Can The Permian Push Oil Prices Down To $40?

Two analyst firms have revised upwards their production growth forecasts for the Permian, expecting oil output there to be 300,000 bpd higher by the end of this year. The firms are none other than Wood Mackenzie, whose analysts expect 300,000 bpd more in Permian output by end-2017 – a 200,000-bpd increase to its year-end forecast – and Rystad, which sees the cumulative increase for June-December at 300,000 bpd.
That’s the kind of consensus market players like to see, especially when it comes a couple of days after reports that investors are pulling out from the Permian after Pioneer Resources reported the share of natural gas and gas liquids in its overall output has been rising at the expense of oil. Investors love their crude, after all, and are much less excited about gas.
Amid the worry, which some say is not as widespread as it may seem, the upbeat forecasts of these analysts were certainly welcome. Indeed, EIA data shows that the Permian continues to be the leader among the shale plays in terms of production growth. This month, output there is seen to rise by 64,000 bpd from July, to 2.535 million bpd. To compare, the second-fastest output growth is forecast for Eagle Ford, at a distant 27,000 bpd this month. In fact, the Permian should account for over half of the total U. S. shale oil output increase in August from July. The figure stands at 113,000 bpd. Related: Oil Rises, But Saudis Face Daunting Dilemma

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

“Doomsday Trainwreck” Is Coming To Manhattan Luxury Real Estate, Barry Sternlicht Warns

It’s been a while since we checked in on the state of Manhattan’s ultra high end real estate market, and judging by what was said in the latest Starwood Property Trust earnings call, where CEO Barry Sternlicht warned of a doomsday waiting at the end of New York’s “Billionaire’s Row”, what’s coming is nothing short of a disaster. During the Starwood Q2 earnings call, Sternlicht said the development of ultra high-end residential building on West 57th Street – where two years ago Bill Ackman among others parked $91.5 million – an imminent “debacle.” He pointed out the out-of-balance mezzanine loan at JDS Development and Property Markets Group’s 111 West 57th Street project and predicted more distress in the luxury residential market, including at 53 W 53, a supertall condo being developed next to the Museum of Modern Art by Hines, Pontiac Land Group and Goldman Sachs, as the Real Deal reported.
‘We are beginning to see the cracks of the high-end residential market in Manhattan,’ Sternlich warned, putting in jeopardy future seasons of Million Dollar Listing. ‘The building on 57th Street just went through it’s B-lender. Those deals, and the building going up next to MoMA, those deals are going to be a disaster. So high-end resi in New York really is in trouble.’
Sternlicht also noted that just like during the last bubble peak, most exposed to loans backing luxury condos are not the banks but rather hedge funds, private equity firms and alternative lenders chasing high returns who have backed projects with asking prices of $7,000 to $10,000 a foot.

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

A Defiant Trump Doubles Down: “Blame On Both Sides” For Violence

During a fiery, improvized press conference that was supposed to address Trump’s infrastructure proposal but quickly veered into an angry back and forth between President Trump and the media over Saturday’s tragic events in Virignia, Donald Trump defended his initial response to the weekend violence in Charlottesville, saying he needed to “know the facts” before specifically calling out racist groups, and stating that there was ‘blame on both sides’ for the violent clashes that erupted in Charlottesville over the weekend.
‘You had a group on one side that was bad and you had a group on the other side that was also very violent and nobody wants to say that but I’ll say it right now,’ the president said. He added: ‘You had a group on the other side that came charging in without a permit. They were very violent.’
Claiming he needed more information, Trump said ‘I didn’t wait long’ to condemn the violence, saying ‘I wanted to make sure, unlike most politicians, that what I said was correct, not make a quick statement.”
He then said that “the statement I made on Saturday, the first statement, was a fine statement, but you don’t make statements that direct unless you know the fact. It takes a little while to get the facts. You still don’t know the facts. And it’s a very, very important process to me. And it’s a very important statement. So I don’t want to go quickly and just make a statement for the sake of making a political statement. I want to know the facts.’

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

Inventory Slips Higher, Downside Economic Risks That Much More

Last week the Commerce Department reported wholesale sales in June 2017 had risen by 5.6% year-over-year (unadjusted). Having increased by nearly 10% in May, and by the most in five years in January, 5.6% was instead the same kind of 2014 disappointment that is becoming far too common. These growth figures include petroleum sales on the wholesale level, meaning that like inflation rates oil price base effects have more to do with the outlier high estimates than any economic momentum.

This post was published at Wall Street Examiner on 15th August 2017.

This Picture Of Mike Pence ‘Triggered’ An Entire Campus Of California Private College Kids

When McKenzie Deutsch posted a picture of herself posing with the Vice President of the United States at the White House she probably didn’t expect to set off a mass ‘triggering’ event at her ritzy Southern California private institution of higher indoctrination, Scripps College, but that’s exactly what happened.
According to the Daily Caller, Deutsch, a rising junior at Scripps, was an intern this summer in the office of U. S. Representative Cathy McMorris Rodgers (R-WA) and was excited by the opportunity to meet the Vice President. So, after snapping the pic below she posted it to Facebook with the caption: ‘The places you’ll go, the things you’ll see, the people you’ll meet… What a day it was in DC!’

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

Chain-Store Stock Carnage Continues (Despite Biggest Jump In Retail Sales Since 2016)

Oh the irony – as bulls celebrate the best jump in retail sales since 2016, the scene for retailer stocks is an utter bloodbath…
Earlier today, US Retail Sales in July rebounded dramatically to a 0.6% MoM gain – the most since Dec 2016 – driven a surge in motor vehicles (record incentives) and department stores (more inventives?). Year-over-year saw upward revisions and a rebound to a 4.2% rise in July.
The last two month’s declines in Retail Sales have been revised away magically and we have now gone 5 months without a decline…

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

The Guns of August, The Trade Set-Up And Removing Your Rose Colored Glasses

Today I am going to lay out the case of a major market top and how it fits into the geopolitical backdrop of today. We then profile the trade set-up to look for and finally I will forcefully remove your Rose Colored Glasses you have been wearing since January 2017.
In Barbara Tuchman’s ‘The Guns of August’ she argues that August 1914 was when the Gilded Age died and the modern era actually began. The book opens with the famous depiction of Edward VII’s funeral in 1910 attended peacefully by all the kings of Europe. Never again would the body of world leaders be unified and cut from a similar cloth. The war ushered in a new world, not recognizable from the past. Not since that time have we witnessed such diplomatic folly as in the month of August 1914. Today we wonder are we witnessing a similar conflict between a super power and the client state of China which is an emerging super power? Could it unfold in a similar fashion?
Since May I have chronicled the topping process associated with a post bubble contraction. We have witnessed the following sequence:
1 The Gold-Silver ratio initially warning of an upcoming credit contraction in the future.
2. European stocks putting in a top in the traditional time window of May-June
3. USA stocks embarking on a final run for the roses, one last hurrah over the summer.
4. The Gold-Silver ratio signaling a confirmation of its original signal.
5. Yield curve flattening and credit spreads widening
6. Investor psychology embracing market top behaviors.
7. An initial crack in the US indexes in the time window of August or September.

This post was published at GoldSeek on 15 August 2017.

What the Heck’s Going On with Vintage Automobiles?

The fate of asset bubbles under the new regime.
Everyone is hoping that next Friday and Saturday, at Sotheby’s auction in Monterey, California, the global asset class of collector cars will finally pull out of their ugly funk that nearly matches that during the Financial Crisis. ‘Hope’ is the right word. Because reality has already curdled. Sotheby’s brims with hope and flair:
Every August, the collector car world gathers to the Monterey Peninsula to see the magnificent roster of best-of-category and stunning rare automobiles that RM Sotheby’s has to offer. For over 30 years, it has been the pinnacle of collector car auctions and is known for setting new auction benchmarks with outstanding sales results.
This asset class of beautiful machines – ranging in price from a 1962 Ferrari 250 GTO Berlinetta that sold for $38.1 million in 2014 to classic American muscle cars that can be bought for a few thousand dollars – is in trouble.
The index for collector car prices in the August report by Hagerty, which specializes in insuring vintage automobiles, fell 1.0 point to 157.42. The index is now down 8% year-over-year, and down 15%, or 28.4 points, from its all-time high in August 2015 (186).
Unlike stock market indices, the Hagerty Market Index is adjusted for inflation via the Consumer Price Index. So these are ‘real’ changes in price levels.

This post was published at Wolf Street on Aug 15, 2017.

China’s $9 Trillion Shadow Banking System Shrinks For The First Time In 9 Months

On the surface, the latest Chinese credit data reported overnight by the PBOC was not particularly memorable: new loans tumbled from the near record 1.540TN Yuan in June to only 825.5BN in July, just above the 820BN expected, while Total Social Financing also declined substantially from June’s 1.78TN to 1.22TN, also beating the 1TN estimate. While both July prints were a steep drop from June – reflected in Monday’s miss in retail sales, industrial production and capex – they were a significant increase from the year ago numbers. At the same M2 dropped to a new record low, sliding from June’s 9.4% to 9.2% in July, missing expectations of a modest rebound to 9.5%.
And while there are more details on the various constituent components below, there was one remarkable aspect to last night’s number: for the first time in 9 months China’s $9 trillion Shadow Banking Industry – defined as the sum of Trust Loans, Entrusted Loans and Undiscounted Bank Loans – contracted. These three key components combined resulted in a 64BN yuan drain in credit from China’s economy, the first negative print since October, seen by analysts as more evidence that Beijing’s campaign to contain shadow banking and quash risks to the financial system, is starting to bear fruit.

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

The Central Bankers Have Become Desperate, They Are Asking People To… – Episode 1356a

The following video was published by X22Report on Aug 15, 2017
German and other countries are following in the US footsteps, there latest program cash for clunkers. Retail sales have improved according the corporate media. These numbers are manipulated to make you believe the retail has rebounded. Remove autos and factor in the number of stores closures the stats are terrible. CEO of Dick’s says they are in panic mode because their prices are two high. The housing bubble 2.0 is here as the number of people borrowing with less than 10% increases. NY Fed Dudley now says that low inflation is ok and wants everyone to access their equity in their homes and go spend it in retail. This is one of the last desperate act of the central bank. The Fed also warns that debt is two high and people will not be able to sustain the debt level.

AUGUST 15/ANOTHER RAID BY THE CROOKED BANKERS: GOLD DOWN $11.00 AND SILVER DOWN 44 CENTS/KIM AND TRUMP SILENT ON THE NORTH KOREAN POWDER KEG/CHINA REINS IN ITS SHADOW BANKING SECTOR AND WE SHOULD…

GOLD: $1273.70 DOWN $11.00
Silver: $16.70 DOWN 44 cent(s)
Closing access prices:
Gold $1271.90
silver: $16.64
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: $1281.93 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1274.90
PREMIUM FIRST FIX: $5.02
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1279.81
NY GOLD PRICE AT THE EXACT SAME TIME: $1274.15
Premium of Shanghai 2nd fix/NY:$5.66
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est $1274.60
NY PRICING AT THE EXACT SAME TIME: $1274.80
LONDON SECOND GOLD FIX 10 AM: $1282.30
NY PRICING AT THE EXACT SAME TIME. $1282.30
For comex gold:
AUGUST/
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 26 NOTICE(S) FOR 2600 OZ.
TOTAL NOTICES SO FAR: 4547 FOR 454700 OZ (14.14 TONNES)
For silver:
AUGUST
70 NOTICES FILED TODAY FOR
350,000 OZ/
Total number of notices filed so far this month: 900 for 4,500,000 oz

This post was published at Harvey Organ Blog on August 15, 2017.

Negative Interest Rates Are Almost Certainly in Our Future

With interest rates still at extremely low levels, what will central bankers do when the next recession comes along?
Just take those interest rates negative.
Iain Stealey serves as Head of global aggregate strategies at JPMorgan Asset Management in London. He raised the specter of negative rates during a recent interview with Bloomberg.
I don’t think the central bankers would like to go back into negative rates once they get out of it, but the reality is they may well have to during the next recession.’
Even now, the number of negatively yielding bonds continues to grow. According to Bloomberg, market value of the world’s bonds with negative yields has jumped almost 25% over the past month, rising to $8.6 trillion. This despite the Fed raising rates and talking about reducing its balance sheet.

This post was published at Schiffgold on AUGUST 15, 2017.

Beware The Dead Cat Bounce: “Exuberant Markets Can’t Escape The Shadow Of Negatives”

Treasury yields have erased the knee-jerk losses from retail sales, Nasdaq is now tumbling, and gold is bouncing…
This is not the market we saw yesterday that was relieved that the world had not ended and Bloomberg’s macro strategist Mark Cudmore is worried that it’s not over, warning that “exuberant markets can’t escape the shadow of negatives”
Via Bloomberg,
Risk assets have rallied sharply so far this week but there are sufficient flaws in the positive narrative to argue that the bears will likely inflict further pain on impatient bulls. On Monday, the S&P 500 Index had its best day in more than three months. With U. S. stocks the flagship risk asset, that good mood has spread across markets. I argued a week ago that the global market outlook had turned much more negative, so the strength of the (expected) bounce has taken me by surprise.

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

Stocks Rise despite Potential Trade War with China

The stock market news today is highlighted by President Trump’s latest executive order threatening to crack down on China’s intellectual property abuses. Dow Jones futures are up 55 points this morning even though China threatened to take defensive action to protect its interests.
Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:

This post was published at Wall Street Examiner on August 15, 2017.

Gold Prices ‘Shed Crisis Premium’ as N.Korea’s Kim ‘Backs Down’ to ‘Foolish Yankees’

Gold prices fell 1.4% in Asian and London trade Tuesday, erasing all of August’s prior gains as world stock markets rose for a second day amid reports of easing tensions between the US and North Korea after last week’s threats of nuclear missile strikes.
As Washington’s Secretary of Defense James Mattis said it would be “game on” if Pyongyang attacked, the pariah state’s regime said it would wait and watch the next move from “the foolish Yankees” before sending “enveloping fire” at the US island and military base of Guam.
“We are very…I’d say almost ecstatic that Kim Jong Un has backed off,” said Guam Homeland Security Advisor George Charfauros.
Listen to Jeff Christian on Metals, Lithium, and Electric Vehicles
“The yellow metal continued to see some of its recent risk premium wiped away during Asian hours today,” said Tuesday morning’s note from Swiss refiners and finance group MKS Pamp.

This post was published at FinancialSense on 08/15/2017.

Central Bank Polices Disrupt Our Ability to Assess Risk

When central banks manipulate interest rates, they disrupt normal patterns of savings and investment. They pump up economic bubbles that ultimately pop and kick off economic crashes. We saw this vividly in the 2008 financial crisis. Low interest rates, along with government policies, encouraged unsustainable investment in housing. When the bubble popped, it nearly brought the entire economy down with it.
There is another problem with central bank interest rate tinkering that exacerbates bubbles.
It hides inherent risk.
When interests rates remain artificially low, it suppresses risk premiums and drives further malinvestement.
Thorsten Polleit writing for the Mises Institute Fed Watch explained the mechanism.
Inherent risk exists with any investment, but some are riskier than others. In an unfettered market, investors reap a reward in the form of higher yield for taking on higher risk.

This post was published at Schiffgold on AUGUST 15, 2017.

Trump Slams “Grandstanding” CEOs Who Have Quit His Council

For every CEO that drops out of the Manufacturing Council, I have many to take their place. Grandstanders should not have gone on. JOBS!
— Donald J. Trump (@realDonaldTrump) August 15, 2017

Well, on the bright side, it took him around 12 hours to respond to last night’s resignations…
The remaining CEOs on Trump’s council had the following to say (via Business Insider)
Andrew Liveris, Dow Chemical Company, will remain on the council. “I condemn the violence this weekend in Charlottesville, Virginia, and my thoughts and prayers are with those who lost loved ones and with the people of Virginia,” Liveris said in an emailed statement. “In Dow, there is no room for hatred, racism, or bigotry. Dow will continue to work to strengthen the social and economic fabric of the communities where it operates – including supporting policies that help create employment opportunities in manufacturing and rebuild the American workforce.” Bill Brown, Harris Corporation, did not respond to a request for comment. Michael Dell, Dell Technologies, will remain on the council. “While we wouldn’t comment on any member’s personal decision, there’s no change in Dell engaging with the Trump administration and governments around the world to share our perspective on policy issues that affect our company, customers, and employees,” a spokeswoman said. John Ferriola, Nucor Corporation, did not respond to a request for comment.

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