JP Morgan et al Engineer Gold to a New Low Close

Gold was sold lower by a bit starting an hour after trading began in New York at 6:00 p.m. on Thursday evening, with the Far East low tick coming around 10 a.m. China Standard Time on their Friday morning. It began to crawl higher starting around 1 p.m. over there, but was capped shortly before 10 a.m. in London. It was sold off pretty hard until precisely 1 p.m. GMT/8:00 a.m. EST — and the subsequent very sharply rally met its ended at exactly 8:30 a.m. in New York. It was all down hill from there with the absolute low tick — and a new low for this move down — set minutes before 2:45 p.m. in the thinly-traded after-hours market. It recovered a few dollars from there, before chopping sideways into the 5:00 p.m. close.
The high and low ticks were recorded by the CME Group as $1,173.80 and $1,159.50 in the February contract.
Gold finished the Friday session in New York at $1,159.60 spot, down $10.80 on the day. Considering that a new low closing price for this move down was set, net volume wasn’t overly heavy at 146,000 contracts.

This post was published at GoldSeek on Sunday, 11 December 2016.

Nate Silver “Calculates” Hillary Would Win If Not For Comey, Russia As Democrats Come Swinging

In the immediate aftermath of last night’s WaPo article revealing a “secret” CIA assessment according to which Russia (without a shred of evidence) helped Trump win the election, we explained – in five points – how this was nothing short of a “soft coup” attempt by leaders of the US Intel community and Obama administration to influence the Electoral College vote. To wit:
Announce “consensus” (not unanimous) “conclusion” based in circumstantial evidence now, before the Electoral College vote, then write a report with actual details due by Jan 20. Put a proven liar in charge of writing the report on Russian hacking. Fail to mention that not one of the leaked DNC or Podesta emails has been shown to be inauthentic. So the supposed Russian hacking simply revealed truth about Hillary, DNC, and MSM collusion and corruption. Fail to mention that if hacking was done by or for US government to stop Hillary, blaming the Russians would be the most likely disinformation used by US agencies. Expect every pro-Hillary lapdog journalist – which is virtually all of them – in America will hyperventilate about this latest fact-free, anti-Trump political stunt for the next nine days. Shortly thereafter, the prominent beacon of liberal thought, Paul Krugman, confirmed that this agenda was quickly taking shape when he tweeted that “we’ll have a president who lost the pop vote by 2.1%, got in thanks to FBI and Putin. And supporters will demand respect. Um, no.”
He continued: “Also note CIA held findings until after election; FBI splashed its story — which turned out to be LITERALLY nothing — 10 days before”, and concluded furiously that “The big problem, for me at least, it how to keep the rage on a simmer, rather than boiling over. The path to justice will be long 9:24 AM – 10 Dec 2016.”

This post was published at Zero Hedge on Dec 10, 2016.

10/12/2016: Austerity: Three Wrongs Meet One Euro

“Is it the ‘How’ or the ‘When’ that Matters in Fiscal Adjustments?” asks a recent NBER Working Paper (NBER Working Paper No. w22863). The authors, Alberto Alesina, Gualtiero Azzalini, Carlo A. Favero and Francesco Giavazzi ask a rather interesting and highly non-trivial question.
Much of recent debate about the austerity in the post-GFC world have focused on the timing of fiscal tightening. The argument here goes as follows: the Government should avoid tightening the pursue strings at the time of economic contraction or slowdown. Under this thesis, austerity has been the core cause of the prolonged and deep downturn in the euro area, as compared to to other economies, because austerity in the euro area was brought about during the downturn part of the business cycle.
However, there is an alternative view of the austerity impact. This view looks at the type of austerity policies being deployed. Here, the argument goes that austerity can take two forms: one form – that of reduced Government spending, another form – that of increased taxation.

This post was published at True Economics on Sunday, December 11, 2016.

Active Managers Move Back ‘All In’ On Stocks

Via Dana Lyons’ Tumblr,
Active managers have adopted an average of over 100% exposue to stocks; such exuberance has not been necessarily represented a poor bet in the past, however.
The jury is out on whether investors have embraced the ‘Trump Rally’. While there is some evidence that investors and money managers remain under-invested, there is probably more evidence to the contrary. From jacked-up surveys to record ETF inflows, it’s probably safer to conclude that folks are pretty enthusiastic about stocks right now. One specific example comes from the National Association of Active Investment Managers (NAAIM) survey of active manager equity exposure. This week, based on the survey, these active managers have an average of 101.6% exposure to equities. I’d say that’s pretty high.

This post was published at Zero Hedge on Dec 10, 2016.

Portland Asks Businesses to Move Elsewhere

Okay, maybe not exactly. They are using state coercion to force companies not to pay their CEOs more than 100 x the companies’ median employee. Businesses in Portland, OR, who pay such “too high” salaries to their CEOs will be hit by a 10% surcharge on their taxes. This, if policy-makers and other economic illiterates are to be believed, will make Portland more equal.
They probably think businesses will stay in Portland, and possibly even move to Portland, despite this new rule.

This post was published at Ludwig von Mises Institute on December 10, 2016.

Week in Review: December 10, 2016

From Brexit to Donald Trump’s election, the surge in populism this year has revealed that many voters believe something is wrong with the world’s political and economic system. What is less clear is what exactly can be done to combat these problems. While voters in Italyrecently rejected an effort to centralize the country’s political system, the matter is never truly settled and we will continue to have to combat efforts to centralize political power and criminalize dissent.
And, no election will change this. While technological progress can indeed improve our daily lives, the ideological battle over government power will never fully go away, and the battle over ideology will continue so long as people have free will.
Indeed, the western media’s fawning treatment of Fidel Castro demonstrates the enduring mystique of socialism – while recent Harvard and Rasmussen polls suggest that perhaps half of young Americans hold unfavorable attitudes toward capitalism. No matter how many millions perish in collectivist bloodbaths, the Left remains committed to its ideology of radical egalitarianism and enamored of murderous revolutionary figures like Che Guevara.

This post was published at Ludwig von Mises Institute on December 10, 2016.

Government Bond & Mortgage ‘Carnage’ Enters Sixth Week

The bond market is doing the math.
Traders got even more nervous on Friday, after having been twitchy all Thursday, and they alleviated this condition by selling government bonds.
In July, government bonds were sitting ducks with their low yields, and perfectly ripe for a good plucking. This plucking has now proceeded relentlessly and has entered its sixth week in a row, after an already rough four months.
The price of the 10-year Treasury note swooned on Friday. The 10-year yield, which moves in the opposite direction, rose 6 basis points to 2.47%, the highest yield since June 2015. Since early July, the 10-year yield has jumped by 1.08 percentage points! That’s a 77% move (via StockCharts.com):

This post was published at Wolf Street on Dec 10, 2016.

EU: Central Bank Will Continue Quantitative Easing Next Year

The European Central Bank (ECB) announced on Dec. 8 that it would extend its bond-buying program through December 2017 rather than end it in March as it originally intended. Starting in April, however, the bank will decrease its bond purchases from 80 billion euros ($85 billion) a month to 60 billion euros a month. The bank also announced it would keep its benchmark interest rate at zero.
The bank’s governing council said in a press release that the bond-buying program, known as quantitative easing, could be extended again if necessary. The institution also said it may expand the size of the program at any time if the eurozone’s financial outlook worsened. After the announcement, ECB President Mario Draghi said the bank would change how it buys bonds. Currently, the bank focuses on buying riskier bonds. But under the new strategy, it could start buying bonds issued by European countries with yields less than the ECB’s deposit rate (now at -0.4 percent), such as German short-term debt.

This post was published at FinancialSense on 12/09/2016.

Manufacturing Under President Donald Trump

President Elect Trump was elected on the thesis that he would bring back manufacturing jobs to the U. S. and stop them from leaving. Before we can gauge the future success or failure of this proposed initiative we need to understand the current landscape for manufacturing jobs in the country.
The first myth that needs to be busted is that the US doesn’t make anything anymore. Our manufacturing output is the highest it’s ever been. While it is true that China displaced the US as the largest manufacturing nation in 2010, the US has outperformed most other wealthy countries in the growth of ‘value added’ which is a measure of the economic contribution of manufactures in the design, assembly and marketing of the product.

This post was published at Wall Street Examiner on December 9, 2016.

Inevitable Global Ruin: Top Hedge Fund Managers Sound the Alarm

When monetary control is centralized, as it is today, prosperity withers. The Wall Street Journal just surveyed top hedge fund managers and found a significant belief that full-fledged, global ruin is on its way. Tamper with freedom, monetarily or otherwise, and you end up facing catastrophe.
That’s just where we are today.
The managers pointed directly at the purposeful monetary mismanagement of central banks around the world. These central banks large and small are pumping oceans of money into financial markets as well as lowering rates until they are actually negative, which has never happened before in recorded history.
When the final catastrophic implosion eventually occurs, we will look back on this era with amazement, wondering how people didn’t sense the disaster to come.
Here at TDV, we’ve been quite aware of what’s going to take place right from the start. Even our name – The Dollar Vigilante – speaks to our awareness of the world’s impending monetary ruin.
We were something of a lone voice because people have a hard time visualizing that King Dollar can collapse. But before all of this is over, not a currency – or economy – will be left standing. We’ll probably have to start from scratch.
We’ve said for years that all of this ends in a rock and a hard place scenario. The two options are to stop the money printing and interest rate suppression… leading to a catastrophic crash and depression of biblical proportions. Or, to continue with it until we reach hyperinflation… leading to an even worse catastrophic crash and depression of biblical proportions.
For now, they continue on with the game. And the longer they continue playing this game the crazier everything will get.

This post was published at Dollar Vigilante on December 10, 2016.

Trump: Trojan, Traitor, or Tried and True?

I risked losing my fellow anti-establishment readers in September by suggesting Trump may be an establishment Trojan horse. After seeing Trump choose Pence as VP and a Goldman Sachs exec as campaign finance manager, I was concerned the establishment knew a citizen’s revolt was brewing and made sure that even the road to revolt led back to Rome. Now that we are seeing Trump make actual decisions, we can test that hypothesis.
Trump’s INSTANT reversal on major campaign promises
Trump has not simply backed off on some of his campaign promises, but has backed away from the promises that seemed to fire up his supporters the most. That he scaled the wall across the Mexican border down to a wall in some places and mere fences in others is, frankly, less significant than the main-stream media is playing it to be. If the border patrol thinks a fence will do as well as a wall in some places, why spend more money on a wall? Scaling down the wall could just be Trump, the pragmatist, applying common sense as he listens to the border patrol about their needs and seeks the most cost-effective solution. Trump is a pragmatist.
Of course, a wall was never the right solution in the first place IF Trump actually wants to stop illegal immigrants in a cost-effective manner from taking US jobs. Jailing the people who knowingly hire illegal immigrants (in addition to fining them) would end the problem in about a month at almost no cost, and the best part is that those who are illegal and couldn’t get work would find their own ride home (so long as you also cut off welfare). As for stopping terrorists and drug smugglers, the job of catching them becomes much easier once you stop the flood of illegal laborers that make up 95% of the total flow of illegal aliens – with or without a wall.

This post was published at GoldSeek on 7 December 2016.

Profit from One of the Worst Stocks on the Market Now

The markets may be at record highs, but there is actually a huge profit opportunity from one of the worst stocks on the market right now.
When you are looking for the worst stocks on the market, companies with price-sensitive customers, recent scandals, or any industry disruptions are all great places to look.
The stock that we’re bringing investors today is also part of a challenging industry: the food-service industry
The restaurant industry is highly competitive with low profit margins. Because of this, any restaurant stocks trading at a high multiple of earnings should be a red flag. One of the worst stocks now is trading at 150 times earnings, which positions it for a hard fall.
While fast-casual revenue growth grew more than 10% from 2014 to 2015 and the restaurant industry as a whole grew 5%, this company has seen sales fall by almost 20% this year.

This post was published at Wall Street Examiner on December 9, 2016.

Fed to Be of Not to Be This Week – 14th

Today, any information ahead of something like a rate hike is seen as insider trading. But back during the 1970s going into 1981, things were different. The banks were not big proprietary traders. I would routinely get a call that the Fed would raise rates in 15 minutes. It was not that someone was trying to front-run in those days. They did not want to see anybody get hurt and lose a boat-load for clients.
Back in December 2015, the Fed raised interest rates for the first time since 2006. Nobody was really surprised for instead of giving phone calls, the Fed publicly tries to telegraph its intentions for the same reason we use to get phone calls decades ago. The Fed has been trying to keep telling people it will raise rates and the general expectation is that they will do so on December 14th – almost exactly a year later – with a rate target range of 0.5-0.75%.

This post was published at Armstrong Economics on Dec 10, 2016.

Gold Market Hanging on a Razor’s Edge

Accurate Market Calls
Avi Gilburt of Elliott Wave Trader has made a number of great calls on our podcast this year and we encourage our listeners and readers to consider his outlook when it comes to the stock market and an area that he is widely considered an expert – gold.
First, when it comes to the US stock market, here’s what he told listeners in September, months before US elections and the recent push up to new all-time highs:
September 29, 2016: “The 2037 to 2090 region is very important support for the strong bullish move to be maintained to the upside…as long as that region holds as support, I’m looking for a take-out of 2200 with a straight shot up and then in that set up it’ll be a very fast move to about 2350 to 2375 where we’ll consolidate and pullback a bit; and then we’ll be on our way clearly much higher over 2400 from there. For now, the 2037-2090 region is very important support…”

This post was published at FinancialSense on 12/09/2016.

Non-OPEC Nations Agree To Cut Oil Production But Many Questions Remain

Non-OPEC oil-producing nations struck a deal in Vienna on Saturday to cut crude output by 600,000 barrels a day, joining a pact meant to reduce a global oversupply of crude, lift prices and lend support to economies hurt by a two-year market slump.
The pact, the first between the two sides in 15 years, comes two weeks after OPEC agreed to reduce its own production by 1.2 million barrels a day.
If complied with, and that is a big “if” since many of the non-OPEC nations had previously expressly stated they would not actually cut but rather let oil production decline naturally, the deal would amount to a reduction of almost 2% in global oil supply and, as the WSJ notes, “would represent an unprecedented level of cooperation among oil-producing countries.”

This post was published at Zero Hedge on Dec 10, 2016.

ECB To Extend it Bond Buying Program into End of 2017

Mario Draghi, extended the European Central Bank (ECB) $ 1.74 trillion bond purchase program to support the economy by nine months to at least the end of December 2017. This is far longer than most economists had expected. However, the monthly volume of currently 80 billion euros will drop to 60 billion euros from April 2017 onwards. In total, a further 540 billion euros will be pumped into the market. However, there is still no indication that thie will have any inflationary influence. All its appears to be doing is slowing the collapse buying bonds the private sector does not want.
According to German newspaper the Frankfurter Allgemeine Zeitung (FAZ), the decision of the ECB to expand its bond purchases was objected to by the Bundesbank President Jens Weidmann. The newspaper reported that Weidmann had expressed objections and not voted. The Bundesbank did not wish to comment on the report, reported Reuters.

This post was published at Armstrong Economics on Dec 10, 2016.