Bank of Canada Shuts Out Free Market Economists from Key Policy Conference

Next week’s Bank of Canada policy conference appears set to deliver standard talking points. Not a single free market economist has been invited and a BOC spokesperson confirmed that the alternative-financial press is also being shut out.
The BOC event, titled Monetary Policy Framework Issues: Toward the 2021 Inflation Target Renewal , takes place during a critical time for Canada’s central bank.
Bank of Canada economists emerged from the 2008 financial crisis red-faced, after having failed to predict the event in advance, despite the clear warning signs and having some of the country’s most respected practitioners on staff.
The BOC then had to bail out Canada’s big five banks, whose solvency the monetary authority is charged with overseeing.
Questions regarding Poloz’s ‘trickle down’economics
Things do not appear to have improved much under the reign of Stephen Poloz, its current Governor.
The Bank of Canada ranks last among the G-7 central banks in terms of its gold holdings, this during a time of record high Canadian household debts and one of the planet’s biggest housing bubbles.
There are also increasing questions regarding Mr. Poloz’s ‘trickle down’ economics strategy, which consists of leveraging ‘considerable economic stimulus’ to boost asset prices, in the hope that a resulting ‘wealth effect’ will trickle down to the poor and the young.

This post was published at GoldSeek on Friday, 8 September 2017.

Trump Now “Hates” Gary Cohn, Who “May Be Pressured To Leave White House”: Report

When Gary Cohn criticized Trump’s response to the Charlottesville tragedy, he set off a sequence of events which not only reportedly cost the former Goldman COO his future position as Fed chair, but – according to an overnight report from Reuters – his job as Trump’s chief economic advisor.
Extending on recent reports from the WSJ that Gary Cohn has lost Trump’s good graces in recent days, Reuters focuses on that the newly fraying relationship between U. S. President Donald Trump and top White House economic adviser Gary Cohn, which has raised questions about how long Cohn will stay in his job, according to two people with close ties to the White House. Several sources quoted by Reuters said Cohn had long planned to stay in his post for at least a year. But one source said concern had grown among Cohn’s allies over the past 24 hours that he might be pressured to leave.
The recent concerns stem from a report in the Wall Street Journal that Cohn was unlikely to be nominated by Trump as a potential successor to Fed Chair Janet Yellen. Trump had mentioned Cohn in July for the job. Cohn resigned as president of Goldman Sachs to join the new administration. ‘The calculus has shifted for Gary. He’s gone, essentially, from untouchable to possibly being bounced out,’ the source said. ‘The message is clear that suddenly Cohn’s job in the White House has real downside risk.’ As reported at the time, the formerly sterling relationship between the two men broke down last month when Cohn crossed Trump, critizing the president in a Financial Times interview for his response to the violence at a rally organized by white nationalists in Charlottesville, Virginia, in which one woman died.

This post was published at Zero Hedge on Sep 8, 2017.

Eight Crooks Against The World

I’d like to share what may be a different way of looking at the gold and silver market, but still remain focused on what has been the primary driver of price – changes in the COMEX futures market structure. It has become fairly common knowledge that prices rise when the managed money traders buy and prices fall when these traders sell. So great is the effect on price of this COMEX derivatives positioning that it is discussed in more commentaries than ever before. And that is due to what has become a clearly observable pattern of cause and price effect.
Let me first quantify the amount of gold in existence throughout the world in all forms as 5.6 billion ounces, an amount on which there is near universal agreement. Not all of this gold is thought to be available for sale at some price, such as religious and other artifacts and some jewelry, but much of it could find a way to the market depending on price. Quite arbitrarily, let me assert that 4 billion ounces of gold might find its way to market at some point, including all government holdings and the amount held by the earth’s 7.5 billion inhabitants. Don’t get caught up with the precise amount, as it doesn’t make much of a difference whether the number is 3 billion or 5 billion oz.
Just like in any investment asset, those entities and individuals which hold gold would prefer and would generally be benefited by a rise in the price. Conversely, all the holders of gold would generally be adversely affected by lower prices. This is very basic stuff and in no way is intended to trick anyone; I’m just speaking in very simple terms. In addition to all the existing physical gold in the world, there is a large gold mining and production industry that extracts 100 million oz of new gold each year; which in turn, is owned by all types of investors, all of which would prefer to see rising gold prices for the obvious reasons.

This post was published at SilverSeek on September 8, 2017 –.

Howard Marks Unveils The 6 Options For Investing In Today’s “Low-Return World”

Via Seabreeze Partners’ Doug Kass,
In late July, Oaktree Capital Management co-chairman Howard Marks issued several market warnings in “There They Go Again … Again,” which I extensively highlighted in my Diary.
“There is plenty more food for thought in this must-read 22 pages of observations. Howard closes his musings with this advice:
“If you refuse to fall into line in carefree markets like today’s, it’s likely that, for a while, you’ll (a) lag in terms of return and (b) look like an old fogey. But neither of those is much of a price to pay if it means keeping your head (and capital) when others eventually lose theirs. In my experience, times of laxness have always been followed eventually by corrections in which penalties are imposed.
It may not happen this time, but I’ll take that risk. In the meantime, Oaktree and its people will continue to apply the standards that have served us so well over the last [thirty] years.”
From my perch, greed reigns today.
As Howard relates, investors make the most — and safest — money when they do things that other people don’t want to do. But when most investors are unworried and taking unusually high risks, asset prices are typically elevated, risk premiums are low and markets are risky.
It’s what happens when there is too much money and too little fear.”
–Kass Diary, “There They Go Again … Again,” July 27, 2017
In that July memo Howard made these principal points in evaluating current conditions:
* The market uncertainties are unusual in terms of number, scale and insolubility. * In the vast majority of asset sectors, prospective returns are about the lowest they have ever been.

This post was published at Zero Hedge on Sep 8, 2017.

Deflation and the Markets; are deflationary forces here to stay

Machines are worshipped because they are beautiful and valued because they confer power; they are hated because they are hideous and loathed because they impose slavery. Bertrand Russell
Manufacturing output continues to improve, even though the number of manufacturing jobs in the U. S. continues to decline and this trend will not stop. While some Jobs have gone overseas, the new trend suggests that automation has eliminated and will continue to eliminate a plethora of jobs. As this trend is in the early phase, the momentum will continue to build in the years to come.
Machines are faster, cheaper and don’t complain; at least not yet. So from a cost cutting and efficiency perspective, there is no reason to stick with humans. This, in turn, will continue to fuel the wage deflation trend. Sal Guatieri an Economist at the Bank of Montreal in a report titled ‘Wage Against the Machine,’ states that automation is responsible for weak wage growth.
‘It’s unlikely that insecurities from the Great Recession are still weighing, given high levels of consumer confidence,’ he wrote. ‘However, automation could be a longer-lasting influence on worker anxieties and wages. If so, wages could remain low for a while, restraining inflation and interest rates.’
Guatieri goes on to state that ‘The defining feature of a job at risk from automation is repetition’. This puts a lot of jobs at risk, many of which fall under the so-called highly skilled category today; for example, Accountants, Lawyers, Radiologists, X-Ray technician, etc.
North American business order record number of robots
In 2016, they order 35,000 robots, 10% more than in 2015. But that is nothing compared to China, which ordered 69,000 robots in 2016, South Korea ordered 38,000 and Japan for its small size ordered 35,000 robots. This proves that jobs are not going overseas but are being taken over by machines. Nothing will stop this trend; a trend in motion is unstoppable.

This post was published at GoldSeek on Friday, 8 September 2017.

Equities Topping – Breakdown Ahead?

With the S&P 500 at 2464, it continues to hover within 1% of a new all-time high. Yet, internally, the market is deteriorating with more and more stocks moving below their 50-day and 200-day moving averages.
Throughout 2017, the story of the rise in the S&P 500 has been a story of a fairly narrow list of very large-cap stocks that have contributed to nearly half of the index’s strong advance. Many of those stocks are very close now to breaking down through key support with the S&P Index also flirting above key levels. For the S&P 500 (last at 2463.36 as we pen this update), a couple of key levels to watch are the 2458 level, which is close in support, and then just below that is the 50-day average at 2454.50.

A break below 2454.50 would be short-term bearish and would turn up the credibility on the potential that the S&P 500 has been moving in a large distribution top over the last few months. It is potentially a head and shoulders pattern, but would still need a downside break down to confirm that outcome. Until the S&P breaks below the 100-day average (at Point c on the chart above) at a reading of 2431.15 AND key horizontal support at approximately 2410, it would be too soon to call a top is in place. Mind you, that does not mean that the entire structure right now looks incredibly vulnerable. In addition, any time we are talking about the potential for a serious break down in the stock market, we always want to watch several different indices for confirmation.

This post was published at FinancialSense on 09/08/2017.

Retail Bloodbath After Target Announces Price Cuts On “Thousands Of Items”

Amazon may have the most razor thin margins in the entire retail world, but that doesn’t mean that its peers can’t catch up as the global race to the deflationary bottom enters its final stage.
Moments ago, that’s precisely what Target did when it announced on its blog that it has taken a “close look” at products most important to its customers to ensure they’re priced right daily, and has cut prices on “thousands of items.” The company also unveiled that it has “eliminated more than two-thirds of our price and offer call-outs so you can more easily spot the savings” and that it is not “ditching promotions.”
In short, Target just pre-pre-announced that it will shortly be guiding both margins and earnings much lower. The only question is whether Amazon will allow it to expand revenues by enough to offset the bottom line drop. Judging by the market REACTION, the answer is no…

This post was published at Zero Hedge on Sep 8, 2017.

Welcome To The Third World, Part 25: Losing Faith In College

One of the hallmarks of a successful society is the widespread belief that education is a key to success. For that to be true there have to be 1) enough jobs farther up the food chain to make four more years of studying worthwhile, and 2) schools that are good and cheap enough to make the equation work financially.
The US is losing both:
Americans Losing Faith in College Degrees, Poll Finds
(Wall Street Journal) – Americans are losing faith in the value of a college degree, with majorities of young adults, men and rural residents saying college isn’t worth the cost, a new Wall Street Journal/NBC News survey shows. The findings reflect an increase in public skepticism of higher education from just four years ago and highlight a growing divide in opinion falling along gender, educational, regional and partisan lines. They also carry political implications for universities, already under public pressure to rein in their costs and adjust curricula after decades of sharp tuition increases.
Overall, a slim plurality of Americans, 49%, believes earning a four-year degree will lead to a good job and higher lifetime earnings, compared with 47% who don’t, according to the poll of 1,200 people taken Aug. 5-9. That two-point margin narrowed from 13 points when the same question was asked four years earlier.

This post was published at DollarCollapse on SEPTEMBER 8, 2017.

“Greatest Evacuation In History” – 650,000 Ordered To Leave Florida

In what spokesman Michael Hernandez describes as “the biggest evacuation in history,” Miami-Dade has expanded its mandatory evacuations orders to Zone C, forcing over 650,000 to leave Florida in a “traffic nightmare” as Cat-5 Hurricane Irma bears down.
An earlier order included just Miami Beach, other low-lying and barrier island areas and all mobile-home residents, but as the storm grew in intensity and the cone of uncertainty narrowed, County Mayor Carlos Gimenez issued the order this afternoon expanded to Zone C.


This post was published at Zero Hedge on Sep 8, 2017.

Will Low Unemployment Cause Accelerating Inflation?

In August the US unemployment rate closed at 4.4% against 4.3% in the month before. The relatively low unemployment rate seen by some commentators as implying that the US is almost at the so-called natural rate, which believed to be at around 4.5%.
It is held that once the unemployment rate falls below an “optimal” rate -called the Non-Accelerating Inflation Rate of Unemployment (NAIRU) -it sets off an inflationary spiral. This acceleration in the rate of inflation takes place through increases in the demand for goods and services.
It also lifts the demand for workers and puts pressure on wages, reinforcing the growth in the rate of inflation.
The NAIRU is an arbitrary measure, derived from a statistical correlation between changes in the consumer price index and the unemployment rate.
What matters in the NAIRU framework is whether the theory “works”, i.e., whether a decline in the unemployment rate below the NAIRU results in the acceleration in the rate of inflation.
Using statistical correlation as the basis of a theory means that “anything goes.” For example, let us assume that a high correlation has been found between the income of Mr. Jones and the rate of growth in the consumer price index. The higher the rate of increase of Mr. Jones’ income, the higher the rate of increase in the consumer price index.

This post was published at Ludwig von Mises Institute on Sept 8, 2017.

Market Talk- September 8th, 2017

Governments and central banks across the world are still concerned about the lack of inflation or significant growth and we saw evidence again in that today from the Japanese Q2 GDP release. Well below estimate of 4% this mornings release came in at 2.5%. Mario Draghi also commented on growth concerns in yesterdays ECB meeting and it is also being questioned in the Federal Reserve as well. It didn’t help the stock market which closed down -0.65% with financials and exporters leading the decline and this again encouraged the yen dash as we now watch the mid 107’s trade. 10yr JGB’s traded negative for most of the day. One bright spot was the Hang Seng but that was large cap’s reflecting the US holding yesterdays levels. Still worth keeping an eye on the Chinese yuan as yet another stronger set today (6.5032) making this a double digit gain in days. SENSEX closed small up today still helping its impressive 10.5% YTD gain.

This post was published at Armstrong Economics on Sep 8, 2017.

This Is What Miami Could Look Like On Sunday Morning

An analysis by Climate Central shows that the Florida storm surge from hurricane Irma could endanger millions, and result in billions in property damage.
According to Climate Central, it has created the following resources to help anyone remaining in the area visually understand how dangerous the flooding will be in their neighborhood and take safety measures accordingly.
These simulations are based on the Coastal Emergency Risks Assessment (CERA) storm surge and wave model using data from the National Hurricane Center forecast track from Friday morning (Advisory 37). CERA partners include multiple leading universities and federal agencies.
The videos use Google Earth to simulate what the these storm surge forecasts would appear like in different South Florida neighborhoods. The height above mean sea level for each simulation is shown in the titles. As local topography varies, these values translate to approximately 7-10 feet of water above ground in many areas according to the Storm Surge Warming forecasts from the National Weather Service.


This post was published at Zero Hedge on Sep 8, 2017.

Equifax Hit With $70 Billion Lawsuit After Leaking 143 Million Social Security Numbers

One day after Equifax announced (more than one month after it itself had learned) that its systems had been hacked, resulting in up to 143 million social security numbers, names, addresses, driver’s license data, birth dates, some credit card numbers and pretty much all other critical personal data being leaked and currently for sale somewhere on the dark web, the company whose job is, ironically, to protect the credit and personal information of hundreds of millions of Americans has been hit with a monster class-action lawsuit seeking as much as $70 billion.
In retrospect, we find it surprising that it wasn’t multi-trillion lawsuit in light of the galactic stupidity exhibited by a company whose server apparently had zero firewalls from the internet and where any hacker could get access to the most confidential information available.
And while for the most part class action lawsuits are filed by ambulance-chasing lawyers seeking a recovery for a class of plaintiffs in exchange for a juicy 25-40% of the final amount, in this case In the complaint filed in Portland, Ore., federal court has every single merit to ultimately crush Equifax for what is nothing less than unprecedented carelessness in handling precious information.
In the lawsuit, plaintiffs alleged Equifax was negligent in failing to protect consumer data, choosing to save money instead of spending on technical safeguards that could have stopped the attack, Bloomberg reports. Imagine how much angrier they would be if they found that instead of “saving” the money, the company used it instead to buy back its own stock (in this case from selling executives). ‘In an attempt to increase profits, Equifax negligently failed to maintain adequate technological safeguards to protect Ms. McHill and Mr. Reinhard’s information from unauthorized access by hackers,’ the complaint stated. ‘Equifax knew and should have known that failure to maintain adequate technological safeguards would eventually result in a massive data breach. Equifax could have and should have substantially increased the amount of money it spent to protect against cyber-attacks but chose not to.’

This post was published at Zero Hedge on Sep 8, 2017.

SEPT 8/ANOTHER MINI FLASH CRASH ON GOLD AND SILVER FAILS AGAIN/GOLD STILL UP $1.10 BUT SILVER RETREATS BY ONE CENT/ISRAEL STRIKES INTO SYRIA DESTROYING A CHEMICAL FACTORY BUT DOES SO ON THE LEBAN…

GOLD: $1346.60 UP $1.10
Silver: $18.03 DOWN 1 CENT(S)
Closing access prices:
Gold $1349.50
silver: $18.12
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: $1355.02 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1348.95
PREMIUM FIRST FIX: $6.07
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1353.46
NY GOLD PRICE AT THE EXACT SAME TIME: $1353.50
Premium of Shanghai 2nd fix/NY:$0.00

This post was published at Harvey Organ Blog on September 8, 2017.

THE U.S. PETRO DOLLAR BREAKDOWN CONTINUES: Big Moves In Gold & Silver Ahead

The four-decade long monopoly of the U. S. Petro-Dollar as the world’s reserve currency is coming to an end. Unfortunately, most Americans have no clue that when the Dollar loses its reserve currency status, life will get a lot tougher living in the U. S. of A. Let’s say, Americans will finally receive ‘Precious metals religion.’
The U. S. Dollar Index fell considerably yesterday and is now down below a key support level. In early morning trading yesterday, the U. S. Dollar Index fell to 91.46, down 73 basis points:

This post was published at SRSrocco Report on SEPTEMBER 8, 2017.

Brick & Mortar Meltdown: Bon-Ton Department Stores Hires Bankruptcy Advisor

Vitamin World plans to file for bankruptcy, Perfumania Holdings just filed. And Toys R Us… All in just two weeks.
Bon-Ton Stores, Inc., which operates about 260 department stores largely in the Northeast and Midwest under the names Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s, and Younkers, has hired PJT Partners, which describes itself as ‘a leading advisor to companies and creditors in restructurings and bankruptcies around the world.’
Faced with falling sales and customer traffic, the company is trying to refinance debt and prepare for a possible bankruptcy filing, ‘people familiar with the matter’ told the Wall Street Journal.
Bon-Ton had already hired turnaround firm AlixPartners to help improve its operations but added PJT to focus on the financial aspects, ‘the people’ told the Journal.
Bon-Ton’s debt and shares found their way onto WOLF STREET for the first time in November 2015, in Capital Destruction Rages Beneath S&P 500 Tranquility after it reported crummy results, blaming the ‘unseasonably warm weather’ and ‘continued weakness in overall traffic trends.’ That day, its already beaten-down 8% notes plummeted well below 40 cents on the dollar, and its shares crashed 39% to $1.21.

This post was published at Wolf Street by Wolf Richter ‘ Sep 8, 2017.

Crude Is Getting Slammed After China Headlines

WTI crude is suddenly tumbling. While it’s unclear of the specific catalyst (storms outweighing most other events), desk chatter suggests it is due to a story in The FT that China is striving to reduce capacity of its ‘teapot’ oil refineries – thus cutting demand notably.
Beijing’s push to use crude import quotas and licences as a tool to spur consolidation within China’s independent refining sector is working to correct an industry that has grown ‘out of control’. A new report from Columbia University’s Center on Global Energy Policy argues the number of privately owned ‘teapot’ refineries will shrink over the next decade as larger, sophisticated plants thrive at the expense of smaller rivals. Consolidation comes as the industry faces pressures from overcapacity, a battle for market share between independent and state-owned companies and slower demand for refined products. Large plants with higher utilisation rates and greater access to imported crude had already begun acquiring smaller plants that had not been granted the same rights by Beijing.
‘The government does not want dozens of refineries running at 40-50 per cent capacity,’ said Erica Downs, the author of the report.
‘Beijing is correcting a course for an industry that has gotten out of control.’

This post was published at Zero Hedge on Sep 8, 2017.

Mark Thornton: Trump’s Deal With Dems Increases His Power over GOP

In this discussion, Mark Thornon examines how Donald Trump’s new deal with the Democrats on teh debt ceiling will help him bring the GOP into line on issues like tax reform.
As Thornton notes, the debt-ceiling deal only extends the status quo, so is not a really a big win for the Democrats. It is, however, a win for Trump because it illustrates to the GOP leadership in Congress that Trump does not need them as much as the GOP thinks he does.
This will, Thornton says, force the GOP to move forward on tax reform, which the GOP in Congress has been ignoring up until now. The details, however, don’t matter that much to Trump. Thornton explains how tax reform works in Congress – special interest groups descend on Congress, handing out campaign contributions, to ensure the latest tax reforms benefit their groups. Trump, on the other hand, just wants a general lessening of the tax burden. Trump has made it clear that if the GOP is not willing to help him, Trump is willing to hand more political defeats to the GOP by working with the dems.

This post was published at Ludwig von Mises Institute on Sept 8, 2017.

Yuan Tumbles After Beijing Gives Speculators Green Light To Short The Currency

And now, Trump finally has reason to be angry with China for intervening in its currency to manipulate it lower, not higher.
* * *
After the biggest weekly surge in the Yuan on record, the first sign that Beijing had had enough of the relentless surge in the currency was unveiled overnight, when according to a Reuters report quoting “policy insiders” China had “begun to worry about a rallying yuan as exporters come under strain” a sign the currency’s gains might lose steam after it hit a two-year against the dollar just weeks before Beijing is set to host a crucial Communist Party gathering in the autumn.
For those who have not been following our daily morning update on the Yuan, here is how sharp the move has been in recent weeks, and how painful to countless Yuan shorts who have been left with massive margin losses.

This post was published at Zero Hedge on Sep 8, 2017.