Why the Gold Price Could Rebound 12.8% After This Week’s Flash Crash

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
The gold price has been going strong over the long term, up 7.7% to $1,241 so far in 2017. But if you just look at its short-term price action, you’d be hard-pressed to find many bulls.
It’s frustrating to watch gold prices and feel like they’re not making any headway. And that’s especially true in the current context of a weakening U. S. dollar, which normally helps boost the metal…
While the dollar has fallen from 97.30 to 95.76 this week, the price of gold is also on track for a 1.2% weekly loss.
Yet if you look at gold’s price behavior from a technical perspective, there’s evidence that it’s actually holding up exceedingly well.

This post was published at Wall Street Examiner by Peter Krauth ‘ June 30, 2017.

When “Whatever It Takes” Ends

Via Global Macro Monitor,
On Tuesday, June 27th, Super Mario said this,
‘Deflationary forces have been replaced by reflationary ones.’ – Mario Draghi
And here is how global 10-year bond yields reacted,
The German 10-year Bund yield increased 77 percent – OK, from a low base – and bonds across the world from Canada to Australia to the United States were tattooed.
Change In Fundamentals?
Absolutely not!
Bond yields haven’t been trading on economic fundamentals for several years due to central bank financial represssion via quantitative easing (QE), ZIRP and NIRP. We have been pounding the table on this point,
Lot’s of hand wringing these days about the flattening yield curve. We still maintain our position that the signal from the bond market is significantly distorted due to the global central bank intervention (QE) into the bond markets. See here and here.
Most of what is happening with the U. S. yield curve is technical. – Global Macro Monitor, June 22, 2017

This post was published at Zero Hedge on Jun 30, 2017.

Today’s Silver News Shows Why Prices Are Down for the Second Straight Day

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
The big silver news today (Friday, June 30) is how prices are on track for a 4% gain in the first half of the year despite falling for the second day in a row. We are still bullish on the metal’s price in 2017.
The price of silver is down 0.1% today and trading at $16.63 per ounce, marking the second straight session of losses after yesterday’s 0.8% decline to $16.65. If the metal closes at $16.63, it will post a flat performance for the week. However, silver prices would still cap off the first half of 2017 with a 4% gain.

This post was published at Wall Street Examiner by Alex McGuire ‘ June 30, 2017.

Bob Rodriguez: “We Are Witnessing The Development Of A Perfect Storm”

Authored by Robert Huebscher via AdvisorPerspectives.com,
Robert L. Rodriguez was the former portfolio manager of the small/mid-cap absolute-value strategy (including FPA Capital Fund, Inc.) and the absolute-fixed-income strategy (including FPA New Income, Inc.) and a former managing partner at FPA, a Los Angeles-based asset manager. He retired at the end of 2016, following more than 33 years of service. He won many awards during his tenure. He was the only fund manager in the United States to win the Morningstar Manager of the Year award for both an equity and a fixed income fund and is tied with one other portfolio manager as having won the most awards. In 1994 Bob won for both FPA Capital and FPA New Income, and in 2001 and 2008 for FPA New Income.
The opinions expressed reflect Mr. Rodriguez’ personal views only and not those of FPA.
I spoke with Bob on June 22.
In a recent quarterly market commentary Jeremy Grantham posited that reversion to the mean may not be working as it has in the past. What are your thoughts on mean reversion?
There will be a reversion to the mean. We are in a very difficult and challenging time for active managers, and in particular, value style managers. Many of these managers are fighting for their economic lives.

This post was published at Zero Hedge on Jun 30, 2017.

Market Talk- June 30, 2017

Following a weak US session, Asia fell in sympathy with US prices then levelled as China’s core held in well, especially as PBOC set the YUAN rate at 6.7744 – the highest in a while. China’s Manufacturing data helped Shanghai but the core large cap’s suffered as the Hang Seng lost -0.8%. Japan’s CPI and Manufacturing did not help the Nikkei and that closed -0.9% as the JPY remained with a 112 handle indicating that maybe the ‘normal’ flight to safety
may be in the process of change. ASX fell on mineral, commodity and ASX bounce to close the day down 1.66% not a great day to finish the month.

This post was published at Armstrong Economics on Jun 30, 2017.

Blue Apron Turns Red; Tumbles Below IPO Price As Underwriters Give Up

So much for the long anticipated debut of the food delivery IPO, with the big customer churn problem and even bigger cash flow problem.
One day after the company IPOed at a downward revised price (seeing its market cap at $1.9 billion, below its last private round valuation of $2 billion) and broke for trading into the green, only to close at exactly $10.00, Red Blue Apron has now tumbled to $9.50, down 5% from its IPO price just yesterday as the underwriters have given up on protecting the $10 IPO price… and the company.
As a reminder, on Wednesday, Blue Apron sold 30 million shares for $10 each, raising less than two-thirds of the $510 million it had initially targeted. Hours before the pricing, the company lowered the IPO range to $10 to $11 a share, down from $15 to $17. The underwriters hoped the price cut would be sufficient to prevent immediate selling. They were wrong.
Sadly, for Blue Apron, there was good reason for the latest selling avalanche. As Bloomberg reported overnight, shortly after raising $300 million in IPO proceeds, Blue Apron will need much more cash, and soon.

This post was published at Zero Hedge on Jun 30, 2017.

Bank of America’s Forecast Of When The Fed Will Crash The Market

Earlier today we reported that Bank of America’s chief strategist Michael Harnett made two stunning (if perfectly obvious) revelations for a person, who stands to potentially lose his job if he dares to publicize the truth, which is precisely what he did when he said that i) “central banks have exacerbated inequality via Wall St inflation & Main St deflation” and ii) it is “no longer politically acceptable to stoke Wall St bubble; two ways to cure inequality… you can make the poor richer…or you can make the rich poorer…they have failed to boost wage expectations, inflation expectation, ‘animal spirits’ on Main St… so Fed/ECB now tightening to make Wall St poorer”
Some further observations from Harnett’s note “No market for Rich Men”:
Tightening by Fed, rhetorical tightening by ECB has succeeded in raising bond yields, volatility, reducing tech stocks (CCMP, QNET, SOX all at 1-month lows); flow data had indicated tech very overbought (Chart 2 – flows into tech annualizing 22% AUM YTD)…

This post was published at Zero Hedge on Jun 30, 2017.

Pensions Timebomb In America – ‘National Crisis’ Cometh

Pensions Timebomb – Pensions ‘Are Going To Be A National Crisis’
– America’s underfunded pension system is ‘not a distant concern but a system already in crisis’…
– Tax may explode as governments seek to bail out insolvent pension plans
– Illinois, California, New Jersey, Connecticut, Massachusetts, Kentucky and eight other states vulnerable
– The simple mathematical mismatch at the heart of the pension crisis…
– Why the pension crisis really is ‘America’s silent crisis’…
– Pensions timebomb confronts Ireland, UK and most EU countries

By Brian Maher, Managing editor, The Daily Reckoning
‘This is going to be a national crisis…’
‘This’ being America’s woefully underfunded pension liabilities, according to Karen Friedman. She’s the executive vice president of the Pension Rights Center.
(A place called the Pension Rights Center does in fact exist. We checked.)
MarketWatch columnist Jeff Reeves howls in confirmation that ‘collapsing pensions will fuel America’s next financial crisis.’

This post was published at Gold Core on June 30, 2017.

Is This Why The Fed Is Raising Rates???

Authored by Chris Hamilton via Econimica blog,
As the Fed is in the midst of a rate hike cycle, it seems important to remember why this cycle is like no previous rate hike cycle. The mechanics of this hiking cycle are completely unique and experimental…thus the outcome is far more of an unknown than “normal”.
Why? In a typical cycle, the Fed would sell a relatively small portion of its assets…er, balance sheet (typically short duration bills and notes) to banks. This would withdraw some of banks liquid funds (replacing them with less liquid assets) and create “tightness”. This tightness would push overnight lending rates higher and the daisy chain of rising rates would work its way through from the shortest eventually all the way to the 30yr Treasury bonds.
However, this time, nothing like that is happening. This is because the Fed sold all its short term notes/bills (in Operation Twist) and bought longer duration MBS (mortgage backed securities) and longer duration Treasuries in Quantitative Easing to the tune of $4.5 trillion. Further, since the Fed bought most of these assets from large banks, these banks held much of the proceeds from these sales at the FRB (Federal Reserve Bank). For the Fed to perform typical rate hikes, it would need to remove most of the $2.1 trillion banks are now sitting on in excess reserves @ the FRB…likely creating a crisis in the process. Conversely, if the Fed can’t contain the $2.1 trillion at the FRB, and the reserves are leveraged into the market…stand back in awe of the mother of all bubbles.
Thus, the Fed has instead determined to raise rates via paying banks interest on these excess reserves to maintain the reserves at the Federal Reserve. In short, pay banks not to lend money, not to invest the reserves. This is just like Federal programs that paid farmers not to farm…IOER (interest on excess reserves) pays big bankers not to bank.

This post was published at Zero Hedge on Jun 30, 2017.

When the Deal Goes Down

This is a syndicated repost courtesy of Kunstler. To view original, click here. Reposted with permission.
Who needs Russia when the Tweety-Bird-in-Chief is hacking his own presidency into a global joke? Or at least it might be a joke if the USA weren’t such a menace to international order, and to itself, by the way. Interestingly, the 25th amendment allows for the removal of a president from office on account of incompetence or disability, but not for being an embarrassment to the nation.
They may come after him anyway with the 25th, especially as the financial system unravels later this year, because this time, unlike 2008-9, central bank interventions will not avail to rescue the faltering money system from nine years of previous central bank interventions. All it takes is for the ‘liquidity’ flows to seize up and before you know it, there’s no food in the supermarkets because everything in our just-in-time economy is exquisitely calibrated to the sure expectation of getting paid, and when that goes, it all goes.

This post was published at Wall Street Examiner by James Howard Kunstler ‘ June 30, 2017.

Trump On Chicagoland: “Killings Have Reached Epic Proportions…I’m Sending In The Feds!”

He’s been promising to do it for a long time, and now it appears that Trump is finally “sending in the Feds” to help with Chicago’s “crime and killings” which have “reached epic proportions.”
Crime and killings in Chicago have reached such epidemic proportions that I am sending in Federal help. 1714 shootings in Chicago this year!
— Donald J. Trump (@realDonaldTrump) June 30, 2017

As the Chicago Sun Times noted this morning, Trump’s Federal force will include 20 agents from the U. S. Bureau of Alcohol, Tobacco, Firearms and Explosives and they have been tasked with the mission of solving gun crimes and hunting down gun traffickers in the city.

This post was published at Zero Hedge on Jun 30, 2017.

JUNE 30/OPTIONS EXPIRY FINALLY OVER/CHINA FURIOUS AT THE USA FOR SALE OF $1.4 BILLION IN ARMS TO TAIWAN/3 USA STATES IN PRECARIOUS POSITION AS THEY HAVE NOT PASSED THEIR BUDGET: ILLINOIS,CONNECTI…

GOLD: $1240.70 DOWN $3.50
Silver: $16.57 DOWN 2 cent(s)
Closing access prices:
Gold $1245.50
silver: $16.65
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: $1261.24 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1253.05
PREMIUM FIRST FIX: $8.23

This post was published at Harvey Organ Blog on June 30, 2017.

‘Morning Joe’ Hosts Respond To Trump’s “Bleeding Face” Tweet

Having replied to President Trump’s outburst with a snarky tweet yesterday, ‘Morning’ Joe Scarborough and Mika Brzezinski made a more considered response this morning suggesting…
“We believe it would be better for America and the rest of the world if he would keep his 60-inch-plus flat-screen TV tuned to ‘Fox & Friends.’”
As The Hill reports, The hosts of MSNBC’s ‘Morning Joe’ accused President Trump of lying and called on him to end his ‘unhealthy obsession with our show’ in a Friday morning op-ed responding to the president’s Twitter attack the day before.

This post was published at Zero Hedge on Jun 30, 2017.

Deep State Attack?! – Oppose, Protect And Profit

Apparently, The Globalist Deep State has gone on the Offensive again against Investors and Freedom – Potentially Conning Citizens everywhere via the deceptively named Bill ‘Combating Money Laundering, Terrorist Financing and Counterfeiting Act of 2017’ (S1241 – Grassley R-IA). We say apparently because the language of the proposed law appears straightforward enough. However, the language of Key Provisions is so Broad it could be interpreted and applied in such a way very detrimental to Investors, Businesses and Citizens in General.
Here, Deepcaster provides information about how to Oppose, Protect and Profit from it. Unfortunately, the Bill already has bi-partisan support with Feinstein (D-CA, Corryn (R-AZ) and Whitehouse (D-RI) co-sponsoring it. It therefore has a high probability of passing unless…grassroots Investors and Citizens stop it.
It is however clear that the Bill does dangerously expand the powers of Government vis vis Investors, Businesses and the Citizenry, as follows:
It would expand Government Power to engage in Civil Asset Forfeiture on small pretexts, e.g., if one fails to timely file one Government Form It would Force Private Businesses to Monitor private Financial Activity It would Legalize Government Monitoring of Private Citizens and Businesses if, in the Opinion of some Government Official, you may be engaging in some Suspicious Activity.

This post was published at GoldSeek on Friday, 30 June 2017.

JP Morgan Insider Rats Dumping Shares As Bank Ups Buyback

After it was announced that the Fed gave the big banks a pass on their ‘stress’ test, the TBTFs announced huge dividend and share buyback plans:

If the banks had properly marked to market their Level 3 assets and some of their riskiest non-Level 3 assets, would they have still passed the Fed stress test, which essentially places a stress-test ‘bar’ on the ground and lets the banks step over it? Probably not. This would explain why JPM insiders have been dumping shares en masse over the last three months.

This post was published at Investment Research Dynamics on June 30, 2017.

WTF Chart Of The Day – Chicago PMI Spikes To 3 Year High, Beats By 7 Standard Deviations

Even as the rest of the ‘soft’ survey data catches down to ‘hard’ data’s ugly reality…
Someone or something in Chicago is exuberantly celebrating Trumpmania as the city collapses under a hail of bullets.
Beating expectations by 7 standard deviations, June PMI spike to 65.7 – the highest since May 2014.

This post was published at Zero Hedge on Jun 30, 2017.

World Markets Calm As First Half Of 2017 Winds Down

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
(Kitco News) – World stock markets were narrowly mixed in quieter dealings overnight. U. S. stock indexes are headed toward slightly higher openings when the New York day session begins.
Gold prices are weaker again in pre-U. S.-market trading. The quieter geopolitical front and bearish technical charts have helped to push the safe-haven metal’s prices lower recently.
The world government bond markets’ sell offs that have hit most of the world this week spread to Asia on Friday. A soft inflation report from the Euro zone did put a damper on the sell-off in European government bonds. The EU Statistics Agency on Friday reported that Euro zone inflation in June was up 1.3% from the same time last year. The reading in May was up 1.4%. The June number was the lowest this year and falls into the camp of the Euro zone monetary policy doves, who want to see the ECB’s easy-money policies hang on for a longer period of time.
Friday is an extra important trading day from a technical perspective. It’s the last trading day of the week, of the month, of the quarter, and of the first half of the year.

This post was published at Wall Street Examiner by Jim Wyckoff ‘ June 30, 2017.

UMich Consumer Confidence Slips To 7-Month Lows As Hope Fades

Despite modestly beating expectations, UMich consumer sentiment for June dropped to 95.1 – the lowest since Nov 2016 – led by a collapse in ‘hope’ for the future.
Inflation expectations for the medium-term fell very modestly but both short- and medium-term remain near record lows.
Personal finance expectations improved in June as did the percentage of Americans expecting higher incomes. However, the percentage of Americans who expect a comfortable retirement dropped notably… and the percentage of Americans who expect the country to have contonuous good times for the next 12 months also tumbled.

This post was published at Zero Hedge on Jun 30, 2017.