Stock Prices Climb as FOMC Debates Rate Hikes

stock prices climbed as investors wait to see if the Federal Reserve will raise rates at the conclusion of the June FOMC meeting tomorrow.
Here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
Index Closing Point Change Percentage Change Dow Jones 21,328.47 +92.80 +0.44% S&P 500 2,440.35 +10.96 +0.45% Nasdaq 6,220.37 +44.90 +0.91% Now here’s a closer look at today’s most important market events and stocks, plus Wednesday’s economic calendar.

This post was published at Wall Street Examiner by Garrett Baldwin ‘ June 13, 2017.

Qatar Is Running Out Of Dollars

While the Saudi-led campaign to starve Qatar’s citizens may end up short of the target, with both Turkey and Iran volunteering to provide needed staples to the isolated Gulf nation while local entrepreneurs have started a cow paradropping campaign to offset the decline in milk imports, a more pressing problem has emerged: Qatar’s financial system is running out of dollars. As Bloomberg reports, several Qatari banks have boosted interest rates on dollar deposits to shore up liquidity as the Saudi-led campaign to isolate the gas-rich Arab state intensifies.
To boost their hard currency reserves, Qatar banks are now offering a premium of as much as 100 basis points over LIBOR to attract dollars from regional banks, some 80 bps higher compared to the rate they offered prior to last week’s crisis. A similar picture is visible on the 3-Month QIBOR, or Qatar Interbank Rate, which has surged to 2.3% as of Tuesday.

This post was published at Zero Hedge on Jun 13, 2017.

Hell Freezes Over: CFTC Finds Trader Guilty of Metals Price Rigging

It must have been painfully awkward for the Commodity Futures Trading Commission (CFTC).
Last year, Deutsche Bank settled a civil suit involving blatant market rigging and turned over reams of information, including chat logs and voice recordings. The trove contained plenty of damning evidence which had gone overlooked by the CFTC.
CFTC investigators supposedly spent 5 years searching for illegal market manipulation, but somehow, managed to find nothing.
The cheating became hard to ignore after Deutsche Bank turned over voice recordings and 350,000 pages of documents which revealed bank trading desks being run like the back office of a crooked casino.

This post was published at GoldSeek on 13 June 2017.

Oil Prices Suffer First ‘Death Cross’ Since 2014 Collapse

or the first time since September 2014, after which oil prices collapsed almost 75%, Brent and WTI Crude futures both just flashed a ‘death cross’ signal as the 50-day moving-average crossed below the 200-day moving-average.
The crossover is typically seen a loss of short-term momentum and last occurred in the second half of 2014, when prices collapsed due to oversupply amid surging U. S. shale oil production.

This post was published at Zero Hedge on Jun 13, 2017.

Get Ready for the Fed’s Big Mistake

America is fully employed, or so say the statistics. Federal Reserve officials think the job market is strong enough to justify higher interest rates. They’re afraid inflation will get out of control.
But if inflation is a problem, it’s not yet apparent in the average worker’s paycheck. ‘Just wait,’ the inflation hawks say.
Like many economic dilemmas, this one includes several big assumptions. One is that having a job means you have a steady income. Maybe you want more, but you at least have some kind of reliable baseline.
A pile of evidence says that may no longer be a good assumption. If so, Janet Yellen and whoever follows her will be making a huge mistake. We all need to get ready for it.
Persistent Puzzle
We all know people who are unemployed or underemployed – probably more than the stats say we should. Are the official numbers wrong?
Yes, they could be flawed. But even if they’re right, it doesn’t mean everyone is happy about it.
Maybe you lost your job because your company went bankrupt. No other employers in your area need your skills. You can’t sell the house and move because you’re underwater on the mortgage. With no better choices, you take a lower-skilled job at half your former pay.

This post was published at Mauldin Economics on JUNE 13, 2017.

The Tech-Wreck – A Shot Across The Bow For “Passive Indexers”

I wanted to pick up on a discussion I started in this past weekend’s missive, with respect to both Friday’s rout in technology stocks as well as Monday’s rather nasty open. While the issue seemed to be a simple short-term rotation in the markets from large capitalization Technology and Discretionary stocks into the lagging small and mid-capitalization stocks, the sharpness of the ‘Tech Break’ on Friday revealed an issue worth re-addressing. To wit:
‘Both Discretionary and Technology plunged on Friday as a headline from Goldman Sachs questioning ‘tech valuations’ sent algo’s running wild. The plunge was extremely sharp but fortunately regained composure and shares rebounded. A ‘flash crash.’
One day, we will not be so lucky. But the point I want to highlight here is this is an example of the ‘price vacuum’ that can occur when computers lose control. I can not stress this enough.
This is THE REASON why the next major crash will be worse than the last.’
I am not alone in this reasoning. Just recently John Dizard wrote for the Financial Times:
‘The most serious risks arising from ETFs are the macro consequences of too much capital being committed in too few places at the same time. The vehicles for over-concentration change over time, such as the ‘Nifty Fifty’ stocks back in 1973, Mexican and Argentine bonds a few years after that, internet shares in 1999, and commercial property every other decade, but the outcome is the same. Investors’ cash goes to money heaven, and there is a pro-cyclical decline in productive investment.

This post was published at Zero Hedge on Jun 13, 2017.

2017 Is Going To Be The Worst Retail Apocalypse In U.S. History – More Than 300 Retailers Have Already Filed For Bankruptcy

Not even during the worst parts of the last recession did things ever get this bad for the U. S. retail industry. As you will see in this article, more than 300 retailers have already filed for bankruptcy in 2017, and it is being projected that a staggering 8,640 stores will close in America by the end of this calendar year. That would shatter the old record by more than 20 percent. Sadly, our ongoing retail apocalypse appears to only be in the early chapters. One report recently estimated that up to 25 percent of all shopping malls in the country could shut down by 2022 due to the current woes of the retail industry. And if the new financial crisis that is already hitting Europe starts spreading over here, the numbers that I just shared with you could ultimately turn out to be a whole lot worse.
I knew that a lot of retailers were filing for bankruptcy, but I had no idea that the grand total for this year was already in the hundreds. According to CNN, the number of retail bankruptcies is now up 31 percent compared to the same time period last year…
Bankruptcies continue to pile up in the retail industry.
More than 300 retailers have filed for bankruptcy so far this year, according to data from BankruptcyData.com. That’s up 31% from the same time last year. Most of those filings were for small companies – the proverbial Mom & Pop store with a single location. But there are also plenty of household names on the list.

This post was published at The Economic Collapse Blog on June 13th, 2017.

JUNE 13 B/GOLD DOWN $0.80/SILVER DOWN 17 CENTS/AGAIN FOR THE 9TH CONSECUTIVE TIME, THE AMOUNT OF SILVER STANDING AT THE COMEX INCREASES IN QUANTITY/SHALE OIL PRODUCTION WILL HIT RECORD LEVELS BY …

GOLD: $1265.30 down $0.80
Silver: $16.74 down 17 cent(s)
Closing access prices:
Gold $1266.50
silver: $16.84
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1274.99 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1265.80
PREMIUM FIRST FIX: $9.19
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1273.50
NY GOLD PRICE AT THE EXACT SAME TIME: $1265.90
Premium of Shanghai 2nd fix/NY:$7.60
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est $1261.30
NY PRICING AT THE EXACT SAME TIME: $1261.90
LONDON SECOND GOLD FIX 10 AM: $1262.00
NY PRICING AT THE EXACT SAME TIME. $1262.00
For comex gold:
JUNE/
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 11 NOTICE(S) FOR 1100 OZ.
TOTAL NOTICES SO FAR: 2191 FOR 219,100 OZ (6.8149 TONNES)
For silver:
For silver: JUNE
4 NOTICES FILED TODAY FOR 20,000 OZ/
Total number of notices filed so far this month: 816 for 4,080,000 oz

This post was published at Harvey Organ Blog on June 13, 2017.

Is This The First Sign Of A US-Chinese Solar War?

After a banner year for solar power installation in the United States, reports on the progress of solar power in the first quarter of 2017 have industry advocates hopeful that renewable energy will continue to grow throughout the year, despite competition from fossil fuels, U. S. government support for traditional energy sources and resistance towards cheap imported solar panels by domestic manufacturers.
The first months of 2017 saw 2 gigawatts of photovoltaic panels added, continuing a six-quarter streak and a huge boost in solar installations that came at the end of 2016, when more than 6 GWs were installed. The growth in Q1 of 2017 marks a slight decrease of 2 percent from the level last year, but it’s still indicative of an overall growth trend, as total additions have increased year on year since 2012, according to the Solar Market Insight Report.
Out of the 2 GWs added, about a quarter came in the form of rooftop panels added in the households segment, while utilities added the bulk of new production. The non-residential solar market has increased 29 percent year-on-year.

This post was published at Zero Hedge on Jun 13, 2017.

GATA’S Chris Powell Reveals The Golden “Totalitarian Scheme” | SD Midweek Metals Report

The following video was published by SilverDoctors on Jun 13, 2017
Gold and silver are cooling off after a month-long rally triggered by geopolitical termoil, says Chris Powell of GATA. But in the long-run, precious metal prices will be determined by central bank intervention or the lack of it, he believes. Western central banks continue to manipulate the price of gold, he says, in order to prevent it from being used as a world reserve currency. “We do not have free markets anymore,” he continues, “essentially it’s a totalitarian scheme.”

Federal Debt Ceiling Amid No Growth in Federal Tax Receipts (Nothing Has Been The Same SInce TARP)

What is the US Treasury to do? They are bound (sort of) by the Statutory Debt Ceiling and a Congress that works together like a mink and chickens.
Federal tax receipts have been disappointing and below the Congressional Budget Office’s forecast.
And the US Treasury’s cash position has never been the same since the Bush announcement of TARP (Troubled Asset Relief Program) on September 19, 2008.

This post was published at Wall Street Examiner on June 13, 2017.

Banks are becoming less safe. Again.

What I’m about to tell you isn’t some wild conspiracy. Or fake news.
It’s raw fact, based on publicly available data from the US Federal Reserve.
This data shows a very simple but concerning trend: banks in the United States are becoming less safe. Again.
And they’re doing it on purpose. Again.
Few people ever give much thought to the safety and security of their bank.
After all, banks go out of their way to instill an overwhelming sense of confidence that they’re rock solid.
They spend tons of money on ornate lobbies in giant buildings. They buy the naming rights to football and baseball stadiums.
And hey, they’re insured by the government.
But it turns out that none of these elaborate distractions means anything when it comes to bank safety.
Safety is actually pretty easy to calculate.
Think about the business of banking – it’s simple. Banks take deposits, and then use that money to make loans and various investments.

This post was published at Sovereign Man on June 13, 2017.

Visualizing Baltimore’s Opiate Experience

A quick drive through some of the more desolate parts of East Baltimore will give you some insight into a crisis that is consuming not just Baltimore, but almost every corner of the United States.
The streets are littered with boarded up warehouses and tenement housing-rows and rows of dilapidated, graffiti covered buildings that litter the landscape like tombstones, commemorating a once vibrant city that has succumbed to a trifecta of affliction: economic hardship, racial tension, and rampant drug addiction.


This post was published at Zero Hedge on Jun 13, 2017.

Felix Zulauf: “Today Feels Like Late 1999; I Expect FANG Stocks To Fall 30% Or 40%”

In his last interview as part of the Barron’s Roundtable, from which he is retiring at the end of the year after three decades of participation, Felix Zulauf, owner of Zug-based Zulauf Asset Management had some parting words of caution.
First, in his discussion of stocks, Zulauf said “markets exhibit the signs we usually see going into a peak. My trend and momentum indicators are still bullish, but excesses are building up as stocks and sectors move too far above their moving averages. Investor-sentiment readings are getting excessive. July or August could bring an important peak in stocks.”
Comparing to previous episodes of market exuberance, Zulauf said that “today seems like late 1999. We haven’t seen the peak yet. Much depends, as noted, on whether China continues its current policies. Either way, there is a window of vulnerability in the markets. I’m not talking about a 5% setback. It could be 20% from August to November.”
As a reminder, this is what late 1999 looked like, and how it is oddly similar to the S&P tech sector currently.

This post was published at Zero Hedge on Jun 13, 2017.

Stocks Rally Ahead of the FOMC

The Dow Jones news today will be dominated by the first day of the June FOMC meeting. Dow Jones futures are up 24 points as markets prepare for the Fed to hike interest rates. In other stock market news, the Dow and the Nasdaq will both attempt to rebound from their worst two-day stretches of the year.
This Could Make Big Oil Obsolete: One gallon of this new ‘crystal fuel’ could get you from New York to L. A. and back… seven times! Read more…
Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:

This post was published at Wall Street Examiner on June 13, 2017.

The Timetable for an Exploding US Debt Bomb

US national debt currently stands at $19.9 trillion and, at the rate it’s going, is set to surpass $20 trillion in 2017. Gary Shilling, publisher of the must-read Insight newsletter, said this is not a problem until we either see “a tremendous amount of inflation or a complete breakdown in confidence in US Treasury obligations.” Once that happens, the world’s largest economy is at risk of an exploding ‘debt bomb,’ as he puts it:
“Government debt in this country is about 80% of GDP – federal government debt – and that’s the net debt in the hands of the public. We throw out the debt where one government agency is lending to another…(because) when government collects Social Security payments from everyone, the Social Security Administration sends that to the Treasury and then the Treasury issues them an actual government bond, but that’s an intergovernment transfter and doesn’t really have anything to do with markets and so on, so we exclude that…
We look back at the point in which the interest on the government debt was the highest it ever was and that was back in the 70s and that did not upset the apple cart and we say, ‘What will it take to get there?’ Because, you see, the whole argument here is this ‘debt bomb,’ it’s the idea that government debt gets to the point that the interest on that debt becomes a huge chunk of the deficit and that adds to the debt and then the whole thing then grows asymptotically.

This post was published at FinancialSense on 06/13/2017.

What Trump Told Yellen In The Oval Office (Next To Gary Cohn)

In an otherwise quiet morning as we await Jeff Sessions’ testimony, a WSJ article is making the rounds which recounts the interactions between Trump and Janet Yellen – who it turns out were born two months apart in neighboring boroughs of New York City – according to which despite Donald Trump’s fierce criticisms of the Federal Reserve in the final weeks of the 2016 election campaign “the nation’s two most powerful economic-policy players – the president and the leader of the central bank – are “off to a surprisingly smooth start.”
According to the WSJ “weeks after his inauguration, President Trump held court with Fed Chairwoman Janet Yellen in the Oval Office. Seated behind the office’s Resolute desk, he told her she was doing a good job, according to people familiar with the exchange. Ms. Yellen sat across from Mr. Trump in a chair next to Gary Cohn, Mr. Trump’s chief economic adviser, who has emerged as the key intermediary in the unfolding relationship with the Fed.”
While the conversation took place long before Trump’s subsequent interview with the WSJ in which he once again had good words for Yellen, and suggested that low rates and a weak dollar are the way to go, the WSJ reports that “the president told Ms. Yellen he considered her, like himself, a ‘low-interest-rate’ person. During a roughly 15-minute conversation, they discussed how economic policy might help the millions of Americans who felt left behind during the postcrisis recovery.”
Which is odd, because during his campaign Trump on several occasions extolled the virtues of higher rates, especially in a nation in which yield-starved retirees are forced to seek extra employment or speculate in the stock market just to make ends meet. Also, as the WSJ notes, “Mr. Trump’s April comments marked a reversal from last year, when he accused Ms. Yellen of keeping rates low to help Democrats.”

This post was published at Zero Hedge on Jun 13, 2017.

This Toxic Trifecta for Auto Loans is Fueling #Carmageddon

Subprime Auto-Loan Backed Securities from 2015 on track to be Worst Ever.
Institutional investors that manage other people’s money grabbed subprime auto-loan backed securities because of their slightly higher yields. These bonds are backed by subprime auto loans that have been sliced and diced and repackaged and stamped with high credit ratings. But those issued in 2015 may end up the worst performing ever in the history of auto-loan securitizations, Fitch warned.
And then there are those issued in 2016. They haven’t had time to curdle.
The 2015 vintage that Fitch rates is now experiencing cumulative net losses projected to reach 15%, exceeding the peak loss rates during the Financial Crisis.
Fitch Ratings’ Auto Loan Annualized Net Loss Index shows the strong seasonality, with either May or June forming the low point each year and the winter months forming the peaks. A terrible trend took off in 2014. The winter peak last year occurred in November with a net annualized loss of 10.9%. The latest data point is for April, at 7.8%, up from 7.4% last year. The index peaked in February 2009 at 13.1%. The trend is pointing that way (via Fitch Ratings ABS):

This post was published at Wolf Street on Jun 13, 2017.