Gold – Ready to Spring Another Surprise

Sentiment Extremes
Below is an update of a number of interesting data points related to the gold market. Whether ‘interesting’ will become ‘meaningful’ remains to be seen, as most of gold’s fundamental drivers aren’t yet bullishly aligned. One must keep in mind though that gold is very sensitive with respect to anticipating future developments in market liquidity and the reaction these will elicit from central banks. Often this involves very long lead times.
If one looks at long term charts of gold, one can see that meaningful rallies usually start as technical short covering moves, which often are still at odds with at least some of the macroeconomic fundamentals. The starting points of these rallies often involve divergences with associated markets or data points. If the market is too far ahead of itself, these moves will be given back again quickly.
If a meaningful move has indeed begun though, the fundamental drivers will begin to fall into place as it continues, and it will become clear in hindsight that the market has anticipated these developments. It is therefore definitely worthwhile to pay attention to sentiment extremes and inter-market divergences.
One thing that has struck us as noteworthy lately is that the momentum of the decline in gold stocks has decreased significantly during the the most recent phase of the decline in the gold price – contrary to the much stronger relative momentum seen in the August sell-off.

This post was published at Acting-Man on December 28, 2016.

Is 100% Of “US Warming” Due To NOAA Data Tampering?

It never pays to be an ‘afterthought.’
That was the word Jackie Gleason used to characterize the proposed reprisal of ‘Minnesota Fats’ in The Color of Money, 1986’s sequel to The Hustler. Chances are Paul Newman himself, who had at least 36 script conferences with the screenwriter, didn’t take offense to Gleason’s rebuff. ‘We desperately wanted the character to return,’ Newman told the New York Times of Gleason’s ‘Fats,’ ‘but every time we put him in, it seemed like we were trying to glue an arm on a man and make it stick.’
Under the brilliant direction of Martin Scorsese, Newman would go on to win an Oscar for his role in Color. Still, as a whole, the sequel simply couldn’t stand up to the 1961 original. Hence the irony of Newman’s Oscar, which critics suggested was in belated recognition of his original performance as an ace pool player in The Hustler. In his young, glory days, Newman so deeply penetrated his characters’ roles that he literally vanished into them. His brilliance as an actor shined brightest in one scene when Eddie lost to Fats; rather than hostility or animus, his fascinated adoration for his idol was unabashedly on display, reflected in his bright eyes and amused expression. Now that’s Hollywood.
As for Wall Street, it’s recent performance has also laid the drama on thick and in perfect form as stocks pierce record highs. The investor community, the Street’s audience, couldn’t agree more. According to the latest survey from the Conference Board, retail investors’ enthusiasm for the stock market’s prospects is at the highest level since February 2007. A stroll down memory lane reveals that similar readings on the giddiness gauge were contrarian in nature, aka sell signals. That is, unless you’re referring to 1996 as a step-off point. In that case, today’s positive parallels suggest stocks’ 2017 sequel could best the original rally that culminated in the S&P 500 peaking in 2001.
What’s driving the train to stock market stardom? The singular theme since Trump was elected has been happiness bordering on euphoria. The overall December Conference Board survey hit a 15-year high. This echoed the most recent University of Michigan December survey, which hit a 12-year high. But it’s not just your average Joe on the street, as in Main Street.

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

More Bad News For NYC Real Estate As Luxury Co-Op Contracts Collapse 25%

Luxury real estate broker Olshan Realty, Inc. has some bad news for New York’s hedge fund managers looking to dump their luxury $5 million, 1,500 square foot palaces as the market for luxury New York City real estate just might be on the verge of collapse. Accroding to a year end report published by Olshan, contracts for luxury co-ops (defined as those with an asking price above $4mm) collapsed 25% in 2016 while the average number of days that apartments sat on the market surged 31% and discounts to original listing price also jumped a point to 6%.
The decline reflects classic price resistance. There was a 2% increase in the average asking price, but a 30% increase in the average days on the market – 318 days. You read that right – it took more than two months longer to sell a luxury property in 2016 than in 2015. The average price drop from listing to contract signing was 6%, an increase from 5% in 2015. There was also a 5% decline in contracts signed at $10 million and above.

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

Investing in Our Furry Friends

We Americans love our pets almost as much as our children.
My wife and I became empty-nesters this year, but we still have two dogs, two cats, and some itinerant raccoons and armadillos, which technically aren’t pets but they seem to think they are.
More and more Americans seem to prefer pets to children… and the resulting demographic trend has massive economic and investment implications.
The numbers are startling and affect everyone, whether you are a parent, a pet owner, neither or both. They’re also an investment opportunity you might try in 2017.
4 Million Missing Babies
While the memories of the Great Recession may be fading, the effects are still very much with us. Among other places, the impact shows up in demographic data.
Last summer I ran across some fascinating analysis by University of New Hampshire sociologist Kenneth M. Johnson. He found that US fertility levels dropped sharply beginning in 2008 and have yet to recover.
All those babies we didn’t have add up to a big number.

This post was published at Mauldin Economics on DECEMBER 27, 2016.

The Central Bankers Warn That Under Trump’s Policies The Market Might Turn In 2017 – Episode 1164a

The following video was published by X22Report on Dec 28, 2016
The central bankers are getting ready to push the DOW over 20,000 points, from all indications they might do this on Friday. Pending homes sales decline as mortgage rates increase. Central banks hate cash and they are pushing their agenda to get rid of it in 2017. People in England are hoarding their currency in fear that the market will most likely turn in 2017. Central banks and JP Morgan Chase warn that the market might turn in 2017 due to Trump’s policies.

DEC 28/OFFSHORE CHINESE YUAN COMES CLOSE TO 7.00; FINISHES AT 6.9670/GOLD AND SILVER RISE AGAIN FOR THE 4TH STRAIGHT DAY/OBAMA SET TO PUT SANCTIONS ON RUSSIA FOR THEIR ‘ELECTION HACKING’/TURKEY C…

Gold at (1:30 am est) $1139.40 UP $2.10
silver at $15.99: UP 6 cents
Access market prices:
Gold: $1142.60
Silver: $16.02
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:
WEDNESDAY gold fix Shanghai
Shanghai morning fix Dec 28 (10:15 pm est last night): $ 1161.18
NY ACCESS PRICE: $1141.90 (AT THE EXACT SAME TIME)/premium $19.28
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1159.93
NY ACCESS PRICE: $1139.50 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD 2ND FIX TODAY!!: $16.73.78
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Dec 28: 5:30 am est: $xxx.1139.75 (NY: same time: $1141.00 5:30AM)
London Second fix Dec 27: 10 am est: $1134.60 (NY same time: $1138.60 ??? 10 AM)

This post was published at Harvey Organ Blog on December 28, 2016.

House Flipping Makes A Comeback As 2016 Volume Soars To Highest Since 2007

Ten years after one of the largest asset corrections in history nearly brought down the entire global financial system, house flippers are making a comeback in a big way. Just ask Eduardo Axtle, a 35-year-old former telecom entrepreneur (which we assume means Verizon store clerk) in Oakland, California, who say that “the floodgates have opened” and allowed him to take out 50 home loans over the past couple of years. But we’re sure Yellen & Co. were right, 0% interest rates for nearly a decade were a fantastic idea.
Per the Wall Street Journal, home flipping volume in the first three quarters of 2016 reached levels not seen since 2007…
…driven by rising home prices and the ability to extract pre-recession level gross profit from flips.
But, of course, like last time around, none of this would be possible without a little help from Wall Street. But, since new regulations imposed after the previous housing collapse restrict the types of home loans that the large banks can make, they had to get creative with structuring and have decided to fund other “online lenders” rather than going straight to the borrower. In fact, JP Morgan recently bankrolled 5Arch Funding of Irvine, California with $60 million.

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

Pending Home Sales Slump Slightly … To 2003 Levels (Rising Mortgage Rates Aren’t Helping!)

Pending home sales declined 2.5% in November, bring PHSI back to 2003 (pre-bubble) levels.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 2.5 percent to 107.3 in November from 110.0 in October. After last month’s decrease in activity, the index is now 0.4 percent below last November (107.7) and is at its lowest reading since January (105.4).
The PHSI in the Northeast nudged forward 0.6 percent to 97.5 in November, and is now 5.7 percent above a year ago. In the Midwest the index declined 2.5 percent to 103.5 in November, and is now 2.4 percent lower than November 2015.

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

Market Shakeups for Gold and Silver Prices for 2016

The prices of gold and silver are always moving, influenced by factors such as current events, market speculation, currency fluctuations, and supply and demand. In 2016, there were several events that influenced the highs and lows of the gold and silver market. For investors, staying on top of these fluctuating prices is crucial to financial success. Here are some of the events that affected the market the most:
Brexit
The British EU Referendum results were announced on Friday, June 24, 2016, and pushed gold to a 2-year-high. After the announcement that the UK would exit the EU, the price of gold climbed 4.7% to $1,316.05 an ounce by 11 a.m. in London. In the US, the price of gold rose by 8.2% to $1,358.2 an ounce before settling around $1,325 per ounce.

This post was published at Schiffgold on DECEMBER 28, 2016.

Home Buyers Sapped by Soaring (but Still Low) Mortgage Rates, Sky-High Home Prices

‘The budget of many prospective buyers was dealt an abrupt hit’
How will home sales be impacted by the toxic combination of sky-high home prices that even on a national basis exceed the crazy levels of the prior bubble, and mortgage rates that have soared nearly a full percentage point since late October, to nearly 4.4%?
That’s what everyone wants to know. The industry was hoping that soaring rates would trigger panic buying to lock in current rates before they go even higher. But the opposite seems to be happening.
It takes months between looking at a home and closing the sale. The home sales data reported so far covered home sales that had been negotiated before the rates jumped. But more immediate data, such as home viewings, writing offers, and pending home sales, do not look promising.
The National Association of Realtors today released its Pending Home Sales Index for November. It dropped to 107.3 (seasonally adjusted annual rate), the lowest since January. It’s down 0.4% from November a year ago.
The index, considered a leading indicator for existing home sales, tracks the number of contracts that have been signed. From that point on, it usually takes one or two months before the sale closes and gets reported as a ‘sale.’ So this is not exactly a bright spot for home sales going into 2017.

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

Stagnation: M2 Money Velocity Continues Falling To All-time Lows!

M2 Money Velocity is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. It is measured by looking at the change in nominal GDP compared to the change in M2 money stock.
M2 velocity keeps falling after peaking in 1997. What is notable after the 1997 peak is that asset bubbles have replaced solid economic growth. For example, the highest GDP growth during the Clinton years exceeded 5% YoY, while the highest GDP achieved under George W Bush was 4.41% YoY. Real GDP YoY never exceeded 3.5% YoY under Obama.

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

Bank EPS Misses On Deck: Rising Rates Lead To Biggest Bank Portfolios Losses Since The “Taper Tantrum”

Wondering how the blow out in interest rates is impacting commercial banks, which just happen to have hundreds of billions in duration exposure in the form of various Treasury and MBS securities, not to mention loans, structured products and of course, trillions in IR swap, derivatives and futures? Wonder no more: the Fed’s weekly H.8 statement, and specifically the “Net unrealized gains (losses) on available-for-sale securities” of commercial banks, gives a glimpse into the pounding that banks are currently experiencing. In short: it has been a bit of a bloodbath.
After hitting a recent high of $34 billion in gains three months ago when interest rates were still near 2016 lows, the reported amount of net unrealized gains has tumbled, and from a gain it has turned into a loss of $14 billion as of the week ended December 14. On a 4-week rolling basis, the change amounts to $37 billion in losses, the biggest monthly drop since the 2013 Taper Tantrum.

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

THE WEALTH GAP CONTINUES: BILLIONAIRES INCREASED THEIR WEALTH $237 BILLION IN 2016

Editor’s Note: While the dying middle class is busy trying to figure out how to pay for the rising costs of housing, utilities, food, and the health insurance Obamacare has priced them out of, the billionaires who own the majority of the planet’s wealth are getting even more filthy rich…
The world’s wealthiest can celebrate 2016 as a banner year.
That’s according to the Bloomberg Billionaires Index. Bloomberg writes Wednesday,
…the biggest fortunes on the planet whipsawed through $4.8 trillion of daily net worth gains and losses during the year, rising 5.7 percent to $4.4 trillion by the close of trading Dec. 27, according to the Bloomberg Billionaires Index.
That translates to $237 billion more for the uber-wealthy than they started the year with, according to the index’s rankings.

This post was published at The Daily Sheeple on DECEMBER 28, 2016.

George Soros Conjures Hitler In Attack On ‘Ascendant Populists’, Warns “Democracy Is Now In Crisis”

Well before Donald Trump was elected President of the United States, I sent a holiday greeting to my friends that read: ‘These times are not business as usual. Wishing you the best in a troubled world.’ Now I feel the need to share this message with the rest of the world. But before I do, I must tell you who I am and what I stand for.
I am an 86-year-old Hungarian Jew who became a US citizen after the end of World War II. I learned at an early age how important it is what kind of political regime prevails. The formative experience of my life was the occupation of Hungary by Hitler’s Germany in 1944. I probably would have perished had my father not understood the gravity of the situation. He arranged false identities for his family and for many other Jews; with his help, most survived.
In 1947, I escaped from Hungary, by then under Communist rule, to England. As a student at the London School of Economics, I came under the influence of the philosopher Karl Popper, and I developed my own philosophy, built on the twin pillars of fallibility and reflexivity. I distinguished between two kinds of political regimes: those in which people elected their leaders, who were then supposed to look after the interests of the electorate, and others where the rulers sought to manipulate their subjects to serve the rulers’ interests. Under Popper’s influence, I called the first kind of society open, the second, closed.

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

Investing for maxium profits during a new US presidency

By listening to President-elect Trump we can anticipate the effect his administration will have on the US economy.
Here is what we know: Mr. Trump plans to beef up the military, and improve US infrastructure, including a wall at the southern border.
While there are other priorities, such as improving on healthcare, just his two main goals will require many billions of dollars.
Being a successful businessman is his asset, and no doubt the new president will surprise us with funding that will be new and novel, such as enticing US companies with overseas assets to repatriate those funds and put them to work in the USA.
Nevertheless, we can be assured that whatever new sources of revenue the new administration comes up with, government spending will increase and so will the Federal Deficit.
The total US Federal Deficit will top 20 trillion before long. This will be accomodated with more printing press money. Congress and the Senate are likely to go along with spending plans. Already the ongoing monetary inflation is causing price inflation, and the expectation is that this price inflation will accelerate.
Our ‘investing for maximum profits’ therefore must include stocks and commodities that will grow during a period of price inflation.

This post was published at GoldSeek on 28 December 2016.

Three Mini-Bubbles Are Bursting

The world has gotten so used to ultra-low interest rates that even economists and money managers seem to be shocked by what happens when rates start creeping back towards normal levels.
Some of the mini-bubbles that formed in an essentially free-money environment are now starting to leak. Notably:
US Housing
While the action in this sector is nothing like the raging mania of the 2000s, prices in many hot US markets are at all-time highs, while affordability is at or near an all-time low. And now rising mortgage rates are beginning to bite.
Pending Home Sales Reflect ‘Dispirited’ Buyers.
(Mortgage News) – Pending sales, which were widely expected to make a good showing in November, pulled back sharply instead. The National Association of Realtors (NAR) said its Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts for existing home purchases, declined 2.5 percent to 107.3 in November from 110.0 in October. NAR said ‘the brisk upswing in mortgage rates and not enough inventory dispirited some would-be buyers.’ The decrease brought the PHSI to its lowest level since January of this year and it is now 0.4 percent below the index last November which stood at 107.7. Analysts polled by Econoday had been upbeat about the November outlook. The consensus was for an increase of 0.5 percent with some analysts predicting as much as a 2.0 percent gain.

This post was published at DollarCollapse on DECEMBER 28, 2016.

California Man Arrested, Charged With Driving Under The Influence Of Caffeine

38-year-old Joseph Schwab has been fighting a DUI for over a year, despite the fact that he was not under the influence of any illegal drugs at the time, he did, however, test positive for caffeine.
The Guardian reported that Schwab was pulled over last August by an officer who accused him of driving erratically.
Schwab was driving home from work when he was pulled over by an agent from the California Department of Alcoholic Beverage Control, who was driving an unmarked vehicle. The agent said Schwab had cut her off and was driving erratically. The officer claims that Schwab cut her off and she gave him a breathalyzer which showed a blood alcohol content of 0.00%.
Unfortunately, the officer was still not convinced. So, she arrested him and took him to jail so his blood could be drawn for other drugs. His blood tests came back negative for all illegal drugs. But he did test positive for caffeine. For some reason, this was enough to charge Schwab with a DUI.

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