10Y Spikes Over 3.00% Or Copper Crashes – What Happens Next?

The spread between 10Y Treasury yields and the ratio of copper-to-gold has never been wider as the former signals recessionary economics (flattest curve since 2007) and the latter reflationary recovery (highest in 3 years)… so who is right?
Bond yields are sliding as Gundlach’s favorite signal (copper/gold) soars… implying 10Y over 3.01% (75bps higher than the current level!)

In fact, the gold-to-copper ratio is on the cusp of dipping beneath four for the first time since November 2014.

This post was published at Zero Hedge on Oct 16, 2017.

OCT 16/2017/GOLD AND SILVER FALL ON NEWS THAT TRUMP IS CONSIDERING JOHN TAYLOR AS FED GOVERNOR/KIRKUK FALLS TO IRAQI GOVERNMENT/SPECIAL FORCES LAND IN SOUTH KOREA/BREXIT TALKS GOING NOWHERE

GOLD: $1302.35 DOWN $1.64
Silver: $1733 DOWN 6 cents
Closing access prices:
Gold $1295.50
silver: $17.24
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: $1309,55 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1301,50
PREMIUM FIRST FIX: $8.05 (premiums getting larger)
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1311.55
NY GOLD PRICE AT THE EXACT SAME TIME: $1303.50
Premium of Shanghai 2nd fix/NY:$8.60(PREMIUMS GETTING LARGER)
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est $1305.10
NY PRICING AT THE EXACT SAME TIME: $1304.10
LONDON SECOND GOLD FIX 10 AM: $1299.60
NY PRICING AT THE EXACT SAME TIME. 1299.60
For comex gold:
OCTOBER/
NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 19NOTICE(S) FOR 1900 OZ.
TOTAL NOTICES SO FAR: 2353 FOR 235,300 OZ (7.318TONNES)
For silver:
OCTOBER
9 NOTICES FILED TODAY FOR
45,000 OZ/
Total number of notices filed so far this month: 562 for 2,810,000 oz
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Bitcoin: $5659 bid /$56 79 offer up $171.00

This post was published at Harvey Organ Blog on October 16, 2017.

Oops, Will Sears Holdings Last through Holiday Selling Season?

Director, owner of 27% of Sears’ shares suddenly jumps overboard. 4th director to quit in 10 months.
The board of directors of Sears Holdings keeps shrinking – and that makes sense: Who’d want to be a director as the retailer careens along its path to bankruptcy, it only being a question of when it’ll get there, and whether or not the company will make it through the holiday selling season.
Today the company announced that Bruce Berkowitz ‘has decided to step down’ from the board of directors, effective October 31, 2017. He’d joined the board in February 2016. So that wasn’t long. No reason was given for the abrupt departure, which caused bankruptcy fears to flare up, and shares (SHLD) plunged 11.5% to $5.99.
Berkowitz is the fourth director to jump overboard over the past 10 months and none has been replaced. The other three:

This post was published at Wolf Street on Oct 16, 2017.

Netflix Hits New Record High After Smashing Subscriber Expectations, Unveils $17 Billion In Content Commitments

After some initial confusion, Netflix stock surged after hours, a repeat of what it did last quarter, soaring above its all time high price, up over 2% after reporting Q3 numbers which while beating slightly on revenues ($2.99Bn, Exp. $2.97Bn), and beating modestly on non-GAAP EPS (GAAP EPS$0.29, non-GAAP EPS $0.37, exp. $0.32), were far more remarkable for the subscriber numbers, which smashed expectations as follows:
Q3 total net streaming additions 5.3 million, Exp. 4.5 million Q3 domestic net streaming additions 850,000, exp. 774,000 Q3 international net streaming additions 4.45 million, exp. 3.72 million The addition of 5.2 million subs in Q2 was the largest increase ever during the period, which traditionally is among the company’s slowest time of year.
Netflix’ Q4 outlook was in line with expecations and the company now expects Q4 net streaming adds of 6.3 million (1.25m in the US and 5.05m internationally) just fractionally higher than the consensus estimate of 6.29 million and below the 7.05 million in the year ago quarter (which was the company’s all time record high quarter).
The company expects $3.27 billion in Q4 revenue, also above the consensus estimate of $3.15 billion, generating net income of $183 million.

This post was published at Zero Hedge on Oct 16, 2017.

Krinsky: We’re Seeing a Global Market Breakout

Jonathan Krinsky, Chief Market Technician for MKM Partners, tells Financial Sense Newshour that markets are breaking out across the globe and there’s little evidence we are at or near any sort of top.
For full audio, see Saturday’s podcast: Jonathan Krinsky on Synchronized Upturn; Marc Chandler on Currencies, Dollar
Seasonal Expectations May be Myths
Though we typically see deeper corrections come in September and October, so far, it’s looking like smooth sailing on Wall Street.
‘We have to remember that we’re in a very strong uptrend, and that’s been the case for over a year now,’ Krinsky said.
Though August and September are on average the worst months for the year, from a historical perspective, these apparent trends actually tend to be anomalies, Krinsky stated.
‘If we go back the last 30 years or so, October has only marked a major peak or the intra-year high one or two times,’ he said. ‘October gets more of a bad rap, but it actually tends to be a fairly decent month, especially when we’re in strong uptrends like we are now.’

This post was published at FinancialSense on 10/16/2017.

Morgan Stanley Sees “Greater Risk For A Correction Than We’ve Seen In A While”…But There’s A Catch

As U. S. equity markets casually melt up to all new highs with each passing day, Morgan Stanley Equity Strategist Michael Wilson, whose 2,550 year-end price target from back in August was just breached in a matter of months, says he’s getting somewhat concerned given Fed tightening, tax cut legislation that looks increasingly unlikely to pass, USD strengthening and extreme levels in pretty much every economic indicator which will make future improvement nearly impossible.
Given that, Wilson says he now sees “a greater risk for a correction than we have seen in a while…”

This post was published at Zero Hedge on Oct 16, 2017.

Weinstein Company In Talks To Sell Itself To Colony Capital

Despite repeated denials from Bob Weinstein and the Weinstein Company Board that the Hollywood studio was exploring a sale or shutdown after former executive Harvey Weinstein’s 30-year history of using his position to harass and assault actresses was exposed, the Weinstein Company revealed that it’s negotiating a sale of “all or a significant portion of” its major assets to Colony Capital, the private-equity arm of investment firm Colony NorthStar Inc.
The two companies have already entered into a preliminary agreement whereby Colony is providing Weinstein with a needed capital infusion – again appearing to contradict executives’ claims that the studio is in strong financial health despite the scandal. Financial terms of the investment weren’t immediately disclosed.

This post was published at Zero Hedge on Oct 16, 2017.

Stocks and Precious Metals Charts – On the Wings of a Dove

“Interesting that the papers of record regret that they worked the Weinstein story, but never felt like they had enough to actually publish it. Apparently they had a lower standard for the publication of the Iraqi WMDs and Russian hacking stories. It makes one wonder what other big stories they are sitting on, that they can’t quite bring themselves to publish, for whatever reason.”
Malcolm, a reader
There was an obvious bear raid in the precious metals today.
We are nearing peak fraud, at least for this latest iteration of bubbles and busts.
A good man can speak truths most profoundly with his silences. A wicked man tells lies with his. A sin against the Spirit will not be forgiven.
What is a sin against the Spirit? What is Truth? Pilate asked that question of Truth itself. as truth stood before him in silence, and then turned and washed his hands of it.

This post was published at Jesses Crossroads Cafe on 16 OCTOBER 2017.

Investors Are Ignoring The Evidence At Their Peril

I was recently watching a movie about the FBI trying to bring down a terrorist cell in the U. S. During their investigation, their evidence board became more and more cluttered with people, evidence, and locations as they attempted to track down the ‘cell.’ At first, the clues were disparate, and they didn’t provide a clear path to the end goal. But as more clues were obtained, the bigger picture emerged eventually leading to the successful ending of the terrorist threat.
It got me to thinking about what is currently happening in the markets. As stocks rang new highs last week, there were several disparate stories that caught my attention. Individually, each story is nothing to be overly concerned about, and are regularly dismissed by investors. However, when you begin linking these stories, a picture is beginning to emerge that suggests investors may be ignoring the evidence at their own peril.
Story 1: CPI Remains Weak
Despite three hurricanes and wildfires over the last couple of months, core CPI (ex-aircraft) failed to register much inflationary pressure. One would have expected given the surge in demand for goods and services needed to rebuild destroyed communities.
However, despite the Fed’s hopes for a surge in inflationary pressures to justify further hikes in interest rates, inflationary pressures have been on the decline for the last several months.

This post was published at Zero Hedge on Oct 16, 2017.

Asset-Stripping by Private Equity Firms Is Booming

Here are the numbers. Peak chase-for-yield by institutional investors?
Most of the brick-and-mortar retailers that have filed for bankruptcy protection to be restructured or liquidated over the past two years have been owned by private equity firms – including the most recent major casualty, Toys ‘R’ Us. Part of how PE firms make money is by stripping capital out of their portfolio companies via special dividends funded by ‘leveraged loans’ – more on those in a moment – leaving these companies in a very precarious condition.
So just how much have PE firms paid themselves in special dividends extracted from their portfolio companies? $4.76 billion in the third quarter, bringing the year-to-date total to $15.3 billion. So the year-total for 2017 is going to be a doozie.
In all of 2016, this sort of activity – ‘recapitalization,’ as it’s called euphemistically – amounted to $15.7 billion, up from $10.5 billion in 2015, according to LCD, of S&P Global Market Intelligence. LCD’s chart shows the quarterly totals:

This post was published at Wolf Street on Oct 16, 2017.

Is Silver Set to Soar?

Could silver be set to soar?
Analysts Barron’s spoke with recently think so.
An article published on the business journal’s website last week predicted the white metal will emerge as a winner for the second straight year.
With a per-ounce price of $17.41 for silver futures as of Friday, analysts say the white metal is poised for a big climb, particularly as the gold-to-silver ratio stands well above historical averages.’
Peter Schiff talked about the silver-gold ratio over the summer, noting it is historically very high. This means silver is extremely undervalued. The current silver to gold ratio stands at nearly 76:1. This means you can buy almost 76 ounces of silver with one ounce of gold. Consider the historic average ratio hovers around 16:1, and the modern average over the last century is around 40:1. As Peter said, ‘This is silver on sale.’
It’s one of the greatest silver sales of all time, relative to the price of gold.’

This post was published at Schiffgold on OCTOBER 16, 2017.

Cable Plummets On Report Brexit Talks Headed For “Catastrophic Breakdown” If No EU Compromise

Having traded near sessions highs most of the morning session, sterling suddenly tumbled (even if Gilts refused to move) following a Bloomberg report that the UK is said to see Brexit breakdown if the EU refuses to compromise. In immediate kneejerk reaction, GBPUSD plunged 50 pips, to session lows on fears that Theresa May’s visit to Brussels will be meaningless and just another opportunity for Juncker to get drunk.
As Bloomberg adds, Brexit negotiations are heading for a “catastrophic breakdown” unless the European Union signals this week that it will allow talks to move on to trade, according to a person familiar with the U. K. government’s position.
While the headline is likely just another trial balloon meant to send a message to Brussles, Bloomberg notes that without a clear sign that negotiations will progress to trade and transition arrangements by December at this week’s summit of European leaders, “the entire Brexit process will be in danger of collapse – and senior British ministers are losing faith in the EU’s willingness to strike a deal”, a Bloomberg source said.

This post was published at Zero Hedge on Oct 16, 2017.

Playing the Part in NAFTA Negotiations

As the fourth round of NAFTA negotiations comes to an end, the agreement’s survival has once again been brought into question. US President Donald Trump has threatened to strike a new deal with just Canada. Mexico downplayed the threat, saying it would walk away from negotiations if the new terms brought by the US put it at a disadvantage. For their part, the Canadians have been quiet, keeping their cards much closer to their chests.
All this commotion belies the fact that no NAFTA member is likely to walk away from the deal. The economic realities and commercial interests that led to its formation in the first place still incentivize cooperation, no matter how much any side postures.
Still, at first the glance, the United States appears to have the upper hand. It boasts the largest economy in the world and accounts for about a quarter of global gross domestic product. Exports account for only roughly 12% of its GDP, according to the Department of Commerce, so the US has the benefit of a strong consumer class to boost economic activity when international demand is low. Easy access to such a large and vibrant consumer market has enabled Mexico and Canada to build up their economies without having to trade much with each other. In Mexico, on the other hand, exports account for about 38% of GDP, and about 81% of those go straight to the United States. Exports account for 31% of Canada’s GDP, according to the World Bank, about 76% of which go to the US. Exports are simply more important to the Canadian and Mexican economies than they are to the US’s.

This post was published at Mauldin Economics on OCTOBER 16, 2017.

Healthcare Stocks Slide After Trump Says “Drug Prices Out Of Control”

Another day, another Trump soundbite to bring the algos out of hibernation. Moments ago the commented on tax and welfare reform, stating that “some people are taking advantage of the system while others are not receiving enough to live.”
TRUMP SAYS LOOKING TO REDUCE GOVERNMENT SPENDING HEADING INTO NEXT BUDGET SEASON TRUMP SAYS LOOKING AT WELFARE REFORM IDEAS TRUMP SAYS SOME PEOPLE ARE TAKING ADVANTAGE OF THE SYSTEM WHILE OTHERS ARE NOT RECEIVING ENOUGH TO LIVE

This post was published at Zero Hedge on Oct 16, 2017.

Australian Gold Mine Production on Track to Fall By Half Over Next 25 Years

Australian gold output will peak in just four years and then begin a steep decline, according to a report issued by a Melbourne-based industry adviser.
According to MinEx Consulting analysis reported by Bloomberg Business, Australian mine output will max out in 2021 and then fall by half into the mid-2050s, as aging mines close down.
A steep decline in Australia’s gold production will have a significant impact on world supply and lends credence to remarks made by the chairman of the World Gold Council during an interview at the Denver Gold Forum last month.
Randall Oliphant said he thinks the world may have reached peak gold. This means the amount of gold mined out of the earth will begin to shrink every year, rather than increase, as it has done pretty consistently since the 1970s. Oliphant said there are signs we’ve reached that point. In the near-term, he expects production to likely plateau at best, before slowly declining as demand rises, especially given global political risks and robust purchases by consumers in India and China

This post was published at Schiffgold on OCTOBER 16, 2017.

“There Are Just Too Many Things Wrong With The Country!” – How Trump Handled The ’87 Crash

The U. S. has gained more than 5.2 trillion dollars in Stock Market Value since Election Day! Also, record business enthusiasm.
— Donald J. Trump (@realDonaldTrump) October 16, 2017

Thirty years ago this week, the stock market took a massive nosedive, a crash that came to be known as Black Monday. Many investors were destroyed by this one day’s collapse, but, as we noted earlier, some survived (and even fewer thrived).
A few investors said they predicted the crash, including one familiar name: Donald Trump.
While now-President Trump is crowing about the surging stock market almost every day (for instance today)…
The Wall Street Journal reported at the time that the real estate executive said he sold all his stocks before the market tanked. He wasn’t too optimistic about a rebound in stock prices.
Why?
‘There are just too many things wrong with the country,’ he said.

This post was published at Zero Hedge on Oct 16, 2017.

One Trader Warns: “Don’t Confuse Risk-Asset-Buying With Calm”

CNBC’s Joe Kernen nonchalantly commented this morning that “Dow futures are indicated higher… Just like every other morning,” and that just about sums up the current utopia as consumer and business surveys spike irrepressibly in line with a seemingly unstoppable meltup in US equity markets. However, as former fund manager Richard Breslow warns this morning, investors should avoid confusing risk-asset-buying with calm.
Watching the markets playing out the latest version of what passes for investing these days, you have to wonder if traders have finally found religion. I don’t mean all those times we prayed with all our heart that a bad position would be saved. Or even, heaven forgive us, for something bad to happen which would be good for moi.
Rather, when all other analysis seems to have failed, there’s this curious yet understandable, belief that God will provide.
After all, what else sensibly explains the unceasing rewards from the accumulation of risky assets, despite serial reminders that all may not be as copacetic as the price levels insist is the case.

This post was published at Zero Hedge on Oct 16, 2017.