32 Children Dead, 30 More Missing In Rubble Of Collapsed Mexico City School

More than 30 students have been confirmed dead, and 30 more are missing, as rescuers sift through the rubble of the Enrique Rebsamen primary and secondary school, a private school that was one of 44 buildings in Mexico City that collapsed during Tuesday’s historic earthquake. According to the Associated Press, a wing of the three-story school pancaked into a pile of concrete slabs during the quake, killing dozens and leaving dozens more trapped in the wreckage.
Soldiers and volunteers toiled through the night to try and free the trapped schoolchildren and staff. At least and five teachers, and 32 students, have been confirmed dead. The 7.1 magnitude quake shook Central Mexico, leaving at least 250 people dead in the deadliest earthquake since a 1985 quake that left 5,000 dead. Bizarrely, Tuesday’s quake occurred on the 32nd anniversary of the 1985 quake. Two children were rescued from the rubble, but 30 more people are still missing, local media reported.

This post was published at Zero Hedge on Sep 20, 2017.

“If This Trade Doesn’t Work, You Can Blame Me…”

In July I wrote a piece titled, ‘Is the real US Dollar Pain Trade Lower?’. At the time the US dollar was sucking wind, but many traders were still playing for a bounce. The prevailing wisdom was that the Fed’s tighter monetary policy, combined with Trump’s business acumen, along with a tax reform bill, and topped off with a massive short covering surge from emerging market US dollar denominated issuers, would ensure the two-year US dollar rally would continue.

This post was published at Zero Hedge on Sep 20, 2017.

Yet Again?

This week’s Outside the Box is from one of my favorite writers and analysts. Howard Marks of Oaktree Capital is simply an investing legend. He writes several ‘memos’ a year on the world of investing, and I put quotes around the word memos because they are typically longer than what you would think of as a memo. This week’s selection is reduced from the full memo, which you can see here.
(And for those who are wondering what I omitted, Howard did a long section on Bitcoin that I had to edit out. If you’re interested, click on the link above, go down about halfway, and you’ll find that section.)
Oaktree Capital, which is a $100 billion hedge fund, runs the largest distressed debt fund in the world, according to its wiki. Distressed-debt hedge funds are among my favorite investment styles. Where others see risk, great distressed investors simply say let’s lower the valuation of the asset until we take out the risk. It’s all about the market finding its own level. And the really good funds can offer some quite pleasurable investments noncorrelated to market returns. The problem is getting access to them. Oh well. More from the wiki:

This post was published at Mauldin Economics on SEPTEMBER 20, 2017.

Ahead Of The Fed, A Reminder: Gross Vega On VIX ETFs Just Hit A “Staggering” All Time High

What if the Fed surprised today, and instead of only announcing a reduction in its balance sheet, it also sent an uber-hawkish signal by hiking rates 25 bps, something which virtually nobody expected? While stocks would certainly suffer an adverse reaction, as the Fed confirmed that its intention was to burst one or more asset bubbles, it may be just what many in the market desire.
The reason for that is the active trader community has been growing increasingly bearish in recent weeks, and in anticipation of a potential downside shock as stocks trade at all time highs, it has been aggressively putting on hedges. One place where this is visible is in S&P 500 options where the put to call ratio has climbed to its highest level in more than two years according to Bloomberg.

This post was published at Zero Hedge on Sep 20, 2017.

“Reading Between The Dots”: Is The Fed About To Admit The Market Was Right All Along

With the Fed set to unveil its first balance sheet reduction in modern history – an event that is largely priced in – what traders are far more interested in, is what will happen to the Fed’s “dots”, where consensus anticipates no move for the 2017 dot, while the 2018 and 2019 dots could shift lower as the FOMC language turns slightly more dovish.
How could this dot “migration” take place?
First, as Adnan Chian observes, at least 4 Fed members need to move their 2017 dots lower to shift the median from 1 more hike in 2017 to no more hikes, i.e. December is “dead.”

This post was published at Zero Hedge on Sep 20, 2017.

SEPT 20/BANKERS SET UP ANOTHER GOLD AND SILVER RAID ON THE CLOWNS FOMC BALANCE RUNOF/YIELD CURVE FLATTENS WITH THE FOMC ANNOUNCEMENT INDICATING FED FAILING POLICY/DEVASTATION IN BOTH MEXICO AND P…

GOLD: $1312.75 UP $5.25
Silver: $17.29 UP 5 CENT(S)
Closing access prices:
Gold $1300.00
silver: $17.15
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: $1316.24 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1312.70
PREMIUM FIRST FIX: $3.54
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1318.43
NY GOLD PRICE AT THE EXACT SAME TIME: $1313.85
Premium of Shanghai 2nd fix/NY:$4.58
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est $1314.90
NY PRICING AT THE EXACT SAME TIME: $1315.20
LONDON SECOND GOLD FIX 10 AM: $1311.30
NY PRICING AT THE EXACT SAME TIME. 1311.80
For comex gold:
SEPTEMBER/
NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 0 NOTICE(S) FOR nil OZ.
TOTAL NOTICES SO FAR: 54 FOR 5400 OZ (0.1679 TONNES)
For silver:
SEPTEMBER
71 NOTICES FILED TODAY FOR
355,000 OZ/
Total number of notices filed so far this month: 5,881 for 29,405,000 oz

This post was published at Harvey Organ Blog on September 20, 2017.

Russian Depositors On Edge After Second Major Bank Fails In Under A Month

If once is happenstance, twice is coincidence, and three times is a full-blown collapse in the financial system, then Russia may be getting close.
Just three weeks after Russia bailed out its largest and very politically connected private bank, Otkritie, after an unexpectedly acute bank run resulted in the bank’s near-collapse, already nervous Russian depositors shifted their attention to another domestic lender, and earlier today Russia’s B&N Bank, the country’s 12th biggest lender by assets, also sought a bailout from the central bank. While it is unclear how much this bailout would cost Russian taxpayers, when the central bank took over Otkritie last month, it said it might need up to $6.9 billion, the biggest ever bailout in the country.
B&N Bank, which is controlled by Russian oligarch Mikhail Gutseriev and was not on the central bank’s list of systemically important lenders, said it had under-estimated the problems within the banks it had bought during an expansion drive. ‘Our objective is, with the support of the central bank … to conduct an effective financial rehabilitation of the bank,’ said Mikail Shishkhanov, who was named as chairman of B&N Bank, whose assets account for 2 percent of the Russian banking system, according to ratings agency Fitch.

This post was published at Zero Hedge on Sep 20, 2017.

This Fed is on a Mission

QE Unwind starts Oct. 1. Rate hike in Dec. Low inflation, no problem. The two-day meeting of the FOMC ended on Wednesday with a momentous announcement that has been telegraphed for months: the QE unwind begins October 1. It marks the end of an era.
The unwind will proceed at the pace and via the mechanisms announced at its June 14 meeting. The purpose is to shrink its balance sheet and undo what QE has done, thus reversing the purpose of QE.
Countless people, worried about their portfolios and real estate investments, have stated with relentless persistence that the Fed would never unwind QE – that it in fact cannot afford to unwind QE.
The vote was unanimous. Even no-rate-hike-ever and cannot-spot-housing-bubbles Neel Kashkari voted for it.
The Fed also telegraphed that it could raise its target range for the federal funds rate a third time this year, from the current range of 1.0% to 1.25%. There is only one policy meeting with a press conference left this year: December 13, when the two-day meeting ends, remains the top candidate for the next rate hike.
This has been the routine since the rate hike last December: The FOMC decides to change its monetary policy at every meeting with a press conference: December, March, June, today, and December.

This post was published at Wolf Street by Wolf Richter ‘ Sep 20, 2017.

New Survey Shows Just How Hard It Is To Make Ends Meet: ‘Half Of People Need Credit Cards Just To Make It To Their Next Payday’

A new survey was done in the United Kingdom and it shows just how hard it is for young people to survive paycheck to paycheck. Almost half of those surveyed admitted to needing credit to make ends meet until they get paid again.
More than half of young women have to borrow to make their funds last to the end of the month, highlighting the impact of stagnating wages, insecure work, and rising prices like taxation on millennials. A survey of 4,000 people aged 18-30 shows that 51% of young women and 45% of young men regularly use credit to stretch their finances until payday. The report also found that a quarter of these young people in the UK are constantly in debt.
When asked how they borrow to make ends meet, one in five claimed they used overdraft credit or borrowed from family members. The next most common form of borrowing was the use of credit cards. The Young Women’s Trust, which commissioned the representative sample of young people, said many of those questioned in the survey also worked extra hours or skipped meals to make their cash stretch to the end of the month.
The survey was conducted after a growing number of people began asking for help from debt charities with personal debts and monthly bills.

This post was published at shtfplan on September 20th, 2017.

Russia and China’s Golden Plan to Shift Economic Power East

Russia and China seem to be betting their monetary futures on gold. Their long-term maneuverings could seriously undermine the dominance of the US dollar and shift the world’s economic center of power from West to East.
Russia and China buy more gold than any other countries in the world, with Russia leading the way. Over the last decade, the the Central Bank of the Russian Federation has added more than 1,250 tons of gold to its reserves, according to the World Gold Council. At 1,700 tons, Russia’s has the sixth largest gold reserves in the world. Russian gold makes up about 17% of the nation’s wealth.
In 2016 alone, the Russian central bank purchased 201 tons of gold, far more than any other central bank in the world. The People’s Bank of China ranked second, adding 80 tons to its reserves.
In June 2015, the Chinese central bank announced its gold holdings had grown by 57% to about 1,658 tons. It was the first official update to China’s gold reserves since 2009. Since then, the Chinese have aggressively added to their holdings and taken other steps to increase their influence on the world’s economic stage. Many analysts believe China drastically understates the amount of gold it owns.

This post was published at Schiffgold on SEPTEMBER 20, 2017.

Fed’s Asset Bubbles Now At The Mercy Of The Rest Of The World’s Central Bankers

“Like watching paint dry,” is how The Fed describes the beginning of the end of its experiment with massively inflating its balance sheet to save the world. As former fund manager Richard Breslow notes, however, Yellen’s decision today means the risk-suppression boot is on the other foot (or feet) of The SNB, The ECB, and The BoJ; as he writes, “have no fear, The SNB knows what it’s doing.”
As we reported previously, In the second quarter of the year, one in which unlike in Q1 fund flows showed a persistent and perplexing outflow from US stocks, a trading desk rumor emerged that even as institutional traders dumped stocks and retail investors piled into ETFs, a “mystery” central bank was quietly bidding up risk assets by aggressively buying stocks.
The answer was revealed this morning when the hedge fund known as the “Swiss National Bank” posted its latest 13-F holdings. What it showed is that, as rumored, the Swiss National Bank had gone on another aggressive buying spree in the second quarter, and following its record purchases in the first quarter, the central bank boosted its total equity holdings to an all time high $84.3 billion, up 5% or $4.1 billion from the $80.4 billion at the end of the first quarter.

This post was published at Zero Hedge on Sep 20, 2017.

Will The Fed Really ‘Normalize’ It’s Balance Sheet?

To begin with, how exactly does one define ‘normalize’ in reference to the Fed’s balance sheet? The Fed predictably held off raising rates again today. However, it said that beginning in October it would no longer re-invest proceeds from its Treasury and mortgage holdings and let the balance sheet ‘run off.’
Here’s the problem with letting the Treasuries and mortgage just mature: Treasuries never really ‘mature.’ Rather, the maturities are ‘rolled forward’ by refinancing the outstanding Treasuries due to mature. The Government also issues even more Treasurys to fund its reckless spending habits. Unless the Fed ‘reverse repos’ the Treasurys right before they are refinanced by the Government, the money printed by the Fed to buy the Treasurys will remain in the banking system. I’m surprised no one has mentioned this minor little detail.
The Fed has also kicked the can down the road on hiking interest rates in conjunction with shoving their phony 1.5% inflation number up our collective ass. The Fed Funds rate has been below 1% since October 2008, or nine years. Quarter point interest rate hikes aren’t really hikes. we’re at 1% from zero in just under two years. That’s not ‘hiking’ rates. Until they start doing the reverse-repos in $50-$100 billion chunks at least monthly, all this talk about ‘normalization’ is nothing but the babble of children in the sandbox. I think the talk/threat of it is being used to slow down the decline in the dollar.

This post was published at Investment Research Dynamics on September 20, 2017.

Cryptocurrency Website Says Now Is a Good Time for Gold

Even some of the biggest supporters of Bitcoin and other cryptocurrencies recognize the stability of gold.
Last week was a bad week for Bitcoin. It’s price dropped significantly in the wake of a Chinese government crackdown on cryptocurrency exchanges in the country. Bitcoin’s price has recovered a bit this week, but a recent article published by The Cointelegraph still proclaimed now is a good time for gold.
Cryptocurrencies, especially Bitcoin, have flown a little too close to the sun recently, and it has seen them get burned by a few key monetary institutions, as well as governments. This attack on Bitcoin, as well as fear and speculation around other markets, could spell a good time for investment in gold. Seen as an insurance policy, gold has been a steady and safe investment for hundreds of years. As markets, beyond even the crypto market, get spooked, investors could see a safety net in the precious metal.’
The Cointelegraph article emphasized gold as a ‘safe steady investment.’

This post was published at Schiffgold on SEPTEMBER 20, 2017.

Warren Buffett Predicts Dow 1,000,000; But There’s A Catch…

The Wall Street Journal won the award for the greatest “Shock And Awe” financial headline of the day when it published a story earlier entitled “Warren Buffett Says the Dow Is Going Over One Million.” The ‘Oracle of Omaha’ apparently made the ‘bold’ prediction at the 100-year anniversary celebration of Forbes magazine in which he also said that “being short America will continue to be a loser’s game.” Here are the highlights from WSJ:
You heard it from Warren Buffett first: the Dow Jones Industrial Average is headed above one million.
The blue-chip stock benchmark is likely to be above that milestone in a hundred years’ time, the Berkshire Hathaway Inc. chief executive and chairman said Tuesday night.
‘The Dow will be over a million and that is not a ridiculous forecast at all if you do the math,’ he said.

This post was published at Zero Hedge on Sep 20, 2017.

US Household Incomes: A 50-Year Perspective

Last week the Census Bureau released its annual report on household income data for 2016. Last year the median (middle) household income rose to $59,149, a 4.1% increase over 2015 and a record high. The median income adjusted for inflation is also at a record high, above the peak of $58,882 set in 2000. The mean (average) household income set a new high of $83,143. More about that in another commentary. Meanwhile, let’s take a closer look at the quintile averages, which dates from 1967, along with the statistics for the top 5%.
Most people think in nominal terms, so the first chart below illustrates the current dollar values for the six cohorts across the 50-year period (in other words, the value of a dollar at the time received – not adjusted for inflation). What we see are the nominal growth patterns over the complete data series. In addition to the five quintiles, the Census Bureau publishes the income for the top five percent of households. We’ve included a table to document the impressive year-over-year growth in 2016 for all six cohorts.

This post was published at FinancialSense on 09/20/2017.

Stock And Financial Markets Pause Ahead Of FOMC Statement, Yellen Comments

World stock markets were mixed in subdued trading overnight. U. S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
Gold prices are higher in pre-U. S.-session trading, on bargain hunting, short covering and some safe-haven demand following a fiery speech by U. S. President Trump at the U. N. on Tuesday. Trump threatened to completely destroy North Korea.
Markets have paused ahead of the Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement.

This post was published at Wall Street Examiner on September 20, 2017.

Existing Home Sales Slump To 1-Year Lows, NAR Says “There’s Simply Not Enough Homes For Sale”

After July’s housing sales data horrors, yesterday’s permits rebound prompted some hope (despite last week’s 9.7% collapse in mortgage applications) but August’s existing home sales just crushed that dream, dropping to one-year lows. Following a 1.3% MoM decline in July, August saw existing home sales tumble 1.7% MoM (against expectations of a 0.2% rebound) and up just 0.2% YoY.
This is the 3rd monthly decline in a row…

Dropping SAAR sales to one year lows…

This post was published at Zero Hedge on Sep 20, 2017.