold would decline to about $1310 ahead of the jobs report. It went to about $1306. Since then, gold has rallied to about $1335 and the technical situation is now very good. Note the 14,7,7 series Stochastics oscillator at the bottom of the chart. There’s a crossover buy signal in play. Even though Indian demand is currently soft, gold is very well supported by institutional money managers. At this point in time, it could be persuasively argued that neither the love trade nor the fear trade are the prime movers of the gold price. Instead, gold is being supported by the ‘competitive cost of carry’ trade. Low rates and negative rates on most fiat currencies make gold very attractive as a currency.

This post was published at GoldSeek on 6 September 2016.

Gold Daily and Silver Weekly Charts – Like a Wrecking Ball For the Real Economy

Gold and silver came roaring out of the long weekend as the US ISM Services number came in far under expectations, taking some of the wind out of the sails of the economic elite.
The pundits have been pushing the meme that US manufacturing, which is horribly weak, is an ‘old economy’ thing, and that the US ISM Services number would shine like the bright new era of economic growth that it is (not apparently).
So the markets thought it over, and decided that this additional bad news puts the Fed off of a September rate increase, and that they will continue to dilly dally around, jawboning all the passing strangers with tales of their hawishness.
As you might expect, the US dollar took a serious dive, which is somewhat justified by the ridiculous rally it had just the week before. The wash and rinse cycle is a forex wiseguy’s favorite.
So let’s see if the Fed can come in, without a shred of remaining credibility, and convince the world that indeed they are raising rates to cool off the overheating US economy that has surely reached and surpassed full employment.

This post was published at Jesses Crossroads Cafe on 06 SEPTEMBER 2016.

Clinton Slams Trump For “Commenting On Fed Actions”, Just Like Obama Did In April

Desperate to change the narrative from her coughing fit, Hillary Clinton has come out swinging at Trump’s comments about how The Fed’s low interest rates have created an “artificially strong stock market,” exclaiming thatpresidents and candidates should not comment on Fed actions, showing he should not be president. That’s a little awkward given President Obama’s meeting with, and comments on, The Fed in April… but hey, when did hypocrisy ever lose an election?

This post was published at Zero Hedge on Sep 6, 2016.