Pentagon Worried about Hackers Causing Stock Market Crash

The Pentagon?! But no one’s worried when stocks get manipulated higher.
It’s funny, the all-out government effort to prevent a major decline of the stock market, or of individual stocks, via manipulation or hacking. Now even the Pentagon is looking into it.
What’s funny is that everyone cheers when manipulation, hacking, and other shenanigans cause the market or individual stocks to soar. It’s just declines they’re worried about at these precarious levels.
Manipulating stocks higher is a time-honored game that routinely receives kudos from all around. The Fed printed nearly $4 trillion and cut rates to zero for eight years – no matter what the damage to the real economy – for the sole purpose of manipulating up asset prices including stock prices. ‘Wealth effect,’ Ben Bernanke called it. Corporate executives and analysts exaggerate future earnings only to deflate them at the last minute, because stock prices are ‘forward looking’ and fake future earnings is all that matters, even if reality now sucks. And on and on. Whatever it takes to push stock prices up, by hook or crook, is cool. These are our heroes.
But when some lonely dude might hack into high-speed stock trading systems or spook the trading algos, quant-fund managers, and high-speed traders and throw algorithmic trading off track to where prices might actually fall in a major way, all heck breaks loose, and the Pentagon feels empowered to step in.

This post was published at Wolf Street by Wolf Richter ‘ Oct 15, 2017.

The Bullish Chartology for Gold

Tonight I would like to update you on some of the longer term gold charts we’ve been following which are still hanging in there from the bullish perspective. Keep in mind these are long term charts so changes come slowly.
Lets start by looking at the long term weekly chart for gold which shows its 2011 bear market downtrend channel we’ve been following for a long time now. Back in July of this year the price action broke out above the top rail and just recently the top rail was backtested from above and we are getting a bounce exactly where we needed to see a bounce.
Normally at the end of a long protracted bull or bear market you will find some type of reversal pattern buildout. As you can see the 2011 top built out the 6 point rectangle just below the all time highs. Currently gold has built out the blue triangle with the 5th reversal point falling just shy of reaching the bottom rail. I have seen in the past that sometimes when the 5th reversal point fails to reach the bottom rail it can be a sign of strength, meaning the bulls are not waiting around, red circle. If the bulls are truly in charge the next thing we’ll want to see is a new high above the previous high that was made on the initial breakout.

This post was published at GoldSeek on Sunday, 15 October 2017.

How The Elite Dominate The World – Part 1: Debt As A Tool Of Enslavement

Throughout human history, those in the ruling class have found various ways to force those under them to work for their economic benefit. But in our day and age, we are willingly enslaving ourselves. The borrower is the servant of the lender, and there has never been more debt in our world than there is right now. According to the Institute of International Finance, global debt has hit the 217 trillion dollar mark, although other estimates would put this number far higher. Of course everyone knows that our planet is drowning in debt, but most people never stop to consider who owns all of this debt. This unprecedented debt bubble represents that greatest transfer of wealth in human history, and those that are being enriched are the extremely wealthy elitists at the very, very top of the food chain.
Did you know that 8 men now have as much wealth as the poorest 3.6 billion people living on the planet combined?
Every year, the gap between the planet’s ultra-wealthy and the poor just becomes greater and greater. This is something that I have written about frequently, and the ‘financialization’ of the global economy is playing a major role in this trend.
The entire global financial system is based on debt, and this debt-based system endlessly funnels the wealth of the world to the very, very top of the pyramid.
It has been said that Albert Einstein once made the following statement…
‘Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.’
Whether he actually made that statement or not, the reality of the matter is that it is quite true. By getting all of the rest of us deep into debt, the elite can just sit back and slowly but surely become even wealthier over time. Meanwhile, as the rest of us work endless hours to ‘pay our bills’, the truth is that we are spending our best years working to enrich someone else.

This post was published at The Economic Collapse Blog on October 15th, 2017.

This $1.1 Million Silicon Valley Shack Is A Steal, But There’s A Bizarre Catch

The owner of one tiny, unassuming cottage in Mountain View, California just sold his house for well below the asking price of $1.6 million – but asked the new buyers to agree to one highly unusual condition: They must allow him to continue living there, rent free, for seven years, NBC News reported.
The Silicon Valley property went for $1.1 million after being on the market for only a few weeks, which is surprising, considering the house – little more than a shotgun shack – hardly has room for multiple tenants.
The property’s realtor said the home’s elderly former owner will continue living in the home for seven more years ‘rent back at no charge.’
Realtor Joban Brown said that while the price is not unusual for the hot spot location, the former owner’s request to continue living at the property is ‘not a typical situation.’

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

Days of Living Dangerously in Catalonia

Fractured communities, splintered families, broken friendships.
In Catalonia the economy is already beginning to feel the pinch from the rise in political tensions, as tourist numbers plunge 20% to 30% and as hundreds of companies, both domestic and foreign, move their headquarters to other parts of Spain, albeit in most cases only on paper.
But there’s one business that’s doing a brisk trade: the flag business.
Wherever you go these days, flags are everywhere. For years the esteladaflag, the starry symbol of Catalan independence, has been a ubiquitous feature of the urban landscape. But now the Spanish flag is doing its best to catch up. As Catalonia’s separatist movement grows in confidence, more and more balconies in Madrid, Valencia, Seville and other Spanish cities, including even Barcelona, are sporting the bold red and yellow of the Spanish flag.
I took these photos in Barcelona. The estelada draped from windows and balconies:

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

Buffett’s Wrong – Why Market Valuations Are Not Justified By Low Interest Rates

As is his way, Billionaire investor Warren Buffett calmed an anxious nation earlier this month with his comments that:
“Valuations make sense with interest rates where they are.” And it seemed to work as stocks hit new record highs and Americans have never, ever been more sure that stocks will continue rising for the next 12 months…

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

Eric Peters: “This Is The Nightmare Scenario For The Next Fed Chair”

While we will have much more to share from the latest weekend letter by One River’s Eric Peters shortly, we found the following section on inflation vs asset bubbles – a topic which BofA’s Michael Hartnett has been focusing extensively on in the past year and which serves as the basis for the “Icarus Rally” – particularly notable as it explains all of today’s comments from Janet Yellen and other central bankers, discussing why it is only a matter of time before inflation returns, as the alternative, as Peters’ explains, is a world in which yields simply refuse to go up, leading to a nightmare scenario for the next Fed chair, who will be forced to pop the world’s biggest asset bubble.
Excerpted from the latest weekend notes by One River CIO, Eric Peters:
‘Why are we not experiencing deflation?’ he asked. ‘How can the top five stocks in the Nasdaq reduce US GDP but we feel better off?’ he asked. ‘Why are Americans buying no more cars today than in 1978 when our population is 100mm higher?’ he asked. ‘Why compare today to a world of combustion engines when we have so many more interesting things to do without moving an inch?’ he asked.

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

Is Bend, Oregon In A Bubble?

I grew up in Bend, Oregon and hope to retire there someday soon. I love everything Bend has to offer (if you don’t know Bend, think Boulder or Sun Valley…but better). I have family, friends, and rental properties in Bend.
So when a friend sent me a video with an economist (Bill Valentine) explaining why Bend was not in “a bubble” in mid-2017 and that residential property “prices were virtually permanently headed higher”, I was pleased but simultaneously more than a little curious.
My curiosity stemmed from the fact that since 1985, Bend’s property values have risen in excess of 6x’s. Since 2000, prices are up nearly 3 fold. Subsequent to the financial crisis lows, property values have nearly doubled and prices are now marginally higher than the ’07 peak. The same peak which economists unanimously agreed was an unsustainable speculative “bubble”. But this time is different???
To define our terms, “a bubble” is trade in an asset that strongly exceeds the asset’s intrinsic value. Mr. Valentine explained that Bend’s property values are not in “a bubble” and that “property prices (in Bend) are virtually permanently headed higher” because “more people want to and can move into Bend from cities with loftier property values than the future supply of homes (in Bend) can keep up with”. So, Mr. Valentine’s bet on Bend (or most highly desirable getaway destinations) is a bet on continual property value rises in the larger cities (alongside continued financial asset appreciation…whose ownership is concentrated in the cities). This will allow these “city folk” to ultimately sell high and buy high in relatively cheaper Bend. Plus Bend will be unable or geographically constrained from adding adequate supply of new housing to keep up with demand.

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

Bitcoin or Gold? Do I have to Pick Just One?

People seem to enjoy pitting gold and Bitcoin against each other. But do I really have to pick just one?
While cryptocurrency and precious metals have many similarities, in many ways they are polar opposites. And you can have both.
First the similarities.
Both gold and Bitcoin serve as a medium of exchange. They are currencies. They are both decentralized and don’t depend on the good faith and stability of any government to prop them up or give them value.
You can’t create cryptocurrencies or gold out of thin air. You can’t turn on a printing press, or push a button at a central bank to get them. You have to work to ‘create’ both. The mining process may fundamentally different. You mine gold through good-old fashioned manual labor. You mine Bitcoin with a computer. But the principle is the same. Cryptos and precious metals are both inherently scarce.
Gold and Bitcoin also serve similar investment functions. They are both assets. Investors tend to buy them as a safe haven. Both their prices tend to rise during times of crisis.

This post was published at Schiffgold on OCTOBER 13, 2017.

Colin Kaepernick Reportedly Files Grievance Against NFL Owners For “Collusion”

I am told that @Kaepernick7 has filed a grievance under the CBA for collusion against the owners. If accurate, this is huge.
— mike freeman (@mikefreemanNFL) October 15, 2017

Despite playing poorly in his last season, having undergone multiple surgeries, and being a public relations time-bomb, Colin Kaepernick is upset that he is still unsigned through six weeks of the 2017 NFL season.

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

Technical Scoop – Weekend Update Oct 15

Weekly Update
‘The bull market in everything’ – so blared the headline of the latest issue of The Economist(October 7th – 13th 2017). The full article can be found atWell, we don’t wish to fully embrace the alarmists but the bull market since the bottom of March 2009 is not yet the granddaddy of all bull markets. So far, the current bull market is 104 months old, having experienced only two pullbacks, both less than 20% in 2011 and 2015/2016. The ‘Roaring 20s’ bull market lasted 97 months with only one significant correction under 20% and few other milder pullbacks. The ‘biggest bull’ still belongs to the 1990s and tech boom that lasted 112 months with only one major correction under 20% in 1998. So the current one still has potentially a few months to go to overtake that bull market.
In terms of gains, the current bull is up (Dow Jones Industrials (DJI) 254%, certainly an impressive gain. But the ‘Roaring 20s’ bull gained 495% and the 1990s bull tagged on 396%. The current bull still has a ways to go to equal either one. Both bull markets ended with the collapse from 1929 to 1932 seeing the DJI lose 89% while the collapse of 2000 – 2002 dropped 38% only to be followed five years later with the financial crisis of 2007 – 2009 that saw the DJI collapse almost 54%. A reminder that roaring bull markets rarely end well.
The Economist article referred to the bull market in everything. The stock market has not been the only bull market. Bonds too experienced a powerful market that may well have peaked in 2016. The bond bull wasn’t limited to just government bonds but to all credits, especially what is referred to as ‘junk bonds’ as credit spreads narrowed sharply. Our chart below shows the spread between Baa corporate bonds relative to 10-year US Treasury notes at the lowest level in a decade (currently 1.97%). The only time the spread has been lower was in the run-up to the top in 2007. While higher, the spread between US 10-year Treasury notes and ‘junk’ bonds (rated BB or lower by S&P, and Ba or lower by Moody’s) is also at or near record lows.

This post was published at GoldSeek on 15 October 2017.