Electing “the Right People” Won’t Fix Washington, DC

The 2016 presidential circus isn’t over with yet, but no matter the result it has already proven to be a frustrating electoral season for libertarians. Both Senator Rand Paul’s and former Governor Gary Johnson’s campaigns have disappointed most of their respective bases, and it now seems uncertain whether Johnson will achieve the 5% national goal the Libertarian Party to help them in future campaigns. What lessons should libertarians learn?
Perhaps the most important takeaway is that the goal of a libertarian savior riding into Washington and saving the day is an inherently foolish one. This goal overlooks how bureaucratic and indissoluble most of the Federal government has become. As opposed to Congressman Ron Paul’s Presidential campaign, which focused primarily on educating people on issues such as the Federal Reserve and blowback, both Senator Paul’s and Governor Johnson’s focused on the personal value each would bring to the White House and an implicit promise that they could make the beltway more libertarian.
But libertarians need to realize that Washington isn’t salvageable, for reasons Ludwig von Mises well understood.
While Murray Rothbard loved to hate the state, Ludwig von Mises did not. Throughout his life, Mises was a champion of liberal minarchism and believed that a watchman state was necessary for the protection of private property and individual liberty. But as an uncompromising advocate for free markets and fierce opponent of central planning, Mises was well aware of the dangers of a professional governing class isolated from accountability.
Anyone who has read his book Bureaucracy, or any other of his works related to the subject, knows the disdain Mises held for this professional class of government workers. Bureaucratic, tyrannical governments were disastrous – not necessarily due to the character of the individuals involved – but due to the stifling nature of the government bureaucracy:

This post was published at Ludwig von Mises Institute on Nov 2, 2016.

The US NeverEnding Recession: Private Domestic Investment Continues Near Historic Lows

Like the movie ‘The NeverEnding Story,’ the US seems mired in a NeverEnding recession.
Look at real net domestic investment (annual) as a percentage of GDP. As of 2015, it has risen to … the lowest level since the recessions of 1974, 1981 and 1990.

Looking a quarterly nominal net private domestic investment as a percentage of nominal GDP, we find that it has fallen to levels that we have seen in previous recessions.

This post was published at Wall Street Examiner by Caleb Crawdad ‘ November 2, 2016.

Gold Daily and Silver Weekly Charts – Much Ado About Nothing

There was a posting on the NAV of some of the precious metal trusts and funds intraday here.
And there was also a short piece on the competing crime families that are our two established political parties here.
Gold and silver had a nice spike higher earlier in the day on a lower dollar as you can see in the charts below.
The metals gave back some of their gains into the close.
The FOMC did not seem to affect them much despite its dovish waffling and wistful desire to raise rates at least once before the end of the year in December.
The clearing (delivery) reports were brisk for gold and meh for silver. And the reverse for the warehouse reports as silver keeps moving metals in and out, and the gold bullion sits there and looks pretty while the punters swap a pyramid of IOUs per ounce for it.

This post was published at Jesses Crossroads Cafe on 02 NOVEMBER 2016.

91% Of All Paddy Power Bets In Past Two Days Have Been For Trump

In the past 48 hours, 91% of bets on the US Election have been on Trump. He's into 9/4. And we've already paid out on Hillary. Uh-oh. pic.twitter.com/pGEkHMbrF2
— Paddy Power Politics (@pppolitics) November 1, 2016

Recall that in the days leading to the Brexit vote, one of the most closely followed indicators of public sentiment was online bookmaker betting, where in a curious split, the majority of smaller wages was for Brexit, however the total amount betted was skewed by a handful of outsized bets on “remain.” However, when it comes to Trump, there appears to be less confusion – or interference – at least in the last several days.
According to a recent Paddy Power tweet, on Monday and Tuesday the Republican candidate outshone his rival in terms of both the number and the volume of wagers, as just shy of 100,000 euros ($111,000) in bets came in, with 91 percent of that for Trump.

This post was published at Zero Hedge on Nov 2, 2016.

This Is What Gold Does In A Political Crisis, ‘Trump Might Actually Win’ Edition

A week ago it looked like the US government was destined to end up firmly – maybe even more firmly – in the hands of the banks, public sector unions and defense contractors. Trump was imploding and the markets were basking in the prospect of never-ending liquidity from a re-energized Fed. And safe-haven assets like gold were being dumped in favor of growth stocks and the like.
Then Anthony Weiner reached out from the grave to throw the result back into doubt. Polls have tightened, especially in crucial swing states, and it’s now at least conceivable that an outsider will gain control of bank regulation and nuclear codes, with all the uncertainty that that implies.
Today’s markets, addicted as they are to government coddling, don’t like this idea one bit,
and capital is suddenly running scared. Where’s it going? Where it always goes in times of uncertainty, straight into precious metals:

This post was published at DollarCollapse on NOVEMBER 2, 2016.

What Today’s FOMC Meeting Statement Told Us

There was no big surprise from the FOMC meeting statement today after the U. S. Federal Reserve ended its closely watched two-day policy meeting.
As widely expected, the Fed left interest rates unchanged. Heading into the meeting, market odds of a rate hike at today’s Fed gathering were just 7.2%, according to CME Group’s FedWatch Tool.
Here are the key highlights from the November FOMC meeting…
FOMC Meeting Statement’s Biggest Takeaways
Policymakers decided to maintain the target range for the federal funds rate at 0.25% to 0.50%. The case for an interest rate hike has increased. But the U. S. central bank has decided to wait for more evidence of continued progress toward its full employment and inflation objectives. The Fed’s monetary policy stance remains accommodative. It wants to support further improvement in the labor market and an inflation rate of 2%.

This post was published at Wall Street Examiner by Diane Alter ‘ November 2, 2016.

7 Indicators Show We Are In A Recession As We Head Into An Economic Crisis – Episode 1117a

The following video was published by X22Report on Nov 2, 2016
ADP report declines which indicates the manipulation of the employment numbers are failing. US mortgages apps fall to five month lows. 7 economic indicators show that the economy is already in a recession and headed towards a major crisis. The market is flashing red and indicating it is ready to crash. Deutsche Bank is pointing out that the ECB has created asset bubbles. CETA is a trojan horse to usher in the TTIP.

How Expensive Is the Stock Market?

Here is a new update of a popular market valuation method using the most recent Standard & Poor’s “as reported” earnings and earnings estimates and the index monthly average of daily closes for the past month. For the earnings, see the table below created from Standard & Poor’s latest earnings spreadsheet.
TTM P/E ratio = 22.8 P/E10 ratio = 26.5 The Valuation Thesis
A standard way to investigate market valuation is to study the historic Price-to-Earnings (P/E) ratio using reported earnings for the trailing twelve months (TTM). Proponents of this approach ignore forward estimates because they are often based on wishful thinking, erroneous assumptions, and analyst bias.
TTM P/E Ratio The “price” part of the P/E calculation is available in real time on TV and the Internet. The “earnings” part, however, is more difficult to find. The authoritative source is the Standard & Poor’s website, where the latest numbers are posted on the earnings page.

This post was published at FinancialSense on 11/02/2016.

Fed Holds, Says Case For December Hike “Strengthens”; No Mention Of Election; 2 Dissent

While the dollar is up, every other asset class is lower since the September FOMC statement ahead of the least-anticipated Fed meeting of the year. Fed funds implied a 14% chance of a rate hike today but sentiment was for a 0% chance with expectations of a hawkish-biased statement (67% prob of Dec hike). From Bloomberg:
*FED DECIDED TO WAIT FOR TIME BEING FOR SOME FURTHER EVIDENCE *FED SAYS CASE FOR A RATE HIKE HAS CONTINUED TO STRENGTHEN *FED SAYS GEORGE AND MESTER DISSENT IN FAVOR OF RATE HIKE With no press conference to explain the latest phrasing, we can only assume the jawboning and newspeak will be heavy to covince the world December will be a “dovish hike.”
Notably, while in the September meeting there were 3 disenters, George, Mester and Rosengren, this time Rosengren decided to join the majority, leaving just two dissenters.

This post was published at Zero Hedge on Nov 2, 2016.

OPEC Has Never Done This Before

As you read this, Marina and I are flying out to Seattle for something we do several times a year – spoiling two of our grandkids. The other two live in Germany, which requires its own distinct spoiling campaign.
Now, I regularly serve as the sounding board for a wide gamut of observations from all types of sources. It seems to come with the territory. And as we were traveling to the airport, I was reminded of some very startling rumors I recently heard about OPEC’s oil cap negotiations.
What I’m hearing now suggests that, in addition to another meeting between OPEC and Russia, there is now an attempt to get OPEC and U. S. producers to sit down at the same table.
That’s never happened before.
And that’s not the only reason why these rumors (if true) are so startling…
You see, the reason why this has never happened before goes to the very heart of the U. S. oil industry…

This post was published at Wall Street Examiner by Dr. Kent Moors ‘ November 2, 2016.

These Were The Best And Worst Performing Assets In October And YTD

October was a month most investors will wish to quickly forget. As DB’s Jim Reid writes, for the most part October will likely be remembered as the month where ‘Hard Brexit’ concerns well and truly jumped into the spotlight and Sterling related assets suffered as a result. Politics was a fairly consistent theme during the month however with the US Presidential Election campaign also attracting plenty of attention. Earnings season has provided another distraction for markets while we’ve also had the usual focus on central banks including a number of speculative ECB stories. Add to that the ongoing OPEC related news and it’s certainly made for a busy October.
As DB adds, it was sterling assets which really stand out. Unsurprisingly the negative news flow had a big impact on the currency with Sterling dropping -6% during the month from around $1.30 to the low $1.20’s. Negative sentiment also hurt Gilts which in local currency terms dropped -4% however in USD hedged terms plummeted -10% and the most amongst the assets in the asset sample. It was a similar story for UK equities which were up 1% in local terms but -5% in USD terms. Given the moves for Gilts, Sterling credit also had a poor total return month despite the BoE purchasing scheme impressing with the initial pace of purchases in October. Indeed GBP corps, non-fins and fins were -8% to -9% in USD total return terms (and -2-4% in local currency terms) although GBP HY (0% local and -6% USD terms) did outperform.
It wasn’t just Gilts which suffered in bond markets however. With markets also reassessing inflation expectations, in USD terms BTP’s (-5%), EU Sovereigns (-4%), Bunds (-4%) and Spanish Bonds (-4%) all suffered. BTPs being also hit as the polls leaned slightly towards a rejection of the senate reform referendum in early December. Treasuries (-1%) outperformed but were still weaker during the month. Those moves had another obvious knock on in credit markets too although performance was reasonably resilient despite the rates selloff. US credit outperformed with indices finishing flat to -1% during the month while European indices were broadly -1% to -3% with ECB purchases still evidently having a positive impact and helping out-perform rates. Interestingly EUR higher beta HY and sub-fins outperformed more.

This post was published at Zero Hedge on Nov 2, 2016.

NOV 2/FIVE INVESTIGATIONS UNDERGOING BY THE FBI ON CLINTON, THE CLINTON FOUNDATION AND INNER CIRCLE/TRUMP SURPASSES CLINTON IN THE POLLS/DEUTSCHE BANK STOCK PLUMMETS AGAIN/DB’S CHIEF ECONOMIST BL…

Gold closed at $1306.40 up $20.40
silver closed at $18.66 or up 47 cents.
Access market prices:
Gold: 1296.50
Silver: 18.47
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
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 Nov 2 (10:15 pm est last night): $ 1294.53
NY ACCESS PRICE: $1289.70 (AT THE EXACT SAME TIME)
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1296.08
NY ACCESS PRICE: 1291.70 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD TODAY!! 4 dollars
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Nov 2: 5:30 am est: $1295.85 (NY: same time: $1296.10: 5:30AM)
London Second fix Nov 2: 10 am est: $1303.75 (NY same time: $1301.75 , 10 AM)
Shanghai premium in silver over NY: 59 cents.
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 November 2, 2016.

Gawker Settles With Hulk Hogan For $31 Million

With Gawker no longer operational, and both Peter Thiel and Hulk Hogan having proven their point, former Gawker CEO Nick Denton said in a blog post that the media company is settling its case with Hulk Hogan: “After four years of litigation funded by a billionaire with a grudge going back even further, a settlement has been reached. The saga is over.”
According Forbes, Denton did not disclose the terms of the settlement, however court documents revealed the case was settled for $31 million plus a portion of the website’s sale proceeds. Denton added wrote that while the company was “confident” an appeals court would reduce a $140 million settlement awarded to the former wrestler and entertainment star, ultimately Gawker, the writer of the story against Hogan and he himself would not be able to fund the legal battle.
Below is Denton’s full statement:
A Hard Peave
After four years of litigation funded by a billionaire with a grudge going back even further, a settlement has been reached. The saga is over.
As the most unpalatable part of the deal, three true stories? – ?about Hulk Hogan, the claim by Shiva Ayyadurai that he invented email and the feud between the founders of Tinder? – ?are being removed from the web.

This post was published at Zero Hedge on Nov 2, 2016.

How ‘Risk-Free’ Bonds Will Trigger Bloodletting in Bonds, Stocks, other Assets

Rarely do we investors get a market that we know is overvalued and that approaches such clearly defined limits as the bond market now. That is because there is a limit as to how negative bond yields can go. Their expected returns relative to their risks are especially bad. If interest rates rise just a little bit more than is discounted in the curve it will have a big negative effect on bonds and all asset prices, as they are all very sensitive to the discount rate used to calculate the present value of their future cash flows.
That is because with interest rates having declined, the effective durations of all assets have lengthened, so they are more price-sensitive. For example, it would only take a 100 basis point rise in Treasury bond yields to trigger the worst price decline in bonds since the 1981 bond market crash. And since those interest are embedded in the pricing of all investment assets, that would send them all much lower.
Those words are from the most successful hedge fund manager of all time – Ray Dalio. When he speaks, we listen.
There is now more than $13 trillion – that’s trillion with a ‘T’ – of global debt that offers investors a guaranteed loss if held to maturity. Investors are now partaking in what can only be described as the largest game of ‘Greater Fools’ in the economic history of man.

This post was published at Wolf Street by Alex M. ‘ November 2, 2016.

US Economy – Are We Approaching the Peak?

Weakening LEI Trend
The Philly Fed Leading Economic Index for all 50 US states has weakened considerably from its 2014 highs (see above) and is getting closer and closer to reaching our first warning threshold of a possible peak in the US economy.
‘We’re getting more and more of these indicators that are telling us we’re in danger of going into stall speed, and the labor markets are also edging lower with fewer job formations,’ Puplava noted.
Also, a lot of the stimulus we’ve seen in place over the last couple of years has started to fade, adding that long-term interest rates are starting to tighten again, which is particularly concerning.

This post was published at FinancialSense on 11/01/2016.

Passive Negligence

The stock market is an essential cornerstone of capitalism, not a game of roulette. Well-functioning and free capital markets properly regulate the cost of capital, which is a vital input allowing companies to analyze the cost and benefit of investing and the economy to run efficiently. When investors fail to analyze assets and blindly invest in the capital markets, they distort capital valuations, misallocate capital and as a result economic prospects weaken.
The Federal Reserve (Fed), in historic efforts to increase debt and further stimulate consumption, has taken extraordinary actions to lower interest rates to levels never seen before. Low interest rates encourage consumers to borrow and spend. They also encourage investors to speculate instead of investing in more productive endeavors. From the Fed’s perspective, speculative behavior drives financial asset prices higher and generates a so-called ‘wealth effect’. The hope is that, as investors grow wealthier, they consume more goods and services. Additionally, the increased value of assets can be used as collateral for new debt, allowing for further growth in debt and consumption.
One of the consequences of a ‘managed’ economy, such as the one the Fed has created, is that the normal functions of a capitalistic society erode. Capital is misallocated in a behavioral response to policy, and asset price inflation emerges in a divergence from economic fundamentals. One of the manifestations of this reaction by investors is the recent rise in popularity of passive equity investing. This mindless style of investing has implications that few investors appear to consider. It is important for investment managers to understand the consequences of passive investing. The sizeable and growing source of demand for equities due to interest in passive strategies may generate a short-term boost to valuations, which helps explain the cheerleading, but the intermediate to longer-term effects seem destined to be quite damaging.

This post was published at Wall Street Examiner on November 2, 2016.