The Future is Not as Dark As it Seems

I took this picture at the beach. At first glance, it is hard to tell if it is a sunrise or a sunset. For the record, it was a sunrise – the dawn of a new day. What we face can be disastrous but it also can be the dawn of a new era. Government is our worst enemy because it refuses to relinquish power to save society. Like Hillary – it’s always just about them.
This Presidential election has exposed the tremendous deep divide of the nation and the world for that matter. We are headed into the eye of the storm in this battle between left and right. The left is all about punishing people who have more. They are really the people who would break into you house and rob you under the pretense that they deserve it because you have cheated them in some way. This uprising always comes from the left; i.e. China, Russia, and Europe. The uprisings that spring from the general population are directed at government and not the rich class warfare stuff. Those are the revolutions such as the American and French of the 18th century.
The future is dark and sinister if the majority remain silent against the left. Keep in mind that the left have the press in their pocket. This historically has always made them the most dangerous. The left will rise up in class warfare and that takes various forms. Even the uprising in Germany that targeted the Jews was based in class warfare. Kristallnacht, also referred to as the Night of Broken Glass or ‘crystal night’, symbolized this was really a class warfare incident that began with the idea that the Jews were the bankers and evolved into getting all the Jews who were often the store owners as well. Kristallnacht was the looting of the Jewish stores and robbing them of their property. Yes it targeted the Jews. But the ethnic origin masquerades the class warfare.

This post was published at Armstrong Economics on Dec 24, 2016.

Top Ex-White House Economist Admits 94% Of All New Jobs Under Obama Were Part-Time

Just over six years ago, in December of 2010, we wrote “Charting America’s Transformation To A Part-Time Worker Society“, in which we predicted – and showed – that in light of the underlying changes resulting from the second great depression, whose full impacts remain masked by trillions in monetary stimulus and soon, perhaps fiscal, America is shifting from a traditional work force, one where the majority of new employment is retained on a full-time basis, to a “gig” economy, where workers are severely disenfranchised, and enjoy far less employment leverage, job stability and perks than their pre-crash peers. It also explains why despite the 4.5% unemployment rate, which the Fed has erroneously assumed is indicative of job market at “capacity”, wage growth not only refuses to materialize, but as we showed yesterday, the growth in real disposable personal income was the lowest since 2014.

This post was published at Zero Hedge on Dec 23, 2016.

Irrational Exuberance in US Stock Market Grasps at 20K for Dow

Since Trump’s election, the US stock market has climbed unstoppably along a remarkably steep path to round off at a teetering height. Is this the irrational exuberance that typically marks the last push before a perilous plunge, or is the market reaching escape velocity from the relentless gravity of the Great Recession?
This burst of enthusiasm in response to Trump’s victory, flew in the face of almost everyone’s predictions. That it lifted the market from seven months of languor certainly makes 20K on the Dow look like the elevation marker of a breathtaking summit.
While breaking 20k, if it happens, may be as meaningless as one more mile on the odometer when all the numbers roll over, it is psychologically potent for many. Breaking through it, could cause fear as eyes turn down and see how far below the earth now is, or the rarified air up here may bring euphoria that lifts the market to even greater levels on a rising current of hot air.
Investors have been buying and selling with as much frenzy as Christmas shoppers. Now there will be much eating and drinking to celebrate this record-setting Santa-Clause rally, even if it doesn’t top 20, before Christmas, as investors take a brief rest to enjoy their surprise gains, fat and happy in belief that 2017 will be a prosperous new year.

This post was published at GoldSeek on Friday, 23 December 2016.

California to Pay Billions More After Calpers Cuts Assumed Rate (NOW A Warning?)

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
US Pension Funds are massively underfunded and grow progressively more untenable with each recessiona and financial market downturn. Throw in an aging population, unrealistic return expectations and increased pension recipient demands, and we have party! And not the fun kind.
(Bloomberg) – California will be forced to pay billions more in pension contributions for government employees after the state retirement system’s decision to lower its assumed rate of return. [The chief investment officer of the $303 billion California Public Employees’ Retirement System just recommended that it lower its annual assumed rate of return to 7 percent from 7.5 percent, which will require workers to contribute more money to the plan].
California is already paying $5.38 billion to the California Public Employees’ Retirement System this year, and in fiscal year 2018 the state will need to add at least $200 million more. By fiscal year 2024 the annual tab will increase at least $2 billion from current levels. This all comes on top of increases already scheduled under the system, according to Governor Jerry Brown’s finance department.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ December 23, 2016.

Five 3-Standard-Deviation Price-Moves Post-Election

Submitted by Eric Bush via Gavekal Capital blog,
Most of the time not a whole lot actually changes in the markets over the course of a month. For example, small cap stocks tend to outperform large cap stocks by a rather mundane 31 bps over the course of a month on average going back to 1996. There are, however, periods of time when extreme moves do occur over the course of a month. We have just experienced one of those times.
A three standard deviation price change is a pretty rare event especially outside of a crisis period. The US presidential election has clearly been that rare event catalysts. In the charts below, we have identified five different examples of a three standard deviation 1-month price change in four different asset classes: equities, commodities, fixed income, and currencies.
In equities, we have experienced an extreme move in the relative price change between small cap stocks against large cap stocks. As of 12/8/2016, the S&P 600 had outperformed the S&P 500 by over 12% over the previous month. This was the best 1-month outperformance since March 2000 and the first positive three standard deviation move since 2002.

This post was published at Zero Hedge on Dec 23, 2016.

SPY Assets Zooming Higher

During the post-election stock market rally, there has been a huge push into ETFs, and especially into SPY. It is the largest of the ETFs tied to the SP500 Index. It is normal to see fluctuations over time, with total shares outstanding rising and falling as prices do the same.
This is a normal function of investor sentiment. Rising prices get people more bullish, and so they pile into the market. Falling prices scare people away, and they sell. The sponsoring firm of SPY, State Street, responds to that changing demand by issuing or redeeming shares in exchange for cash or the underlying stocks, in order to keep the share price close to the net asset value (NAV).
Listen to Strong Dollar vs. Market Reflation
Generally speaking, when there is a huge surge of buying into SPY that pushes the shares outstanding number up above the upper 50-1 Bollinger Band, that can be a sign of a meaningful top for the overall stock market. The corresponding point can be made about dips below the lower band marking price bottoms.

This post was published at FinancialSense on 12/23/2016.

DEC 23:GOLD UP/SILVER DOWN/GOLD PREMIUMS AROUND $30.00 SHANGHAI GOLD VS NY PRICING/MONTE DEI PASCHI NATIONALIZED: BAIL IN ON BONDHOLDERS, MUST WAIT FOR OTHER BANKS IF THEY NEED RECAP./DEUTSCHE BA…

Gold at (1:30 am est) $1131.90 UP $3.10
silver at $15.70: DOWN 12 cents
Access market prices:
Gold: $1134.00
Silver: $15.76
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:
FRIDAY gold fix Shanghai Shanghai morning fix Dec 23 (10:15 pm est last night): $ 1161.13
NY ACCESS PRICE: $1131.10 (AT THE EXACT SAME TIME)/premium $30.03

This post was published at Harvey Organ Blog on December 23, 2016.

Canada’s Goods Producing Sector Caves

Exports get blamed, despite the crushed loonie. Many countries, including the US, report GDP on a quarterly basis. Canada reports on a monthly basis. So today Statistics Canada reported GDP for October. What’s disconcerting isn’t so much that GDP fell 0.3% on a monthly basis – these things happen – though it disappointed economists along the way: the ‘results were surprisingly bad,’ wrote Krishen Rangasamy, senior economist at Economics and Strategy, National Bank of Canada. But just how much the goods producing sectors are getting hammered.
This chart by NBF Economics and Strategy shows the decline in October (blue bars, left scale), and it also shows that this type of monthly decline, during our mediocre economic era, is not rare. The red line (right scale) shows the annualized rate for the last three months, which is still positive, but careening lower:

This post was published at Wolf Street by Wolf Richter ‘ Dec 23, 2016.

Aussie Dollar Tanks After China Admits Growth Will Miss 6.5% Target

With fears mounting over China’s debt load sustainability, and amid yet another liquidity crisis, President Xi Jinping appeared to admit that China’s economic growth will slow below the government’s 6.5% target. Despite the promise of creating a “modestly prosperous society,” Xi warned that China doesn’t need to meet the objective if doing so creates too much risk – a little late for that after trillions of freshly created credit was spewed into zombified firms this year – but at least reality is starting to set in.
Last year’s 6.9 percent expansion was the slowest in a quarter century. For this year, the government set a 6.5 percent to 7 percent target range, slower than last year’s goal of about 7 percent. IMF Managing Director Christine Lagarde said earlier in February that the fund strongly recommended that China set a growth target range of 6 percent to 6.5 percent.
As Bloomberg reports, too much emphasis on meeting growth objectives is increasing financial risk, according to Huang Yiping, an adviser to the People’s Bank of China. The higher the short-term growth target, the more difficult it will be to rebalance the economy to favor long-term growth, Huang, an economics professor at Peking University, said at an event this week in Beijing.

This post was published at Zero Hedge on Dec 23, 2016.

The Fiat Gods Must be Crazy: Gold and Silver and Bits, Oh My!

‘Disclaimer,’ the post that a friend sent over warned: ‘This is a theory based on no evidence whatsoever.’
Hmm…
Glad I don’t take financial advice from you, I thought. But, hey, at least you’re honest.
‘I feel like,’ it went on, not skipping a beat, ‘the SEC is going to approve the Bitcoin ETF, and some of the high-ranking officials are already privy to this information. I am of the belief that these officials are buying up all of the cheap coins they can before the ETF news is released, and before the true FOMO begins.
‘Therefore, my advice to you guys is to buy up whatever you can before we hit four and five digits.’
There’s been an explosion of speculation from all sides as to why bitcoin’s up well over $100 in less than 30 days. (The price, upon writing, is a smidge below $888.

This post was published at Laissez Faire on Dec 23, 2016.

Clarification on India’s Gold Confiscation

To make it clear, India is not going door to door to confiscate gold any more than FDR did. The reason so many $20 gold coins have survived is because there was no door to door confiscation. Banks and corporations who had records of gold were forced to turn their gold over and then FDR superseded all contracts overriding what was known as the ‘gold clause’ in contracts. In 1935, the Supreme Court heard constitutional challenges to the abrogation of gold clauses in contracts and Treasury bonds. Gold clauses guaranteed that creditors would receive payment in gold dollars as valued at the time a contract was made. Due to the deflation that followed the Great Depression, this meant that debtors were forced to pay back much more than they owed originally in purchasing power.

This post was published at Armstrong Economics on Dec 23, 2016.

‘Buy’ Signals Appearing Everywhere In Gold

Although it seems like the precious metals sector has experienced another down year, the
HUI index is still up 48.6% from its 12/31/15 close and it’s up 65% from its low on January
19th this year.
The technicals in the gold market never been set up better than they are now for a contrarian move higher. On the assumption that gold closes on Friday lower for the week than last week, it will mark seven straight weeks in which gold has closed lower on a weekly basis. This has never happened before.
The premiums for physically delivered gold in China have never been higher. Egon Von Greyers, in Switzerland, reported in his latest King World News interview that there are reports that Swiss refiners have been paying a premium to buy gold. My suspicion is that the Chinese are willing to pay $30 premiums to world gold in order to keep the supply from Swiss refiners flowing, which is why Swiss refiners are willing to pay premiums to acquire dore bars and scrap.

This post was published at Investment Research Dynamics on December 23, 2016.

The U.S. Dollar Is Destined To Move Higher

As counter-intuitive as it may seem to many, I believe the world-wide desirability to own the much, maligned U. S. Dollar is destined to rise. To my mind, the recent upside break-out of the U. S Dollar Index is a major event and confirms my belief. It is driven by conditions existing beyond the borders of the United States that are destined to worsen. The result will be the flight of large sums of foreign capital to the U. S. and the dollar. This will likely be a temporary phenomenon, but its effect will be widely felt.
There are numerous reasons that would lead one to expect a weaker dollar. Yet, reality overwhelms what we may or want to believe! In this case, the United States is in better financial and economic condition than most other major countries. This positions the U. S Dollar to become more desirable to many foreigners, than their own currencies. The economic, political, and social problems facing the other important nations are currently far more serious than those we are experiencing on American soil. All that is needed is a triggering event to set into motion massive currency flows to the dollar.
Japan has joined the E. U. and others. It has embarked upon yet another period of monetary easing in their effort to improve their economy. If they fail, the consequences can be damaging on many fronts. Numerous European banks are questionably solvent and a banking crisis may be unavoidable. Italy just announced it will bail out one of its largest banks, Monte dei Paschi di Siena. Both houses agreed to use 20 billion euros to save its banking industry. One must wonder from where they will get the money, and if that is enough. India’s government cancelled their 500 and 1,000 rupee banknotes, and severely limited gold ownership for its citizens. They instituted these changes allegedly to fight corruption. However, these actions may lead to a global trend as country after country will likely initiate these or other acts to achieve at least two goals. The first is to punish those who are hiding untaxed money from them. The second is to accumulate gold, possibly with the intent to use it for future backing of their currencies.

This post was published at GoldSeek on Friday, 23 December 2016.

Dollar Euphoria and Gold

The US dollar has rocketed higher since early November’s US presidential election, rivaling the massive gains seen in the stock markets. With the world’s reserve currency catapulted to extreme secular highs, dollar euphoria has naturally exploded. Traders are overwhelmingly betting the dollar’s strong upside will continue. But this greed-drenched currency looks very toppy and ready to fall, which is very bullish for gold.
The US dollar’s recent stampede higher has been amazing, as evidenced by the venerable US Dollar Index. Launched way back in 1973, the USDX is the dominant and most-popular market gauge of how the US dollar is faring. Since Election Day 2016 alone, the USDX has soared 5.1% higher in merely six weeks! That isn’t much behind the flagship S&P 500 broad-market stock index’s 5.9% post-election rally.
But the post-election USDX surge is still far more extreme. The world’s handful of reserve currencies are decisively commanded by the US dollar. Because of the vast amounts of dollars flooding the globe, it has great inertia. Thus like an oil supertanker, the dollar’s moves tend to be gradual and unfold over a long time. The USDX usually moves with all the sound and fury of a tortoise, leisurely meandering around.
The dollar’s normal lack of volatility helps explain why leverage on currency trading can be so epic, over 100x in some cases! To translate USDX moves into stock-market equivalents, they probably need to be multiplied by at least 3x or so. The dollar’s post-election surge is every bit as extreme as a 15% rally in the S&P 500 over six weeks would be! Such a colossal move has major implications for many markets.
Trump’s surprise victory unleashed staggering US-dollar buying on Fed-rate-hike expectations. Like all traders, the currency guys assume Trump’s proposed slashing of tax rates and regulations will help fuel a much-stronger US economy. That not only gives the Fed cover to hike rates faster, but could spark surging inflation that forces the Fed’s hand on rate normalization. It all boils down to Fed hawkishness.
This was reinforced at last week’s FOMC meeting, where the Fed met market expectations to hike its federal-funds rate for the first time in a year and just the second time in 10.5 years. Accompanying every other FOMC meeting, the Fed releases a Summary of Economic Projections. Currency, stock, bond, and commodity traders eagerly look to part of that report known as the ‘dot plot’ to divine where rates are heading.
This dot plot is a graphical summary of where each individual FOMC member and regional-Fed president expects the federal-funds rate to be in each of the following few years. Since these are the guys who actually set monetary policy, traders heavily weight their collective outlook. Last week the newest dot plot pegged the number of rate hikes expected in 2017 at three, well above the two forecast a quarter earlier.
So the USDX took off like a rocket on higher expected US interest rates, soaring 1.0% on that Fed Day and another 1.0% the next! That monster 2.0% USDX gain made for its biggest two-day rally by far since late June in the immediate wake of that surprise Brexit vote. And it vaulted already-major dollar euphoria up to nosebleed extremes. Currency traders are totally convinced the dollar’s gains are only beginning.

This post was published at ZEAL LLC on December 23, 2016.

Feds Stance on rate hikes equates to Nonsense and Masses are Turning Bullish on Stocks

Beware of all enterprises that require a new set of clothes.
Henry David Thoreau
Remember over a year ago when they first raised hikes-they huffed and puffed warning everyone that they would raise rates several times in 2016 and viola nothing happened until now. Now they are repeating the same thing all over again. To illustrate how bad this economy take into consideration that the Fed has raised rates only twice in the last decade; the economy was a lot stronger in 2006 and 2007 than it is today. Yellen’s statement below illustrates how the Fed is positioning itself so that it can pull another ‘oops we were wrong once again’ moment.
“All the (Federal Open Market Committee) participants recognize that there is considerable uncertainty about how economic policies may change and what effect they may have on the economy,” Yellen said
Has anything changed since the last hike; is the economy stronger? The only thing that is getting stronger is the illusion that this economy is on the mend. If the economy was improving, then a rising rate environment could be seen through a bullish lens. In this instance, this economic recovery is a joke; it is all an illusion that is funded by debt. If the supply of hot money is cut, the markets will tank. The real estate sector is not stable yet, and most people already can’t afford a house, so raising rates is a recipe for disaster. Our take is that the Fed has raised rates to give them more room to manoeuvre while making it appear that they are loath to embrace negative rates. The Fed has to play a delicate balancing game; the US dollar has to look attractive to the world, as that is what gives the Fed the power to create unlimited money. The US dollar is the World’s reserve currency. If it were not, then the US would have followed Greece’s path long ago. It is our ability to rob the world by creating money out of thin air at other nation’s expense that gives the US capacity to hold onto the top dog position precariously. It is precarious because it is just a matter of time before China displaces the US. On a purchasing power parity basis, China has already replaced the US as the World’s largest economy. One day the world will realise that the emperor is naked, fat, old and ugly as sin. However, as there is still some time before this comes into play, we are not going to address this issue.

This post was published at GoldSeek on Friday, 23 December 2016.

The Real Question This Christmas

Everyone says Merry Christmas and a Happy New Year.
Nice wish, eh? Some make sure to emphasize the religious aspect of the holiday. A few acknowledge that early Christians stole the existing festival of the Sun (before we understood celestial mechanics people prayed that the Sun would come back — they certainly understood that without it they’d die, but not that irrespective of their burnt offering the days would get warmer — and longer — anyway!) And, of course, the mercantile world has turned it onto a debt-fed orgy of buying crap we don’t need for people who don’t appreciate it.
But let me put the question a different way for the coming year.
What are you willing to put up with?
That’s the real question you ought to ask this “holiday season.”
For myself, I concluded back in the 2011 timeframe that the people of this country would not force the government to stop allowing the medical system to rob everyone blind, that we would not collectively rise and demand that those who refuse to stop go to prison, and that this meant that either I stop, to the extent possible, my expanding waistline and decreasing physical ability that was coming as I got older or I would have some miserable number of years at a point in the not-so-distant future before I finally met my demise. This conclusion (and by the way, Congress is perfectly happy to not only screw you but personally profit from it – and you let them do that too) drove me to make a decision. I decided that I would put up with feeling like I got hit by a bus every day for months and would stop eating a bunch of very pleasurable “foods” that are in fact poisons — anything laced with sugar, grains, starches and human-generated frankenoils – which are most of them. I decided to put up with that in order to attempt (with no guarantee of success) turning back that which was inexorably creeping upon me.

This post was published at Market-Ticker on 2016-12-23.

Save The Snowflakes

Our nation’s snowflakes are being cared for by colleges and universities across the country. These schools – no, HEROES – are financially supporting cry-ins, hot chocolate, bubbles, kittens, puppies and ponies, crayons, and Play-Doh to comfort these wounded snowflakes. Some schools even canceled exams and classes to ensure that America’s youth are treated with extra care and understanding during these difficult times.
But clearly, state funding – tax-payer dollars – are simply not enough.
State budgets cannot be expected to bear this burden alone. It’s going to take a far more sustainable funding source to ensure special snowflakes have the emotional support they need. In response, we here at the Media Research Center have launched the Save the Snowflakes project to respond to this emergency and bring crucial attention to this devastating human crisis.

This post was published at Zero Hedge on Dec 22, 2016.