DB Stock Hits a Record Low (and Our Puts Are Up 166%)

Monday morning, Deutsche Bank AG (NYSE: DB) stock hit a record low, dropping 6.5% to below $12. So far this year, the embattled bank has lost more than 50%.
As I warned you in February, Deutsche Bank is the proverbial canary in the coal mine of the global financial system. It poses systemic risk because it is poorly managed, even more poorly capitalized, and party to $60 trillion of derivatives contracts.
Now the U. S. government is chasing it down for billions of dollars of penalties on fraudulent mortgages it sold before the financial crisis, but German Chancellor Angela Merkel has said that the German government will not bail out the bank if it runs out of money. This is a recipe not only for DB stock to drop to where global interest rates are – zero – but to damage the rest of the financial system on the way.

This post was published at Wall Street Examiner by Michael E. Lewitt ‘ September 27, 2016.

The Federal Reserve Note “Dollar” Is Indeed Dying, but Not Next Week

Some say the U. S. dollar may die 5 days hence. The Chinese renminbi will kill it. Much is being made of plans by the International Monetary Fund (IMF) to add the renminbi to its basket of strategic reserve currencies called Special Drawing Rights (SDR). The IMF will make the change on October 1. While the implications for the Federal Reserve Note, currently the U. S. dollar, as the world’s primary reserve currency may be profound over time and the importance of this even should not be overlooked, the impact is unlikely to happen overnight.
The composition of the SDR may change on October 1, but few people understand what the SDR is. Even fewer actually have any experience trading it. For the many who wonder what an SDR is, here is a brief description from the IMF;
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. As of March 2016, 204.1 billion SDRs (equivalent to about $285 billion) had been created and allocated to members. SDRs can be exchanged for freely usable currencies. The value of the SDR is currently based on a basket of four major currencies: the U. S. dollar, euro, the Japanese yen, and pound sterling. The basket will be expanded to include the Chinese renminbi (RMB) as the fifth currency, effective October 1, 2016.
The IMF actually decided to make October 1st’s changes to the SDR one year ago. Some expected that decision would represent the death knell for the dollar. But when the announcement came, the currency markets hardly noticed.
Mass psychology – or relative confidence – is what ultimately determines whether or not a dollar holds value. Not much will happen October 1st if not many people care.

This post was published at GoldSeek on 27 September 2016.

The FT Goes Full Fearmonger: Electing Trump “Would Unravel The World”

It would appear that, despite the tsunami of ‘spin’ across every major media platform since the end of the debate, the establishment is gravely concerned at Donald Trump’s proximity to ‘their gal’ in the polls. With Hillary herself questioning “why am I not 50 points ahead?”, The Financial Times has unleashed Martin Wolf to explain to the ignorant mass of deplorables just how apocalyptic a Trump presidency would be…

This post was published at Zero Hedge on Sep 27, 2016.

Bond-Stock Correlation Reaches Record High

The correlation between bonds and stocks has never been higher. In a ‘normal’ world, bond prices and stock prices are strongly inversely correlated (red shaded region in lower pane below) but the last few weeks have seen a massive regime shift (in fact the biggest shft in history) as the entire financial market becomes captured by central bank idiocy.

This post was published at Zero Hedge on Sep 27, 2016.

The Endpoint of Automation

For companies, it’s just a question of money.
Earlier this year, Citi Global Perspectives & Solutions came out with a report on what computerization and automation in the US will do to jobs. It built on a study that Oxford University had produced in 2013. By looking at ‘702 detailed occupations,’ it found that about 47% of all jobs would disappear over the next 10-15 years.
There are certain things that you have to understand. About 53% of the jobs will not disappear, and no job on the list will disappear totally. Some jobs will lose a lot of people, some jobs almost no people, which makes good logical sense.
For example, furriers (people who shoe horses) are still in demand. Not nearly as many as 100 years ago, but there is still a need for furriers.
When companies look at automation, they use a simple formula. You take the initial cost, add in interest to borrow the money, add in the cost of maintenance, and divide by the number of hours of useful life. That gives you a cost per hour.
Then you look at the cost of a human (or humans) per hour to do the same job with all the perks, and compare the two numbers. The lower number wins.

This post was published at Wolf Street by James Murray ‘ September 27, 2016.

Wells Fargo or the Federal Reserve: Who’s the Bigger Fraud?

The Wells Fargo bank account scandal took center stage in the news last week and in all likelihood will continue to make headlines for many weeks to come. What Wells Fargo employees did in opening bank accounts without customers’ authorization was obviously wrong, but in true Washington fashion, the scandal is being used to deflect attention away from larger, more enduring, and more important scandals.
What Wells Fargo employees who opened these accounts engaged in was nothing more than fraud and theft, and they should be punished accordingly. But how much larger is the fraud perpetrated by the Federal Reserve System and why does the Fed continue to go unpunished? For over 100 years the Federal Reserve System has been devaluing the dollar, siphoning money from the wallets of savers into the pockets of debtors. Where is the outrage? Where are the hearings? Why isn’t Congress up in arms about the Fed’s malfeasance? It reminds me of the story of the pirate confronting Alexander the Great. When accused by Alexander of piracy, he replies ‘Because I do it with a small boat, I am called a pirate and a thief. You, with a great navy, molest the world and are called an emperor.’

This post was published at Lew Rockwell on September 27, 2016.

Germany Told Their People To Prepare, Was This For The Economic Collapse? – Episode 1086a

The following video was published by X22Report on Sep 27, 2016
UK retail declines once again. US Government consumer confidence model surges while the public models decline. US home prices slow and they begin the slow decline downward. Housing bubble is now seen in major cities across the world. Richmond Fed declines and the world trade slows dramatically. The German government tell their people to prepare, it is starting to look like this was for the collapse of Deutsche Bank and then the economy.

Russian Hackers Breached Democrats’ Cell Phones: FBI

Those Russian hackers never sleep.
Having had most of their computers hacked, a new threat has emerged for Democrats. Reuters reports that FBI investigators believe “foreign hackers” have targeted mobile phones used by “a small number of Democratic Party figures, possibly including elected officials” according to four political and government sources said on Tuesday.
Reuters notes that the hacking attempts occurred within the last month or so, and adds that two sources said investigators believe that, like hackers who earlier attacked the central data servers of key Democratic Party organizations, the mobile phone attacks were carried out by hackers connected to the Russian government.
One source said that some of those whose phones were targeted by hackers had been asked by the FBI to turn over their phones so that investigators can “image” them.

This post was published at Zero Hedge on Sep 27, 2016.

Howard Dean Stands By Tweet Accusing Trump Of Snorting Blow, Wants An Answer

We previously observed that among the reasons why last night’s debate broke all TV and social media popularity records, was Donald Trump’s recurring sniffling, which promptly became a viral phenomenon and was dubbed #Trumpsniffle on Twitter. While the discourse was mostly in good humor, and some say Trump had it coming after all the focus on Hillary’s health – with good reason – over the past month, things escalated last night when democrat Howard Dean suggested that Trump is sniffing because he may be a “coke user.”
Notice Trump sniffing all the time. Coke user?
— Howard Dean (@GovHowardDean) September 27, 2016

Moments ago, Dean appears on MSNBC where he was asked to explain the comment and whether he would apologize and delete his tweet. His answer: “no, absolutely”, and added that “the sniffling, the grandiosity, the delusions, the pressured speech – you know, this guy’s already proven himself to be unstable, the question is, why is he unstable?”
The full exchange below.

This post was published at Zero Hedge on Sep 27, 2016.

Homicides Rates Increase, but Remain Near Historic Lows

The FBI released new crime statistics for 2015 yesterday, and they show homicides up ten percent from 2014 to 2015. During 2015, there were 4.9 homicides per 100,000 population. This was up from the 2014 revised rate of 4.4 per 100,000.
Much of the media has breathlessly reported the news as if an indication of some new trend. The left is reporting it as if it’s proof of too little gun control, while the right is reporting the news as evidence of too many immigrants. Trump, of course has made homicides by immigrants a staple in many of his speeches.
In fact, the increase in homicides is driven by a small number of specific metropolitan areas and neighborhoods. Most homicides are committed by native-born Americans. The vast majority of Americans have likely never been safer from homicide.
But first, let’s look at the nationwide trend:

This post was published at Ludwig von Mises Institute on Sept 27, 2016.

Crude Chaos Strikes: Saudis Admit “No Deal” But “Hopeful” For November

Having failed completely to consumate a freeze deal in Algiers, the Saudi oil minister throws out a bone of hope to crude bulls that November’s OPEC meeting may see a freeze deal. Crude is testing its lows of the day butbouncing around like Hillary’s eyes as the minister desperately tries to keep the dream alive.

This post was published at Zero Hedge on Sep 27, 2016.


The Shanghai fix is at 10:15 pm est and 2:15 am est
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
Shanghai morning fix Sept 27 (10:15 pm est last night): $ 1337.76
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1336.83
London Fix: Sept 27: 5:30 am est: $1335.85 (NY: same time: $1336.00: 5:30AM)
London Second fix Sept 16: 10 am est: $1327.00 (NY same time: $1326.90 , 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.
Also why would mining companies hand in their gold to the comex and receive constantly lower prices. They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.

This post was published at Harvey Organ Blog on September 27, 2016.

Hillary vs Donald: So Who Won?

The question everyone is asking this morning is who won the debate. The answer is: it depends who you ask.
To be sure, conservative website Drudge Report had Trump a blow out winner with over 82% of the nearly 500,000 votes cast, which however can probably be explained by the self-fulfilling ideology of most of the site’s visitors.
Alternatively, the left-leaning CNN, conducted a snap poll, which gave Clinton the win with 62% to Trump’s 27%. It was the biggest, and fastest, exercise conducted by an opinion polling firm. The poll of 521 registered voters who watched the debate was a sample which the network warned leaned more Democratic than the average – starting the night with Clinton ahead 26 per cent among the sample. While CNN handed the victory overwhelmingly to Clinton, it was more mixed on whether the debate will make a difference, with 47 per cent saying it would not affect their vote, 34 per cent saying it moved them towards Clinton, and 18% towards Trump.
More surprising was a poll by CNBC, where of the 748,000 votes cast as of this morning, Trump had collected nearly two-thirds of the votes, although Trump’s outperformance here may be explained by the fact that this, too, was linked off the Drudge main page, the same as a Time poll.

This post was published at Zero Hedge on Sep 27, 2016.

This Is What Trump Should Do In The Second Debate

Last night’s debate has sparked a tsunami of conversations over who won, who looked more presidential, who coughed more, and who had bigger hands. What is more useful, however, is what can the candidates learn from this debate. Here are three readers’ comments that summed up perfectly what trump should do in the second debate.
“The_Dude” was disappointed but had some useful questions for Trump to ask…
Do your homework Donald! This isn’t a game… Does this guy prep at all or is he trying to throw it?
Question: Internet Security…you play into her hand discussing Russia and you don’t fucking mention her server.
Question: Policing…she talks “training” cops…and you don’t raise the issue of Fed overreach into local police forces?
Question: Iran..took him 3/4 if his time before mentioning $150B that will be used to build them nukes?
Question: Your taxes…hmm…I can show mine. ..how about we discuss the taxes of the Clinton Foundation and misappropriation?

This post was published at Zero Hedge on Sep 27, 2016.

Gold: Debates, Inflation, And Option Expiry

1. If gold is to move substantially higher and retain the bulk of those gains, inflation needs to become a significant concern.
2. Please click here now. Double-click to enlarge this eight hour bars gold chart. An upside breakout seems imminent, but patience is required.
3. A breakout from that drifting rectangle pattern I’ve highlighted on the chart is significant, because it creates a much bigger breakout on the monthly chart.
4. Please click here now. Double-click to enlarge. Gold is almost ready to begin a significant leg higher!
5. The US presidential debate had almost no effect on the gold price, and that’s because most of the questions had nothing to do with the economy.
6. On that note, please click here now. Double-click to enlarge this interesting 8 hour bars chart of the Dow.
7. The US stock market initially rallied after the debate, but it’s since given back most of those gains.
8. There’s a clear bear wedge pattern in play on the chart, and that follows a breakdown from a head and shoulders top pattern.
9. The bottom line is that the September – October time frame is crash season for the US stock market, and the situation is grim.
10. Who won the debate? Well, mainstream media is essentially socialist, and they say Hillary won.

This post was published at GoldSeek on 27 September 2016.

Deutsche Curve Inverts As Bundesbank Dismisses State Support Of “Zombie” Banks

Deutsche Bank Sub CDS closed above 500bps for only the second day in its history (and the longer-term CDS curve inverted once again) as a bad day ended worse with Bundesbank member Andreas Dombret exclaimed“state support of banking sector must end,” warning that it only “props up zombie banks.” His pronouncements also pushed politicians to make the hard decisions and “tell banks they need structural reform.”
As Bloomberg details, ‘Political support for the banking sector has to end at last,’ Bundesbank board member Andreas Dombret says in text of speech in Vienna. ‘Unfortunately I’m only seeing this to a limited extent.’

This post was published at Zero Hedge on Sep 27, 2016.

Curve Flattens After Treasury Sells $34 Billion In Uneventful, Tailing 5Y Auction

Unlike yesterday’s 2Y auction, when paper was trading -1.0% special in repo which helped yesterday’s issuance to pass with the high yield printing through the WI, today’s 5Y auction did not have the added benefit of a short squeeze going into the 1pm deadline (5Y was trading just -0.1% in repo), and as such we were not surprised to see the high yield print at 1.129%, tailing the 1.128% When Issued by a marginal 0.1 bps. Putting this in context, it was the second lowest 5Y auction yield since June 2013, with the exception only of last month’s auction pricing at 1.25%

This post was published at Zero Hedge on Sep 27, 2016.