Emerging Markets And Basic Materials Breaking Out Together

By Rambus
While most members are focused on the precious metals, I’ve been waiting patiently for two other sectors to setup a long term buy signal which I believe happened last week. I know you are well aware of my mantra that big consolidation patterns lead to big impulse moves. What’s pretty amazing is these 2 sectors have an almost identical long term consolidation pattern and are breaking out at the same time. It stands to reason that if the Emerging Markets are going to be strong then the Basic Materials sector should benefit as well.
Most like to look at the EEM, emerging market index, but there is another emerging market index which trades with much more volume, VWO which I will use in this post. Lets start with just a simple daily line chart for VWO which shows a H&S bottom in place and a breakout yesterday of the blue bullish rising flag. Keep those two patterns in the back of your mind when we look at the longer term charts.

This post was published at GoldSeek on Sunday, 16 July 2017.

What the Headlines Got Wrong about Friday’s Data Dump

It elegantly depicted the same wobbly growth we’ve seen for years.
The news media had a field day on Friday morning – as if they were trying to force the Fed to change course with their headlines:
‘Weak U. S. inflation, retail sales data dim rate hike prospects’ – Reuters gleefully.
‘Inflation Data Weakens the Fed’s Case for Another Hike’ – Bloomberg.
‘Retail sales fizzle out in June’ – MarketWatch.
‘U. S. Retail Sales Fell 0.2% in June’ – Wall Street Journal.
‘Wall Street Hits Highs as Data Supports Fewer Rate Hikes’ – New York Times.
But wait….
The data Friday morning depicts elegantly an economy of the same type we’ve seen for years: wobbly growth. The data was better than late last year when the Fed started hiking rates in earnest and when some Fed governors started talking about unwinding QE.

This post was published at Wolf Street by Wolf Richter ‘ Jul 15, 2017.

Deutsche: The Fed Has Created “Universal Basic Income For The Rich” And Now It Can’t Get Out

Two weeks after Aleksandar Kocic highlighted the moment in 2012 when the market stopped caring about newsflow and reality, and, in a word “broke” with pervasive complacency setting in regardless of macro uncertainty…

… Deutsche Bank’s post modernist master of stream-of-consciousness narrative is back with a new essay dissecting his favorite topic, the interplay between the Fed and markets, the so-called “umbilical limbo” that connects the two in the form of ultraeasy monetary policy and QE in general, and more importantly, the narrative that the Fed has spun over the past ten years, which while supportive of risk assets, has concurrently resulted in what Kocic calls a “permanent state of exception” from normalcy as a result of the Fed decision to defer the financial crisis indefinitely.

This post was published at Zero Hedge on Jul 15, 2017.

In Case You Missed It – July 15, 2017

This is a syndicated repost courtesy of Danielle DiMartino Booth – Money Strong, LLC. To view original, click here. Reposted with permission.
Janet Yellen headed for the Hill this past week for what could be her last appearance before Congress. Of course, that prompted me to grace sweltering Manhattan with my presence to chime in and opine on her viewpoint of the world. As you will see in more than a few of the links below, Yellen’s confusion left me scratching my head. The job market continues to strengthen and wage growth still can’t get off the floor. The economy has withstood as much as it can in the form of interest rate hikes and it’s time to get busy shrinking the balance sheet ‘appreciably,’ to borrow her term? ‘Egregious and unacceptable’ practices have occurred on her watch and yet no action has been taken. The sensation was akin to being swallowed whole by inconsistency itself. If you have a moment, enjoy my jaunt across media outlets. Some are longer than others. But those asking the questions had done their homework and that’s always a plus for the gal on the receiving end.

This post was published at Wall Street Examiner by Danielle DiMartino Booth ‘ July 15, 2017.

National Debt Too High, Silver Price Too Low

Silver currently sells around $16, which would be sensible if the U. S. national debt was much less than its current $20 trillion.
Given the massive national debt and 100 years of experience, silver prices could easily be double or triple their current prices, and far higher in a panic.
WHY?
Examine over a century of official national debt data graphed on a log scale. Official debt in 1913 was $3 billion. Since then it has risen 8% to 9% every year to reach $20 trillion or $20,000 billion. Debt will continue rising as long as politicians spend and bankers lend.
Proof: Name the Senators, Representatives, Presidents, military contractors, pharmaceutical companies, and Medicare recipients who wish to see the government reduce expenses.

This post was published at Deviant Investor on July 14, 2017.

Ron Paul Warns “Central Bankers Are Always Wrong…Especially Before A Bust”

The global dollar-based monetary system is in serious jeopardy, according to former Texas Congressman Ron Paul. And contrary to Fed Chairwoman Janet Yellen’s assurances that there won’t be another major crisis in our lifetime, the next economy-cratering fiat-currency crash could happen as soon as next month, Paul said during an interview with Josh Sigurdson of World Alternative media. Paul and Sigurdson also discussed false flag attacks, the dawn of a cashless society and the dangers of monetizing national debt.
Paul started by saying Yellen’s attitude scares him because “central bankers are always wrong – especially before a bust.”
‘There is a subjective element to when people lose confidence, and when is the day going to come when people realize we’re dealing with money that has no intrinsic value to it, we’re dealing with too much debt, too much bad investment and it will come to an end. Something that’s too good to believe usually is and it usually ends. One thing’s for sure, we’re getting closer every day and the crash might come this year, but it might come in a year or two.’ ‘The real test is can it sustain unbelievable deficit financing and the accumulation of debt and it can’t. You can’t run a world like this, if that were the case Americans could just sit back and say ‘hey, everybody wants our money and will take our money.’

This post was published at Zero Hedge on Jul 15, 2017.

Key Points to Consider When Choosing an Accounting Firm for Small Business

Many people are born to be entrepreneurs. They dream of owning a business, and with the right knowledge and skills, they can now make it happen. The rise in various funding sources such as angel investors and business loans, it is now easy to build a small business right from home. Startups operate in small scale both in terms of staff and number of clients. A lot of businesses, running in the United States, are in the small business category. The majority of them are under sole proprietorship and a few in partnerships with two more people having co-ownership.
Though every startup owner wants to make his or her venture successful, there are a lot of challenges that he or she has to overcome to make it happen. Two major problems most small businesses struggle with include:
1. Marketing
2. Accounting
In most cases, with a bit of studying, business owners can grasp the basic concept of marketing, and that helps them to get started. However, accounting is a different altogether. It not only requires mathematical skills, but it also calls for experience in managing financial matters on a large scale. Startup owners may still be able to take care of the accounting part on their own if there is a lack of resources. However, as the business grows, the process gets more complicated, and they must hire professional accountants to do the job.

This post was published at ZenTrader on July 15, 2017.

US Restaurant Industry Stuck In Worst Collapse Since 2009

One month after we reported that the “restaurant industry hasn’t reported a positive month since February 2016“, we can add one more month to the running total: according to the latest update from Black Box Intelligence‘s TDn2K research, in June both same-store sales and foot traffic “growth” declined once more, dropping by -1% and -3%, respectively, extending the longest stretch of year-over-year declines for the US restaurant industry to 16 consecutive months – the longest stretch since the financial crisis – with sales rising in 45 markets while declining in 150 with Texas, the worst region in the US, suffering a 2.2% and 4.1% decline in sales and traffic respectively.

As Black Box adds, “bad news is same-store sales and traffic growth were still negative in June and the second quarter of 2017; and year-over-year, same-store sales have been declining for the last six consecutive quarters.”
While there was some offsetting “good news”, namely that “June results were the best for the industry for both sales and traffic growth since January” – in other words a 3% decline in traffic is now spun as “good” – it may have been due to a calendar effect and certainly was not enough to offset growing concerns about the relentless deterioration in the space.

This post was published at Zero Hedge on Jul 15, 2017.

People Not Amused by EU Efforts to ‘De-Cash’ their Lives

By Don Quijones, Spain & Mexico, editor at WOLF STREET. In January 2017 the European Commission announced it was exploring the option of imposing upper limits on cash payments, with a view to implementing cross-regional measures as soon as 2018. To give the proposal a veneer of respectability and accountability the Commission launched a public consultation on the issue. Now, the answers are in, but they are not what the Commission was expecting.
A staggering 95% of the respondents said they were opposed to a cash ceiling at EU level. Even more emphatic was the answer to the following question:
‘How would the introduction of restrictions on payments in cash at EU level benefit you, or your business or your organisation (multiple replies are possible)?’
In the curious absence of an explicit ‘not at all’ option, 99.18% chose to respond with ‘no answer.’ In other words, less than 1% of the more than 30,000 people consulted could think of a single benefit of the EU unleashing cross-regional cash limits.

This post was published at Wolf Street by Don Quijones ‘ Jul 14, 2017.

A Bearish Citi Warns “Bigger Forces Are At Play”, Pointing To Its ‘Chart Of The Week’

Over the next three weeks, the investing world will shift its attention away from the endless chatter of central bankers and concerns about the state of the economy, and instead focus on second quarter earning season, which launched on Friday with results from the three biggest US banks which showed that chronically low volatility is anything but good for trading revenues (as Jamie Dimon made all too clear in a bizarre Friday rant). As previewed last week, and is the norm, we get most of the US numbers first, followed by Europe and then Japan.

And yet, despite expectations for a Q2 S&P500 EPS increase of roughly 7% Y/Y, suggesting solid economic growth, Citi warns that “we may be approaching a cyclical peak.” The biggest concern is that recent economic data, especially the “hard” variety, has been anything but good.

This post was published at Zero Hedge on Jul 15, 2017.

Europe’s Unsustainable Welfare State

Angela Merkel used to say that ‘the European Union is about 5% of the world’s population, about 25% of its GDP, and about 50% of global welfare spending’:
The real data is more concerning.
The European Union is:
7.2% of the World Population.
23.8% of the World’s GDP.
58% of the World’s Welfare Spending.
Something has to give.
The EU average tax burden on workers is 44.9%. The average worker in the EU spends half a year working for the tax man.
Taxation accounts for 41% of the euro area GDP.
Ease of doing business remains below the leading economies of the world.
Bureaucracy is asphyxiating. The EU approves on average 80 directives, 1,200 regulations and 700 decisions per year.
The main EU economies remain significantly below the leaders in economic freedom.

This post was published at Ludwig von Mises Institute on 07/14/2017.

Industrial Drag

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
Completing a busy day of US economic data, Industrial Production was, like retail sales and inflation data, highly disappointing. Prior months were revised slightly lower, leaving IP year-over-year up just 2% in June 2017 (estimates for May were initially 2.2%). Revisions included, the annual growth rate has been stuck around 2% now for three months in a row, suggesting like those other accounts a pause or even possible end to the mini-improvement cycle.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ July 14, 2017.

Here’s a Simple Breakdown of the Senate Healthcare Bill’s Latest Changes

This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
Congressional Republicans unveiled their newest version of the Senate healthcare bill – known formally as the Better Care Reconciliation Act (BCRA) – yesterday (July 13).
The latest version offers a few slight differences from its predecessor, which was revealed on June 22.
Among the new healthcare bill’s changes:
More funds would be set aside for the opioid crisis A provision would allow people to pay for premiums using a health savings account Two taxes targeting the wealthy would be maintained from Obamacare The updated legislation also includes a modified version of the ‘Cruz Amendment’ – pushed by Sen. Ted Cruz (R-TX) – that would allow providers to offer ‘skimpier’ insurance plans with cheaper monthly costs.

This post was published at Wall Street Examiner by Money Morning Staff Reports ‘ July 14, 2017.

Week in Review: July 15, 2017

Janet Yellen didn’t make much news this week when she testified before the House and Senate banking committees. She continued to defend the Fed’s low interest rate policy, painted a very optimistic picture of the American economy, and struggled to defend her opposition to Audit the Fed. Unfortunately for Yellen, while she can duck and dodge the questioning of the occasionally hostile legislator, she can’t avoid the consequences of the policies of herself and her predecessor.

This post was published at Ludwig von Mises Institute on July 15, 2017.

Bad Models Result In Terrible Outcomes

Recently I spent a month in Buenos Aires. I went there to study the culture and the economy of a formrely prosperous land, filled with kind well-educated people.
One key lesson was this: Given enough time, bad policies will eventually ruin any advantage.
While not as bad off as it was in 2002, when the masses took to the streets banging pots and pans in protest of their nations ruined economy, the city of Buenos Aires is still clearly depressed. As are most of its people.
More than that, all hope has been lost. Every time a new politician is elected, things are promised to get better, but they don’t. Argentina’s current woes are the result of far too many successive political regimes that made terrible decisions. It’s a clear as simple as this: Bad policies lead to bad outcomes.
As we learned in our interview with Daron Acemoglu on Why Nations Fail, what matters most for widespread prosperity is that the political and economic institutions be fair and inclusive. From the podcast:
It all depends on incentives and opportunities. If people have opportunities to become rich, to open businesses, be innovative, do things that are going to further their interests and at the same time the nation’s GDP (Gross Domestic Product) and they have incentives to do so, that’s going to lay the foundations of economic prosperity.

This post was published at PeakProsperity on Friday, July 14, 2017,.

Doug Noland: Yellen on Inflation

This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
Global Markets rallied sharply this week. The DJIA rose 223 points to a record 21,638. The S&P500 gained 1.4% to a new all-time high. The Nasdaq100 (NDX) surged 3.2%, increasing 2017 gains to 20.0%. The Morgan Stanley High Tech Index rose 3.4% (up 24.6% y-t-d), and the Semiconductors surged 4.7% (up 21.8%).
Emerging markets were notably strong. Equities rallied 5.0% in Brazil, 5.5% in Hong Kong, 5.1% in Turkey, 2.5% in Russia, 2.2% in Mexico and 2.1% in India. The Brazilian real gained 3.2%, the Mexican peso 3.0%, the South African rand 2.7% and the Turkish lira 2.3%. Global bond markets also rallied. Yields (local currency) dropped 27 bps in Brazil, 18 bps in South Africa, 16 bps in Turkey and 22 bps in Argentina. Here at home, five-year Treasury yields dropped eight bps (to 1.87%). U. S. corporate Credit also enjoyed solid gains. Across global markets, it appeared that short positions were under pressure.
Markets reacted with elation to Janet Yellen’s Washington testimony – widely perceived as dovish. In particular, the chair’s timely comments on inflation were cheered throughout global securities markets. A headline from the Financial Times: ‘Fed Chair Yellen’s Inflation Concern Buoys Markets.’ And Friday afternoon from Bloomberg: ‘S&P 500 Hits Record as Inflation View Turns Iffy’.

This post was published at Wall Street Examiner by Doug Noland ‘ July 15, 2017.

You Mean They Were Stealing, Right?

Isn’t it funny how when the government actually expects you to work for your handout, or at least be working toward being able to work, there are suddenly a lot fewer people who “need” help?
Alabama began 2017 by requiring able-bodied adults without children in 13 counties to either find a job or participate in work training as a condition for continuing to receive Supplemental Nutrition Assistance Program (SNAP) benefits.
According to AL.com, the number of those recipients declined from 5,538 to 831 between Jan. 1 and the beginning of May – an 85 percent drop.
So 85% of the people who were getting SNAP (food stamps) didn’t need them or weren’t willing to either work or try to learn some useful skill in order to keep the benefits?

This post was published at Market-Ticker on 2017-07-15.

The New Silk Road Will Go Through Syria

Authored by Pepe Escobar via Asia Times,
China and Syria have already begun discussing post-war infrastructure investment; with a ‘Matchmaking Fair for Syria Reconstruction’ held in Beijing
Amid the proverbial doom and gloom pervading all things Syria, the slings and arrows of outrageous fortune sometimes yield, well, good fortune.
Take what happened this past Sunday in Beijing. The China-Arab Exchange Association and the Syrian Embassy organized a Syria Day Expo crammed with hundreds of Chinese specialists in infrastructure investment. It was a sort of mini-gathering of the Asia Infrastructure Investment Bank (AIIB), billed as ‘The First Project Matchmaking Fair for Syria Reconstruction’.
And there will be serious follow-ups: a Syria Reconstruction Expo; the 59th Damascus International Fair next month, where around 30 Arab and foreign nations will be represented; and the China-Arab States Expo in Yinchuan, Ningxia Hui province, in September.

This post was published at Zero Hedge on Jul 14, 2017.