Strip-Mining The World

The richest vein in the history of predatory mining is just about played out.
A gigantic mine engages in every conceivable destructive practice – strip mining, heap leaching, tailings dams and ponds and so on. It pays such low wages its workers only make ends meet by borrowing from the company at usurious rates. The mine has befouled the air and poisoned the water. Many workers are chronically sick and their children are afflicted with birth defects. The mine’s absentee owners know that the mine is played out and the tailings dam is structurally unsound. They close the mine, count their profits, and move on. A month later the dam gives way. A deluge of noxious sludge inundates the town below the dam, sparing no one and rendering the area uninhabitable.
The government is a strip mining operation, plundering the dwindling residual value of a once wealthy America. Forget ostensible justifications, policy is crafted to allow those who control the government to maximize their take and put the costs on their victims, leaving devastation in their wake.

This post was published at Zero Hedge on Jul 23, 2017.

A Mystery Investor Has Made A 262 Million Dollar Bet That The Stock Market Will Crash By October

One mystery trader has made an extremely large bet that the stock market is going to crash by October, and if he is right he could potentially make up to 262 million dollars on the deal. Fortunes were made and lost during the great financial crisis of 2008, and the same thing will happen again the next time we see a major stock market crash. But will that stock market crash take place before 2017 is over? Without a doubt, we are in the midst of one of the largest stock market bubbles in U. S. history, and many prominent investors are loudly warning of an imminent stock market collapse. It doesn’t take a genius to see that this stock market bubble is going to end very badly just like all of the other stock market bubbles throughout history have, but if you could know the precise timing that it will end you could set yourself up financially for the rest of your life.
I want to be very clear about the fact that I do not know what will or will not happen by the end of October. But one mystery investor is extremely convinced that market volatility is going to increase over the next few months, and if he is correct he will make an astounding amount of money. According to Business Insider, the following is how the trade was set up…

This post was published at The Economic Collapse Blog on July 23rd, 2017.

One Hedge Fund CIO Is Shocked To Learn The Fed’s Model Ignores “The Only Two Things That Matter”

Some Sunday thoughts from the CIO of One River Asset Management, whose latest Weekend Notes starts off in traditional Eric Peters style, namely a mockery of the Fed…
‘Wait, that’s not even part of your model?’ asked the private sector, imagining itself in the presence of the Fed. ‘You seriously don’t even consider the crushing weight of the pension avalanche that is bearing down on us?’ And the governors shrugged.
‘You don’t even take into consideration what’s happening in China?’ Silence. ‘Do you even understand today’s world? You’re all so old, you’re from a different time.’ They returned to their spreadsheets, moving dots around, what fun.
‘Pensions and China are the only two things that matter!’ Silence.
‘Let me get this straight,’ said the private sector, collecting its composure. ‘You’ve got this thing called China, and you don’t understand that?’ The governors nodded.
‘And you’ve got this other thing which is my pension liability, and you’re not modelling that?’ Each nodded.
‘And I’m supposed to have confidence in Fed policies?’ asked the private sector. The governors put down their crayons, lifted their dot plots, displaying them proudly.
And the private sector quietly started selling its assets to buy Amazon stock, which has none of these problems.
… Continues with some additional thoughts on credit math…

This post was published at Zero Hedge on Jul 23, 2017.

Will Plunging Store Rents Slow the Retail Doom-and-Gloom?

Landlords are reading the memo, but it may be too late.
Shares of Amazon multiplied by a factor of ten since 2009. Shares of Wal-Mart are flat over the past five years but are up 30% since the beginning of 2016. Since mid-2015, shares of Best Buy are up 58%, Home Depot 28%, and Costco 10%. These and other retailers like them saw their share prices rise because they managed to navigate the new retail environment.
Many online retailers and online operations of brick-and-mortar retailers are thriving. Other retailers are thriving because, like Home Depot, they’re in a segment that is booming. So not all brick-and-mortar retailers are melting down. But many are, including the samples in the list below. The percentage denotes the crash in share prices over the past two years:

This post was published at Wolf Street by Wolf Richter ‘ Jul 23, 2017.

Technical Scoop – Weekend Update July 23

It was another quiet week for the markets even as the S&P 500 hit new all-time highs less than 25 points from 2,500. Investor focus continued to be on Trump and the goings-on at the White House. For months, years even, Republicans and Trump vowed that there would be health care reform by ending Obamacare and bringing in their own version. Tax reform was another part of the agenda that was top in investors’ minds. By week’s end, health reform lay in tatters and tax reform is becoming doubtful. Despite a number of iterations of repeal-and-replace Obamacare, in the end they did not satisfy enough Republican senators to push it through the Senate. It went either too far or not far enough. In desperation, they went for a straight repeal and that one proved to be dead on arrival.
After six months of Republicans controlling the White House, Congress, and the Senate they have not been able to pass one piece of major legislation. While seemingly it has not weighed on the stock markets, it does appear to be weighing on the US Dollar as the US$ Index sunk to new 52-week lows. As to tax reform, well, that appears to be going nowhere either and deadlines loom at the end of the fiscal year September 30, 2017. The debt ceiling is looming once again as the Treasury is poised to run out of money in early October – unless, of course, they agree to extend it once again. The debt ceiling debate is becoming increasingly rancorous, but not between Republicans and Democrats – instead, between Republicans and Republicans. The White House is on one side and Congress on the other, with one wanting and recognizing the need to raise the debt ceiling while the other wants to slam on the brakes for their own agenda.
Things continue to heat up on the Russian investigation front. Donald Trump Jr., Paul Manafort, and Jared Kushner, the principals at the heart of the Russian meeting that was initially denied, are due to meet a Senate judiciary committee on July 26. Things continue to whirl around the investigation with constant implied threats from the White House leveled at special counsel Robert Mueller if the investigation expands into Trump’s finances. It ought to be interesting given Mueller’s authority especially if it clashes directly with the President. The President also slammed his Attorney General for recusing himself in the Russian investigation and if he had known that in advance, Jeff Sessions would never have been appointed. Something about throwing your report under the bus it seems. Finally, the President said that since he has the power to grant pardons he could pardon himself. Nothing said about the ensuing constitutional crisis.

This post was published at GoldSeek on 23 July 2017.

Macron’s Approval Rating Plunges, Only Chirac Was Worse

Macron, deuxime plus forte chute de popularit en trois mois aprs Chirac pic.twitter.com/MGqywBGCic
— Le JDD (@leJDD) July 23, 2017

A Ifop poll released on Sunday showed that the approval rating of France’s new President Emmanuel Macron tumbled by 10 points, hitting 54% in his third month in office, as voters were “either confused by plans for the tax system, shocked by a dispute with the head of the army or unsettled by upcoming labor laws reform”, according to Journal dy Dimanche.
According to Bloomberg calculations, the 10 point slump for Macron, elected in early May, was the second-biggest decline for a French president so soon after election. Jacques Chirac dropped 15 points from his May 1995 election to July, the Paris-based pollster said. The survey for JDD was conducted by phone and online July 17-22 among 1,947 respondents.

This post was published at Zero Hedge on Jul 23, 2017.

Why VIX ‘Acceleration Events’ And Extreme Short Interest Signal “Clear Path To Uglier Scenarios”

VIX ETFs and ETNs
We take a deeper dive into the strange world of VIX ETFs and ETNs. We take a quick look at the incredible short interest in both the long VIX products and the short VIX products. This massive short interest in both long and short products seems unique to the VIX world (it reflects a re-balancing trading strategy that works in the VIX space because of the high volatility of the VIX products) (VIX ETFs seem to run 5 to 10 times the realized volatility of the S&P 500).
Then we dig into the prospectus for each of the 4 funds I focus on (VXX, UVXY, XIV and SVXY).
What is important is the Acceleration Event in XIV. The language from the prospectus seems clear that if the VIX Short Term Futures Total Return index moves 80% in a day, then XIV has to unwind. While an 80% move in a single day is very unlikely, I believe that the lower VIX goes, the easier it is for it to occur (VIX at 8 only needs to jump to 14.4 in a day for this to occur), because these VIX products make a ‘mistake’ in my view of converting changes in VIX to percentage changes to provide returns (the VIX futures do not do that for example).
The problem with an XIV acceleration event is two-fold – all of the hedges (short futures positions it has) will need be covered, just as the market is struggling. The second order problem is that many investors who have been waiting for a spike in VIX to sell volatility won’t have an outlet. If you planned to buy XIV on a VIX spike and it isn’t there, what do you buy? It is far less clear what sort of trigger mechanism SVXY has (that is something we are looking into).

This post was published at Zero Hedge on Jul 23, 2017.

When Is A P/E Not A P/E: How To Turn Nasdaq’s 90x Into 22x In 3 Easy Steps

Having previously exposed the greatest trick the market has pulled on Biotech investors in the past – What Is The PE Of The iShares Biotech ETF? It Depends On Whether You Read The Fine Print – it appears investors need another lesson in reality versus perception.
As Horizon Kinetics puts it so eloquently – It’s One Thing to Not Know, It’s Another to Be Told What Isn’t So “So, in reality one knows that an unprofitable company makes an investment more expensive, while in the world of indexation, such as in the QQQ, unprofitable companies are lower.”
Unpacking a Mainstream Index, the NASDAQ 100
First, the Label
The essential value of an index is that it is a passive form of investing, the opposite of active management. The active manager’s results are dependent upon security selection; in contrast, indexation’s foundational intent is that the results will derive from broad exposure to a vast array of securities; that no individual security will dramatically impact the result – the entire idea is to avoid company?specific risk.

This post was published at Zero Hedge on Jul 23, 2017.

Small Town Suburbia Faces Dire Financial Crisis As Companies, Millennials Flee To Big Cities

College graduates and other young Americans are increasingly clustering in urban centers like New York City, Chicago and Boston. And now, American companies are starting to follow them. Companies looking to appeal to, and be near, young professionals versed in the world of e-commerce, software analytics, digital engineering, marketing and finance are flocking to cities. But in many cases, they’re leaving their former suburban homes to face significant financial difficulties, according to the Washington Post.
Earlier this summer, health-insurer Aetna said it would move its executives, plus most of technology-focused employees to New York City from Hartford, Conn., the city where the company was founded, and where it prospered for more than 150 years. GE said last year it would leave its Fairfield, Conn., campus for a new global headquarters in Boston. Marriott International is moving from an emptying Maryland office park into the center of Bethesda.

This post was published at Zero Hedge on Jul 22, 2017.

Venezuelans Are Now Paying 1000 Times More For US Dollars Than They Did In 2010

The hyperinflationary-hell in Venezuela’s currency is deepening as a crippling dollar shortage and a threat of oil sanctions (amid President Maduro’s attempts to rewrite the constition to maintain his grip on power) take their toll on the economy.
Venezuela’s Latin American neighbors urged President Nicolas Maduro to refrain from actions that might exacerbate the country’s political crisis in a disappointment to some regional governments that favored more direct and forceful criticism. As Bloomberg reports, Mercosur, South America’s largest trade bloc, called on ‘the government and the opposition not to carry out any initiative that could divide further Venezuelan society or aggravate institutional conflicts,’ in a joint statement issued at the end of a summit in Mendoza, Argentina. Member countries Brazil, Argentina, Uruguay and Paraguay were joined by Chile, Colombia, Guyana and Mexico in signing the statement.
International condemnation of the Maduro government’s plan to rewrite the country’s constitution to maintain its hold on power is gathering pace after the U. S. said it would impose sanctions on Venezuelan officials if Maduro goes ahead.
As we noted earlier in the week, The Trump administration is mulling over sanctions against senior Venezuelan government officials, and additional measures could include sanctions against the country’s oil industry, such as halting imports into the U. S., according to senior Washington officials who spoke to media.

This post was published at Zero Hedge on Jul 22, 2017.

Scaramucci: “If The Leaks Don’t Stop, I’m Going To Pare Down The Staff”

One day after new White House communications director Anthony Scaramucci scoured through his Twitter account, deleting any tweets (mostly critical of Trump) that could be a “distraction” for the White House, on Sunday morning the former Goldman employee pledged that as one of his first steps, he would “take dramatic action” to halt the biggest problem plaguing the Trump White House: the endless torrent of leaks.
“I will take dramatic action to stop those leaks,” Scaramucci told Chris Wallace on “Fox News Sunday” adding that while he could not control leaks coming from the intergovernmental agencies, he would take action in the White House communications department.
“If the leaks don’t stop, I’m going to pare down the staff because it’s not fair to the president, to America, and to the people in government” he threatened while adding that “everyone can stay if the follow protocol against the leaks.”

This post was published at Zero Hedge on Jul 23, 2017.

Last Chance for the Dollar to Rally

I think we need to focus on what is happening to the dollar. The intermediate cycle is now 63 weeks long. Clearly that isn’t normal. I’ve maintained for several years that the end game was going to play out in the currency markets. There has to be consequences to printing trillions and trillions of currency units , and leaving interest rates at 0 for 8 years. I don’t think the consequences are going to be deflation. I think the end game will be inflation, just like it was in the 70’s, and just like it was in 2007 and 2008.
It’s taken a while to manifest as other countries have jumped into the game and turned on their printing presses as well, so the collapse in the currency I’ve been looking for has taken quite a while to unfold. The first leg down ended in 2008.
The dollar rally out of the 2014 3 YCL has fooled everyone into thinking the dollar is strong and the euro is going to collapse. So everyone is now on the wrong side of the market. That’s pretty much how every bear market starts with everyone on the wrong side of the boat.

This post was published at GoldSeek on Sunday, 23 July 2017.

The Bottom Line On The Coulter Seat Deal

Ann Coulter may be one of the most-hated women in America (by half the country, anyway) but that doesn’t change what happened with her and Delta.
She paid for an assigned and premium seat. She was assigned that seat. The airline then moved her to give that seat to someone else.
Folks, this isn’t “overbooking”, but it is fraud.
Contract of carriage or no, the facts are simple in this sort of situation. Today airlines do not give you assigned seats until you get to the airport unless you pay an extra fee. That is, an assigned seat is no longer part of your “base fare”, it is an explicit service for which you pay.
Once you’ve paid you’ve had offer, acceptance and an act in furtherance of performance has taken place.
That’s a binding contract — period.

This post was published at Market-Ticker on 2017-07-23.

Did The Dutch Central Bank Lie About Its Gold Bar List?

Head of the Financial Markets Division of the Dutch central bank, Aerdt Houben, stated in an interview for newspaper Het Financieele Dagblad published in October 2016 that releasing a bar list of the Dutch official gold reserves ‘would cost hundreds of thousands of euros’. In this post we’ll expose this is virtually impossible – the costs to publish the bar list should be close to zero – and speculate about the far reaching implications of this falsehood.
Recap This story started a couple of years ago. As I am Dutch and concerned not only about my own financial wellbeing but of my country as well, I commenced inquiring my national central bank about the whereabouts and safety of our gold reserves in late 2013. One of my first actions was submitting the local equivalent of a Freedom Of Information Act – in Dutch WOB – to De Nederlandsche Bank (DNB) in order to obtain all written communication of the past decades between DNB and the Federal Reserve Bank Of New York (FRBNY). In 2013 I knew a large share of the Dutch gold was stored at the FRBNY, which I deemed to be an unnecessary risk. In a crisis situation, for example, the US government would be able to confiscate Dutch gold stored on American soil. Unfortunately, DNB responded it’s exempt from certain WOB requests under the banking law from 1998, article 3. (I thought the WOB hit a dead end, though recent developments have changed my mind regarding the legitimacy of the rejection. In a forthcoming post more on my WOB from 2013.)

This post was published at Bullion Star on 23 Jul 2017.