The Dow Has Never Had A Longer Streak Of Record Closes… Ever

Core Durables Goods and Shipments MISS, Pending Home Sales MISS, Dallas Fed ‘Survey’ BEAT…
“Never gonna let you down”… 12th Record Dow Close In A Row.
One streak was broken today – after 6 straight days of Dow and Long Bond price rises, bonds dropped as stocks rose today…
But another streak reached a record high… The Dow has never had a longer streak of record closes than this in its 100-plus year history..

This post was published at Zero Hedge on Feb 27, 2017.

Oops, this Isn’t Supposed to Happen in a Rosy Credit Scenario

For the first time in the US since the Financial Crisis.
Let’s forget for a moment the Fed, its rate-increase flip-flopping, and what that might do in theory to the economy, and let’s look instead at what companies are actually doing, how they’re responding to the environment they find themselves in. Because now, something is happening that we haven’t seen since the trough of the Financial Crisis.
Credit growth no matter what has been the mantra. It could never be enough. If companies borrow more from banks, they’ll use that money to invest in productive activities or equipment and grow. That’s the theory. And it would move the economy forward.
So total loans and leases at all commercial banks have soared 40% since the bottom of the Financial Crisis to $9.13 trillion in the week ending February 15, according to the Board of Governors of the Federal Reserve, and are 25% above the peak of the prior credit bubble in October 2008.
But since the week ending December 7, 2016, they have declined a smidgen. So why is that all-important loan growth flattening out after soaring for so many years? And how do companies fit into this?

This post was published at Wolf Street by Wolf Richter/ Feb 27, 2017.

March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way Overdue

For more than 100 years global debt levels have been rising, and now we are potentially facing the greatest debt crisis in all of human history. Never before have we seen such a level of debt saturation all over the planet, and pretty much everyone understands that this is going to end very, very badly at some point. The only real question is when it will happen. Many believe that the current global debt super cycle began when the Federal Reserve was established in 1913. Central banks are designed to create debt, and since 1913 the U. S. national debt has gotten more than 6800 times larger. But of course it is not just the United States that is in this sort of predicament. At this point more than 99 percent of the population of the entire planet lives in a nation that has a debt-creating central bank, and as a result the whole world is drowning in debt.
When people tell me that things are going to ‘get better’ in 2017 and beyond, I find it difficult not to roll my eyes. The truth is that the only way we can even continue to maintain our current ridiculously high debt-fueled standard of living is to grow debt at a much faster pace than the economy is growing. We may be able to do that for a brief period of time, but giant financial bubbles like this always end and we will not be any exception.
Barack Obama and his team understood what was happening, and they were able to keep us out of a horrifying economic depression by stealing more than nine trillion dollars from future generations of Americans and pumping that money into the U. S. economy. As a result, the federal government is now 20 trillion dollars in debt, and that means that the eventual crash is going to be far, far worse than it would have been if we would have lived within our means all this time.

This post was published at The Economic Collapse Blog on February 27th, 2017.

Guess ‘Who’ Just Figured Out The Fed Is Behind The Curve

I must admit, I had been expecting the Fed to be a little more hawkish over the past couple of months. Given how tone deaf they seemed during previous tightening periods when the US dollar was screaming higher and oil plunging to levels that would have resulted in entire states going bankrupt, today’s climate of rocketing risk assets and rising inflation seemed like a no brainer to err on the hawkish side. And I am not alone in this analysis. Recently Peter Broockvar, the Chief Market Analyst for the Lindsey Group published a great list titled ‘Why March Must be on the Table.’ Broockvar went through a variety of economic metrics to demonstrate how economic conditions have heated up over the past couple of months. (the note was from last week, so some of the data is a touch stale)
On inflation:
5 yr inflation breakeven: 12/14 was 1.83% vs 1.97% today 10 yr inflation breakeven: 12/14 was 1.97% vs 2.02% today Headline CPI: November CPI (the one they saw at December meeting) 1.7% vs 2.4% expected tomorrow for January Core CPI: November CPI 2.1% vs 2.1% expected tomorrow January Headline PCE: November 1.4% vs 1.6% for December Core PCE: November 1.7% vs 1.7% for December NY Fed survey of inflation expectations: November 2.5% vs 3% in January UoM one yr inflation expectations: November 2.4% vs 2.8% in February CRB index: 12/14 192 vs 192 today Journal of Commerce index: 12/14 104.5 vs 108.7 today On Jobs:
December/January monthly private sector job gains averaged 201k vs the previous 12 months average 176k Jobless claims 4 week average: mid December 264k vs 244k last week Average hourly earnings: November 2.7% y/o/y vs 2.5% in January Atlanta Fed wage tracker: November 3.8% vs 3.5% in December U6 unemployment rate: November 9.3% vs 9.4% in January NFIB Net compensation: November 21% vs 30% in January NFIB Net compensation future plans: November 15% vs 18% in January

This post was published at Zero Hedge on Feb 27, 2017.

Dr. Doom’s Back: Marc Faber Warns Markets Will Fall “Like An Avalanche… Trump Can’t Stop It”

“One man alone cannot make ‘America great again’. That you have to realize,” warns Marc Faber, the editor of “The Gloom, Boom, & Doom Report,” reminding the world that the US stock market is vulnerable to a seismic sell-off that won’t be caused by any single catalyst. His argument: Stocks are very overbought and sentiment is way too bullish for the so-called Trump rally to continue.
“Very simply, the market starts to go down. As it goes down, it will start triggering selling, and then it will be like an avalanche,” said Faber recently on CNBC’s Futures Now. “I would underweight U. S. stocks.”
Faber, a supporter of President Donald Trump, isn’t blaming the new administration for his bearish forecast:

This post was published at Zero Hedge on Feb 27, 2017.

Strange That The Same Point In Time For The Economic Crisis Keeps Coming Up – Episode 1215a

The following video was published by X22Report on Feb 27, 2017
Netherlands is making a move to leave the EU. Theresa May is worried that a Scottish Referendum vote will happen at the same time as the Article 50 vote. Former IMF chief sentenced to jail in Spain. The EU says no bail-ins at this time because it would hurt the creditors. Maine drops 9,000 from Food Stamp roll says people need to look for jobs. Pending home sales tumble. Durable goods decline. David Stockman says it will begin on March 15 and the economy will really go down hill in the summer and the fall will be a disaster.

Obama Has Tied Trump’s Hands

America is going broke. That’s not an opinion or scare tactic – it’s a fact based on simple arithmetic. President Trump could be forced to face this fact as early as March 15, the date the latest U. S. debt ceiling suspension ends.
Government debt is growing faster than the economy. If you extend that trend, and that’s exactly what official government projections do, you reach a point where higher taxes cannot cover interest expense, investors lose confidence in the bond market, and a death spiral of higher deficits, higher interest rates, and still higher deficits spins totally out of control.
This does not mean the end of America, let alone the end of the world. There are several ways out of the debt death spiral. It’s just that none of the ways out are easy, and all of them will cause massive losses to unprepared investors.
The ways to escape the debt dilemma are default, inflation, asset sales (‘What do you bid for Yellowstone National Park?’), an IMF bailout, or some combination of these.
Default imposes immediate losses on government bondholders, and mark-to-market losses on other bondholders as interest rates spike to account for increased risks. Even the possibility of default can push world markets into a tailspin or result in a credit downgrade for the United States, which happened in 2011 during that debt ceiling crisis.

This post was published at Wall Street Examiner on February 27, 2017.

David Tepper Asks “Why Are Stocks And Bonds Acting So Differently”

With bond and stock markets having recently bifurcated, signalling two distinctly different outlooks on the future of the reflation trade, the confusion among the “smartest money” persists.
Close up this looks even more divergent.
Friday was the 6th day in a row that The Dow and the Long Bond have
risen in price together… equal record longest streak (1989 and 1994)
As we noted last night, in his latest statement to Reuters, DoubleLine’s Jeffrey Gundlach sided with bonds, pointing out that “stocks are out of sync with the stealth flight to safety. Lots of hope built in” and adding that “the 10-year Treasury will go below 2.25 percent … not below 2 percent.”

This post was published at Zero Hedge on Feb 27, 2017.

Swap Spreads Surge To 5-Year Highs As Debt Ceiling Despair Strikes

It appears David Stockman’s warnings over the looming debt ceiling debacle has sparked some investors to face up to reality once again. The Treasury-Bill yield curve has inverted further and swap spreads soared to five-year highs.
The difference between 2-year swap rates and Treasury yields has widened back to 37.5 basis points which is the highest since March 2012. Societe Generale analysts led by Subadra Rajappa expect net bill issuance to drop by about $150 billion as Treasury shrinks its cash balance to $23 billion by the March 15 deadline.

This post was published at Zero Hedge by Tyler Durden Feb 27, 2017.

FEB 27/RAID ON GOLD AND SILVER IN THE ACCESS MARKET/GOLD AND SILVER EQUITY SHARES CLOBBERED/STRANGELY GLD AND SLV INVENTORIES REMAIN CONSTANT/SILVER OI REMAINS QUITE HIGH WITH ONE DAY TO GO ( 17,…

Gold at (1:30 am est) $1257.40 down $.20
silver was : $18.35: UP 1 CENT
Access market prices:
Gold: $1253.00
Silver: $18,29
For comex gold:
FEBRUARY/
NOTICES FILINGS FOR FEBRUARY CONTRACT MONTH: 65 NOTICE(S) FOR 6500 OZ. TOTAL NOTICES SO FAR: 6023 FOR 602300 OZ (18.7340 TONNES)
For silver:
For silver: FEBRUARY
13 NOTICES FILED FOR 65,000 OZ/
TOTAL NO OF NOTICES FILED: 614 FOR 3,070,000 OZ
This is options expiry week for both the silver and gold contracts. First day notice is this Tuesday, Feb 28.2017. Options expired on the comex yesterday and on the OTC market in London they will expire early Tuesday morning. For the first time comex has silver in backwardation February/March by 2 cents. The open interest on the silver comex is now over 1 billion oz and no doubt that the London OTC is multiples of that.
The gold/silver equity shares again performed terribly today. We have seen gold/silver metal rise in the past 8 weeks but the silver/gold equity shares have been trampled upon by our crooks. Tomorrow, options expiry in the UK and OTC generally end in the morning so we should see some recovery in the price of the metals and hopefully the equity shares rise from their constant whacking.
Tomorrow is also first day notice for the active silver, and non active gold comex contract.
Let us have a look at the data for today

This post was published at Harvey Organ Blog on February 27, 2017.

Stocks and Precious Metals Charts – Here Come Donnie and Snapchat

There are two notable events in particular this week that may affect the markets.
The first will be President’s Trump address to the joint session of the Congress tomorrow night.
Since this is his first term, it will not be called a ‘State of the Union.’ And I doubt he will start with the traditional opening phrase, ‘the state of the union is strong.’
But he has expressed the intention to make a ‘big announcement,’ so we’ll have to see if anything of substance falls on the table with regard to infrastructure spending and tax cuts, not to mention healthcare.
The second event will be the IPO of Snapchat, in the form of SNAP, which is likely to be coming out to market on Wednesday. I am going to be watching the aftermarket action closely, as well as the ability of the wiseguys to sustain these lofty levels in equities.
As you know I am leaning towards a suspicion of the usual shenanigans and antics by the money men, but still keeping an open mind. It is hard to tell exactly what flavor of scam they may be weaving.
Next week we will get the February Non-Farm Payrolls report.
Gold and silver were attempting to rally higher today, but gave up their gains and went negative, even as stocks rallied. Interestingly enough the VIX finished higher.

This post was published at Jesses Crossroads Cafe on 27 FEBRUARY 2017.

Pending Purchases of U.S. Existing Homes Unexpectedly Decline

Bloomberg – Princess Laya – Contracts to buy previously owned U. S. homes unexpectedly declined in January as higher mortgage rates, elevated prices and a limited number of listings pushed the index to a one-year low, according to figures released Monday from the National Association of Realtors in Washington.
Pending home sales gauge dropped 2.8 percent (forecast was for 0.6 percent advance), the most since May, to a one-year low of 106.4.
Contract signings rose 0.8 percent in December, revised down from a previously reported 1.6 percent gain
Index increased 2.7 percent from January 2016 on an unadjusted basis

This post was published at Wall Street Examiner on February 27, 2017.

Fearing A Surge In Inflation, China Launches Probe Into Commodity Futures, “Distorted” Prices

One and a half years after the Chinese government violently burst the stock market bubble, leading the massive losses among retail investors, and months after China’s third housing bubble since the financial crisis appeared to have peaked, also China has found itself with yet another hot-money funded bubble: commodities. And perhaps in hopes of intercepting this latest mania before it gets too big, overnight China’s top economic planner, the National Development & Reform Commission – not a market regulator, but the core agency behind China’s goalseeked economic data – announced it is investigating whether speculation has “distorted” commodity futures prices, due to concerns that the recent rally will drive inflation higher, according to Bloomberg.
In recent weeks, the NDRC has questioned futures brokers whether “price distortion” had occurred, which is a polite way of saying the buying mania has gone too far. The agency is worried over the potential impact on producer and consumer prices. China’s worries are understandable: with commodity prices surging, whether due to speculators or simply tight supply and rising demand, China’s producer prices soared in January by 6.9%, the highest level since the inflationary scare of 2011.

This post was published at Zero Hedge on Feb 27, 2017.

A Global Eurodollar Shortage

The World Bank just released a telling report entitled “Trade Developments in 2016: Policy Uncertainty Weighs on World Trade“. Though they deflect the problems in global trade to areas such as excessive regulatory initiatives and policy uncertainty (which is true), what is to be found buried in the appendix are the two un-annotated charts below. I suspect the World Bank didn’t compare them directly (they are shown separately) because it would cast a spotlight on an even larger political ‘football’.
How does global trade ship ~10% more trade volume but receive ~12% less revenue over a 5 year period? The answer has traditionally been significant improvements in productivity. However, the productivity numbers by country don’t even come close to supporting such a premise.
We believe the actual answer is that a strong US dollar is choking global profits and wealth creation because of a dollar shortage and a lack of real global economic growth! It went “critical” when ‘TAPER’ ended. You can see this inflection point in an endless array of economic charts.

This post was published at GoldSeek on 27 February 2017.

Minimum Wage Massacre: Wendy’s Unleashes 1,000 Robots To Counter Higher Labor Costs

In yet another awkwardly rational response to government intervention in deciding what’s “fair”, the blowback from minimum wage demanding fast food workers has struck again. Wendy’s plans to install self-ordering kiosks in 1,000 of its stores – 16% of its locations nationwide.
“Last year was tough – 5 percent wage inflation,” said Bob Wright, Wendy’s chief operating officer, during his presentation to investors and analysts last week. He added that the company expects wages to rise 4 percent in 2017. “But the real question is what are we doing about it?”
Wright noted that over the past two years, Wendy’s has figured out how to eliminate 31 hours of labor per week from its restaurants and is now working to use technology, such as kiosks, to increase efficiency.

This post was published at Zero Hedge on Feb 27, 2017.

A Hole in the Head

We need a new civil war like we need a hole in the head. But that’s just it: America has a hole in its head. It’s the place formerly known as The Center. It didn’t hold. It was the place where people of differing views could rely on each other to behave reasonably around a touchstone called the National Interest. That abandoned place is now cordoned off, a Chernobyl of the mind, where figures on each side of the political margin fear to even sojourn, let alone occupy, lest they go radioactive.
Anyway, the old parties at each side of the political transect, are melting down in equivalent fugues of delusion, rage, and impotence – as predicted here through the election year of 2016. They can’t make anything good happen in the National Interest. They can’t control the runaway rackets that they engineered in legislation, policy, and practice under the dominion of each party, by turns, going back to Lyndon B. Johnson, and so they have driven themselves and each other insane.
Trump and Hillary perfectly embodied the climactic stage of each party before their final mutual sprint to collapse. Both had more than a tinge of the psychopath. Trump is the bluff that the Republicans called on themselves, having jettisoned anything identifiable as coherent principles translatable to useful action. Hillary was an American Lady Macbeth attempting to pull off the ultimate inside job by any means necessary, her wickedness so plain to see that even the voters picked up on it. These two are the old parties’ revenge on each other, and on themselves, for decades of bad choices and bad faith.

This post was published at Wall Street Examiner on February 27, 2017.