Enter The NatGas Cartel

The King Dollar is mortally wounded. Many notice but the masses seem largely unaware. Since 1971, the Gold Standard has been removed from its anchor position. But since 1973, the Petro-Dollar has taken its place. It has called for crude oil sales led by the Saudis and OPEC to be transacted in USDollar terms, for oil surpluses to be stored in USTreasury Bonds, and for some kickbacks from the Saudis to the USMilitary complex for weapons purchases. Of course, the US is ready willing and able to create strife and to foment wars whereby the Arab oil monarchs will need more weapons. Since 2014, many events have pointed to the crippled condition of the important link between the USDollar and crude oil. The price has plunged by 50% of more, and not recovered. It is currently lurching in the nether bounds near the $45 level. Anything less than $65 to $70 per barrel is very dangerous for keeping the oil sovereigns afloat and for keeping the US energy sector solvent. Witness the Wall Street banks having tremendous problems with impaired bonds and toxic energy portfolios. They seem not resolvable. They cannot keep the oil price over $50, a sign of their impotence.
Not enough financial analysts connect the new normal of a much lower crude oil price with the eventual vanishing act of the Petro-Dollar. The Wall Street banks are deeply exposed on their entire energy portfolios, which include both bonds and commercial loans. Tens of $billions will have to be written off as loss, beyond the $billions already declared as losses. These corrupt banks have worked their magic to lift the oil price above the $50 level, but failed. They worked the task for over a year, but failed. They need an oil price over $60, but failed. The Saudis did not help the cause, by their ongoing extra output to finance their filthy Yemen War. The Saudis earned the anger of their OPEC partners, especially the Gulf Arab allies. The Wall Street banks deeply resent the Saudis for this deed, but the USMilitary complex loves the Saudis. The other Arab oil producers also harbor consider rancor toward the Saudis, who really have no friends in the entire Persian Gulf region. They are so worthy of a palace coup, which would bring clamors of rejoicing in many corners of the West if it were to occur. The day might be close.

This post was published at GoldSeek on July 5, 2017.

Pimco CIO Says Firm Is “Reducing Risk Across The Board”

Mark Kiesel probably isn’t the first name that springs to mind when Pimco’s investment strategies are being discussed. That honor, ironically, still resides with Bill Gross even though he departed the firm for Janus over 3 years ago.
That said, as the manager of the $10.4 billion Pimco Investment Grade Corporate Bond Fund and the firm’s CIO of global credit, you should probably at least take notice when Kiesel says that he expects returns on financial assets to “be much lower for the next 3-5 years” and that, as a result, he’s “reducing risk across the board”…which is exactly the message he delivered on Bloomberg earlier this morning.

This post was published at Zero Hedge on Jul 5, 2017.

Terrible News For Illinois: Moody’s Puts State On Review For Downgrade To Junk Despite Budget

The passage of Illinois’ budget, which is scheduled for tomorrow despite the veto of Gov. Rauner which was duly overriden on July 4, was supposed to be critical catalyst that saved the state from a downgrade to junk status by the rating agencies, a first in US history. Unfortunately, moments ago Moody’s said that the passage of the budget may have been too little too late, and moments ago the rating agency said that it had place the rating of Illinois’s Baa3 general obligation under review for possible downgrade, citing the state’s failure to fully enact timely budget for fiscal year that began July, and its failure to achieve broad political consensus on how to move toward balanced financial operations.
A downgrade from Baa3, even by just one notch, means that Illinois would become the first US state rated junk, potentially forcing many muni bond managers to dump its bonds, and sending its costs of funding sharply higher despite a relief rally that took place today on hopes the state’s day of reckoning had been pushed indefinitely into the future.
In short: the scramble to pass a budget may have been for nothing.
The full note from Moody’s is below:

This post was published at Zero Hedge on Jul 5, 2017.

A Look at the Gold and Silver Price Drop of 3 July, 2017

Mystery Nosedive
The price of gold dropped from $1,241 as of Friday’s close to $1,219 on the close Monday, or -1.8%. The price of silver fell from $16.58 to $16.11, or -2.9%. It is being called a gold and silver ‘smash’ (implication being that one party or a conspiracy is doing the smashing).
Our goal is to help you develop a clear understanding. The move was no mystery. Monetary Metals makes an intensive study of the spread between the spot market – where metal is bought and sold – and the futures market.
Much analysis treats these market moves as mysterious, literally inexplicable except by reference to nefarious actors who are variously trying to make illicit profits or who act not-for-profit to somehow protect the dollar.
Which they do by somehow pushing down ‘paper’ gold. Which they do by sheer size, size being the critical characteristic to manipulate markets.
However, ask anyone who has ever run a multi-billion dollar fund and you will get the opposite picture. Size is a disadvantage, because when you buy, you end up with a higher price and when you sell you get a lower price. At least if you are trying to make money.

This post was published at Acting-Man on July 5, 2017.

What’s Going On With US Consumers: Store Traffic Plunges 8% Into July 4th Weekend

First it was auto the auto parts suppliers getting hammered after O’Reilly Auto announced unexpectedly poor results (duly blamed on “mild weather” and weaker than expected Hispanic spending) and tumbling the most in 5 years, and then it was the retail REITs turn, after channel checks at Prodco Retail Traffic Analytics revealed that the US consumer continued to hibernate into the July 4th weekend with North American store traffic 8.1% lower in the week leading up to the July 4 holiday weekend, a steeper drop than the year-to-date trend of down “only” 6.6%. In the week ending July 1, with footfall at luxury retailers down 9.7%, and 8.3% weaker at apparel stores, Bloomberg reported.
The justifications for the abysmal results were legion: retail 2Q sales results may be impaired by weak traffic, as consumers still prefer digital, and they swap shopping for travel, dining out, or outdoor recreation. Shopping less in-store continues to hurt retailers’ ability to prompt unplanned purchases.

This post was published at Zero Hedge on Jul 5, 2017.

The Global Oil Demand Driver That Is Being Ignored

When looking at oil demand, oil market analysts focus overwhelmingly on passenger vehicles. One of the hottest debates today is over the prospect of peak oil demand: whether or not electric vehicles along with general trends towards more fuel efficiency will ultimately lead to a peak and decline of total oil demand worldwide. No doubt the upcoming release of Tesla’s Model 3 will spark more than a few columns on how it could be the beginning of the end for oil.
But the conversation often overlooks the role that heavy trucks and freight play in driving demand. The International Energy Agency just published a report arguing that the world needs to get a handle on fuel efficiency for freight, or else oil demand will continue to rise, regardless of how many Tesla’s are on the road.
Freight transit is crucial for economic growth, and indeed, it tends to be correlated with GDP. The IEA says that only four countries – Canada, the U. S., China and Japan – have fuel efficiency standards for heavy trucks, one-tenth of the 40 countries that have rules for passenger vehicles.
‘For far too long there has been a lack of policy focus on truck fuel efficiency. Given they are now the dominant driver of global oil demand, the issue can no longer be ignored if we are to meet our energy and environmental objectives’ Dr. Fatih Birol, the IEA’s Executive Director, said in a press release.

This post was published at Zero Hedge on Jul 5, 2017.

JULY 5/NORTH KOREA LAUNCHES AN ICBM AND WITH THAT WAR DRUMS BEAT LOUDER/SAUDI ARABIA REJECTS THE QATARI NEW PROPOSAL AND THE BLOCKADE CONTINUES IN THE GULF/SOUTH AFRICA TO NATIONALIZE ITS CENTRAL…

GOLD: $1220.40 UP $2.40
Silver: $15.92 DOWN 18 cent(s)
Closing access prices:
Gold $1227.00
silver: $16.10
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: $1236.89 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1228.10
PREMIUM FIRST FIX: $8.79
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1244.88
NY GOLD PRICE AT THE EXACT SAME TIME: $1235.85
Premium of Shanghai 2nd fix/NY:$9.03
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est $1235.20
NY PRICING AT THE EXACT SAME TIME: $1235.80
LONDON SECOND GOLD FIX 10 AM: $1220.30
NY PRICING AT THE EXACT SAME TIME. $1220.30
For comex gold:
JULY/
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 1 NOTICE(S) FOR 100 OZ.
TOTAL NOTICES SO FAR: 39 FOR 3900 OZ (.1213 TONNES)
For silver:
JULY
397 NOTICES FILED TODAY FOR
1,985,000 OZ/
Total number of notices filed so far this month: 1601 for 8,005,000 oz

This post was published at Harvey Organ Blog on July 5, 2017.

Parents to Pay the Price when Australian Housing Bubble Bursts

Home prices jump to new record amid surging supply and declining real wages.
‘The government, opposition, central bank (RBA), prudential regulator (APRA), FIRE sector (finance, insurance, and real estate industries) and their economists predictably deny the existence of a housing bubble. They firmly assert a severe downturn in the residential property market cannot and will not occur’ – LF Economics.
So when home prices sagged on a monthly basis in May, the fretting began. But now it is ascribed to a seasonal quirk because in June home prices jumped again, according to CoreLogic:
In Sydney, home prices rose 12% in June year-over-year to A$880,000, with house prices up 13% and prices of condos (‘units,’ as they’re unceremoniously called down under) up 9%. On a monthly basis, they rose 2.2% from May. In Melbourne, home prices surged 14% year-over-year, with house prices up 15%, and condo prices up 1.5% (more on that measly increase in a moment).

This post was published at Wolf Street on Jul 5, 2017.

Fed Warns “Equity Prices Are High”, Sees Low Volatility As A “Risk To Financial Stability”

While the core focus in the June FOMC minutes was on whether and when the Fed would hike next, and/or begin its balance sheet unwind (indicentally, Fed Funds futures now shows odds of another rate hike in 2017 at about 60%), what was perhaps most notable in today’s Minutes was the Fed’s repeat warning about asset prices – something it has cautioned on previously – and the introduction of a warning on low volatility, which the FOMC said could pose “risks to financial stability.” Finally, the Minutes highlighted the biggest paradox facing the Federal Reserve namely the continued easing in financial conditions despite the Fed’s 2 rate hikes so far in 2017.
The sections in question, first on high equity prices:

This post was published at Zero Hedge on Jul 5, 2017.

Gold ICL Confirmed

It appears the US Dollar has bottomed following an intermediate degree correction. This suggests that the dollar will rally for 6-8 weeks while gold heads lower. Gold has decisively broken down through its 200 dma. Traders are in a bull market mentality and will try to buy gold’s dips until sentiment becomes bearish. Expect gold to continue lower over the next 4- 8 weeks.


This post was published at GoldSeek on 5 July 2017.

The Most Accurate Economic Predictor Just Rolled Over,You Know What Happens Next – Episode 1324a

The following video was published by X22Report on Jul 5, 2017
Another retailers declares bankruptcy, the trend continues as more and more retailers are ready to go bankrupt. During the holiday brick and mortar stores saw a dramatic drop in traffic. Factors order decline. Illinois Senate overrides the Governor and raises taxes. Corporate tax revenues are flashing a huge warning sign, this predictor is very accurate and is used to predict recessions, looks like the next one is right around the corner. Many individuals are worried because once a government official or a Fed head tells you everything is going to be ok, it normally turns out the other way around.

Yes, a Stock Market Hack Can Happen – Here’s How

Cyberattacks and online hacks are becoming all too common. And a stock market hack could be on the horizon.
Just last week, a wave of powerful cyberattacks spread across Europe, Asia, and even North America. Hundreds of businesses found their online systems corrupted and unusable. Grocery store checkout machines broke down, the turnstile system in the Kiev metro reportedly stopped working, and ATMs demanded ransom payments.
Here’s a scary thought: The onslaught of ransomware attacks may be the ‘new normal,’ according Mark Graff, the chief executive of cybersecurity firm Tellagraff LLC, in an interview with The Washington Post on June 27.
And no person or institution is safe from a cyberattack. Not even the U. S. stock market.
‘Everything is electronic. If you could hack that, you could bring an economy to its knees,’ said Money Morning Capital Wave Strategist Shah Gilani, a market expert who has long been warning of a stock market hack. ‘I can’t imagine that all of the players who want money and who want power aren’t trying to do this already.’
Indeed, cyber criminals could launch a stock market hack at any moment. Here’s how they could do it – and what an attack could mean for investors…
How Vulnerable Are U. S. Markets to a Hack?
Shah has a suspicion that cyberattacks on U. S. markets have already happened more than the American public realizes.
A major U. S. bank suffers an attack every 34 seconds

This post was published at Wall Street Examiner on July 5, 2017.

The Golden Age Has Just Begun

Some Things Actually Go Up Before and During the Fall…
In recent issues of Seasonal Insights I have discussed two asset classes that tend to suffer performance problems in most years until the autumn, namely stocks and bitcoin.
I thought you might for a change want to hear of an asset that will be in a seasonal uptrend over coming months.
Such assets do of course exist, and one that has particularly good prospects at the moment is gold.
You may well have already heard that gold prices typically exhibit strength in the second half of the year.
But when exactly does gold begin to rally, and how long does its strength last?
A close Look at the Seasonal Trend in Gold
Take a look at the seasonal chart of gold below. Contrary to standard charts, seasonal charts illustrate the average performance of an asset price in the course of a year. In this case the prices of the past 20 years were averaged. The horizontal axis depicts the time of the year, while the vertical axis shows the average price performance.

This post was published at Acting-Man on July 5, 2017.

One Trader Warns “Many Assets Are Ripe For A Correction” & Korea Is The Excuse To Sell

With Emerging Market bonds suffering sudden and large outflows (after reaching record low levels of risk), IPOs collapsing, and ‘no brainer’ FANG stocks unable to keep a bid, it appears – despite the hype of a 30-component-index heavily weighted towards financials being near its record highs – that all is not well in the “buy everything.. especially the highest beta crap” investing world in which traders have become so used to existing.
As former FX trader Mark Cudmore notes North Korea could be just the excuse that anxious buy-and-holders need for a period of risk aversion…
Via Bloomberg,
Many risk assets are ripe for a correction from elevated levels and North Korea’s latest provocation provides sufficient excuse for traders to act.

This post was published at Zero Hedge on Jul 5, 2017.

O’Reilly Automotive Plummets On Disappointing Sales; Mild Winter, Low Hispanic Spending Blamed

O’Reilly Automotive stock crashed as much as 21% on 7 times its average daily volume, its biggest drop since June 2012 dragging the share price to the lowest since October 2014, after the auto-parts retailer said same-store sales misses forecast for the second quarter.
The miss slammed ORLY peers: Advance Auto Parts plunged 16%, AutoZone tumbled 10%, while suppliers Standard Motor Products, Dorman Products and Motorcar Parts of America also dropped sharpdly.
Investors were disappointment as same-store sales rose only 1.7% in Q2, trailing O’Reilly’s own projection for growth of 3-5%, the company said in a statement earlier.

This post was published at Zero Hedge on Jul 5, 2017.

Canada Racing Down the Wrong Track

US auto sales peaked in 2016 and fell for a fourth consecutive month in June, while sales in Canada hit a fresh record in the first half of 2017 on an 8.8% increase in light truck sales thanks to (misplaced?) business confidence in construction and oil. Passenger car sales, on the other hand, declined 2%. It’s worth noting that passenger sales have been contracting despite unprecedented incentives and give-a-ways from dealers.
Read Major Disruption Coming, “Decimating” Entire Industries, Says New Report
Consider the below car add from the Financial Post this week. You can lease a brand new 2017 Mazda 3GX in Canada with $1795 down (0n your credit card) and ‘bi-weekly payments’ of $89 for 5 years. What is the actual cost of the vehicle? No one asks.
You can tell dealers are stretching for marginal buyers when they quote bi-weekly payments in case $178 a month sounds too expensive. And therein lies the rub. Everyone who would like to qualify for a car loan/lease has done so, even a couple of times, over the past few years. Now even if auto financing rates could stay at zero forever, there are only so many payments a person can maintain. With more than $2 trillion in outstanding Canadian consumer debt today and flat wages, even using ‘creative’ financing, discretionary consumption had to hit the end of the cash flow tether.

This post was published at FinancialSense on 07/05/2017.

FOMC Minutes Show “Divided” Fed Fearful Of High Asset Prices, Low Inflation

Having hiked in June amid gravely disappointing macro-economic data, all eyes are now on the minutes for inflation (weakness blamed on “idiosyncratic factors”), labor market (concerns about “sustained employment undershoot”), balance sheet normalization (Fed “divided” over when to start), and market valuation concerns (“equity market high on standard metrics”). Rate hike odds for Sept (22%) and Dec (56%) were rising into the release.
Additional headlines…
*FED OFFICIALS DIVIDED OVER WHEN TO START BALANCE-SHEET RUNOFF *FED OFFICIALS REPEATED SUPPORT FOR GRADUAL INTEREST-RATE HIKES *A FEW FED OFFICIALS SAW EQUITY PRICES HIGH ON STANDARD METRICS *FED OFFICIALS NOTED FINANCIAL CONDITIONS EASED DESPITE HIKES *A FEW OFFICIALS SAW LOW VOLATILITY STOKING RISKS TO STABILITY *MOST FED OFFICIALS BLAMED SOFT PRICES ON IDIOSYNCRATIC FACTORS *FED DEBATED PROS, CONS OF SUSTAINED UNEMPLOYMENT UNDERSHOOT Some of the key highlights from the minutes, first on the timing of the next rate hike, where the FOMC appears split:

This post was published at Zero Hedge on Jul 5, 2017.

In the Age of Amazon, Are Traditional Shopping Malls Dead?

Traditional U. S. retailers are staring out at the abyss with massive layoffs expected to continue into the next quarter of 2017, according to a report by MarketWatch. In the last four years, traditional retailers have cut more than 200,000 jobs.
In contrast, Amazon is set to create 100,000 new full-time jobs over the year in the US.
In the early days of Amazon.com the online retailer struggled to turn a profit. Inc. Magazineexplains:
‘Despite having revenues of $1.6 billion in 1999, Amazon still managed to lose $719 million. Things didn’t get better in 2000, when it was found that Amazon had just around ‘$350 million of cash on hand,’ despite raising billions of dollars.
Traditional shopping malls and retailers simply cannot match the lower overhead Amazon business model. The difference between running a warehouse-based infrastructure and a fully operational, brick and mortar venue is pretty obvious – the costs in building and maintaining large bespoke spaces which require 24/7 maintenance and costly renovations, repairs, remodeling.

This post was published at 21st Century Wire on JULY 5, 2017.