Data Fraud At Chinese Province Suggests Local GDP Numbers As Much As 20% “Overcooked”

One month ago, in delightful, if anticipated, confirmation that much if not all of China’s data has been cooked and fabricated as so many skeptics suspected, we reported that according to the People’s Daily, the rust-belt province of Liaoning had admitted to fabricating fiscal numbers from 2011 to 2014. The fabricated economic data was meant to show a state of economic strength with fiscal revenues inflated by at least 20%, and some other economic data were also false, the paper said, without specifying categories. In short, the fabrication opened a hornet’s nest: if one Chinese was doing it, then why not all, and by how much was the real data off?
But why manipulate the numbers to paint a rosier picture? For obvious reasons: the data were made up “because officials wanted to advance their careers.” The fraud misled the central government’s judgment of Liaoning’s economic status, he said, citing a report from the National Audit Office in 2016.
Yet while it was this confirmation of data fraud was gratifying, what was absent was the scale of the fraud, as having the real and fake numbers would provide a useful rule of thumb into just how cooked all of China’s books are, not just those in Liaoning. Conveniently, today we got the answer courtesy of the FT, which reported that the economic output of the province in question shrank by 23% in nominal terms last year, according to official statistics, showing the extent to which officials had previously exaggerated performance in China’s struggling rust-belt.
The sudden drop in provincial gross domestic product is only partly due to a fall in the real economy: in inflation adjusted terms, GDP fell by 2.5 per cent according to the national statistics bureau. The rest was undoing the book cooking: “The main reason for the decline, analysts say, was officials’ attempts to undo the effects of previous over-reporting.”

This post was published at Zero Hedge on Feb 24, 2017.

CNN Responds To Being Blocked From White House Press Briefing

Predictably, those members of the media who were locked out of a Q&A session with White House spokesman Sean Spicer, have reacted furiously, led by CNN who on Friday sharply condemned the White House’s decision to block it and several other outlets.
“This is an unacceptable development by the Trump White House. Apparently this is how they retaliate when you report facts they don’t like. We’ll keep reporting regardless,” CNN said in a statement.

This post was published at Zero Hedge on Feb 24, 2017.

White House Denies Axios’ Report Which Denied Reuters Report About Trump’s Border Tax

Around noon today, retail stocks jumped after Axios reported that Trump’s econ advisor Gary Cohn was opposing a House version of the Border Adjustment Tax, giving hope to retailers who were battered following yesterday’s Reuters interview in which Trump said that he supports “some form” of border tax.
The result, as we observed earlier, was a mirror image of yesterday’s retail selloff, “as now the market no longer has to fear Trump’s tweets, but his staggering position reversals, now coming inside the span of a day.”

In retrospect the market had nothing to fear, because shortly after its origianl report on BAT, Axios followed up with a second report, according to which the White House denies the original report on Cohn’s BAT statement, and says that Trump’s position is unchanged from what he said yesterday.
“There is no daylight between Gary Cohn and the President. His comment was taken out of context as it was part of a broader conversation about the proposals that are connected to border adjustability. At no point during this conversation did Gary make a statement of support or opposition to the House border adjustability plan.”

This post was published at Zero Hedge on Feb 24, 2017.

Chinese Import Data Suggests OPEC Is Lying About A Production Cut

To those cynics who accuse the self-monitoring OPEC, and its various adjunct agencies, of lying that it has implemented last year’s agreed upon production cuts, China just released January crude import data, which validates this skepticism.
As JPMorgan writes, while IEA estimated the OPEC crude oil production fell by 1mbd to 32.06mbd in January, suggesting an initial compliance of 90% with the output agreement reached end 2016, the latest oil supply details released by China customs today suggest a reduction of supplies was not yet seen by China, the world’s largest oil importer.
In fact, quite the contrary: crude oil shipments from the 11 OPEC nations committed to a 1.2mbd output cut increased by 28% yoy, and more importantly, rose 4% from December 2016 – in a time when production was supposed to be declining – to 4.6mbd in January, accounting for 57% of China’s total oil imports.
Ironically, if anyone was cutting it was the non-OPEC nations, mostly Russia, who foolishly assumed that Saudi Arabia et al would be true to their word: non-OPEC countries led by Russia that also agreed to a cut boosted their January supplies to China by 40% yoy, but saw a 10% drop sequentially, in line contractual expectations. Comparing January 2017 levels with the 2016 average, China’s crude oil imports from the committed OPEC and non-OPEC producers gained 6%/13% respectively, while the country’s total oil imports gained 5%.

This post was published at Zero Hedge on Feb 24, 2017.

French Prosecutor To Open Official Probe Into Francois Fillon’s Embezzlement Allegations

As recently as one week ago, French conservative politician Francois Fillon, who until recently was the favorite to win the upcoming presidential election until centrist Emmanuel Macron stormed ahead of him in popularity, said he would end his presidential campaign if an official probe was launched against him over a long-running graft scandal. Then, one week ago, he backtracked on the promise to quit the race if he is placed under formal investigation over his wife’s employment.
Last Friday Fillon said he would stay in the presidential race come what may, despite an ongoing investigation into whether his wife, Penelop Fillon, did real work in exchange for receiving 830,000 of taxpayer money as his parliamentary assistant. ‘My decision is clear: I am a candidate and I will continue until victory,’ he said in an interview with French newspaper Le Figaro
‘The closer we get to the date of the election, the more scandalous it would be to deny the Right and the Centre of a candidate,’ Mr Fillon added.
Or, alternatively, the more scandalous if a formal probe is opened just weeks before the election. Which, incidentally, is precisely what happened on Friday evening when according to the Le Parisien newspaper, France’s financial prosecutor has asked an investigative magistrate to open a probe into allegations that presidential candidate Francois Fillon’s wife was paid large sums of money for work she may not have done.
According to Reuters, the report from Le Parisien followed an earlier media report on the website of French TV station M6 that the prosecutor was likely to publish a statement on the matter later on Friday.

This post was published at Zero Hedge on Feb 24, 2017.

Is This Overlooked Statistic Signaling Investor Complacency?

Via Dana Lyons’ Tumblr,
The number of unchanged issues on the NYSE has spiked, often a sign of complacency among investors.
While the price structure and breadth in the stock market remain solid and supportive of higher prices, one area of concern that we have been noting is investor sentiment. Specifically, it is too complacent for our liking. Investors and traders seem to be outright dismissing the notion of risk in the stock market. And while extreme bullishness can persist for awhile, it usually ends up being mis-guided, eventually. One potential piece of evidence of complacency comes from a surprising, and typically overlooked, statistic: unchanged issues.
As opposed to advancing or declining issues, unchanged issues are those that close a particular day at the same price at which they closed the day before. Historically, we have found that, for whatever reason, elevated numbers of unchanged issues often occur near market tops of varying significance. This indifference towards large numbers of shares may be a signal of investor complacency during low-volatility, up-trending markets, i.e., out of sight out of mind. Conversely, low levels of unchanged issues are often emblematic of market bottoms as perhaps elevated levels of fear and awareness create a greater impetus to trade stocks.
Presently, it is the former case, i.e., elevated numbers of unchanged issues, that is relevant. In fact, as our Chart Of The Day reveals, yesterday saw the highest percentage of unchanged issues on the NYSE since 2003, and one of the highest readings since the move to decimalization.

This post was published at Zero Hedge on Feb 24, 2017.

FEB 24/WORK IN PROGRESS/FINAL DRAFT WILL BE READY BY 6:15 EST TONIGHT/

Gold at (1:30 am est) $1247.00 UP $15.00
silver was : $18.14: UP 20 CENTS
Access market prices:
Gold: $1249.50
Silver: $18.18
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.

This post was published at Harvey Organ Blog on February 24, 2017.

David Morgan Exclusive: Watch What Happens When Silver Hits $26…

Mike Gleason: It is my privilege now to welcome in our good friend David Morgan of The Morgan Report. David, thanks so much for joining us. It’s great to have you on, as always. How are you doing so far here in 2017?
David Morgan: I’m doing pretty good, Mike. It’s great to be on your show. Thank you very much.
Mike Gleason: Well, as we begin here, David, we’re off to another solid start to the year in the precious metals markets. Things look quite similar today to where they did a year ago. We also saw some early momentum in 2016.
So, what have been the key drivers, in your view, thus far in the metals markets, particularly the white metals, silver, platinum, palladium, which have all outperformed gold to this point. What’s behind the advance?
David Morgan: A couple of things. It’s a lot like last year, I think.
First of all, there’s always some contingent of people that are looking for a safe haven or a hedge, and of course that ebbs and flows with market conditions and perception. However, long term investors realize that the financial situation on a global basis, the debt structure, is unsolvable. So, I think there’s that and there’s always people that are adding to that. There’s people that invest too much or expect the market … the gold market or the silver market to move at a certain place, and it doesn’t. So again, it ebbs and flows.

This post was published at SilverSeek on February 24, 2017 –.

Retail Stocks Surge On Report Trump Opposes House Version Of Border Tax

Shortly before the close yesterday, retailers tanked when in a Reuters interview, Trump said that he supports “some form” of border tax without elaborating, sending the S&P Retail Sector tumbling.

“I certainly support a form of tax on the border,” he told Reuters on Thursday. “What is going to happen is companies are going to come back here, they’re going to build their factories and they’re going to create a lot of jobs and there’s no tax.” Trump also said his administration will tackle tax reform legislation after dealing with Obamacare, the health insurance system put in place by Obama.
Not even 24 hours later, the White House appears to have flip-flopped again because earlier today, according to Axios, Goldman’s ex-president Gary Cohn, and chief economic advisor to President Trump, told a group of CEOs that the White House does not support the House GOP version of a border adjustment tax, according to an attendee.
The comment was made while Cohn was being interviewed by The Carlyle Group CEO David Rubenstein, at a private event hosted by The Business Counsel in Washington, D. C.

This post was published at Zero Hedge on Feb 24, 2017.

Northern Dynasty Could Go To Zero

Many of my subscribers asked my view on Northern Dynasty (NAK), developer of the Pebble copper-gold-moly-silver deposit in the Bristol Bay are of southwest Alaska. I figured newsletters were pumping it. I owned NAK for brief period in 2004 before I decided I didn’t like the way it ‘smelled.’ Thirteen years later it smells just as bad.
I found out the Stansberry/Casey marketing juggernaut team was pimping NAK, as well as Martin Katusa and Rick Rule. Upon a closer look, I could not find one redeeming reason to own NAK. If I had looked at it when it was trading at $3.40 at the end of January, I would have put it in my Short Seller’s Journal (NAK is now at $1.61 and likely headed toward zero). I also knew Kerisdale Capital recently slammed NAK, but after the firm’s highly misleading and incorrect hatchet-job on First Majestic, I don’t trust Kerisdale.

This post was published at Investment Research Dynamics on February 24, 2017.

Warning Sign: The Last Time This Happened In Stock Markets An Epic Crash Followed

The Dow Jones continues to hit record highs and yesterday it reached a milestone not seen since January of 1987.
Back then, the band Starship was at the top of the charts with their hit song Nothing’s Gonna Stop Us Now, which appears to also be the rallying cry of Wall Street, Main Street and 1600 Pennsylvania Avenue today.
Of course, for those who are familiar with their history, that year didn’t end up so well for investors. On ‘Black Monday’, October 19th, 1987, the U. S. stock market suffered the largest crash in history with the Dow Jones losing 22.6% in value, amounting to roughly $500 billion in losses by the end of the trading day.
And if the exuberance of 1987 is any guide, we may be looking at a similar set of events over the course of 2017:
The Dow finished with a more than 30 point gain Thursday and hit its tenth record closing high in a row.
But what makes this rally truly historic is the fact that the market is also continuing to hit new highs during this epic run. That hasn’t happened since Ronald Reagan’s second term.

This post was published at shtfplan on February 24th, 2017.

Is The Trump Trade Over? Here Is The “Barometer” BofA Uses To Decide

Bank of America’s chief investment strategist remains bullish.
In his latest Flow Show note, Michael Hartnett, who several weeks ago penned the term “Icarus Trade” to describe what is happening to the market, writes that “we remain long risk in H1 targeting SPX 2500, oil $70/b, GT30 3.5%, DXY 110 (in that order sequentially); note Bull & Bear Indicator up to 7.0 (Chart 1), needs stronger EM/HY inflows & lower cash levels to trigger contrarian ‘sell’ signal (>8.0)”
To validate his point he notes that global stocks (MSCI ACWI) hit all-time highs today and provides two arguments for what happens nest:

This post was published at Zero Hedge on Feb 24, 2017.

Pettis: Capital Flooding Into US as Global Trade Environment Deteriorates

Stock markets continue to roar higher on better global economic data and expectations for pro-growth policies from the US. Beneath the surface, however, it appears that capital is herding in a manner similar to prior market booms that didn’t end too well.
This time on FS Insider, we spoke with Michael Pettis, a finance professor at Peking University and senior associate for the Carnegie Endowment for International Peace, about his views on capital flows, trade imbalances, and what they mean for the world economy in the future.
Imbalances Worsening
Trade imbalances, particularly in Europe, have worsened since Pettis wrote his book, The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy, a few years back.
The reason for the current imbalance is because Germany has been running huge surpluses, and because of the rules of the Euro, countries such as Spain, Italy, France, and Portugal, have been prevented from adjusting. As a result, these high-inflation countries with converging interest rates ended up with negative real interest rates.

This post was published at FinancialSense on 02/22/2017.

Trump’s Stock Market Report Card Says ‘Buy Gold’

The Dow Jones Industrial Average marched to its 10th straight record close yesterday.
That’s the longest streak of record closes since 1987, MarketWatch notes. And if we aren’t counting all-time highs, the last time we saw 10 straight sessions finish in the green was early 2013.
It’s safe to say investors are feeling giddy as the stock market blasts into uncharted territory. Heck, even the president is retweeting bullish market stories these days:

‘In case there was any doubt, the Trump administration sees the stock market as a good barometer of how the economy is doing,’ Yahoo Finance notes.

This post was published at Wall Street Examiner on February 24, 2017.

Day 35: Higher Interest Rates Threaten the Future of Trump’s Economy

This week, we saw predictions Trumponomics will indeed bring a spike of growth, but it will be a spike quickly destroyed by crippling interest rates. Could this be what’s causing the US Federal Chair Janet Yellen to suggest raising rates too fast would be ‘unwise’? As seats start opening up at the FOMC, Trump is in position to add key new members and start swaying the vote in his administration’s favor.
Threat Level ‘Yuuuge’ – Spiking Interest Rates Could Spoil Trump’s Plans
Trumponomics’ double-edged sword: stocks are rising, but so are interest rates. Investors are betting on a Trump-fueled inflation surge on top of massive tax cuts. Trump sees US companies investing in efficient productivity to increase supply. Trump’s economic vision seems at odds with both investors and the Fed in regards to efficient production, according to Fortune. The Fed is predicting price surges in the market, whereas Trump sees production surplus exploding with rising demand. This ‘supply side revolution’ Trump promises has the Fed shaking its collective head in disagreement.

This post was published at Schiffgold on FEBRUARY 24, 2017.

Le Pen soars in French Polls to Top

Marine Le Pen has refused to wear a headscarf at a meeting with a Grand Mufti in Lebanon. The incident is likely to be well received by their electorate in France. Ms Le Pen in the first round of voting in France’s Presidential elections in April, is expected to top the polls. When she was offered a scarf to wear to a scheduled meeting with the Sunni religious leader, the Grand Mufti Sheikh Abdul Latif Derian, she declined. ‘You can pass on my respects to the grand mufti, but I will not cover myself up,’ she said. Le Pen has adopted the same approach as Donald Trump making her slogan – France First.

This post was published at Armstrong Economics on Feb 24, 2017.

White House Bars CNN, NYT, Others From Media Briefing

Just a few hours after Trump warned during his CPAC speech that “we’re gonna do something about the media”, he did just that after the White House barred a number of news outlets from covering Sean Spicer’s Q&A session on Friday afternoon. Spicer decided to hold an off-camera ‘gaggle’ with reporters inside his West Wing office instead of the traditional on-camera briefing in the James S. Brady Press Briefing Room according to press reports.
Among the outlets not permitted to cover the gaggle were various news organizations that Trump has singled out in the past including CNN, The NYT, The Hill, Politico, BuzzFeed, the Daily Mail, BBC, the Los Angeles Times and the New York Daily News.
Several non mainstream outlets were allowed into Spicer’s office, including Breitbart, the Washington Times and One America News Network. Several other major news organizations were also let in to cover the gaggle. That group included ABC, CBS, NBC, Fox, Reuters and Bloomberg, however AP and Time have boycotted the event.
The White House Correspondents’ Association sharply criticized the decision.
‘The WHCA board is protesting strongly against how today’s gaggle is being handled by the White House,’ Jeff Mason, the association’s president, said in a statement. ‘We encourage the organizations that were allowed in to share the material with others in the press corps who were not,’ he added. ‘The board will be discussing this further with White House staff.’

This post was published at Zero Hedge on Feb 24, 2017.

The US stock market is highly overvalued. Here’s why…

This is really starting to get out of control.
No doubt you’re familiar with the S&P 500, the stock index that measures the performance of the largest US companies.
And as we’ve discussed before, one of the most important benchmarks in measuring whether stocks are overvalued or undervalued is the Price/Earnings, or P/E ratio.
Looking back through more than a century of financial data, the long-term average P/E ratio for the S&P 500 has been about 15.
As of yesterday afternoon, the P/E ratio for the S&P 500 stock index reached 26.5.
That’s high – more than 75% higher than the long-term average.
More importantly, since the 1870s, there have been a total of THREE periods in which the average stock P/E ratio was above 26.5.
The first time was around the Panic of 1893.
The second was around the 2000 dot-com crash.
And the third was around the 2008 financial collapse.
See the pattern? Whenever financial markets get overheated, bad things tend to happen.

This post was published at Sovereign Man on February 23, 2017.