Global Bonds Suffer Worst Monthly Meltdown as $1.7 Trillion Lost

It has been over 30 years since 10 year Treasury yields peaked at 15.84% on September 30, 1981. The 10 year Treasury yield is now 2.406%. That is one heck of a bull market!
(Bloomberg) – The 30-year-old bull market in bonds looks to be ending with a bang.
The Bloomberg Barclays Global Aggregate Total Return Index lost 4 percent in November, the deepest slump since the gauge’s inception in 1990. Bonds in Europe extended declines with their U. S. peers as OPEC’s agreement on Wednesday to cut oil production added to prospects of higher inflation. The reflation trade has been driving markets since Donald Trump’s presidential election win due to promises of tax cuts and $1 trillion in infrastructure spending. All this has prompted investors to dump debt that was offering near-record-low yields and pile into stocks.

This post was published at Wall Street Examiner on December 1, 2016.

HEDGE FUND MANAGER ON TRUMP’S WALL STREET-FILLED SWAMP: ‘I CAN TAKE GLEE IN THAT – DONALD TRUMP CONNED VOTERS’

People who truly believed a billionaire reality TV star was going to get into the White House and ‘drain the swamp’ are getting a pretty clear picture now of just how full that swamp is going to be under a Donald J. Trump presidency.
When he isn’t considering neocons and appointing die hard establishment Republican top brass, he’s busy filling up the ranks with Wall Street.
From a 17-year Goldman Sachs banker who once worked for George Sorosas Secretary of Treasury, to a billionaire Senior Managing Director at Rothschild, Inc. for Secretary of Commerce, it’s becoming blatantly obvious the U. S. government will be business as usual only better for megabanks with the Trump Administration running things.
And don’t forget, he also promised to lower taxes for the wealthy in a ‘trickle down economics’ scheme that has proven time again not to work (but it will line the pockets of rich people like… well… Donald Trump and his banker friends).

Now, adding insult to injury, elite bankers are openly laughing at voters who believed Trump when he promised to ‘drain the swamp’.

This post was published at The Daily Sheeple on DECEMBER 1, 2016.

Is The Industrial Metals Surge A Sign Of Growth In Economy, Market?

Industrial metals are attempting to break their relative downtrend versus precious metals; that has historically been good news for the economy and stocks.
There are few better illustrations of the post-election trade, thus far, than the dichotomy between industrial metals and precious metals. The illustration is especially vivid when combining the performance of the 2 groups into a single price series. And while it seems that many folks on financial social media have taken to the practice of gratuitously lumping 2 seemingly disparate securities into a meaningless ratio chart, in this case there may be some merit. First, however, take a look at how the ratio between the S&P GSCI Industrial Metals Index and the S&P GSCI Precious Metals Index is hitting a potentially critical juncture right now.
Specifically, the ratio has essentially been in a descending triangle since 2009. That is, the Industrial Metals have been making lower highs and horizontal lows versus precious metals. In a conventional single issue chart, this pattern would carry negative connotations, i.e., it would suggest a likely eventual breakdown below the lows. If that same interpretation holds here, then Industrial Metals should continue their under-performance relative to precious metals so that the ratio moves to new lows.

This post was published at Zero Hedge on Dec 1, 2016.

Party’s Over? Bonds, Stocks, Dollar Dive As VIX Jumps Most In A Month

For Bondholders, Big Tech shareholders, and Mexicans, here’s the message…
Well if you thought November was turmoily, December is off to a turmoilier start…
Nasdaq worst 2 days in 3 months (below 50DMA) VIX jumped most in a month (above 50DMA) Treasuries worst since Trump election Gold plunged to 10-month lows (but bounced) WTI jumped to highest since July 2015 Following the worst 2 months for risk-parity funds since the taper tantrum…

This post was published at Zero Hedge on Dec 1, 2016.

DEC 1/HUGE SPREAD BETWEEN SHANGHAI GOLD FIXING AND NY PRICES MAINTAINS IT’S 20 DOLLAR PLUS PREMIUM/GOLD WHACKED AGAIN/COMEX GOLD OPEN INTEREST AT 401,000 AT ONE YR LOWS AND PROBABLY SIGNALS THE B…

Gold at (1:30 am est) $1166.90 DOWN $3.00
silver at $16.43: up 2 cents
Access market prices:
Gold: 1171.50
Silver: 16.52
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:
THURSDAY gold fix Shanghai
Shanghai morning fix Dec 1 (10:15 pm est last night): $ 1188.46
NY ACCESS PRICE: $1169.20 (AT THE EXACT SAME TIME)/premium $19.26
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1199.35
NY ACCESS PRICE: 1175.35 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD 2ND FIX TODAY!!: $24.00
China rejects NY pricing of gold as a fraud
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Dec 1: 5:30 am est: $1168.75 (NY: same time: $1168.15 5:30AM)
London Second fix Dec 1: 10 am est: $1161.85 (NY same time: $1162.00 10 AM)

This post was published at Harvey Organ Blog on December 1, 2016.

The Great Unwind Unravels Hottest Rental Markets in the US

Now in San Francisco, New York, Boston, Chicago, Washington DC, and perhaps a city near you.
Averaged out across the US, asking rents for apartments still rose in November on a year-to-date basis, though more slowly than before, with the median asking rent for a one-bedroom up 1.8% and for a two-bedroom up 2.2%, according to Zumper’s National Rental Price Index. In July, rents had still been up over 4% year-to-date. Since then, they’ve started ticking down on a monthly basis. But averages can cover up more than they reveal.
On a city-by-city basis, a different scenario emerges, with rents going totally crazy in some la-la lands, as if it were still the summer of 2015, and in other cities, including the three most expensive rental markets in the US, rents are coming down hard.
In San Francisco, the number one most ludicrously expensive rental market in the US, rents have now sagged for the fifth month in a row. Asking rent for a median one-bedroom fell to $3,330. That’s still a lot of moolah: $40,000 a year for a small, very average apartment. But that’s down 9.3% from the peak of the rental bubble in October 2015.
The median asking rent for a two-bedroom dropped to $4,500. So $54,000 a year. That’s down 6.8% from a year ago, and down 10% from the October 2015 peak, when landlords were asking $5,000 a month, or $60,000 a year, according to Zumper. Back then, rents had soared 11% from the prior year. Those kinds of double-digit rent increases were common. Hence the local term, ‘Housing Crisis,’ when households with median incomes cannot afford to rent a median one-bedroom apartment.

This post was published at Wolf Street on December 1, 2016.

Hollande Announces He Will Not Run For Re-election As French President

With almost 90% of the nation disapproving of him, it hardly a surprise that French President Hollande just told the nation that “for the good of his country” he will not run for Presidency in 2017 saying he was ‘conscious of the risks’ a candidacy would have caused.
The unprecedented decision was driven by his historically low popularity ratings.
‘Power and the exercise of power have not made lose my lucidity. And today, I am conscious of the risks that would create my candidacy for the majority,’ he said in a solemn televised address on Thursday evening. ‘Therefore I have decided not to run for president for president’
He has had some of the worst approval ratings for a president in modern French history.

This post was published at Zero Hedge on Dec 1, 2016.

Trump’s Treasury Pick Looking to Privatize Fannie and Freddie

Donald Trump’s US Treasury nominee Steven Mnuchin sent mortgage markets into a frenzy when he said privatization of Fannie Mae and Freddie Mac should begin and that the incoming administration would ‘get it done reasonably fast.’ Comments about the two mortgage finance titans shot their stocks up over 30% according to Bloomberg.
Both financial institutions have worked as clearing houses for mortgages, buying them from private lenders, packing them into securities, and stamping them with a US government’s guarantee. Privatization means increasing risk to some, but Mnuchin was quick to dispel any worries. ‘We will make sure that when they are restructured, they are absolutely safe and don’t get taken over again. But we’ve got to get them out of government control,’ he stated.
Unfortunately for the free market, Mnuchin’s plan for the two government-backed mortgage companies didn’t include completely closing their doors, which is the only real solution to avoiding another housing market collapse. Both Fannie Mae and Freddie Mac were private companies before their take over in 2008. The only difference between the two lenders and other mortgage companies was they were backed by the Federal government, who essentially co-signed for riskier borrowers.

This post was published at Schiffgold on DECEMBER 1, 2016.

“The World Has Changed” – Average S&P Target Before Trump: 2,087; After Trump: 2,425

In a note from Evercore ISI, titled simply enough “Investors Believe The World Has Changed”, the firm once again confirms that price drives narrative (recall that everyone was bearish should Trump win), and writes that “Post election, investors believe the world has changed. Whether or not Trump’s pro-growth agenda is enacted or succeeds, investors we surveyed yesterday seemed to buy into it. For example, the consensus of investors we surveyed yesterday put the S&P at the end of next year at 2425; a similar survey we conducted on Nov 3 put the S&P at 2087.”
Below is a summary of what the post-Trump survey found – note that a Trump presidency, widely panned by market participants before the election, is now seen at 6.5 on a scale of 0 to 10, with 10 being “wonderful”:

This post was published at Zero Hedge on Dec 1, 2016.

During An Economic Collapse Hyperinflation Will Wipe Out The Savings Of The People – Episode 1141a

The following video was published by X22Report on Dec 1, 2016
Initial jobless claims surge after the election. Dollar General reports that the economy is as good as the government is reporting. Obama is getting ready to forgive student loans making the tax payers pay for it. Global bonds lose 1.7 trillion in November. Central Bankers accelerate the war on cash. Venezuela braces for hyperinflation

Massive Fire Engulfs One Of Italy’s Largest Oil Refineries

#BREAKING Explosion was reported at one of Italy's biggest oil refineries some 40 km south of Milan, residents warned to stay indoors pic.twitter.com/BP7Xm0WPKT
— People's Daily, China (@PDChina) December 1, 2016

Update: Eni, commenting in statement on accident that occurred earlier today, says the fire is now under full control, being extinguished. Affected facility ‘EST’ closed, isolated from rest of plant. Company reiterates no staff injured at refinery. Causes of incident being investigated, information to be passed on to authorities.
According to local press, a massive explosion has rocked one of Italy’s biggest oil refineries in Sannazzaro de’ Burgondi, near Pavia, about 40km south of Milan. Local authorities have ordered residents to stay indoors while an emergency plan is activated.

This post was published at Zero Hedge on Dec 1, 2016.

How to Profit from This Sunday’s ‘Quitaly’ Vote

Last June I wrote to you with an urgent message ahead of the Brexit ‘tantrum’ that wiped $3 trillion from the world’s balance sheets in the worst two-day sell-off of all time.
Now it’s time to talk ‘Quitaly’ – an event that could be three times worse.
That’s what I’m calling Italy’s upcoming referendum on Dec. 4, when millions of Italians are going to vote on what looks to be one of the most significant constitutional reforms since World War II ended.
What it means for your money may surprise you – especially when it comes to the profit potential I see being created when it happens.
Brexit Pales in Comparison to This
Millions of investors breathed an audible sigh of relief when the Brexit aftermath proved to be a non-event, but millions more yet have fallen blithely into the trap of believing that it was a ‘one-off.’
That’s a terrible mistake – ‘Quitaly’ could be orders of magnitude worse.
Naturally, politicians and economic experts won’t tell you this. They’re actively trying to downplay the upcoming vote at a time when all three of Italy’s leading opposition parties favor an ‘exit’ from the euro.

This post was published at Wall Street Examiner on December 1, 2016.

China Losing Control? PBOC Imposes New Yuan Outflow Limits For First Time In Two Decades

Late last week, we reported that in its latest push to limit and/or halt capital outflows, China unveiled new capital controls meant to stem further capital flight disguised as outbound M&A by clamping down with tighter controls on Chinese companies seeking to invest overseas, intensifying efforts to slow a surge in capital fleeing offshore amid tepid growth and an uncertain economic outlook. Beijing was said to focus on ‘extra-large’ foreign acquisitions valued at $10 billion or more per deal, property investments by state-owned firms above $1 billion and investments of $1 billion or more by any Chinese company in an overseas entity unrelated to the investor’s core business. The new controls would apply to deals yet to receive approval from China’s top economic planning agency.
It did not end there.
One month after we noted a Bloomberg report that China was preparing to impose curbs on Bitcoin – which has in the recent past become a widely accepted mechanism to bypass capital controls – including policies restricting domestic bitcoin exchanges from moving the cryptocurrency to platforms outside the nation and imposing quotas on the amount of bitcoins that can be sent abroad, overnight we learned that China was taking a page out of the Indian demonetization playbook, and was curbing gold imports in another attempt to clamp down on capital leaving the country.

This post was published at Zero Hedge on Dec 1, 2016.

Is the Student Loan Bubble Getting Ready to Pop?

For a few years I have been warning that higher education costs have escalated uncontrollably as wages for the masses have flat lined. As with autos and housing, the stop gap that enabled prices to vault well beyond income and productive utility, has been the availability of credit underwritten by the government and often packaged into securities sold by Wall Street.
Not surprisingly, a growing number of students are now defaulting on these loans because they have insufficient income to make the payments. In the process, investors are facing mounting risk in the so-called ‘AAA bonds’ that securitized these loans. See: $40 Billion of AAA loans at risk of becoming junk. With $1.3 trillion in student loans now outstanding, risk-repricing here is just getting started and the ramifications will be widely felt.

This post was published at FinancialSense on 12/01/2016.

Taper Tantrum 2.0: German Bunds Tumble On Report ECB Is Preparing To Taper Bond Purchases

Someone at Reuters must be really short Bunds.
One week ago, 2Y German Bunds tumbled after a Reuters report came out, according to which the ECB was looking for ways to lend out more of its huge pile of government debt to avert a freeze in the 5.5 trillion repo market that underpins the financial system, manifesting in the surge in short-term Bunds. The effect of that particular report lasted for all of one day as the market realized that no matter what the ECB does, the collateral shortage is likely to persist.
Fast forward to today, when the same thing happened, only this time, to the long end, when Reuters reported that, in advance of its March 2017 meeting, the ECB was considering sending a “formal signal after its policy meeting next Thursday that the program will eventually end.” As a result, Bund futures quickly slid to session low, dropping ~30 ticks in 10 minutes, on the back of the Reuters report.

This post was published at Zero Hedge on Dec 1, 2016.

Cycles – A Fuse, An Explosive And The Igniting Catalyst

Investors need to focus on the two key long term structural changes now underway which are going to ignite destructive global dislocations through early 2020. To better understand why this is going to occur we need to place them in context by first examining the major economic cycles currently underway.
HARRY DENT’S MACROECONOMIC CYCLES & DEMOGRAPHICS
This initial cycle chart is from an in-depth discussion I had with Harry Dent earlier this year. Since leaving Harvard, Harry has spent most of his adult working life studying demographics and cycles.
An ominous tell tale is that the four cycles he most closely follows are all presently headed down or flat!
Dent attributes this to; the demographics of the baby boom generation, their spending habits as they enter retirement and the overall falling birth rates in the developed economies.
His work suggests the cycles don’t reverse until the early ’20’s.

This post was published at GoldSeek on 1 December 2016.

SP 500 and NDX Futures Daily Charts – A Tale of Two Economies

The Dow Jones ‘Industrials’ were heading to new all time highs, even as the techs continued to lead the declines to the downside, with the SP 500 going along for the ride.
The Dow is being supported by financials, since its days as an industrial indicator in any kind of Dow Theory are long over. As I have remarked before, the DJIA is the index for tourists, and local news programs.
The economic news was mixed, with unemployment higher than expected but some other industry indicators doing better.

This post was published at Jesses Crossroads Cafe on 01 DECEMBER 2016.

Nasdaq Tumbles Into Red Post-Trump As Bond Market Crashes

It appears the growthiness of the new regime is not so friendly to FANG stocks and big tech as the Nasdaq just gave up all its gains post-election. While tech is the biggest loser in stock land, it’s the bloodbath in bonds that is most worrisome as 30Y yields spike another 10bps today..
Nasdaq is the biggest loser post-Trump…
As FANG stocks slump…

This post was published at Zero Hedge on Dec 1, 2016.