Is 2017 The Year Silicon Valley Experiences The Dark Side Of “It’s Different This Time”?

With 2016 now in the rearview mirror. The one thing that was supposed to be included in that vision was the successful resurgence of IPO’s across ‘The Valley’. 2016 was supposed to be ‘the year’ of the comeback for unicorn cash-out dreams after what can only be described as a ‘not as advertised’ 2015. For if one needs remembering: 2015 was the worst year for tech IPO’s since 2009.
Here’s another problem nobody seems willing to discuss: 2015 may have been the high-water mark going forward when compared to 2016. Yet, not too worry we’re told! For has been reported via many a media source 2017 is shaping up be? Hint: The year it comes back.
Here is a chart from an article just this past August titled ‘Tech IPO Clog Poised To Burst’ To wit:

This post was published at Zero Hedge on Jan 1, 2017.

Kunstler’s Forecast 2017: The Wheels Finally Come Off

‘There is no other endeavor in which men and women of enormous intellectual power have shown total disregard for higher-order reasoning than monetary policy.
– David Collum
American Notes
Apart from all the ill-feeling about the election, one constant ‘out there’ since November 8 is the Ayn Randian rapture that infects the money scene. Wall Street and big business believe that the country has passed through a magic portal into a new age of heroic businessmen-warriors (Trump, Rex T, Mnuchin, Wilbur Ross, et. al.) who will go forth creating untold wealth from super-savvy deal-making that un-does all the self-defeating malarkey of the detested Deep State technocratic regulation regime of recent years. The main signs in the sky, they say, are the virile near-penetration of the Dow Jones 20,000-point maidenhead and the rocket ride of Ole King Dollar to supremacy of the global currency-space.
I hate to pound sleet on this manic parade, but, to put it gently, mob psychology is outrunning both experience and reality. Let’s offer a few hypotheses regarding this supposed coming Trumptopian nirvana.
The current narrative weaves an expectation that manufacturing industry will return to the USA complete with all the 1962-vintage societal benefits of great-paying blue collar jobs, plus an orgy of infrastructure-building. I think both ideas are flawed, even allowing for good intentions. For one thing, most of the factories are either standing in ruin or scraped off the landscape. So, it’s not like we’re going to reactivate some mothballed sleeping giant of productive capacity. New state-of-the-art factories would require an Everest of private capital investment that is simply impossible to manifest in a system that is already leveraged up to its eyeballs. Even if we tried to accomplish it via some kind of main force government central planning and financing – going full-Soviet – there is no conceivable way to raise (borrow) the ‘money’ without altogether destroying the value of our money (inflation), and the banking system with it.

This post was published at Wall Street Examiner on January 1, 2017.

How George Soros Destroyed The Democratic Party

Submitted by Daniel Greenfield via FrontPageMag.com,
It was the end of the big year with three zeroes. The first X-Men movie had broken box office records. You couldn’t set foot in a supermarket without listening to Brittney Spears caterwauling, ‘Oops, I Did It Again.’ And Republicans and Democrats had total control of both chambers of legislatures in the same amount of states. That was the way it was back in the distant days of the year 2000.
In 2016, Republicans control both legislative chambers in 32 states. That’s up from 16 in 2000. What happened to the big donkey? Among other things, the Democrats decided to sell their base and their soul to a very bad billionaire and they got a very bad deal for both.
It was 2004. The poncho was the hottest fashion trend, there were 5 million new cases of AIDS and a former Nazi collaborator had bought the Democrat Party using the spare change in his sofa cushions.

This post was published at Zero Hedge on Jan 1, 2017.

A Change Is in the Air

There was one moment, when I was finishing up the manuscript of Economism, that I thought someone had already said what I was trying to say in the book. This is what I read:
‘The beauty and the simplicity of such a theory are so great that it is easy to forget that it follows not from the actual facts, but from an incomplete hypothesis introduced for the sake of simplicity. … The conclusion that individuals acting independently for their own advantage will produce the greatest aggregate of wealth, depends on a variety of unreal assumptions …
‘Individualism and laissez-faire could not, in spite of their deep roots in the political and moral philosophies of the late eighteenth and early nineteenth centuries, have secured their lasting hold over the conduct of public affairs, if it had not been for their conformity with the needs and wishes of the business world of the day. …
‘These many elements have contributed to the current intellectual bias, the mental make-up, the orthodoxy of the day.’
That’s from the third section of ‘The End of Laissez-Faire,’ the published version of a lecture delivered by John Maynard Keynes in 1924 and 1926.
Keynes’s argument goes something like this:
Beginning in the late eighteenth century, economic theory extended the political philosophy of democratic individualism (epitomized by John Locke), providing a supposedly scientific basis for ‘the idea of a divine harmony between private advantage and the public good.’

This post was published at Wall Street Examiner on December 30, 2016.

Drug Cartels Get Involved As Mexicans Rage, Protest Surging Gas Prices

Even as Mexico has reasons to be concerned about the upcoming presidential inauguration of Donald Trump, who has vowed to make life, and especially trade relations, for Mexicans far more “complicated” under his administration, the population of Mexico has far more pressing problems at this moment, because just days after the finance ministry announced on December 27 that it would raise the price of gasoline by as much as 20.1% to 88 cents per liter while hiking diesel prices by 16.5% to 83 cents, the hikes went into effect on January 1, welcoming in the new year with a surge in the price of one of Mexico’s most important staples and leading to widespread anger, protests and in some cases violence.
As Telesur reports, the people of Mexico “are entering the New Year in a state of rage and anxiety” with protests planned for Sunday to strongly denounce the government’s huge hike in gasoline prices. The sharp rise in gasoline prices has been called the “gasolinazo” in Spanish, which roughly translates to “gasoline-punch.”
The price increase comes as part of a planned liberalization of Mexico’s energy market, which involves the move from subsidies that kept gas prices low to a market-based pricing scheme that will adjust prices at the pump based on supply and demand. And while Mexico’s unpopular president Enrique Pena Nieto had promised that fuel prices will fall thanks to his 2014 energy reforms, which dismantled the seven-decade-old national ownership of petroleum resources by state-owned firm Pemex, the initial move in prices has been higher, and decidedly so, by roughly 20% for gasoline and slightly less for diesel.

This post was published at Zero Hedge on Jan 1, 2017.

Gold: Getting There A Little At A Time

One of life’s hardest-to-learn but most necessary lessons is that things usually take a lot longer to work out than you’d like them to.
That’s where the sayings ‘Being too early is the same as being wrong’ and ‘The market can stay irrational longer than you can stay solvent’ come from.
A current case in point is gold. After the metal’s decade-long bull market, a correction was inevitable. But when it finally came, rather than being short and cathartic it was long and grinding, stretching from 2012 through 2015 and causing many who got back in prematurely to eventually walk away in disgust.
Then, after a nice pop in the first half of 2016, came the current long, slow-mo correction that’s fraying the nerves of remaining gold-bugs.
This latest correction may not be over, but – based on the Commitment of Traders Report (COT) – the bottom is getting closer. For previous posts on this subject, see here and here.
The COT gives a snapshot of what the big players in the ‘paper gold’ market are up to. On the following chart the gray bars represent long positions held by speculators such as hedge funds, and the red bars denote net short positions held by ‘commercial’ players like fabricators and big banks. The speculators are usually wrong at major turning points, so when they’re extremely long, gold usually falls and vice versa. The commercials tend to take the other side of speculators’ bets, and so are generally right at the big turns.

This post was published at DollarCollapse on JANUARY 1, 2017.

Turkey’s “Long Arm” In Europe

Submitted by Burak Begdil via The Gatestone Institute,
Turkey has finally won the title of having the world’s first spook-imams. Turkey is exporting its political wars and tensions to Europe. That is not a good sign for the Old Continent. Officially, Turkey’s General Directorate for Religious Affairs (Diyanet in Turkish) has a mission about offering institutional religious services independent of all political ideologies. In practice, Diyanet’s understanding of “offering institutional religious services” can be different from what the term should mean. Recently, the office of Istanbul’s mufti, an official of Diyanet, described the location of a mosque as “… it was [in the past] a filthy Jewish and Christian neighbourhood.” After press coverage, the depiction was removed from the web page.
Diyanet’s “institutional religious services” may sometimes even overlap with what in other countries people call intelligence. In a briefing for a parliamentary commission, Diyanet admitted that it gathered intelligence via imams from 38 countries on the activities of suspected followers of the US-based preacher Fetullah Glen, whom the Turkish government accused of being the mastermind of the attempted coup on July 15. As if it is the most normal thing in the world, Diyanet said its imams gathered intelligence and prepared reports from Abkhazia, Germany, Albania, Australia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Denmark, Estonia, Finland, Georgia, the Netherlands, the United Kingdom, Sweden, Switzerland, Italy, Japan, Montenegro, Kazakhstan, Kenya, Kyrgyzstan, Kosovo, Lithuania, Macedonia, Mongolia, Mauritania, Nigeria, Norway, Poland, Romania, Saudi Arabia, Tajikistan, Tanzania, Turkmenistan and Ukraine.

This post was published at Zero Hedge on Jan 1, 2017.

How Hedge Funds Closed Out 2016, And Why Hopes For A 2017 Rebound May Disappoint

2016 was a year most hedge funds would be happy to forget. And while the same goes for 2015, 2014, 2013, 2012, 2011, and 2010, in fact virtually every year since the financial crisis in which the vast majority of the two and twenty crowd have failed to generate alpha, in 2016 – a year many said would mark a renaissance for active managers – the “flash hedge fund return” according to a report by BofA’s Paul Ciana from Friday was a paltry 3.34%, which as BofA conveniently calculated meant they “underperforming the S&P500 index by 6.2%” at which point your average underperforming hedge fund manager complains that they shouldn’t be benchmarked against the S&P, even as the redemption notices flood in and the AUM gets ever smaller.
Not everyone did poorly: credit related strategies lead HF performance, including Distressed Credit, Convertible Arbitrage and Event Driven strategies. On the other end, predictably, dedicated Short Bias was down 5.10%.

This post was published at Zero Hedge on Jan 1, 2017.

Gold And Silver – The Golden Lye

Lye – [noun] a strongly alkaline solution, esp. of potassium hydroxide, used for washing or cleansing.
There has indeed been an ongoing cleansing in the precious metals market since the spike highs five years ago. Remember, there have been calls for a massive turnaround in prices for both gold and silver since 2013…2014…again, even more so in 2015. 2016 has just freshly passed, and both metals continue to flirt with their lows from a year ago. A few years ago, all the rage was for the man and woman on the street to be buying gold and silver coins, long lines, especially in China, forming for blocks to make purchases for the inevitable rally ‘sure’ to soon follow.
During that time, we mentioned that individuals, small traders, et al, rarely, if ever, get in at the bottom or get out at the top of market turns. Both gold and silver were much higher, a few years ago, but the moneychangers continue to prevail as the ‘cleansing process’ is still ongoing, tiring out the masses who had been certain that gold and silver would soar to $5,000 in gold, $200-$300 in silver.
Gold closed the year at 1158; silver at 15.98. The lies by the elites’ central banks continue: gold is useless. The favorite add-on line was that gold did not yield any interest. Having stripped their phony fiat paper money of all interest, in fact now charging negative rates, now paper fiat no longer yields any returns. Now, the drive is to eliminate, first, higher denominated fiat currencies, [it will happen in the US, count on it], and then followed by a total removal of all cash. The globalists are corralling everyone into their digitalized banking system where no one will have any financial freedom, none!

This post was published at Edge Trader Plus on January 1, 2017.

2017: The Year of Crisis

Living on borrowed time.
This colloquialism conveys a very clear message. It tells us that some dramatic change or event is not merely imminent but overdue. We are living on borrowed time. For newer readers; first some context.
Our markets, our economies, and our governments in the Western world are completely under the control of a financial crime syndicate known as ‘the One Bank’. It is organized crime taken to an entirely new echelon. The best definition of this crime syndicate comes via the computer model of a trio of Swiss academics, which first appeared in Forbes magazine.
Analyzing a massive data sample of more than 10,000,000 corporate and individual entities, the Swiss academics concluded that a single ‘super entity’ by itself controlled roughly 40% of the entire global economy. According to the computer model; the super entity (crime syndicate) is comprised of 147 corporate fronts, with approximately 75% of these fronts being financial entities – i.e. banks.
The names of many of these corporate fronts will be very familiar to readers, such as: Goldman Sachs, JPMorgan, Bank of America, Citigroup, Deutsche Bank, Barclays, Credit Suisse, and UBS. Goldman Sachs is particularly in the news at the moment, as the new Trump regime is infested with more Goldman Sachs Stooges than any other regime in U. S. history. The United States of America is now Goldman Sachs Inc.
Here it must be understood that this crime syndicate is not some new plague to the Western world, but rather a very old one. It was first brought to our attention in 1907, by two-term Congressman and career prosecutor, Charles Lindbergh Sr. In that year; Lindbergh presented to the U. S. Congress a document entitled The Bankers Manifesto of 1892. It reads in part:
… Capital must protect itself in every possible manner through combination (conspiracy) and legislation. The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible.

This post was published at BullionBullsCanada on 01 January 2017.

Money, Markets, & Mayhem – What To Expect In The Year Ahead

If you thought 2016 was full of market maelstroms and geopolitical gotchas, 2017’s ‘known unknowns’ suggest a year of more mayhem awaits…
Here’s a selection of key events in the year ahead (and links to Bloomberg’s quick-takes on each).
January Donald Trump will be sworn in as U. S. president on Jan. 20.
QuickTakes: Immigration Reform, Free Trade and Its Foes, Supreme Court, Oil Sands, Confronting Coal, Climate Change, Budget Deficit
The World Economic Forum in Davos, Switzerland, Jan. 17-20.
QuickTake: Sustainable Investing
Davos, Switzerland.
Finland begins a test of a universal basic income by offering 2,000 unemployed adults 560 euros a month.
QuickTake: Universal Basic Income

This post was published at Zero Hedge on Jan 1, 2017.

The Morgan Report’s Weekly Perspective: January 2017 Morgan Report Newsletter

The following video was published by The Morgan Report on Jan 1, 2017
Your Editor, David Morgan fires off an opening salvo, in order to “blast away” what might obscure our subscribers’ ability to understand the big picture and how it will influence successful investing going forward. He takes a deep dive into the 10-year forecast of the Congressional Budget Office (CBO), weaving into it the course the Trump presidency may take. David’s perspective on its assumptions quickly demonstrates why he has chosen this approach, saying “This effort is to put our emphasis on investing in the resource sector into a perspective that should help you to maintain a reasonable amount of conviction as to why owning precious metals and resource stocks is an absolute, going forward.” Plan on finding his analysis, conclusions and the benefits for you to be absolutely compelling!

Oil Market Update

We have some contradictory indications for oil now because its long-term charts look bullish, while it latest COTs and Hedgers charts suggest an imminent reversal to the downside, as do shorter-term charts. Anyone who thinks that this might be an excuse for fence sitting should be aware that we called the exact bottom in oil in November, as the following chart from the last Oil Market update makes plain…

This post was published at Clive Maund on January 01, 2017.

The Almighty Dollar and the Currencies that Crushed it in 2016

A mix of deceptive calm, hair-raising craziness, and big surprises.
Much of the strength of the dollar in 2016 has been ascribed to rising interest rates in the US and minuscule tightening by the Fed – or rather ‘removing accommodation,’ as it likes to say – even as other central banks still engage in QE and negative interest rate absurdities. So the US became a destination for the hot money. By December 20, the dollar reached the highest point since December 2002 against the basket of currencies in the Dollar Index, though it has since eased off somewhat since then.
But the Dollar Index contains only six currencies: euro, yen, pound sterling, Canadian dollar, Swedish krona, and Swiss franc. It doesn’t even include the currencies of two of the four largest US trading partners, Mexico and China.
So how has a broader range of currencies fared against the dollar? Turns out, some soared, others plunged.

This post was published at Wolf Street by Wolf Richter ‘ Jan 1, 2017.

‘Gold has peaked for the year’, revisited

I published a blog post in late-June titled ‘Gold has peaked for the year’. In this post I argued that relative to other commodities (as represented by the Goldman Sachs Spot Commodity Index – GNX) gold’s peak for 2016 most likely happened in February. As evidenced by the following chart, I was correct.
***
The reason for this follow-up post is not to give myself a public ‘pat on the back’. I’ve made my share of mistakes in the past and I will make mistakes in the future. The sole reason for this post is the vitriolic response that my earlier article received.
My earlier article should not have been controversial. After all, the February-2016 peak for the gold/GNX ratio wasn’t just any old high, it was an all-time high. In other words, at that time gold was more expensive than it had ever been relative to commodities in general. Furthermore, it is typical for gold to turn upward ahead of the commodity indices and to subsequently relinquish its leadership.

This post was published at GoldSeek on Monday, 2 January 2017.

What Could Go Wrong?

‘Experience is simply the name we give our mistakes.’
– Oscar Wilde
‘Mistakes are the usual bridge between inexperience and wisdom.’
– Phyllis Theroux
‘Economists are often asked to predict what the economy is going to do. But economic predictions require predicting what politicians are going to do – and nothing is more unpredictable.’
– Thomas Sowell
***
We’ve reached that wonderful time of year when financial pundits pull out their forecaster hats and take a crack at the future. This time the exercise is particularly interesting because we’re at several turning points. Any one of them could remake the entire year overnight. I should probably say up front that I am actually somewhat optimistic about 2017 – optimistic, meaning I think we Muddle Through – but that’s a lot better outcome than I was expecting five months ago. And since my annual forecast has been ‘Muddle Through’ for about six years now (which has been turned out to be the correct forecast), then, given all the speed bumps in front of us, this could be the year where I’m spectacularly wrong. Midcourse corrections may be warranted.

This post was published at Mauldin Economics on DECEMBER 31, 2016.

Trump Hints At “Russian Hacking” Revelations In Coming Days: “I Know Things Other People Don’t”

During a brief, informal exchange with reporters on New Year’s Eve at his Mar-a-Lago estate in Palm Beach, Donald Trump questioned the official version of the “Russians hacking the election”, saying it was possible “somebody else” compromised the Democratic campaign’s servers, adding that he will reveal some previously undisclosed facts in the coming days by hinting that “I also know things that other people don’t know, we they cannot be sure of the situation.”
***
Asked what that information included, the Republican President-elect said, “You will find out on Tuesday or Wednesday.” He did not elaborate.
Trump also reiterated his belief that others might be responsible for the cyberattacks: ‘I know a lot about hacking. And hacking is a very hard thing to prove. So it could be somebody else. And I also know things that other people don’t know, and so they cannot be sure of the situation.’

This post was published at Zero Hedge on Jan 1, 2017.

Euronomics Decomposing, Raise a Glass of Cheer!

Europeans must have been delighted to discover that one thing is working as well as it has since the start of the Great Recession. Behemoth banks that are failing are still able to pay their Christmas bonuses to their top executives and give nice dividends to their shareholders thanks to Super Mario Draghi.
Keeping up the tradition of central bankers looking out for other bankers, Mario Draghi, chief of the European Central Bank ‘agreed to lower the minimum capital requirements for Deutsche Bank on Tuesday, ‘giving the lender more leeway to structure bonus payments and dividends.’’ (Zero Hedge).
Thank God for that, huh? The needs of the stockholders and top execs have been taken care of before one of the world’s oldest megabanks falls on everyone else. While Deutsche Bank’s stocks sit at all-time lows after it has been required to pay $8 billion in fines, at least the golden parachutes have been neatly folded.

This post was published at GoldSeek on Monday, 2 January 2017.

“Something For Nothing” All-Weather Funds Disappoint In Post-Election Era

Variously marketed as “all-weather”, “all-season”, or “bulletproof”, the so-called “risk-parity” strategies of some of the world’s largest hedge funds have been anything but ‘stable’ since the election as the combination of leverage and bond losses have crushed the gains from an exuberant equity market.
Promise people something for nothing and you are going to attract a lot of attention. Stumble in the process and the critics will be quick to pounce.
As The Wall Street Journal reports, the weeks since the election have been rough for one of the most polarizing investment strategies out there: risk parity.
The strategy – which simply put, involves using diversification – and sometimes borrowed money (leverage) – to find an (historically-optimized) balance between risk and return.
Bridgewater’s variant of this strategy, for example, has historically used borrowed money to invest about $1.50 for each dollar in assets, often putting the leverage in historically less-volatile bonds. The goal is stocklike returns with less volatility.

This post was published at Zero Hedge on Dec 31, 2016.