Mnuchin Begins Selection Process For Trump’s New IRS-Auditor-In-Chief

In just over six weeks, IRS Commissioner John Koskinen’s term expires. This allows President Trump to choose a new IRS chief who may have two high-profile and sensitive jobs: helping implement the the president’s proposed tax cuts and overseeing an audit of his tax returns.
Trump hasn’t nominated anyone to replace Koskinen yet, but as Bloomberg reports, Koskinen, who was hired by President Barack Obama and is loathed by congressional Republicans, who tried to impeach him in 2016, is unlikely to be reappointed.
Treasury Secretary Steven Mnuchin, whose department includes the Internal Revenue Service, is said to be in the early stages of the selection process, according to two people familiar with the matter.
We would imagine this will be the next target for the left – potentially leading to demands of recusal as the slightest perception that Trump is trying to influence the agency overseeing his audit or any tax-related probes of his campaign’s ties to the Russian government would ignite a furor in Congress.

This post was published at Zero Hedge on Sep 28, 2017.

Stagnation Is Not Just the New Normal–It’s Official Policy

Japan is a global leader is how to gracefully manage stagnation.
In our pay-to-play centralized form of governance, any reform that threatens the skims, privileges and perquisites of existing elites and fiefdoms is immediately squashed, co-opted or watered down. Although our leadership is too polite to say it out loud, they’ve embraced stagnation as the new quasi-official policy. The reason is tragi-comically obvious: any real reform would threaten the income streams gushing into untouchably powerful self-serving elites and fiefdoms.
So the power structure of the status quo has embraced stagnation as a comfortable (except to those on the margins) and controllable descent that avoids the unpleasantness and uncertainty of crisis. We all know that humans quickly habituate to gradual changes in circumstances, and that if the changes are gradual enough, we have difficulty even noticing the erosion.
So wages/salaries stagnate, inflation eats away at the purchasing power of our net income, junk fees, tolls and taxes notch higher by increments too modest to trigger protest, fundamental civil liberties are chipped away one small piece at a time, healthcare costs rise every year like clockwork, and the gap between the bottom 95% and the top 5% widens, as does the gap between the top .1% and the bottom 99.9%, productivity stagnates, the growth rate of new businesses stagnates, but it’s all so gradual that we no longer notice except to sigh in resignation.

This post was published at Charles Hugh Smith on SEPTEMBER 28, 2017.

We Are Already In Depression (If Borrowing Money Is Not Income)

The U. S. economy is not as solid as it appears. Statistical anomalies hide profound weakness. I will examine actual GDP and actual employment. Warning: not for the faint of heart. Do you consider debt as income? Before you answer that, let’s perform a thought experiment. Imagine that you had taken a long cruise last fall and charged $10,000 to an American Express card. When you did your taxes this year, would have told the IRS that you had $10,000 income from American Express? Of course you wouldn’t. Suppose a major oil company issues $800 million worth of bonds to develop a new old field. Would the company report that as income to the stockholders or the IRS? Of course they wouldn’t. I am sure those sound like silly questions as the answer is a self evident ‘NO!’ We do not consider borrowed money as income. It is a liability that must be paid back. Then why do we count Federal Government debt when measuring national income? I will leave speculation as to the ‘why’ to the readers and focus on the fact that we do count new Treasury Debt as income.

This post was published at Zero Hedge on Sep 28, 2017.

Peak Housing Bubble: 2008 Deja Vu All Over Again

Existing Home Sales were released Wednesday and the NAR’s seasonally adjusted annualized rate metric was down 1.7% from July. July was down 1.3% from June. The NAR’s SAAR metric is at its lowest rate since last August. Naturally the hurricane that hit Houston is being attributed as the primary culprit for the lower sales rate. Interestingly, the ‘not seasonally adjusted’ monthly number for the South region was higher in August than in July. Moreover, I’m sure the NAR’s statistical ‘wizards’ were told to ‘adjust’ for Houston. So I’m not buying the excuse.
As for the NAR’s inventory narrative, that’s a bunch of horse hooey. Recall the chart I’ve posted a couple times in previous issues which shows that sales volume is inversely correlated with inventory – this is 17 years of data:

This post was published at Investment Research Dynamics on September 28, 2017.

Networks Told NFL Cameramen To Avoid Shots Of Booing Crowds

President Donald Trump’s feud with the NFL erupted nearly a week ago when he demanded that NFL franchise owners should ‘get that son of a b***h off the field’ when they see players kneeling during the national anthem. Since then, league owners have discovered, to their surprise, that millions of Americans – and more importantly, millions of NFL fans – agree with the president, who encouraged them to boycott the league until it agrees to ban kneeling during the anthem.
So far, evidence suggests that fans have heeded the president’s call to boycott the league. NBC’s ‘Sunday Night Football’ last weekend recorded its worst weekly ratings in years. Overall, ratings are down 11% from last year, according to the Associated Press.

This post was published at Zero Hedge on Sep 28, 2017.

How to Get Started Buying Gold and Silver Today

For thousands of years, gold and precious metals have been used as money. Gold’s scarcity and finite quantity make it a stable and predictable way to preserve wealth. Even in today’s financially uncertain world, gold and silver are still among the most stable commodities to buy. While central banks manipulate interest rates, print more money, and help drive inflation, the value of gold continues to remain steady decade after decade.
Today, it’s easier than ever to make gold and silver part of your portfolio. SchiffGold’s precious metals experts will walk you through where and how to buy gold and where to buy silver. Whether you’re considering home storage or converting your IRA into precious metals, Peter Schiff and his team will take the time to understand your individual needs and goals in order to provide sound guidance on buying gold and silver.

This post was published at Schiffgold on September 28, 2017.

Stocks Up, Bonds Up, Gold Up, & Dollar Down But ‘Middle-Class-Miracle’ Fades

Odd day. Low volume, small range in stocks. Good macro. Some questions over just how ‘miraculous’ Trump’s tax plan will be for the middle-class… but the day’s trend across FX, bond, and commodities was set early on when Asia closed and dollar-sellers, bond-buyers, and precious-metal-purchasers came back to play…

This post was published at Zero Hedge on Sep 28, 2017.

Thousands Donated To A Woman Who Was Fired For Using A Gun To Defend Herself

Jennifer Wertz was fired from her position at a Circle K gas station in Albuquerque after shooting Ferron Mendez as he attempted to rob her. The community has now banded together to donate money to Wertz to help cover for her lost wages.
Mendez pointed a gun towards Wertz during an attempted robbery, making Wertz realize ‘it was either shoot or be shot.’ When asked, Wertz said that she would rather be alive and without a job than dead. Sentiments shared by most human beings. It was later discovered to be an airsoft gun missing the orange tip, but in the heat of the moment, Wertz did what almost any other would have done to preserve their life.
Wertz’s mother responded to her firing by creating a GoFundMe page. After recalling the case, Wertz’s mother explained that her daughter was in need of financial help. The GoFundMe page says:

This post was published at shtfplan on September 28th, 2017.

A New Challenge to the Dollar

In a move that was little noticed outside of the financial world, China announced the creation of an oil futures contract (open to international traders) that will be denominated in Yuan and convertible into gold. This move provides the first official linkage of oil to gold, and more importantly a linkage between the Chinese currency and gold. While the contract volumes that will be traded on this new platform will certainly be minuscule in comparison to those in the dominant markets of New York and London (at least initially), I believe the move is the latest, and perhaps most significant, step that China has taken down the path that could lead to a global economic system that is not fully dependent on the U. S. dollar. The move amounts to a direct challenge to the dollar’s privileged reserve status and could threaten U. S. dollar price erosion.
The move comes at a time when the U. S is particularly vulnerable to an economic challenge. Given the bold, but not particularly diplomatic, efforts of the Trump Administration to push an America First agenda, the U. S. finds herself somewhat isolated. Add to this the widening political polarity in the U. S., which will make it that much less likely that Washington can take needed action in passing economic reforms to prevent a looming debt crisis. The dollar has been neglected far too long, and its strength may be far more tenuous than many imagine.
By way of background, the United States emerged from World War II as the world’s undisputed economic, financial and military leader. In 1944, at Bretton Woods, the U. S. dollar, convertible into gold exclusively by central banks, was adopted as the world’s main reserve currency. This status meant that the dollar was used to price most commodities, used to transact nearly all international trade. This status further strengthened the dollar and helped make Americans the richest people in the world.

This post was published at Euro Pac on September 28, 2017.

Ken Griffin’s Citadel Is Returning Money To Some Hedge Fund Clients

Despite the expert guidance of one Ben Bernanke, the world’s once most levered hedge fund, Citadel, is reportedly returning money to some global hedge-fund clients.
Bloomberg reports that Ken Griffin’s Citadel LLC is forcing out some of the clients in one of its multistrategy hedge funds as it seeks to tighten up its investor base, according to people with knowledge of the matter.
The timing is intersting as Citadel’s move comes amid a revival of interest in hedge funds.

This post was published at Zero Hedge on Sep 28, 2017.

Gary Cohn: “I Can’t Guarantee” Taxes Won’t Go Up For The Middle Class

While proclaiming that “the biggest winners will be everyday American workers,” President Trump’s top economic adviser, Gary Cohn told ABC News’ George Stephanopoulos that he can’t guarantee that taxes won’t go up for some middle-class families under the administration’s sweeping tax overhaul.
“The biggest winners will be the everyday American workers as jobs start pouring into our country, as companies start competing for American labor and as wages start going up at levels that you haven’t seen in many years,” Trump said.
Following Matt Drudge’s cries of “betrayal” yesterday, it appears confusion truly reigns as to just who benefits from the so-called ‘greatest tax cuts in the history of the world’ as we know absolutely nothing because the government has yet to release the income brackets (or get close to guessing at just how ‘progressive’ and ‘punitive’ the optional 4th bracket will be).

This post was published at Zero Hedge on Sep 28, 2017.

Stocks and Precious Metals Charts – Organized Money

‘We had to struggle with the old enemies of peace – business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs.
We know now that Government by organized money is just as dangerous as Government by organized mob.’
Franklin D. Roosevelt
Stocks managed to hold their ground today. No worries.
The metals gained back a little of what they have lost the past few days.

This post was published at Jesses Crossroads Cafe on 28 SEPTEMBER 2017.

Inflation Weakness Is Temporary

Federal Reserve Chair Janet Yellen made clear two things this week. First, that her and her colleagues are somewhat confounded by the inflation data. And second, that confusion does not yet deter them from their plan for gradual rate hikes. December is still on.
The basic operating framework in Yellen’s speech Tuesday follows that of her speech of September 2015 (where, ironically, she defended the beginning of this tightening cycle that was subsequently put on hold by a slower economy). She decomposes inflation into a function of food and energy prices, inflation expectations, labor market slack, import prices, and ‘other factors’. Under this decomposition, the ‘other factors’ term this year is unusually large and negative, as illustrated by Yellen’s chart 3.

This post was published at FinancialSense on 09/28/2017.

Why Is the Retail Sector Struggling? People Are Broke – Especially Millennials

When we reported on the Toys R Us bankruptcy, we argued that it wasn’t just about shifting shopping patterns away from brick and mortar to online companies. A recent article on TechCo complaining that millennials are broke backs up our assertion.
As we pointed out, online retail sales have increased significantly, but they don’t account for the total decline in sales in brick-and-mortar stores. Peter Schiff has argued the problems in the retail sector reveal disturbing economic truths about middle America.
Another reason people are shopping on the internet, other than just the convenience of not leaving your house when you’re doing your shopping, is the fact that the average American shopper is broke. They can barely afford to buy the stuff that they’re buying. In fact, most people are buying stuff that they can’t afford. They’re just buying anyway and they’re using a credit card… Retailing is a shrinking market because Americans’ pocketbooks are shrinking, their paychecks are shrinking.’
Data on consumer debt backs up Peter’s contention that Americans are putting a lot of their purchases on plastic. He went on to say we need to look at the bigger picture when analyzing retail woes.

This post was published at Schiffgold on SEPTEMBER 28, 2017.

Landlord’s View of the Brick and Mortar Meltdown

‘We are faced with weekly tenant bankruptcies, defaults, and requests for rent or space reductions.’
By John E. McNellis, Principal at McNellis Partners, for The Registry: I received an invitation to attend a cocktail party in Los Angeles at next week’s International Council of Shopping Center (ICSC) meeting. In declining, I explained that we would not be attending the ICSC, our first absence in decades. Somewhat forlornly, our host replied he was hearing that a lot.
Why the shopping center industry’s premier West Coast event may go lightly attended is worth considering. One answer is simple: Pizzazz is in short supply at an event where the chalk talks will be about playing defense and even the biggest liars you ever met will admit to challenges facing their portfolios.
The writing may not be on the wall, but it’s sitting every afternoon on our front porch. A cardboard box waits outside almost daily. These boxes contain everything from hair products to prescriptions to pillows. While hard-put to tell a tweet from a text, the household’s reigning monarch can nevertheless shoot the e-commerce rapids blindfolded, ordering any item in a trice.

This post was published at Wolf Street on Sep 28, 2017.

Throwing Wet Paper Towels Against the Wall

There are currently about 2,000 ETFs in existence. Many of them are useless.
This isn’t new to you – many of you who answered my ETF survey said there are just too many.
Sample Response 1: ‘There are so many ETFs that choosing an ETF mix is now as difficult as choosing individual stocks and other assets.’
Sample Response 2: ‘Every Tom, Dick and Harry has formed one for something.’
Some people think there is an ETF bubble, because of all the stupid ETFs that are coming out. When a fund like WSKY (Spirited Funds/ETFMG Whiskey and Spirits ETF) appears on the scene, it’s safe to assume that the top is probably in. Right?
Actually, that is not the case.
Incentives
The thing about ETFs is that they are much cheaper to launch than a traditional open-end mutual fund. It still costs money – in the six figures – but I know rather ordinary people who have done it.
It’s a lot of work navigating the regulations, working with an index provider, getting people to make markets – but it’s just sweat equity. There simply is not a lot of overhead.

This post was published at Mauldin Economics on SEPTEMBER 28, 2017.

Whitney Tilson Shuts His Hedge Fund… Again

Back in the summer of 2012, we had some fun when we reported that Whitney Tilson – the consummate, if always late immitator of other prominent investors especially Warren Buffett and Bill Ackman – following several years of abysmal returns, closed his then-hedge fund T2 (with Glenn Tongue), splitting off into his own, oddly-named venture, Kase Capital. Well, Whitney – who in recent years was better known for his bizarre family photos from Africa than managing money- has done it again and according to the WSJ, Tilson closed his hedge fund… again, “the latest high-profile investor to close shop amid an extended period of disappointing returns for the industry.”
As the WSJ adds, Tilson, 50, shared his decision with clients (apparently he still had some) on Sunday. His latest hedge fund, Kase Capital, which was managing a whopping 50 million at the time of closure, and down from a peak of $180 million, lost about 8% so far this year, a more than 20% underperformance relative to the S&P YTD gain of more than 13%.
As the WSJ adds sarcastically, “while he ran a relatively small fund, Mr. Tilson was a well-known hedge-fund manager thanks to television and conference appearances, as well as books and regular writing about investing and other topics.” In other words, Tilson was not so much a “hedge fund manager” as its straight-to-CNBC marketer, and the results have confirmed it.
In an amusing twist, in 2016 Tilson – a staunch never-Trumpter – inexplicably found himself the subject of scathing criticism by Elizabeth Warren, after Tilson expressed modest public support of some of President Donald Trump’s cabinet and other appointments from the banking world, “even though Mr. Tilson is a lifelong Democrat who voted for Hillary Clinton.”

This post was published at Zero Hedge on Sep 28, 2017.

SEPT 28/GOLD RISES BY $1.55 TO $1286.00/SILVER UP 3 CENTS/UBS AGREES WITH US THAT THE USA WILL NOT IMPLEMENT ANY MEANINGFUL TAX REFORM/CHINA ORDERS ALL NORTHERN KOREAN COMPANIES AND PERSONNEL OUT…

GOLD: $1286.00 UP $1.55
Silver: $16.82 UP 3 CENT(S)
Closing access prices:
Gold $1287.50
silver: $16.87
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: $1293.84 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1283.30
PREMIUM FIRST FIX: $9.54 (premiums getting larger)
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SECOND SHANGHAI GOLD FIX: $1291.23
NY GOLD PRICE AT THE EXACT SAME TIME: $1279.90
Premium of Shanghai 2nd fix/NY:$11.32 (PREMIUMS GETTING LARGER)
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LONDON FIRST GOLD FIX: 5:30 am est $1284.30
NY PRICING AT THE EXACT SAME TIME: $1282.30 ???
LONDON SECOND GOLD FIX 10 AM: $1283.35
NY PRICING AT THE EXACT SAME TIME. 1284.00???
For comex gold:
SEPTEMBER/
NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 484 NOTICE(S) FOR 48400 OZ.
TOTAL NOTICES SO FAR: 577 FOR 57700 OZ (1.7947 TONNES)
For silver:
SEPTEMBER
37 NOTICES FILED TODAY FOR
185,000 OZ/
Total number of notices filed so far this month: 6,575 for 32,875,000 oz
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end
Let us have a look at the data for today
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In silver, the total open interest FELL BY 1909 contracts from 186,997 DOWN TO 184,997 WITH THE GOOD SIZED FALL IN PRICE THAT SILVER UNDERTOOK IN YESTERDAY’S TRADING (DOWN 9 CENTS ). AGAIN TODAY, IT SURE LOOKS LIKE WE GOT A SMALL AMOUNT OF BANKER SILVER SHORT COVERING AT THIS WEEK IS OPTIONS EXPIRY ON THE LONDON/OTC MARKET AND WE ALWAYS ON THE RECIPROCAL END OF RAIDS
RESULT: A SMALL FALL IN OI COMEX WITH THE 9 CENT PRICE FALL. IT LOOKS LIKE WE HAD A SMALL AMOUNT OF BANKER SHORTS COVERING. THE BANKERS AGAIN ORCHESTRATE ANOTHER RAID TODAY AND FAILED AGAIN.
In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.924 BILLION TO BE EXACT or 132% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MAY MONTH/ THEY FILED: 78 NOTICE(S) FOR 390,000 OZ OF SILVER
In gold, the open interest FELL BY A LARGE 9752 CONTRACTS WITH THE FALL in price of gold ($13.65 DROP) WITH YESTERDAY’S COMEX TRADING. The new OI for the gold complex rests at 539,885. WE ARE NOW IN THE MIDDLE OF OPTIONS EXPIRY WEEK SO IT IS NOT A SURPRISE THAT THE CROOKS CONTINUED WITH THEIR RAIDING. THERE IS NO DOUBT THAT THE CONTINUAL RAIDS HAS THE OBJECT OF INTEREST BEING SILVER AND NOT GOLD AS WE STILL WITNESS STUBBORN LONGS REFUSE TO BUDGE FROM THEIR SILVER TREE.
Result: A LARGE SIZED DECREASE IN OI WITH THE GOOD SIZED FALL IN PRICE IN GOLD ($13.65).
we had: 484 notice(s) filed upon for 48400 oz of gold.
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With respect to our two criminal funds, the GLD and the SLV:
GLD: WOW!!
Tonight , NO CHANGES in gold inventory at the GLD:
Inventory rests tonight: 864.65 tonnes.
SLV
Today: a no changes in inventory:
INVENTORY RESTS AT 326.757 MILLION OZ

This post was published at Harvey Organ Blog on September 28, 2017.

Chinks In The Armor (And How To Protect Your Portfolio From A Market Decline)

Indicators of market breadth are often useful in confirming or telegraphing important trend changes in equity markets. In simple terms, indicators of market breadth measure the level of participation of individual stocks in the general trend of the market. At bear market lows, almost all stocks have been going down and readings like the percent of stocks in up-trends and the percent of stocks making new lows hit extremes. At these junctures, an improvement in market breadth (read fewer stocks participating in the bear market) is often an early sign that the worst of the decline has past. Conversely, market breadth indicators often start to deteriorate ahead of important intermediate and long-term highs even as the general trend in the market still appears to be strong. Large divergences between market breadth and stock prices is an early warning sign to market participants that all may not be well underneath the surface.
This brings us to the topic du jour, which is that we are taking note of an early deterioration in some of our most useful market breadth indicators even as the stock market continues to make new highs. That is to say, the stock indexes are making new highs, but the number of stocks participating in that trend is waning. In each of the charts below the market breadth indicator is marked by the blue line plotted on the left axis and the price level index is marked by the red line plotted on the right axis. For this post we’ll focus just on stocks in our United States index, which covers the largest 85% of companies and is a near replica of the MSCI USA index.
In this first chart we show the percent of stocks with their 50-day moving average price above their 200-day moving average price overlaid on the price level of our United States index. This is a blunt tool to measure the percent of stocks that are in an up-trend. As readers can see, our breadth indicator has been deteriorating for some time even as the overall market has been grinding higher. Similar patterns were seen before market declines in 2010, 2011. 2012 and 2015.

This post was published at Zero Hedge on Sep 28, 2017.