US Government Revenues Suffer Biggest Drop Since The Financial Crisis

On the surface, today’s monthly budget statement was disappointing: in February the US Treasury brought in total receipts of $172 billion, versus outlays of $364 billion, resulting in a decicit of $192 billion, more than tha $190 billion expected (if in line with last year’s $192.6 billion deficit). For the fiscal year through Feb. 28, the total US budget deficit was $349 billion, virtually identical to the $351 billion deficit over the same period in 2016 and set to keep rising this year and for the foreseeable future.

This post was published at Zero Hedge on Mar 10, 2017.

“The Fed Is Holding A Hand Grenade In The USA Bunker”

Authored by Howard Kunstler via Kunstler.com,
Can you see those swans coming in for a landing on Pond USA? They’re not exactly black swans, because you knew they were out there circling, but they’re dark enough against the twilight’s last gleaming to give you the heebie jeebies.
Troubles and portents of more trouble are stacking up as we approach the Ides of March zone of financial turmoil. You must surely surmise that a debt ceiling impact, a Federal Reserve interest rate hike, and the election of a Dutch anti-EU leader all scheduled for that one day are a good start on the greater unravel to follow. Glowering in the spotlight at center stage will be President Donald Trump, designated bag-holder of the Deep State and its myrmidons. And what’s in that bag he’s holding? Just a couple of shit sandwiches and a hair shirt for his journey down the lonely road to exile. But getting rid of Trump would only leave the Deep State with a bigger problem: itself. That is, an economy and a society that can’t be governed by any means.
I think many professional observers-of-the-scene are missing something in this unspooling story: the Deep State is actually becoming more impotent and ineffectual, not omnipotent. Case in point: RussiaGate – come on, let’s finally call it that – the popular idea that Russia hacked the 2016 presidential election. It’s popular because it’s such a convenient excuse for the failure of a corrupt, exhausted, and brain-dead Democratic establishment. But all the exertions of the Deep State to put over this story since last summer were negated this week by two events.

This post was published at Zero Hedge on Mar 10, 2017.

Bitcoin Crashes Below $1000 After SEC Rejects ETF

After much anticipation (and a spike to record highs earlier today), The SEC has decided to reject the Winklevoss application for a Bitcoin ETF.
The SEC premise appears to be the unregulated natuire of the underlying:
Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. Therefore, as the Exchange has not entered into, and would currently be unable to enter into, the type of surveillance-sharing agreement that has been in place with respect to all previously approved commodity-trust ETPs – agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in this market – the Commission does not find the proposed rule change to be consistent with the Exchange Act.
What goes up (to $1327) comes down hard to $978!

This post was published at Zero Hedge on Mar 10, 2017.

Why Understanding “Roundaboutness” Is so Important

Economists understand very little about how technological progress occurs. -Alan Greenspan
[This article is adapted from Mark Thornton’s upcoming book on the skyscraper curse.] Before we leave the topic of the problems and blessings of roundaboutness of production and the structure of production, it will be very useful to see a natural, concrete example of it in action. It then will become easier to understand the unnatural cases involving malinvestments and the skyscraper curse.
Making production processes more roundabout results in greater production in terms of the quantity produced and a lower cost on a per-unit basis. Entrepreneurs would not want to make production processes more roundabout unless they thought they would create more profits as a result. More roundabout production takes more time, more steps, and a more extensive division of labor. It also uses new technology.
Entrepreneurs do make mistakes, of course, but the only systematic errors they make are when they are fooled into rearranging production because of artificially low interest rates and easy credit conditions. When the central bank lowers its target interest rates it also makes credit conditions easier in that banks will make a larger volume of loans, which means they weaken their lending standards in order to facilitate the larger volume of loans.

This post was published at Ludwig von Mises Institute on March 10, 2017.

Stocks and Precious Metals Charts – The Metals Hold the Line

Despite some intraday action, stocks finished largely unchanged.
Precious metals managed to hold their key levels in the face of the ‘better than expected’ Jobs Report.
The FOMC will be announcing their decision on rates next Wednesday. I have included the economic calendar for next week below.
The SEC has rejected the Winklevoss twins proposal for an ETF for Bitcoin, sending the value of the digital currency lower after hours. I am not a fan of Bitcoin for anything but a trade.
I have taken down my short position off the Russell 2000, which I had placed at the end of the first trading day for the SNAP IPO. What a piece of crap.
I did pull the trigger on some silver purchases. As I said, I will be much more impressed if silver can hold its level here and start moving back higher. I have the ’30’ target in mind as a measuring objective on the chart as you can see below. But first silver must break out above 21.50, again as you can see on the chart.

This post was published at Jesses Crossroads Cafe on 10 MARCH 2017.

Weekend Reading: All Eyes On The Fed

Authored by Lance Roberts via RealInvestmentAdvice.com,
Next week the Janet Yellen and her minions are expected, with 100% certainty, to lift the Fed funds rate by another 0.25% to 1.00%.
This certainty has been building as of late given the rise in inflation pressures from higher commodity, particularly oil prices, and still rising health care costs as well as a strong market, dollar, and employment data. Speaking of employment data, ADP reported on Wednesday a 298,000 person increase in employment. What is interesting is this was the highest monthly employment rate seen since 2014, 2011, and 2006. In all three previous cases, it was the peak of employment before weakness begin to set in.

This post was published at Zero Hedge on Mar 10, 2017.

Hugo Salinas Price: The World Will Hyperinflate Into A Gold Standard

If one can only see value in paper currency terms, one cannot see value at all
Hugo Salinas Price – website link – posted a couple of comments on Stewart Dougherty’s guest post earlier this week. I concluded that his insights needed to be shared on the front of this blog and he gave me permission to edit them together to make them easier to read for everyone. ‘I know my comment was complex but I wanted to condense the thoughts I have developed over three decades:’
I would like to take this chance to share a few of my thoughts on this. To me it is pretty clear that the American gold is encumbered. Not because of the usual reasons found on the web but because America defaulted on its gold under the Nixon administration. There are still, many foreign claims on that gold. If America starts to use that gold officially, the gold vultures, like the bond vulture funds, will be out en masse and with force. So it is in America’s best interest to ignore that gold – and gold in general.

This post was published at Investment Research Dynamics on March 10, 2017.

MARCH 10/WORK IN PROGRESS/COMMENTARY TO BE COMPLETED BY 6:15 PM EST/

Gold: $1200.70 down $1.70
Silver: $16.88 down 11 cents
Closing access prices:
Gold $xxx
silver: $xxxx
For comex gold:
MARCH/
NOTICES FILINGS TODAY FOR MARCH CONTRACT MONTH: 2 NOTICE(S) FOR 200 OZ. TOTAL NOTICES SO FAR: 59 FOR 5900 OZ (0.1835 TONNES)
For silver: For silver: MARCH
135 NOTICES FILED TODAY FOR 675,000 OZ/
Total number of notices filed so far this month: 2748 for 13,740,000

This post was published at Harvey Organ Blog on March 10, 2017.

Buying The Rumor Is 300% More Profitable Than Buying The News

Authored by Daniel Drew via Dark-Bid.com,
As the market meanders its way through a post-earnings, pre-Fed no man’s land, I couldn’t help but wonder if this was a unique aimlessness or a seasonal pattern.
The market is partly driven by quarterly earnings cycles, and one has to wonder, “Does the earnings hype always live up to expectations?” Not only do individual stocks move up and down around earnings announcements, but the entire market exhibits certain behavior as well.
As earnings season approaches, volatility picks up along with investors’ expectations, and stocks rise in the first month of the quarter. After earnings season ends, reality sets in and stocks underperform, much like they are doing now. If an investor had only been long the S&P 500 in the first month of the quarter since 1990, they would be up 150%. Anyone buying in the 3rd month of the quarter only gained 50%.

This post was published at Zero Hedge on Mar 10, 2017.

A New ‘Shale Smackdown’ Crushes Crude

This is a syndicated repost courtesy of The Daily Reckoning. To view original, click here. Reposted with permission.
The price of oil is edging higher this morning.
But the damage is done.
The price of oil plummeted suddenly earlier this week after U. S. inventories rose by more than 8 million barrels. The surprise inventory boost was the largest in history.
The announcement of this unprecedented crude glut panicked traders. Everyone smashed the sell button, crashing the price of oil by more than 5%. As of this morning, crude is hanging out below $50 for the first time in 2017, giving back most of its gains from the early December ‘OPEC rally’ spurred by promises from the cartel to cut production.

This post was published at Wall Street Examiner by Greg Guenthner ‘ March 10, 2017.

Tumbling Oil Launches Record Options Trading As “800 Million Barrels” Change Hands

With oil’s recent somnolent, low-vol levitation at their back, the number of hedge funds and other speculators who were soothed by the gradual move higher and betting on the success of OPEC reflationary strategy, had recently grown to an all time high, as seen in the chart below showing the number of long net-spec positions in the combined oil futures market.

So when the price of oil unexpectedly tumbled on Wednesday, then continued to slide over the next two days, many were wondering if this sharp reversal in prices would unleash a margin-call driven liquidation scramble.

This post was published at Zero Hedge on Mar 10, 2017.

“Civil War” Breaks Out At White House Over Trade… And Goldman Is Winning

Earlier this week, when we discussed Peter Navarro’s jarring op-ed in the WSJ in which he alleged that the persistent US trade deficit “would put US national security in jeopardy”, we said that “a better question than what is Navarro’s purpose by writing it, is why he is writing it, and does his use of a public forum like the WSJ mean that there is friction between him and Trump camp, especially since in recent weeks it appears that a core pillar of Trump’s trade policies, namely the border adjustability, appear to no longer be on the docket of actionable items.”
As it turns out, that was precisely the correct question, because as the FT reports, “a civil war has broken out within the White House over trade, leading to what one official called “a fiery meeting” in the Oval Office pitting economic nationalists close to Donald Trump against pro-trade moderates from Wall Street.”
More notably, the person at the center of this “civil war” is none other than Navarro, who as we expected is now said to be losing influence, and as a result he resorted to using the WSJ as a means to appeal directly to the general public. It may have been a prudent gamble: the WSJ op-ed may have helped Navarro salvage some of his credibility with Trump, according to the FT:
The officials and people dealing with the White House said Mr Navarro appeared to be losing influence in recent weeks. But during the recent Oval Office fight, Mr Trump appeared to side with the economic nationalists, one official said. Facing off the “hardline group” of Navarro, and other “nationalists” such as Steve Bannon, is a a “faction” led by former Goldman COO Gary Cohn, a career globalist, who leads Mr Trump’s National Economic Council.

This post was published at Zero Hedge on Mar 10, 2017.

The Bag Holder and His Bag

This is a syndicated repost courtesy of KUNSTLER. To view original, click here. Reposted with permission.
Can you see those swans coming in for a landing on Pond USA? They’re not exactly black swans, because you knew they were out there circling, but they’re dark enough against the twilight’s last gleaming to give you the heebie jeebies.
Troubles and portents of more trouble are stacking up as we approach the Ides of March zone of financial turmoil. You must surely surmise that a debt ceiling impact, a Federal Reserve interest rate hike, and the election of a Dutch anti-EU leader all scheduled for that one day are a good start on the greater unravel to follow. Glowering in the spotlight at center stage will be President Donald Trump, designated bag-holder of the Deep State and its myrmidons. And what’s in that bag he’s holding? Just a couple of shit sandwiches and a hair shirt for his journey down the lonely road to exile. But getting rid of Trump would only leave the Deep State with a bigger problem: itself. That is, an economy and a society that can’t be governed by any means.

This post was published at Wall Street Examiner by James Howard Kunstler ‘ March 10, 2017.

February Jobs Report: Hmmmm…

So the first “Trump” jobs report is now in….
Total nonfarm payroll employment increased by 235,000 in February, and the unemployment rate was little changed at 4.7 percent, the U. S. Bureau of Labor Statistics reported today. Employment gains occurred in construction, private educational services, manufacturing, health care, and mining.
So who lost? Retail. Hmmm…..
Let’s have a look inside at the non-adjusted numbers:

This post was published at Market-Ticker on 2017-03-10.

Showdown: European Version

We previously mentioned the budding struggle between the Yellen and Trump factions relating to the strength of the dollar and monetary and fiscal policies. It is the monetary status quo versus the populist rhetoric, and the showdown is worldwide. CNBC:
The European Central Bank (ECB) is faced with an unprecedented political challenge this year as key member states prepare to elect new leaders, though not everyone is convinced the central bank has the tools necessary to weather a populist storm.
The CNBC story goes on to explain that the ECB’s Mario “whatever it takes” Draghi has unleashed a monetarily “nuclear” option to save the eurozone from the brink of a debt-laden collapse. They’ve been in crisis mode for four years.

This post was published at Ludwig von Mises Institute on Mar 10, 2017.

Is The Oil Price Plunge A Turning Point?

Authored by Arthur Berman via OilPrice.com,
WTI futures fell $2.86 from $53.14 to $50.28 per barrel, and Brent futures dropped $3.81 from $55.92 to $52.11 per barrel. WTI is trading below $49 and Brent below $52 per barrel at the time of writing.

The apparent cause was a larger-than-expected 8.2 million-barrel (mmb) addition to U. S. crude oil inventories.

This post was published at Zero Hedge on Mar 10, 2017.

U.S. Shale Kills Off the Oil Price Rally

Shocking level of bullishness by hedge funds, then prices plunged.
Oil prices plunged on Wednesday and Thursday, dropping to their lowest levels since December when the optimism surrounding the OPEC deal was just getting underway. WTI dipped below $50 for the first time in 2017 on March 9, a two-day loss of more than 8 percent.
The catalyst for the sudden decline in prices was yet another remarkably bearish report from the EIA, which showed an uptick in crude oil inventories by 8.2 million barrels last week. That takes crude stocks to another record high, and it was the ninth consecutive week of inventory builds.
Up until now, oil speculators have taken the unusual increase in crude inventories in stride. Instead of paring back their long positions, hedge funds and other money managers doubled down over the past two months, putting more money into bullish bets, hoping that the OPEC production cuts would outweigh the comeback in U. S. shale.
The result was a shocking level of bullish bets on WTI and Brent, creating a lop-sided position in the futures market. That is not necessarily a problem if market conditions are tightening, as many investors believed, but it begins to look unbalanced if in fact the oil market is still oversupplied.

This post was published at Wolf Street on Mar 10, 2017.