The Great American Splurge

In a Frank Talk last week, I discussed the surge in small-cap stocks since Donald Trump’s election. A bet on smaller domestic stocks, I wrote, is a bet that Trump will deliver on his promise to ‘make America great again.’ He plans to lower taxes, streamline regulations and spend big on infrastructure – all of which has led to a rally in the small-cap Russell 2000 Index and the 10-Year Treasury yield.
The ramifications of government policy change under Trump, especially fiscal policy, have the potential to be huge. Since Election Day, we’ve seen the strong U. S. dollar hurt gold, while the Canadian dollar and Chinese renminbi have dropped.
The question now is whether Federal Reserve Chair Janet Yellen will put the brakes on the so-called Trump rally. She asserts that Fed policy is not politically motivated, but I wonder how many people actually believe that. She’s already criticized Trump’s plans to tear up or at least significantly weaken Dodd-Frank Wall Street Reform.
Both former Fed Chair Alan Greenspan and billionaire investor Warren Buffett have recently suggested Dodd-Frank needs to go, with Greenspan telling CNBC that he’d love to see the 2010 law ‘disappear.’ Buffett, meanwhile, commented in an interview this month that the U. S. is ‘less well equipped to handle a financial crisis today than we were in 2008. Dodd-Frank has taken away the Federal Reserve’s ability to act in a crisis.’

This post was published at GoldSeek on 29 November 2016.

How the Federal Reserve Will Destroy Capitalism

With its easy-money policies increasingly ineffective, the Federal Reserve is now devising a new, even more dangerous strategy – one that threatens the very nature of capitalism itself.
You see, the U. S. Federal Reserve fired all its bullets dealing with the fallout from the 2008 financial crisis. That has left the central bank with virtually no policy tools to combat the next major economic setback.
That’s why the Fed is trying to boost interest rates. At just 0.50%, the Federal Reserve is expected to raise it to 0.75% in December. But that leaves little maneuvering room for fighting the next crisis.
And the quantitative easing (QE) bond-buying program has left $2.5 trillion of federal debt on the Fed’s balance sheet. The Fed can’t really go back to that well, either.
That’s why the Fed is floating another idea…
The Federal Reserve Is Looking at This Radical Option
At some point in the not-so-distant future, the Federal Reserve will start buying stocks, ostensibly to boost the U. S. economy.
We know this because it came up recently in a House Financial Services Committee hearing in late September. Committee member Mick Mulvaney, R-S. C., asked Fed Chair Janet Yellen if the Fed was ‘looking as the possibility of adding the purchase of equities to its toolbox.’

This post was published at Wall Street Examiner on November 28, 2016.

‘Disorderly’ Correction of House Price Bubble in Canada Threatens ‘Financial Stability’: OECD

What happens ‘if the boom ends with a bang.’
In its economic outlook released today, the Organisation for Economic Cooperation and Development (OECD) is generally gung-ho about the Canadian economy, and practically bubbling over with new enthusiasm for the global economy. It now expects global growth to accelerate from 2.9% this year to 3.3% in 2017 and to 3.6% in 2018. Call it the ‘Trump effect’ gone global.
But for Canada, despite its hunky-dory economy due to the ‘moderately expansionary policy stance in the 2016 federal budget,’ the OECD has a stark warning: ‘House prices, housing investment and household debt are very high, posing financial stability risks.’
The OECD’s chart shows the house price indices for Vancouver and Toronto, which make up about one-third of the national housing market, versus the index for the rest of Canada. Note the hook at the top of the red line: a feeble sign that house prices in Vancouver might be heading south:

This post was published at Wolf Street on November 28, 2016.

“Buy High, Sell Low”? Bullish Sentiment Soars Most In 6 Years As Stocks Spike

The greatest streak of stock market gains in almost 28 years may have some wondering if it is sustainable, but, according to AAII, this objective spike in valuations following Donald Trump’s victory has sparked overwhelming bullishness among investors.
15 straight days of gains in Small Caps (only bettered by 1988’s streak) has sent AAII bullishness soaring to its highest since January 2015 (following the end of QE3) with the biggest 3-week spike since September 2010.

This post was published at Zero Hedge on Nov 28, 2016.

NOV 28/HUGE PREMIUMS ON GOLD AT THE SGE (OVER 28 DOLLARS) VS USA PRICING AT THE EXACT SAME TIME/THE BUNDESBANK DOES NOT GET ANY OF ITS GOLD BACK THIS MONTH/8 BANKS IN ITALY ARE IN SERIOUS TROUBLE…

Gold at (1:30 am est) $1190.60 UP $12.40
silver at $16.58: UP 12 cents
Access market prices:
Gold: 1293.75
Silver: 16.61
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning
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:
MONDAY gold fix Shanghai
Shanghai morning fix Nov 28 (10:15 pm est last night): $ 1221.43
NY ACCESS PRICE: $1192.80 (AT THE EXACT SAME TIME)/premium $28.63
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1218.64
NY ACCESS PRICE: 1192.20 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD 2ND FIX TODAY!!: $26.44
China rejects NY pricing of gold as a fraud
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Nov 28: 5:30 am est: $1189.10 (NY: same time: $1189.50 5:30AM)
London Second fix Nov 28: 10 am est: $1187.00 (NY same time: $1187.20 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 November 28, 2016.

Where Are We In The Business Cycle: A Troubling Chart From Morgan Stanley

In its 2017 global strategy outlook note titled “Sparkle and Fade”, Morgan Stanley is bittersweet about the future. While on one hand, the bank – which until recent had one of the gloomiest forecasts on Wall Street (a quick walk down Adam Parker’s YTD memory lane should be sufficient) – is now recommending equities and urging the sale of Treasuries and other duration exposure, it also admits that the US is now well into the late stages of the cycle, financial conditions will tighten significantly, and that much more volatility is on the horizon: “by 2Q17, the market will confront a more hawkish Fed, a still-strengthening USD and a renewed moderation in China’s growth. Political reality may also bite, as high expectations for action by the new US administration become hard to meet.”
This is how MS summarizes its recommendations:
“our first theme for 2017 is the need to be flexible; the second is that the distribution of outcomes has grown fatter. The gains in a plausible bull case look larger than before, fueled by the prospect of fiscal expansion, rising earnings and a return of true ‘animal spirits’. But the downside tail has also grown. Cycle models suggest that DM markets are already deep into the final expansionary stage. DM policy easing is coming to an end. The likelihood of booms and busts is far greater. And geopolitical risk looms large.”

This post was published at Zero Hedge on Nov 28, 2016.

Charts for a Quiet Post Holiday Monday – Non-Farm Payrolls on Friday – It’s Back

The markets were quiet today, and perhaps a bit more thoughtful as they gave back some of the recent outsized gains in some areas, and declines in others.
Gold gained more than silver which was a bit odd. Yes, it was a risk re-assessment sort of a day, but in London some of the industrial metals like lead and zinc had done quite well.
This market is likely to be more data and less euphoria driven over the next few weeks, as we have the Non-Farm Payrolls along with a few other goodies like the second estimate of Q3 GDP and the ISM Index.
This coming weekend there will be a referendum on the constitution in Italy that may take on a Brexit-like significance. We’ll have to keep an eye on that one.

This post was published at Jesses Crossroads Cafe on 28 NOVEMBER 2016.

Michigan Certifies Donald Trump Winner Of State’s Electoral Votes

BREAKING: Michigan certifies Donald Trump as winner of state’s 16 electoral votes with recount request expected.
— AP Politics (@AP_Politics) November 28, 2016

Did Michigan just spoil Jill Stein’s party?
As AP reports,
The Board of State Canvassers certified Trump’s 10,704-vote victory on Monday, nearly three weeks after the election.
The two-tenths of a percentage point margin out of nearly 4.8 million votes is the closest presidential race in Michigan in more than 75 years.

This post was published at Zero Hedge on Nov 28, 2016.

Turkeys Were Optimistic On Wednesday – Unicorns May Have Less Than A Week

If you’ve ever read any of Nassim Nicholas Taleb’s work (which should be a requisite for anyone in business) you’ll know one of his often used analogies to explain the psychology of many prior to a Black Swan event is the turkey, and its view of the world up and until Thanksgiving.
A brief description goes something like this: All the time prior the turkey believes life is grand and will continue forever, and the farmer has nothing but his best interest at heart, caring for him with plenty of food, water, and shelter. To convince him otherwise is a fools-errand. Then – Thursday happens.
A similar event may also be on the horizon, but this time – it doesn’t involve turkeys. No, this time it involves a creature once considered so far above and beyond reproach, to even question its business model, metrics, or valuation was seen as blasphemy. And for those that did? Let’s just say – the long knives came for you.

This post was published at Zero Hedge on Nov 28, 2016.

What’s Next for Gold: Interview w/ Keith Neumeyer

The following video was published by FutureMoneyTrends on Nov 28, 2016
We have back on air one of today’s leading mining CEO’s and innovators in the resource sector. Keith Neumeyer has started 3 billion dollar companies and is very active in building more as we speak. In this interview we dig into updates for First Mining Finance, a company he founded last year and who’s stock price has already doubled this year. This is a must listen for anyone investing or looking to invest in resources.

Central Bankers Are Quietly Discussing Taxing Withdrawals From ATM’s – Episode 1138a

The following video was published by X22Report on Nov 28, 2016
Black Friday sales are a disaster, some sales shifted towards online but overall sales are down. Retailers are finding out that Cyber Monday does not increase sales so they are now spreading the sales over a week to push sales numbers up. Mortgage rates are moving up and those who refinance and purchase homes are holding back. Central bankers are now pushing the idea of taxing cash withdrawals. War on cash is now spreading to Spain. Italy’s referendum might trigger banks to collapse.

Gold Prices Today Climb and Will Head Higher in 2017

With the recent sell-off in the price of gold, some investors may be disappointed or even discouraged. Gold prices today are up slightly, 0.53%, to $1,190 per ounce. Despite today’s gain, the price of gold is still down more than 8% in November.
But those getting discouraged are taking a ‘glass half-empty’ perspective.
Instead, the ‘glass half-full’ view shows an opportunity to buy gold at what is likely to be one of the lowest levels for a long time to come.
Remember, despite the latest weakness, gold is still up by $118 or 11% since the start of this year. And that compares well with other asset classes.
It’s true there are several factors pointing to a possible bearish outlook for gold. But if you examine them closely, they are mostly near term. The long-term drivers are overwhelmingly positive and actually point to much higher gold prices, probably within a matter of months.
Some positive data in the form of upbeat U. S. durable goods orders was likely the latest culprit that pushed gold down last week. But as we peer into the new year, it doesn’t take much to find upcoming events and policies that will almost certainly be very supportive of gold prices in 2017…

This post was published at Wall Street Examiner on November 28, 2016.

Global Stock Markets Mostly Weaker; Focus On OPEC Meeting Wednesday

(Kitco News) – World equity markets were mostly weaker overnight. U. S. stock indexes are pointed toward weaker openings when the New York day session begins. Traders and investors worldwide are anxiously awaiting the results of this week’s OPEC oil cartel meeting.
Some reckon OPEC may be able to come to a final agreement to cut production, as the cartel reported in September. However, others remain highly doubtful. Reports over the weekend said Iran and Russia now may not be willing to reduce their crude oil production levels. Global stock markets have been extra-sensitive in recent weeks to the daily price movements in crude oil prices. Nymex crude oil futures prices are modestly lower in early U. S. trading Monday.

This post was published at Wall Street Examiner on November 28, 2016.

SWOT Analysis: Will Inflation Fall With New Stimulus in 2017?

Strengths
The best performing precious metal for the week was palladium, up 2.83 percent. China boasted imports of silver, platinum and palladium in October. In addition, vehicle sales in Europe are up 4.7 percent through October in 2016 versus a year ago. Global auto sales are tracking at over 3 percent, recovering from sub-2 percent growth in 2015. With worries over a supply shortage due to Beijing’s efforts to restrict import licenses, gold premiums in China jumped to their highest in nearly three years this week, reports the Business Standard. One analyst with GFMS, Zhirui Ji, says potential restrictions on gold imports may have to do with limiting the outflows of the Chinese yuan, which touched an eight-and-a-half year low this week. Swiss gold exports rose to 162.6 tons in October, reports Bloomberg, up from 147.4 tons in September. Shipments to India and Hong Kong also rose, while exports to China fell during the month. In Russia, October gold buying has reached the largest in a millennium, reports Zero Hedge. Commerzbank explains this humongous gold purchase as follows: ‘Clearly the central bank was taking advantage of the stronger ruble – which has made gold cheaper in local currency – to buy more gold. Weaknesses
The worst performing precious metal for the week was gold. Through Friday, Bloomberg reports that investors pulled out more than $1 billion from the biggest ETF backed by gold since the end of October. Holdings in ETFs are heading for the biggest monthly drop in nearly three years as the Federal Reserve prepares to hike interest rates. While gold has collapsed in November, ‘cheaper haven silver entered a bear market,’ writes Bloomberg, as investors embrace risk on the back of Donald Trump’s pledge to increase infrastructure spending.

This post was published at GoldSeek on 28 November 2016.

Jill Stein Officially Files Recount Petition In Pennsylvania

In PA, deadline for voter-initiated recount is today in many counties. Voters have to turn in notarized affidavits. — Dr. Jill Stein (@DrJillStein) November 28, 2016

Continuing her crusade against some seemingly imaginary election tampering claims, Jill Stein has just announced that she has officially filed a recount petition in the state of Pennsylvania. According to The Hill, Stein released the following statement:
‘We must recount the votes so we can build trust in our election system. We need to verify the vote in this and every election so that Americans of all parties can be sure we have a fair, secure and accurate voting system,’

This post was published at Zero Hedge on Nov 28, 2016.

If You Think ‘Dow 19K’ Is Great, Wait Till You See What’s Coming Next

Money Morning Editor’s Note: Shah Gilani, our Capital Wave Strategist, is in pretty high demand these days as the keys to D. C. change hands and the Dow rockets past the critical 19,000 mark. Not only is he fresh from making his readers some of the biggest, fastest gains in the history of his trading services – 717% on Sturm, Ruger & Co. puts in a week – he’s been all over the news giving his take on where the markets are going next.
But Shah took a break from his busy television schedule to chat with me by phone about some things he just can’t say on TV, including exactly how important this milestone is, what this unknown territory holds for investors, and how to position yourself for the maximum possible upside at a time like this.
This is big…
Greg Madison: Thanks for taking the time to talk with me, Shah.
Shah Gilani: Of course. Anytime!
GM: Let’s get right to what’s on everyone’s mind: It’s all about the ‘Dow 19K’ phenomenon. What is the significance, psychologically and technically, of the Dow Jones Industrial Average topping 19,000 points?
SG: It is very significant. For three reasons.
For starters, it just wasn’t expected in the wake of Donald Trump’s election. We all know the markets had ‘priced in a Clinton victory’ and were supposed to tank should Trump win. That was the conventional wisdom, anyway, but to be honest, my gut told me this would go Trump’s way –
GM: Like you accurately called the Brexit vote back in June?
SG: Yeah, exactly. So my Capital Wave Forecast and Short-Side Fortunesreaders were in position for a Trump win, too, and I was able to make those infrastructure recommendations in Money Morning pretty quickly on Nov. 9. By the way, none of that stopped us from booking a 717% gain from my ‘Clinton’ trade.

This post was published at Wall Street Examiner on November 28, 2016.

Portugal Bond Yields Hover Near Brexit Highs As Bank Bosses Quit Ahead Of Bailout

Portuguese bank bonds (Novo Banco and Caixa Geral de Depositos) are sliding today with sovereign yields hovering near Brexit highs as AP reports that the new president of the country’s biggest bank (and six board members) have quit less than three months after starting work.
Back in the summer we warned that with all eyes on Italy (and rightly so), Portugal could be the next show to drop, and yields have risen notably since then
And now, as AP reports, the troubles at Portugal’s biggest bank by assets, state-owned Caixa Geral de Depositos, are deepening as its new president and six board members have quit less than three months after starting work.

This post was published at Zero Hedge on Nov 28, 2016.

Can An OPEC Deal Save Venezuelan Oil From Total Collapse?

With the nation’s currency in full-fledged hyperinflationary collapse, OilPrice.com’s Nick Cunningham notes that at times it seems that Venezuela’s economic crisis cannot get any worse. Food shortages, electricity blackouts, and scarce medical supplies have created a humanitarian disaster in Venezuela. However, with each passing month the situation deteriorates, and the crisis appears to be entering a dangerous new phase.
Venezuela’s currency has lost about 60% of its value so far in November, the worst monthly decline on record.
Inflation is thought to be hovering at around 400 percent, according to Bloomberg, although some analysts put it as high as 1,500 percent. ‘Inflation is going to keep rising, there’s a risk of default, and the political situation is becoming more tense each day. People prefer to protect their money,’ Asdrubal Oliveros, director of Caracas-based economic consultancy Ecoanalitica, told Bloomberg.
The horrific humanitarian crisis is only deepening, with food shortages becoming so acute that Venezuelans are starting to flee in large numbers, heading to Colombia, or Brazil, or even setting sail on small boats to seek food, shelter and work on some Caribbean islands. This could yet turn into a major refugee crisis. Venezuela is dangerously short on medical supplies, and the conditions in the country’s hospitals are some of the worst in the world outside of Syria.

This post was published at Zero Hedge on Nov 28, 2016.