Yellen Says Fed Buying Stocks Is “A Good Thing To Think About” And Could Help In A Downturn

Having hinted overnight that The Fed could buy stocks “maybe in the future,” Janet Yellen blurted out confirmation that buying assets other than long-term U. S. debt is on the table. Despite the total and utter failure of SNB and BOJ direct equity buying to create increased consumption, Yellen explained “it could be useful to be able to intervene directly in assets where the prices have a more direct link to spending decisions.”
Speaking via videoconference in response to questions raised at forum of Kansas City Fed minority bankers, Fed Chair Janet Yellen says there could be benefits to Fed buying equities or corporate bonds, yet would also likely be costs that have to be considered.

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


Gold $1321.70 up $2.30
Silver 19.12 up 8 cents
In the access market 5:15 pm
Gold: 1320.75
Silver: 19.08
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 29 (10:15 pm est last night): $ 1329.99
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1326.88
London Fix: Sept 29: 5:30 am est: $1320.85 (NY: same time: $1321.75: 5:30AM)
London Second fix Sept 16: 10 am est: $1318.10 (NY same time: $1319.60 , 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.
For comex gold:The front September contract month we had 6 notices filed for 600 oz
For silver: the front month of September we have a total of 468 notices filed for 2,340,000 oz
Let us have a look at the data for today

This post was published at Harvey Organ Blog on September 29, 2016.

“People Are Mad” – Dave Collum Warns “Existential Change Is In The Air”

Chemistry professor, and infamous market observer Dave Collum, author of the encyclopedic ‘Year in Reviews’, senses “existential risk in the American Experiment.” In an excellent interview with The Cornell Review, Collum opines on everything from ‘safe spaces’ to ‘social unrest’ warning “people are now mad, and it shows in the chaotic election. We are guaranteed to elect a president that half the populace finds repugnant…Change is in the air.”
…It is probably only in the last 15 years that I’ve started hiking up my pants and bitching about the government. Now I am relatively outspoken because I sense existential risk in the American Experiment. …We have an interventionist central bank – a global cartel of interconnected central banks actually – that is determined to use untested (read: flawed) models to try to repair an economy that was hurt by their policies and would fix itself if the Fed would just get out of the way. I think these guys are what Nassim Taleb calls I-Y-I (intellectual-yet-idiot). They will continue with their experiments until the system finally breaks in earnest. They will blame the unforeseeable circumstances.

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

The Next Stock Market Crash Will Be Caused by One Dangerous Policy

There’s a dangerous economic policy known as negative interest rates, and it’s going to cause a stock market crash.
It’s being largely ignored because the policy isn’t used in America. Right now, it’s mostly being used in Europe and Japan. But U. S. Federal Reserve Chair Janet Yellen said in May she would not rule out negative interest rates if the U. S. economy was in an adverse scenario.
And if more and more countries adopt negative-interest-rate policy (NIRP), afuture stock market crash is inevitable.
Here’s why…

This post was published at Wall Street Examiner by Jack Delaney ‘ September 29, 2016.

We’re Issuing a Formal Alert: Something Major is Coming in the Markets

Time for a reality check.
The market has had nothing but positives for three months now. BREXIT was contained. The Fed failed to raise rates again. The Bank of Japan and European Central Bank are printing a combined ~$180 billion per month (a record pace) and using it to prop the markets up.
And stocks are DOWN. While the bulls and CNBC shills talk about the markets like they’re in some incredible rally, the fact is that the S&P 500 peaked in mid-August. And if you want to go back further it’s gone absolutely NOWHERE since July 9th.

This post was published at GoldSeek on 29 September 2016.

Here Are The Best Scream Fests From Today’s John Stumpf Hearing

Ten days after he was grilled in the Senate for two hours, today John Stumpf had to go through twice the grandstanding in yet another kangaroo court, this time for four intense hours in the House, where among other things, he had to suffer the following Maxinewaterism: “I‘m going to move forward to break up Wells Fargo“.
It doesn’t work that way.
And while we agree that Stumpf should resign, and certainly be investigated for potential criminal activity, there are appropriate channels for that – what happened today was a circus, in which many populism-pandering poseurs, many of whom have received generous donations from Wells Fargo, achieved nothing, but yelled a lot while doing it and of course, smiling for the camera.
Still, we admit that there were some legitimate questions asked.

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

I’m in Awe of How Fast Deutsche Bank is Falling Apart

Counterparties lose confidence, withdraw cash.
Deutsche Bank, with $2 trillion in assets, amounting to 58% of Germany’s GDP, one of the most globally interwoven banks, with gross notional derivatives exposure of 46 trillion, right at the top along with JP Morgan (booked as 41 billion in derivative trading assets after netting and collateral) – this creature of risk and malfeasance, is finally starting to scare its counterparties.
This is how Lehman came unglued. Slowly and then all of a sudden.
Bloomberg News today:
[S]ome funds that use the bank’s prime brokerage service have moved part of their listed derivatives holdings to other firms this week, according to an internal bank document seen by Bloomberg News. Millennium Partners, Capula Investment Management, and Rokos Capital Management are among about 10 hedge funds that have cut their exposure, said a person familiar with the situation….
So far, these are just the first of Deutsche Bank’s 200 hedge-fund clients that use it to clear their derivatives transactions. Banking is a confidence game. When confidence sags, the whole construct comes tumbling down. And the first movers have a big advantage in getting their cash out in in time. Bloomberg:

This post was published at Wolf Street by Wolf Richter ‘ September 29, 2016.

At Home in the SkyDome

I just got back from Toronto, the first time I had been there in a really long time – certainly before all the fancy buildings went up. The city could easily have passed for the set of Tomorrowland. And that’s only a slight exaggeration.
All comments about overvalued real estate aside, I learned a lot on this trip, stuff that you don’t get from staring at Bloomberg all day.
So I went to see a ballgame at the SkyDome (now known as the Rogers Centre, but people still call it the SkyDome). It’s great having a ballpark downtown. I was just in San Diego a few months ago and caught a Padres game downtown. Baseball is meant to be played in a city.
The SkyDome is pretty old now, has to be one of the top five or six oldest parks in the league, even though it was only built in the late ’80s. It’s showing a little age – the seats are uncomfortable and meant for when people were smaller – but when you close the roof and get 47,000 people cheering, it’s an amazing place to watch a game.
So since I’m in Canada, and the Jays are playing the Yankees, we get to hear both national anthems. They bring out this big 100-person choir, and they sing the US national anthem, which gets warm applause from the Canadian crowd.
Then they start singing O, Canada. You can hear a pin drop in that place.
Then something incredible happens. About two-thirds of the way through, people start cheering. Then more people start cheering. Then there’s this huge crescendo, and it gets louder and louder, and by the end of it, people are going absolutely nuts. I mean, they are going crazy. For O, Canada!
I have never seen anything like it. Maybe in post-9/11 US. But nowhere else.

This post was published at Mauldin Economics on SEPTEMBER 29, 2016.

Don’t Be Stupid (DoucheBank)

C’mon folks.
First, it’s illegal for the German government to bail out Deutsche Bank. That’s one of the (few) changes made in the EU post-2008, and it has gone into effect.
However, they can be bailed in.
Now let’s talk about what that means, and why in fact it’s worthless in a situation like this.
A bail-in would destroy the stockholder equity (first), then bondholder equity which is converted to stock. That sounds ok but there’s a problem with it.
It works roughly like this: There are multiple “tranches” of bonds with various seniority associated with them. This is done so the institution pays less to borrow on the “higher” (or “Senior”) tranches, because the lower ones are wiped out first before the Senior bonds take any loss.
The issue that arises is that all these institutions “engineer” their tranching through various machinations (including default swaps and similar) so that most of their debt issue is “Senior” or “Super-Senior.” They do this to reduce their borrowing costs but the question becomes whether that “protection” is actually effective, and the only way it is effective is if the mathematical models used to derive that alleged risk are accurate.
This is exactly what was done with the various securitized mortgages from “subprime” lenders, incidentally — and we know how accurate those models were, right?

This post was published at Market-Ticker on 2016-09-29.

BofA Stunned By Record VIX Roundtrip; Fears “Fragile Market”

In recent months, BofA notes that the speed of mean reversion in the VIX has been particularly striking by historical standards. Since the end of QE3, VIX spikes have had very little persistence, generating low cumulative volatility relative to the previous 25 years, underscoring BofA’s thesis of a fragile market that features rapid jumps from states of calm to states of stress and back.
As BofA details, markets are hyper-sensitive today to central bank action / rhetoric, with the beta of global equity, commodity, fixed income, FX, and corporate credit markets to 10yr US Treasuries near 26 year highs.
Hence it is perhaps not surprising that as 10yr Treasury yields fell swiftly following last week’s FOMC decision to not raise rates, the S&P 500 rallied back to 2180 (~35bps away from its pre-selloff high) and the VIX dropped under 12 (to within 0.1 vol points of its pre-spike low).

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

SP 500 and NDX Futures Daily Charts – Should I Stay Or Should I Go

The indecisive markets took a bit of a plunge today when a news story reported that hedge funds using Deutsche Bank for derivatives clearing were pulling the excess cash out of their accounts.
The implications were that these insiders felt concerned about a disruption in access to their cash, and/or a greater threat of a ‘bail-in’ at the troubled bank.
Otherwise the risk factors still seem fairly calm, if not a bit cocky, on Wall Street.
Let’s see if they can keep a hold on this asset bubble. Last one out the door gets scorched if they cannot.

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

Gold Daily and Silver Weekly Charts – Shocking, Positively Shocking

There was a whiff of more serious concern in the markets this afternoon.
Word leaked out in a news story that some of the hedge funds doing derivatives clearing with Deutsche Bank were pulling out the cash from their accounts.
The implications of this were obvious immediately to most. And risk assets sold off.
Gold and silver are still coiling under some market pressure from the usual suspects, loco London, New York, and Washington DC.
When the time comes for the metals to break free it may happen overnight from a shock in the financial markets.
My son missed the train crash in Hoboken this morning by ten minutes. Never so glad to have him answer the phone promptly.
God’s tender mercies.

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

Panic, anxiety sparks rush to build luxury bunkers for Los Angeles’s super rich

September 2016 – PREPPING – Oscar winners, sports stars and Bill Gates are building lavish bunkers – with amenities ranging from a swimming pool to a bowling alley – as global anxiety fuels sales and owners ‘could be the next Adam and Eve.’ Given the increased frequency of terrorist bombings and mass shootings and an under-lying sense of havoc fed by divisive election politics, it’s no surprise that home security is going over the top and hitting luxurious new heights. Or, rather, new lows, as the average depth of a new breed of safe haven that occupies thousands of square feet is 10 feet under or more. Those who can afford to pull out all the stops for so-called self-preservation are doing so – in a fashion that goes way beyond the submerged corrugated metal units adopted by reality show ‘preppers’ – to prepare for anything from nuclear bombings to drastic climate-change events.
Gary Lynch, GM at Rising S Bunkers, a Texas-based company that specializes in underground bunkers and services scores of Los Angeles residences, says that sales at the most upscale end of the market – mainly to actors, pro athletes and politicians (who require signed NDAs) – have increased 700 percent this year compared with 2015, and overall sales have risen 150 percent. ‘Any time there is a turbulent political landscape, we see a spike in our sales. Given this election is as turbulent as it is, we are gearing up for an even bigger spike,’ says marketing director Brad Roberson of sales of bunkers that start at $39,000 and can run $8.35 million or more (FYI, a 12-stall horse shelter is $98,500).

This post was published at UtopiatheCollapse on September 29, 2016.

Deutsche Demolition Derby: Deutsche Bank And Commerzbank Plunge To All-time Lows

Watching the giant German banks, Deutsche Bank and Commerzbank, arelike watching the ‘Bangers’ in the Bob Hoskins film ‘The Long Good Friday.’ That is, a demolition derby.
Today, both Deutsche Bank and Commerzbank fell to all-time lows.
Here is a view from 1989. While Commerzbank rallied back after the financial crisis ‘ended,’ both Deutsche Bank and Commerzbank have not recovered.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ September 29, 2016.

Real Estate Bubbles: Vancouver, London, Stockholm, Sydney, Munich, and Hong Kong Top List

Real Estate Bubbles: The Six Cities at Risk of Bursting by Jeff Desjardins, Visual Capitalist
What do Vancouver, London, Stockholm, Sydney, Munich, and Hong Kong all have in common?
See US Housing Recovery Continues, Though Headwinds Remain
According to economists at UBS Wealth Management, these six cities all have the notorious designation of being the real estate markets furthest into ‘bubble’ territory:

Real Estate Bubbles
The major Swiss bank recently published the results of their 2016 Real Estate Bubble Index. The report found that since 2011, the six cities in ‘bubble’ territory have seen housing prices soar at least 50% on average. Meanwhile, in other comparable markets, the average increase in prices was less than 15% over the same timeframe.

This post was published at FinancialSense on 09/29/2016.

How Reuters “Tweaked” Its Latest Poll (Again) To Show A Clinton Lead

Reuters has taken some heat in recent months for “tweaking” their polling methodology seemingly every time the data reveals “inconvenient” results for Hillary (see our previous posts on the topic here and here). But the latest Reuters/Ipsos polling “tweak” is truly amazing. Having run out of options for slyly “tweaking” questions and categories to sway respondents in their preferred direction, Reuters has apparnetly resorted to blatant poll tampering by altering their polling samples to include a disproportionate number of democrats.
In their latest poll, released just two days ago, Reuters found Hillary to have a 6 point lead in a head-to-head contest with Trump. But, when you dig a little deeper you find that Reuters’ polling sample included 44% democrats and only 33% republicans. Which would be fine, of course, if it had any basis in reality. But, as The Pew Research Center points out very clearly (see table below), registered democrats represent about 33% of the electorate while republicans are 29%…a modest 4 point gap versus the 11 point advantage in the Reuters sample.

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

Outflows From Active Funds Surpass A Record $200 Billion

Following 7 years of underperformance, 2016 is the year where hedge funds and other active managers have been finally been hit with the long predicted mass withdrawals – leading to a spike in prominent hedge fund closures, most recently that of Perry Capital – which in recent months have spiked to the highest level since the financial crisis, paradoxically just as the market is on the verge of making new all time highs again.
And with activist central banks doing everything in their power to prevent any substantial risk-asset declines in order to avoid failing on the “weath effect” mandate, it was only logical that as money flowed out of active funds it would enter passive: something which has not only been happening for the past several years, but which according to BofA has now hit a record level.
As BofA’s Savita Subramanian reports, over the last several years, we have observed an accelerating trend of flows out of active funds and into passive vehicles. Price sensitivity of investors to fees, coupled with poor performance trends, have conspired against active funds, and year-to-date flows out of active have reached a post-crisis high.

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