Jeff Deist: The Broken State of Modern Economics

The following video was published by misesmedia on Sep 30, 2016
This week, Jeff joins our friend John O’Donnell at Power Trading Radio to dive deeper into the the broken state of modern economics. Along with touching on what is really being taught in American Econ programs today, Jeff and John discuss the college federal loan scam, and the unique role the Mises Institute plays in economic education.

Chicago Fed Bounces But Employment Slips

“Economic growth in the US appears to have picked up a little at the end of the third quarter,” reports MNI as September’s Chicago Fed ticked up to 54.2 (better than the 52.0 expectations). Most subindices rose but notably employment fell. While excuses grow around the nation for disappointing data, 79% of Chicago panellists said the run-up to November Presidential Elections is having a negligible impact on business.
As MNI reports, on a trend basis, the MNI Chicago Report paints a slightly better picture than earlier in the year with the Barometer averaging 53.8 in Q3, up from 52.2 in Q2 and the highest quarterly level since Q4 2014.

This post was published at Zero Hedge on Sep 30, 2016.


Nearly a year ago to the day, on September 28th, we wrote ‘Will Deutsche Bank Be This Cycle’s Lehman Brothers?’
In it we asked, ‘In 2008, the financial crisis was set-off by the collapse of Lehman Brothers. Could this year’s crisis be caused by a collapse of Deutsche Bank?’
The day after the end day of the Shemitah in 2015, on September 14th, Deutsche Bank announced that it was laying off 23,000 employees, about 25% of its workforce.
At the time, it was trading around $26 per share.
Now, on the eve of the end of the Jubilee Year, Deutsche Bank was down another 7% on Thursday and is now at an all-time low near $11.50.

This post was published at Dollar Vigilante on SEPTEMBER 30, 2016.

Cheat Sheet: The Third Party Presidential Candidates

It’s coming closer to election time, and it’s hard to shake the feeling that something crazy or unprecedented could happen in the coming months.
Trump and Clinton are the most disliked presidential candidates in history, both having an ‘unfavorable’ image with the majority of the U. S. population. Meanwhile, according to a recent Pew Research poll, only 24% of registered voters feel that the next generation of Americans will be better off than folks today.
PICKING UP STEAM But, as Visual Capitalist’s Jeff Desjardins notes, for the first time in almost 20 years, the third-party candidates are getting attention across the board. Gary Johnson (Libertarian) and Jill Stein (Green) are even getting regular mainstream coverage from outlets such as CNN, Vox, The Washington Post, The NY Times, Forbes, and The Wall Street Journal.
The poll numbers for Johnson and Stein are respectable, especially among the millennial crowd where they garner around 40% of voter support. When it comes to the general electorate, however, average poll numbers are more muted with Johnson averaging 9% and Stein 3%.
The numbers are not enough to meet the arbitrary 15% threshold for the first round of debates, but the third-party candidates are starting to pick up steam in other areas. For example, Gary Johnson just shattered a fundraising record for the Libertarian Party by raising $5 million in August. Meanwhile, Stein is preparing for a major publicity stunt at Hofstra University in New York – the site of the first Presidential Debate on September 26th.

This post was published at Zero Hedge on Sep 30, 2016.

Will The ECB Buy Stocks?

Debate about the ECB’s stimulus options have continued to rage, with an equity purchase plan mentioned as a possibility We think the ECB could legally buy ETFs that fit its requirements… … but it would be controversial and we question the benefits An ETF programme could total EUR 200bn, which would not be large compared to the overall QE programme …and assuming a market-weighted allocation, it would benefit the core more than the periphery… …while it is questionable whether it would have a major sustained impact on equity prices, economic growth and inflation The risk of losses is higher for equities than investment-grade credit Ultimately, we do not think that the ECB will follow other central banks and turn to buying equities via ETF purchases any time soon, if at all We consider whether the ECB will turn to equity purchases The ECB stepped up its unconventional policy around the middle of 2014, by taking its deposit rate into negative territory. Early in 2015, it launched a large-scale QE programme focused on public sector bonds. Since then it has added regional bonds and investment-grade credit bonds to the mix. Despite the positive effects on financial conditions, the outlook for growth and inflation remains disappointing. At the same time, there are market concerns that there are not enough bonds available to be bought and that current monetary policy is losing its effectiveness. This has led to questions about what else the ECB can add to its policy mix. In this research note, we consider whether the ECB will turn to equity purchases. We first look at whether equity purchases are possible from a legal and practical perspective and what such a programme could look like. We then go on to assess how effective buying equities would be in boosting equity prices, and hence growth and inflation, drawing on the experience of Japan. Finally, we look at the risks that the ECB would be exposing itself to. We do this in a Q&A format.

This post was published at Zero Hedge on Sep 30, 2016.

Market Report: Option expiry and Deutsche Bank

Gold and silver drifted lower over the week, in falls which are commonly accepted to reflect prices being massaged ahead of option expiry on Comex. Gold lost $16 to $1325, and silver, 58 cents to $19.11 in early European trade this morning (Friday). If this sort of thing happened on a regulated market in London, the regulators would be crawling all over the suspected riggers. But hey, it’s America.
Putting this behind us, we should focus on the rapidly developing banking crisis in Germany and on its impact on the US dollar. These are separate issues, but they are much intertwined.
This week, a collapse of Deutsche Bank was openly discussed in the general media, and there are signs that institutional depositors in wholesale money markets have begun to minimise their exposure. The result is that DB’s shares on Wall Street last night dropped 7% into new low ground and continued this weakness overnight (Thursday/Friday) into the Frankfurt opening in heavy volume.

This post was published at GoldMoney on SEPTEMBER 30, 2016.

Deutsche Bank CEO Writes Memo To Employees, Blames “Speculators”, Confirms Liquidity Flight

Instead of doing what many have correctly suggested he should be doing, namely focusing on ways to raise more capital for the undercapitalized Deutsche Bank in order to stem the slow (at first) liquidity leak, first thing this morning CEO John Cryan issued another morale-boosting note to employees of Deustche Bank who have been watching their stock price crash to another record low, dipping under 10 in early trading for the first time ever. In the memo the embattled CEO worryingly did what Dick Fuld and other chief executives did when they felt the situation slipping out of control, namely blaming evil “rumor-spreading” shorts, saying “our bank has become subject to speculation. Ongoing rumours are causing significant swings in our stock price. … Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust.”
Just as important, Cryan confirms the Bloomberg report that “a few of our hedge fund clients have reduced some activities with us. That is causing unjustified concerns.” As we explained last night, the concerns are very much justified if they spread to the biggest risk-factor for the German bank: its depositors, which collectively hold over 550 billion in liquidity-providing instruments.
He then tries to sweep the concerns under the rug saying that “We should consider this in the context of the bigger picture: Deutsche Bank overall has more than 20 million clients.” Of course, however by the time the “context” switches over to the rest of the clients, or even a small portion of them, namely the depositors, it would be too late as by then the retail bank run will have begun.
Finally, Cryan confirms that there has been a liquidity outflow, when he says that the bank’s liquidity reserves currently “amount to more than 215 billion euros.” Considering just last night we estimated the liquidity reserves were 223 billion as of June 30, it appears there has been a modest outflow, even when accounting for the recent disposal of the British insurer Abbey Life.
In other words, Cryan once again fails to provide a clear plan how he will short up the bank’s deteriorating liquidity, no mention of a capital raise or approach of the ECB, and most importantly, no specifica plan how to recover crumbling trust in the world’s “most systematically important bank.”

This post was published at Zero Hedge on Sep 30, 2016.

They Know a Bargain When They Make It

This title comes from a comment on Ted Butler’s undisputed claim of JP Morgan’s accumulation of upwards of 500 million ounces of physical silver (or nearly 11,000 tons) over the last four to five years.
This accumulation occurred during a time of horrible sentiment and subdued retail demand. ‘They Know a Bargain When They Make It’ puts the whole issue of manipulation into perspective. It’s almost perfect, capturing, in essence, what the great conspiracy all comes down to in the end. They are making themselves a bargain, because they can.
The issue of gold and silver price manipulation has been circulated and documented among the backwater of blogs and alternative (world-local) publications for decades, led by Ted Butler and the Gold Anti-Trust Action Committee.
For now, the COMEX is the center of price discovery. The most volume. The most inventory. The most well developed. One of the largest known stockpiles.
Paper futures are derivatives of physical metal held within a complex system of warehouses moving incredible amounts of inventory and huge percentages of annual production each day and week. Silver movement far outstrips every other commodity.

This post was published at Silver-Coin-Investor on Sep 29, 16.

Deutsche Bank’s Meteoric Crash Draws Closer, as Markets Brace for Impact

Market Rumblings
Hello brothers, this week we take a look at the enormous market problems being caused by Deutsche Bank. We specifically talk about things like:
-The HUGE share price drop, and how low Deutsche’s share price has gone…
-Which troubled company is now worth more Deutsche Bank…
-The amount of derivatives that Deutsche is involved with, and why no one can fix ultimately fix it…

This post was published at The Wealth Watchman on SEPTEMBER 30, 2016.

Mining Stocks’ Rally Despite Gold’s Decline

Quite a few rallies in the recent months were preceded by the mining stocks’ outperformance relative to gold and we just saw the same kind of phenomenon on Wednesday – GDX rallied while gold declined. Is the bottom in?
Let’s take a look at the miners’ chart for details – other charts don’t feature important changes from what we described previously so mining stocks are the part of the PM sector that we’ll focus on in today’s free article (charts courtesy ofMiners indeed moved higher yesterday, which was nothing unexpected. In yesterday’s alert we explained which technical phenomenon made it quite possible:
The volume was not just low – it was extremely low [on Monday]. Can it tell us anything? It suggests extra caution as metals and miners could be on the verge of a sudden upswing – that’s what happened in the previous months. [as you can see on the above chart]

This post was published at GoldSeek on 29 September 2016.

Global Stocks Slide As Deutsche Bank Fears Rise: Flight To Safety Boosts Bonds, Bullion

Global stocks continued their selloff this morning, driven by surging speculation about the liquidity, solvency and viability of Deutsche Bank, which plunged 9% after opening in German trading today, dropping to a new all time single-digit low of 9.90, its credit default swaps soared to new all time highs, and its Additional Tier 1 notes fell to record lows (the 1.75BN of 6% bonds dropped five cents on the euro to 70 cents), although losses were cut in half after yet another memo by CEO John Cryan sought to reassure the bank’s employees and investors…
Morning Note: 1. Some DB clients reduce exposure. 2. Cryan says everything is ok. 3. Investors remain clueless
— Jonathan Ferro (@FerroTV) September 30, 2016

This post was published at Zero Hedge on Sep 30, 2016.

50 Slides for Gold Bulls – The New Incrementum Chart Book

A Companion Update to this Year’s ‘In Gold We Trust’ Report Our good friends Ronnie Stoeferle and Mark Valek of Incrementum AG have just published a new chart book, which recaps and updates charts originally shown in this year’s 10th anniversary edition of the ‘In Gold We Trust’ report and provides an overview of recent developments relevant to the gold market. The chart book can be downloaded in PDF form via the link at the end of this post.
We show one of the updated charts below, namely the proprietary Incrementum inflation signal. The calculation of the signal is based exclusively on market-derived inputs. It tends to be far more sensitive to changes in inflation/ deflation pressures than many other gauges, which results in more timely responses to changes in these pressures. At present it clearly indicates that the environment for precious metals remains favorable.

This post was published at Acting-Man on September 30, 2016.

German Private Health Insurance up 11% Thanks to Pension Crisis

Private health insurance in Germany now faces a massive contribution increase in 2017 of more than 11%. Add to this the banking crisis and we will start to see the core economy in Europe turn down really hard. This will impact about 9 million people who are privately insured. The industry needs the money, which they could not achieve in the capital markets. The increase is also caused by higher pension costs.

This post was published at Armstrong Economics on Sep 30, 2016.

FBI Investigating More Dead People Voting In The Key Swing State Of Virginia

For years the political elites, backed by funding from George Soros, have fought common sense voter ID laws as blatant attempts of racist right wingers to suppress the votes of minority and low-income citizens. These same people tirelessly argue that there is no evidence of voter fraud despite the mountain of facts that keeps piling up the contrary. In fact, per the National Review, United States District Judge Lynn Adelman of Wisconsin, in response to a voter ID complaint in that state, recently claimed that ‘virtually no voter impersonation occurs’ in Wisconsin and that ‘no evidence suggests that voter-impersonation fraud will become a problem at any time in the foreseeable future.’
Well, we guess that could be true if the pesky facts would just stop getting in the way. According to research conducted by the Pew Research Center in 2012, the capacity for voter fraud in the U. S. is substantial with nearly 2mm dead people found to be registered voters and nearly 3mm people registered in multiple states.

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