The World Turned Upside Down

Thoughts from the Frontline The World Turned Upside Down BY JOHN MAULDIN
OCTOBER 14, 2017
Options Email Print Where Has the Volatility Gone?
A Bull Market in Complacency
San Francisco, Denver, Lugano, and Hong Kong
Strange things did happen here
No stranger would it be
If we met at midnight
In the hanging tree.
– Lyrics from the theme song of The Hunger Games
If buttercups buzz’d after the bee,
If boats were on land, churches on sea,
If ponies rode men and if grass ate the cows,
And cats should be chased into holes by the mouse,
If the mamas sold their babies
To the gypsies for half a crown;
If summer were spring and the other way round,
Then all the world would be upside down.

This post was published at Mauldin Economics BY JOHN MAULDIN OCTOBER 14, 2017.

ECB Suffers from ‘Corporate Capture at its Most Extreme’

Many of these banks are implicated in the biggest financial crimes.
No single institution has more influence over the lives of European citizens than the European Central Bank. It sets the interest rates for the 19 Member States of the Eurozone, with a combined population of 341 million people. Every month it issues billions of euros of virtually interest-free loans to hard-up financial institutions while splashing 60 billion each month on sovereign and corporate bonds as part of its QE program, thanks to which it now boasts the biggest balance sheet of any central bank on Planet Earth.
Through its regulatory arm, the Single Supervisory Mechanism, it decides which struggling banks in the Eurozone get to live or die and which lucky competitor gets to pick up the pieces afterwards, without taking on the otherwise unknown risks.
In short, the ECB wields a bewildering amount of power and influence over Europe’s financial system. But how does it reach the decisions it makes? Who has the ECB’s institutional ear?
The ECB has 22 advisory boards with 517 seats in total that provide ECB decision-makers with recommendations on all aspects of EU monetary policy. A new report by the non-profit research and campaign group Corporate Europe Observatory (CEO) reveals that 508 of the 517 available seats are assigned to representatives of private financial institutions.

This post was published at Wolf Street by Don Quijones ‘ Oct 14, 2017.

WORLD’S LARGEST OIL COMPANIES: Deep Trouble As Profits Vaporize While Debts Skyrocket

The world’s largest oil companies are in serious trouble as their balance sheets deteriorate from higher costs, falling profits and skyrocketing debt. The glory days of the highly profitable global oil companies have come to an end. All that remains now is a mere shadow of the once mighty oil industry that will be forced to continue cannibalizing itself to produce the last bit of valuable oil.
I realize my extremely unfavorable opinion of the world’s oil industry runs counter to many mainstream energy analysts, however, their belief that business, as usual, will continue for decades, is entirely unfounded. Why? Because, they do not understand the ramifications of the Falling EROI – Energy Returned On Invested, and its impact on the global economy.
For example, Chevron was able to make considerable profits in 1997 when the oil price was $19 a barrel. However, the company suffered a loss in 2016 when the price was more than double at $44 last year. And, it’s even worse than that if we compare the company’s profit to total revenues. Chevron enjoyed a $3.2 billion net income profit on revenues of $42 billion in 1997 versus a $497 million loss on total sales of $114 billion in 2016. Even though Chevron’s revenues nearly tripled in twenty years, its profit was decimated by the falling EROI.
Unfortunately, energy analysts, who are clueless to the amount of destruction taking place in the U. S. and global oil industry by the falling EROI, continue to mislead a public that is totally unprepared for what is coming. To provide a more realistic view of the disintegrating energy industry, I will provide data from seven of the largest oil companies in the world.

This post was published at SRSrocco Report on OCTOBER 14, 2017.

What the Headlines Got Wrong about Retail Sales

No, our American consumers didn’t suddenly perform a miracle.
As part of the data dump on Friday, the Commerce Department released its estimates for retail sales for September. If you just looked at the headlines, you’d get the impression that our American consumers suddenly had gone out to splurge, fired up by two powerful, destructive, and deadly hurricanes:
‘U. S. retail sales surge, driven by autos and gasoline purchases’: Reuters
‘Retail sales in September surge most in 2 years’: Los Angeles Times
‘Storms Surge and US Retail Sales Surge; Most in 2 Years’: New York Times:
‘U. S. Retail Sales Rose 1.6% in September: Strong car sales and higher gasoline prices power largest one-month increase since March 2015’: Wall Street Journal
‘U. S. Retail Sales Rise Most Since 2015 on Storm-Related Lift’: Bloomberg News
So US consumers performed one their infamous last-minute miracles and suddenly got on the internet and drove to the mall and to auto dealers and splurged? The headlines pointed at the hurricanes and replacement demand, but this is what you get into when the headlines draw big conclusions from seasonally adjusted month-to-month data that is trying to estimate a very seasonal and volatile reality.

This post was published at Wolf Street by Wolf Richter ‘ Oct 14, 2017.

Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! +Annual, Qtrly, Mthly Charts

Almost everybody complains or laments how both gold and silver are being manipulated, and they are, going back at least to the 1920’s and 1930’s and not just recently. Curiously, very few are even aware, let alone consciously complaining, about how manipulated their lives and those of everyone around them have been and continues to be.
It has been a few months since our last commentary. We used to present one each week, but over the last several months, it makes less and less sense to provide one. The lies by all governments and the media are too many and too constant, and too many people remain cluelessly content in their chosen ignorance to resist and force changes.
In the United States, shortly after Trump’s upset election and in what appeared to be genuine but naive speech promising to Make America Great Again, the sycophant NeoCons, AKA the Deep State, the second most dangerous faction in this country, second only to the hidden-from-sight elites that they so willingly serve in order to bring about the One World Order, staged a coup against the elected president.
Trump promised to Drain The Swamp, but the Swamp has shamelessly enveloped him to prevent populism from becoming more popular. Let us repeat, the NeoCons staged a coup in this country, and a good number of people support all anti-Trump efforts without even realizing how insidious the NeoCons are and how they have been selling this country into the ground.

This post was published at Edge Trader Plus on October 14, 2017.

Vegas Weekend Roundup: Insanity

Ok, time for a round-up on the latest insanity in the Vegas shooting.
Let’s deal with the “security guard” first. He’s “disappeared” — well, not really. He suddenly canceled several interviews, his house is now under “guard” by a firm that was decertified (expired license) in Nevada, and a family member allegedly told a member of the press that he’s under a “gag order.” The “security guard” doesn’t appear to have ever been registered as a private security officer in the State of Nevada, which, if his job description met what one thinks of as a “security guard”, is a legal requirement to work as same in the state. Further, he apparently has union representation (that is, he’s a member of a trade union.)
Ok, let’s go through this because the conspiracy nuts are going insane at the moment.
First off, a “gag order” can only be issued by a judge. They’re not secret. Second, both the FBI and LVMPD have repeatedly claimed that there are no other shooters (and never were), and no other suspects. The only suspect is dead, so there’s nothing to “gag” because there’s nobody to put on trial.
So if there’s a “gag order” (a real one), let’s see it. Best guess is that it doesn’t exist.
What about the other inconsistencies — especially the apparently lack of a private security officer license?
Occam’s Razor folks: I’ll bet he’s an illegal immigrant.
His name is a common Hispanic first name but an extremely rare US one.
If he’s an illegal immigrant he can’t register for a security guard license.

This post was published at Market-Ticker on 2017-10-14.

Why It Doesn’t Matter Who the Next Fed Chair Is

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
Financial media pundits have been breathlessly speculating lately about who the next Fed chair will be.
Yellen again? Will it be Cohn? Warsh? Or… somebody else?
I’m sure it’s something that you, like me, have been spending sleepless nights thinking about.
Well… maybe not.
But the media needs a ‘topic du jour’ to get us all to watch the birdie and divert us from the only fact that matters…
That the Federal Reserve is getting ready to knock the markets for a serious loop. The ‘fix’ is in. That outcome is inevitable.
Still, this horse race the media has set up (‘Who will win?!’) is pretty entertaining. So I’m going to handicap it for you.

This post was published at Wall Street Examiner by Lee Adler ‘ October 14, 2017.

The Curious Case Of Missing The Market Boom

Authored by Raul Ilargi Meijer via The Automatic Earth blog,
‘The Cost of Missing the Market Boom is Skyrocketing’, says a Bloomberg headline today. That must be the scariest headline I’ve seen in quite a while. For starters, it’s misleading, because people who ‘missed’ the boom haven’t lost anything other than virtual wealth, which is also the only thing those who haven’t ‘missed’ it, have acquired.
Well, sure, unless they sell their stocks. But a large majority of them won’t, because then they would ‘miss’ out on the market boom… Some aspects of psychology don’t require years of study. Is that what behavioral economics is all about?
And it’s not just the headline, the entire article is scary as all hell. It reads way more like a piece of pure and undiluted stockbroker propaganda that it does resemble actual objective journalism, which Bloomberg would like to tell you it delivers. And it makes its point using some pretty dubious claims to boot: The Cost of Missing the Market Boom Is Skyrocketing
Skepticism in global equity markets is getting expensive. From Japan to Brazil and the U. S. as well as places like Greece and Ukraine, an epic year in equities is defying naysayers and rewarding anyone who staked a claim on corporate ownership. Records are falling, with about a quarter of national equity benchmarks at or within 2% of an all-time high.

This post was published at Zero Hedge on Oct 14, 2017.

Harvey Weinstein Expelled From Motion Picture Academy

Update: According to the LA Times, Harvey Weinstein’s reign in Hollywood is officially over: the embattled film mogul – a once-dominant force in the Academy Awards who rewrote the rules of Oscar campaigning – has been expelled from the Academy of Motion Picture Arts and Sciences, Hollywood’s de facto governing body, in response to mounting allegations of sexual harassment and assault against him.
In removing Weinstein from its ranks, the academy said in a statement, “We do so not simply to separate ourselves from someone who does not merit the respect of his colleagues but also to send a message that the era of willful ignorance and shameful complicity in sexually predatory behavior and workplace harassment in our industry is over. What’s at issue here is a deeply troubling problem that has no place in our society. The Board continues to work to establish ethical standards of conduct that all Academy members will be expected to exemplify.”
The Academy’s board of governors made the decision at an emergency session after investigations by The New York Times and The New Yorker revealed sexual harassment and rape allegations against him going back decades. In a statement, the academy said the vote was ‘well in excess of the required two-thirds majority.’
The film academy’s 54-member board of governors, which includes such industry luminaries as Steven Spielberg, Tom Hanks, Kathleen Kennedy and Whoopi Goldberg, voted in an emergency meeting on Saturday morning to remove Weinstein from the organization’s ranks in an unprecedented public rebuke of a prominent industry figure. The move marked the latest blow in Weinstein’s stunning downfall and, in symbolic terms, amounts to a virtual expulsion from Hollywood itself. As the NYT adds, although largely symbolic, the ouster of Mr. Weinstein from the roughly 8,400-member academy is stunning because the organization is not known to have taken such action before – not when Roman Polanski, a member, pleaded guiltyin a sex crime case involving a 13-year-old girl; not when women came forward to accuse Bill Cosby, a member, of sexual assault; and not when Mel Gibson allegedly went on anti-Semitic tirade during a drunk driving arrest in 2006 or pleaded no contest to a charge of battery against an old girlfriend in 2011.

This post was published at Zero Hedge on Oct 14, 2017.

Doug Noland: Arms Race

This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
Bloomberg: ‘Treasuries Surge as December Hike Odds Drop After CPI Miss.’ Year-over-year CPI was up 2.2% in September, with consumer inflation above 2% y-o-y for six of the past 10 months. The Producer Price Index gained 2.6% y-o-y in September. Yet, apparently, the focus will remain on core CPI (along with core personal consumption expenditure inflation) that, up 1.7% y-o-y, missed estimates by one tenth and remained below 2% for the sixth straight month. Notably – analytically if not in the markets – the preliminary October reading of University of Michigan Consumer Confidence jumped six points to the high since January 2004. Or taking a slightly different view, Consumer Confidence has been stronger for only one month in the past 17 years. Current Conditions rose to the highest level since November 2000.
Data notwithstanding, from Bloomberg: ‘Bond Shorts Experience the Agony of Defeat Yet Again.’ Ten-year Treasury yields declined nine bps this week to 2.27%, though I’m not sure this qualifies as a ‘defeat.’ In stark contrast to the fanatical gathering on the opposing side of the field, not a single central banker was spotted on the bond bears’ sideline.

This post was published at Wall Street Examiner by Doug Noland ‘ October 14, 2017.

Amid Management Exodus, Tesla Fires Hundreds Of Workers

One month after Tesla lost its head of business development who wished to “spend more time with his family”, and just weeks after the EV company’s veteran battery technology director also unexpectedly quit amid a growing senior management exodus (full list at the bottom of this article), Tesla decided to even out the ranks on the bottom as well, and fired “hundreds of workers” this week, including engineers, managers and factory workers even as the company struggles to expand its manufacturing and product line, according to the Mercury News which first reported of the mass layoffs.
Workers estimated between 400 and 700 employees have been fired, although Tesla refused to say how many employees were let go, and added that it expects employee turnover to be similar to last year’s attrition. Tesla employs about 10,000 workers at its Fremont factory; it lost $336 million in the second quarter, and burned through a record $1.16 billion in cash in Q2, or $13 million per day.

This post was published at Zero Hedge on Oct 14, 2017.

Pay-TV Companies Tank As Subscriber Losses Surge To Record Highs In 2017

As the broader markets casually melt-up to new record highs with each passing day, one small corner of the equity market is in full on meltdown mode: cable and satellite pay-tv providers. Down anywhere from 3-10% on the week, investors in this space seem to be finally admitting that record subscriber losses, quarter after quarter, just may end up being a bad thing.
As Bloomberg points out this morning, pay-tv subscriber losses are expected to set a new record in 2017, surpassing the 1.7mm homes that “cut the cord” in 2016, as industry analyst Craig Moffet warns “it is becoming increasingly clear that the wheels are falling off…”
Barring a major fourth-quarter comeback, 2017 is on course to be the worst year for conventional pay-TV subscriber losses in history, surpassing last year’s 1.7 million, according to Bloomberg Intelligence. That figure doesn’t include online services like DirecTV Now. Even including those digital plans, the five biggest TV providers are projected to have lost 469,000 customers in the third quarter.
AT&T sank 6.1 percent, the biggest one-day loss since November 2008. Dish, which also provides satellite service, declined 5.1 percent. Viacom dropped 2.5 percent while AMC Networks Inc. fell 6.8 percent after Guggenheim Securities LLC downgraded the two stocks to neutral from buy.
Dallas-based AT&T is pushing headlong into TV programming by acquiring HBO and CNN owner Time Warner Inc. in an $85.4 billion deal. Chief Executive Officer Randall Stephenson has argued that the acquisition will let AT&T create compelling video packages for mobile subscribers and provide valuable targeting information for advertisers.
‘It is becoming increasingly clear that the wheels are falling off of satellite TV,’ said Craig Moffett, an analyst at MoffettNathanson LLC, in a research note.

This post was published at Zero Hedge on Oct 13, 2017.

Tech Vs. Trump: The Great Battle Of Our Time Has Begun

Social media helped Donald Trump take the White House. Silicon Valley won’t let it happen again…

In the 1962 Japanese sci-fi classic King Kong vs Godzilla, the two giant monsters fight to a stalemate atop Mount Fuji. I have been wondering for some time when the two giants of American social media would square up for what promises to be a comparably brutal battle. Finally, it began last month – and where else but on Twitter?

This post was published at Zero Hedge on Oct 13, 2017.

Update on Q4 Pivot View for Stocks and Gold

Stock Market Status
In the above-linked article we noted several legs that could be kicked out from under the S&P 500’s table in Q4 2017. The stock market blew right through one of them, which was a bearish (on average) seasonal trend for the 2nd half of September. No one indicator is a be all, end all. In sum, they define probabilities. But price is the ultimate arbiter and as of today, price says ‘still bullish’ (says Captain Obvious).
Another leg was the 30 month cycle that has caught 5 of 7 important tops or bottoms (4 tops, 1 bottom) since 2000. As noted when it was first presented, this monthly chart takes into account months of slush in and around the 30 month mark, so it is far from an exact timer. The S&P 500 remains in the window with the September bar now in play.

This post was published at GoldSeek on 13 October 2017.

The Russiagate Scandal Descends Into Total Absurdity

Even as the Trump administration disintegrates – with the President publicly quarrelling with his Secretary of State, and his Chief of Staff forced to deny he is about to resign – the scandal which more than anything else has defined this Presidency has disintegrated into total lunacy.
Consider these facts…
(1) The Mueller investigation
Just a few weeks ago the media was full of reports of how Special Counsel Mueller’s investigation was ‘closing in’ on the President and his campaign team. The focus of media interest was on an early morning search in July of the house of Paul Manafort, the campaign professional who at one time acted as the Trump campaign’s chairman, with lurid headlines that he was about to be indicted, though it was never made clear for what.
Since then there has been nothing, a clear sign that the search of Manafort’s house has come up with nothing, and that the pressure to get Manafort to talk by dangling threats of indictment in front of him have resulted in nothing.
In all other respects a curtain of silence has fallen on Mueller’s investigation, a strong sign that after its failure to ‘break’ Manafort it no longer has a clear strategy of what to do.
(2) The Senate Intelligence Committee
This held a portentous press conference recently to announce the findings of its nine month investigation into the Russiagate allegations. As a result of that press conference we learnt that

This post was published at Zero Hedge on Oct 13, 2017.