GOLD: $1284.95 DOWN $17.40
Silver: $17.02 DOWN 33 cents
Closing access prices:
Gold $1285.50
silver: $17.03
PREMIUM FIRST FIX: $10.00 (premiums getting larger)
Premium of Shanghai 2nd fix/NY:$9.79(PREMIUMS GETTING LARGER)
LONDON FIRST GOLD FIX: 5:30 am est $1289.70
For comex gold:
For silver:
830,000 OZ/
Total number of notices filed so far this month: 562 for 3,640,000 oz
Bitcoin: $5659 bid /$56 79 offer up $171.00

This post was published at Harvey Organ Blog on October 17, 2017.

Schrodinger’s Market: Goldman Now Has Two Year-End S&P Price Targets

For months, we were wondering how much longer Goldman would ignore the relentless market meltup without revising its year-end S&P500 price target, which at 2,400 was not only among the lowest on Wall Street, but also some 150 points away from twhere the S&P currently is. Furthermore, as of this weekend, Goldman’s 2018 and 2019 targets for the US equity index, were 2,500 and 2,600, implying there was only 50 points of upside for the next 26 months.
All that changed today, when Goldman unveiled that quantum mechanics is not the only arena where objects can exist in superposition: it turns out the “Schrodinger’s S&P” can also have two distinct states prices at the same time, too.
In a report from chief equity strategist David Kostin, he unveils that Goldman now has not one but two price targets for the S&P500: the first one is the traditional one, the same 2,400 as noted before. However, in a plot twist, one which casts the entire role of equity strategist into question, Kostin also said that the S&P 500 price target may “perhaps be 2650” if tax reform passes.
As he explains, “the 2400 target assumes no reform and P/E of 17.3x. 65% probability of passage by 1Q.” However, “with tax reform, target could be 2650 (17.9x).”
Of course, the fact that it is Kostin’s job to take all these probabilities into account when making his year end price target – his one price target – seems to be lost on the strategist, who like the rest of Wall Street had no idea how far the S&P would keep rising and instead of chasing the market, has decided to just bracket it with a low and high “target.” And what better way to avoid getting pestered by angry clients at the end of the yearm than to just give them the option of picking which target they like better.
This is how Goldman gets from its baseline 2018 EPS of $139 to the higher possible scenarios, incorporating a tax plan, and boosting EPS by as much as 12%:

This post was published at Zero Hedge on Oct 17, 2017.

Stocks and Precious Metals Charts – The Arc of the Moral Universe

“Since 1970, every time asset values have risen above 520% of households disposable income (the dashed line in the chart) then the US has been in a bubble and a subsequent crash has followed. This has simply meant asset values growing much faster than households income or households capability to sustain those price increases. The depth of each crash has been relative to the overshoot of asset values on the upside.”
Chris Hamilton, Bubble-nomics
It seems as though when I procrastinate long enough someone eventually does a very good job of making a point for something that is important, and does it in a way that I may not have been able to do as well otherwise.
A favorite refrain of financiers, fraudsters, politicians and their defense lawyers is to pose the questions in defense of a lie or a fraud in such a way as to blur the lines of recognition, so as to create room for a reasonable doubt. Indeed, the boldest among them will ask those would listen to them to question reality itself. What does ‘is’ really mean, for example.
Chris Hamilton of Economica as noted in the second quote above has come up with a very clever way to help to put a little rigor around the concept of financial asset bubbles. Obviously the crux of the problem is to find some metric, some reasonable and relatively stable or significant relationship against which to measure changes in one value and compare them over time.
Chris has chosen disposable income, which is actually pretty darn good. And since the link between disposable income and net worth has a suggestion of correlation, and not just causation, the shoe seems to fit fairly well.

This post was published at Jesses Crossroads Cafe on 17 OCTOBER 2017.


Question: What is a bubble?
Answer: A bubble is trade in an asset at a price range that strongly exceeds the asset’s intrinsic value. Or it could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.
Question: How do you know when you are in a bubble?
Answer: Gauge asset prices against a standard, foundational premise to determine if the price appreciation is warranted.
Lucky for us, the Federal Reserve provides exactly what is needed to show how unjustifiable current prices are against households disposable income. The chart below is all US household’s net worth (current value of all real estate, stocks, bonds, etc.) as a percentage of their disposable personal income (disposable income is what they have left to spend or save after paying their taxes). To round out the picture, I’ve added in the net growth in full time workers during each period, dramatically decelerating.

This post was published at Zero Hedge on Oct 17, 2017.

California Treasurer Skewers Wells Fargo, Wonders Why Tim Sloan is Still CEO, Extends Sanctions

‘The cockroaches infiltrated’ the bank, as ‘systemic corruption and venal abuse of customers’ have become ‘part of Wells Fargo’s brand.’
In a letter so brutally scathing it’s practically funny, California Treasurer John Chiang skewers Wells Fargo, its Board of Directors, and its new CEO Tim Sloan. And he extended the sanctions on Wells Fargo, first imposed in September last year, by ‘at least’ another year.
The Treasurer’s office oversees ‘nearly $2 trillion in annual banking transactions, manages a $75 billion investment pool, and is the nation’s largest issuer of municipal debt,’ Chiang pointed out last year when he imposed the sanctions on Wells Fargo’s ‘most highly profitable business relationships with the State of California.’ Those sanctions include:
Suspension of investments by the Treasurer’s Office in all Wells Fargo securities. Suspension of the use of Wells Fargo as a broker-dealer for purchasing of investments by his office. Suspension of Wells Fargo as a managing underwriter on negotiated sales of California state bonds where the Treasurer appoints the underwriter. With these sanctions, Chiang sought ‘real accountability and lasting reforms.’ But it’s a long and complex relationship that dates back to the Gold Rush era:
Wells Fargo has evolved to become the nation’s second largest bank by total assets. California is set to become the world’s fifth largest economy. What we each do, therefore, matters and effects the public interest.

This post was published at Wolf Street on Oct 17, 2017.

“The System Is Broken”: Angry Baltimore Dad Lashes Out As 12th Grader Tests At 4th Grade Math Level

One Baltimore resident and disable Army veteran, Victor Able, Sr., is fed up with the public education that his son, a 12th grader on the verge of graduation, received from City Neighbors Charter School after he recently tested at 4th grade level in math and 5th grade level in reading. Able says his son was simply passed to the next grade year after year so that his school could continue to receive extra federal funding even though it failed to deliver results. After his complaints fell on deaf ears at city council and the mayor’s office, Able has now hired an attorney to address a system he says is “broken.” Per Fox News:
According to the IEP report, the 12th grader reads at a 5th grade level; does math at a 4th grade level.
‘It’s not supposed to happen,’ stated Able. ‘I don’t want him to fall out into the streets.’
‘They failed my son,’ said Able. ‘Not just my son, a whole lot of kids. The system is broken. They need to stop and fix it.’
Able told Project Baltimore he has hired an attorney and has a meeting with the school later this month.
Confronted with the complaint, City Neighbors released the following generic statement which we can only assume roughly translates to ‘we allow teachers the “autonomy” to consistently fail and never hold them to account because their union says we’re not allowed to’…but that’s a very rough translation.

This post was published at Zero Hedge on Oct 17, 2017.

Speculation Swirls, Trial Balloons Fly: Who’s Next Up for Fed Chair?

Speculation continues to swirl around the question of who President Trump will appoint as Federal Reserve Chair when Janet Yellen’s term comes to an end in February.
Trump will reportedly meet with Yellen this week to discuss the possibility of her staying on as the head of the central bank. During the presidential campaign, Trump was highly critical of Yellen, saying she is ‘obviously political,’ and accusing her of ‘doing what Obama wants her to do.’
A number of other names have been floated for the job in recent weeks. The mix includes both ‘dovish’ and ‘hawkish’ contenders. Some of the names bandied about include Fed Governor Jerome Powell, Fed Governor Kevin Warsh, Stanford economist John Taylor, National Economic Council Director Gary Cohn, and Federal Reserve Bank of Minneapolis president Neel Kashkari.
Of course, nobody knows what Trump will ultimately decide. We’ve seen this same swirl of speculation around other appointments. It almost seems like Trump revels in floating trial balloons, throwing out names, and keeping people guessing. It shouldn’t surprise anybody if Trump ultimately comes out of left field and appoints somebody not even on the current speculative list.

This post was published at Schiffgold on OCTOBER 17, 2017.

Goldman Sachs Says Gold Is Better Than Bitcoin

‘Precious metals remain a relevant asset class in modern portfolios, despite their lack of yield,’ analysts including Jeffrey Currie and Michael Hinds wrote. ‘They are neither a historic accident or a relic.’ Looking at properties such as durability and intrinsic value, they are still relevant even with new materials discovered and new assets emerging, such as cryptocurrencies, they said (LINK)
Here’s what blows my mind: When gold ran from $250 to $1900, the entire western mainstream financial media called it a bubble. Bitcoin has run from $250 to $5500 and price momentum-chasers and the usual hypster con artists exclaim that it’s going to $100,000. Qu’est-ce que c’est, Rudolph Havenstein?
This is typically what a bubble looks like:

This post was published at Investment Research Dynamics on October 17, 2017.

The ‘Winners Of The New World’ Redux

The New ‘Winners of the New World’
Do you remember Jim Cramer’s February 29th, 2000 speech, ‘Winners of the New World?
You want winners? You want me to put my Cramer Berkowitz hedge fund hat on and just discuss what my fund is buying today to try to make money tomorrow and the next day and the next? You want my top 10 stocks for who is going to make it in the New World? You know what? I am going to give them to you. Right here. Right now.
OK. Here goes. Write them down – no handouts here!: 724 Solutions ( SVNX), Ariba ( ARBA), Digital Island ( ISLD), Exodus ( EXDS), InfoSpace.com ( INSP), Inktomi ( INKT), Mercury Interactive ( MERQ), Sonera ( SNRA), VeriSign ( VRSN) and Veritas Software ( VRTS).
We are buying some of every one of these this morning as I give this speech. We buy them every day, particularly if they are down, which, no surprise given what they do, is very rare. And we will keep doing so until this period is over – and it is very far from ending. Heck, people are just learning these stories on Wall Street, and the more they come to learn, the more they love and own! Most of these companies don’t even have earnings per share, so we won’t have to be constrained by that methodology for quarters to come.
We try to own every one of them. Every single one. And if I had my druthers, I wouldn’t own any other stocks in the year 2000. Because these are the only ones worth owning right now in this extremely difficult, extremely narrow stock market. They are the only ones that are going higher consistently in good days and bad. I love every one of them, just as I loathe the rest of the stock universe.

This post was published at Zero Hedge on Oct 17, 2017.

Is The Aramco IPO On The Brink Of Collapse?

In what could be a humiliating decision, Saudi Aramco is considering not staging an IPO next year as planned, due to the difficulty of pulling off an international listing.
On Friday, the Financial Times reported that Aramco is weighing a different strategy: selling stakes in the company to private investors and sovereign wealth funds. No final decision has been made yet, but there are several potential paths forward, including a public listing on Saudi Arabia’s domestic stock exchange plus a private sale. Or a private sale followed by an international listing, but maybe not until 2019.
Aramco officials tried to beat back the report, insisting that everything is moving forward as planned. ‘A range of options, for the public listing of Saudi Aramco, continue to be held under active review. No decision has been made and the IPO process remains on track,’ Saudi Aramco said in a statement, according to the FT.
However, Reuters echoed the FT, reporting on Friday that Aramco was in talks with a Chinese investor.

This post was published at Zero Hedge on Oct 17, 2017.

Trump Expected To Announce His Pick For Fed Chair In Next Two Weeks

In the latest update on Trump’s search for the next Fed Chair, Reuters reported that the search has narrowed down to 5 finalists – Yellen, Warsh, Taylor, Powell and Cohn (condolences to Jeff Gundlach: his dark horse candidate, Neel Kashkari did not make the cut) – and that after meeting Yellen on Thursday, Trump will have discussed the Fed job with all five candidates. More importantly was the news that Trump is expected to announce his decision for next Fed Chair in the next 2 weeks, before he leaves for his Asian trip on November 3.

This post was published at Zero Hedge on Oct 17, 2017.


Left-wing financier George Soros has transferred $18 billion to the Open Society Foundations, the network of non-profits Soros uses to advance his left-wing ideology both in the United States and around the world.
The massive transfer, which was first reported by the Wall Street Journal, is roughly equivalent to the gross domestic product (GDP) of Afghanistan, according to World Bank data. Grover Norquist, president of Americans for Tax Reform, suggested that the transfer is a way for the 87-year-old Soros to avoid the estate tax – also known as the death tax – which penalizes large inheritances.
Inside Philanthropy reported last year that Soros, who has said that he considers himself to be ‘some kind of god,’ began laying the groundwork for the foundation to continue his mission after he dies. (RELATED: Leaked Emails Show Clinton Campaign Coordinating With Soros Organization)

This post was published at The Daily Sheeple on OCTOBER 17, 2017.

Wheezing Consumers & Slowing Economy, No Problem: UK Inflation Jumps Most in 5+ Years. Rate Hike Due in November

The Fed leads, other central banks follow.
The UK is not the only one. But it’s furthest ahead. In the US, consumer prices as measured by the Consumer Price Index rose 2.2% in September compared to a year ago. In the Eurozone, prices rose 1.5%. And today the UK’s Office for National Statistics reported that consumer prices in the UK jumped 3.0%, after having already risen 2.9% in August. It was the biggest increase since April 2012.
And inflation is outpacing wage increases, which inched up a meager 2.1%, slamming consumers further, and hampering the UK economy that is already showing signs of strain, with, for example, new vehicles sales plunging over 9% in September from a year ago.
Inflation has now been above the Bank of England’s target of 2.0% for the eighth month in a row:

This post was published at Wolf Street on Oct 17, 2017.

Global Growth Cues Abound

Sometimes stock market rallies can be so powerful that you just have to grab ahold of something sturdy and hang on. Every once in a while, the upward surge can be so strong that it feels as though it’s fake – too much wealth being created in too short a time, inevitably destined to evaporate.
The last 12 months have felt that way. With the major averages up anywhere from 19-26%, many investors are logging in to see account balances that have never been this high.
A recent analysis by FactSet adds a unique perspective to this recent surge. According to them, since February 2016, the market-cap of global shares has risen by an amount roughly equal to the entire value of world stocks in March 2009.
That’s sort of crazy if you think about it. In the span of roughly 20 months, as much wealth was created in global equities as existed around the world in 2009. Whoa.
Too much too fast? It’s possible.

This post was published at FinancialSense on 10/17/2017.

Gary Cohn is Concerned about Wall Street Clearinghouses – Blockchain is Already Fixing it

Gary Cohn, chief economic adviser to the President, voiced concern over the weekend about risk posed by Wall Street clearinghouses that became systemically important following the 2008 financial crisis.
As Bloomberg reported:
As ‘we get less transparency, we get less liquid assets in the clearinghouse, it does start to resonate to me to be a new systemic problem in the system,’ Cohn, director of the White House’s National Economic Council, said at a banking conference in Washington on Sunday.
Cohn isn’t the first to raise the risk. JPMorgan Chase & Co. and BlackRock Inc. have argued for years that clearinghouses pose their own threats, shifting risk to just a handful of entities. The Treasury Department’s Office of Financial Research has warned that clearinghouses used for derivatives trades can be vulnerable and potentially spread risks through the financial system.
While it is worth noting that this is another example of how the government’s response to a crisis they created made the economy as a whole more fragile, the good news for Mr. Cohn is that there is an exciting technological breakthrough that allows people to transparently move money without relying upon third parties to guard against shady counterparties: blockchain.

This post was published at Ludwig von Mises Institute on October 17, 2017.

Two Stars Crashed Into Each Other Flinging Out Gold, And Wobbling The Universe

The amazing new discovery of two crashing stars is a giant leap forward for astrophysics. This celestial event has been described by many as one of the most exciting things to happen in space.
According to The Independent, the super-dense neuron stars crashed together 130 million light-years away, spewing out precious metals and other heavy elements like platinum and uranium. Neutron stars, the collapsed remnants of massive stars that have died in supernova explosions, are some of the most exotic objects in the universe Experts say the event has kickstarted a ‘new chapter in astrophysics’ and confirmed theories about the origin of the mysterious neutron stars. They were also able to use telescopes on satellites and the ground to see the light and radiation that was being flung out of the explosion, which is known as a ‘kilonova.’
‘They [neuron stars] are as close as you can get to a black hole without actually being a black hole,’ theoretical astrophysicist Tony Piro, of the Observatories of the Carnegie Institution for Science in Pasadena, California, said in a different statement. ‘Just one teaspoon of a neutron star weighs as much as all the people on Earth combined.’

This post was published at shtfplan on October 17th, 2017.

Predicting Dow One Million – Was Warren Buffett Being Bold or Overly Cautious?

In a recent speech, Warren Buffett came down boldly on the side of optimism when it comes to both the economy and financial markets. What he said was “being short America has been a loser’s game… And it will continue to be a loser’s game.”
And to throw down the gauntlet against some the current negative talk in the markets, Mr. Buffett boldly predicted something quite extraordinary – which was that in 100 years “the Dow will be over a million.”
Is that even remotely believable, or is Mr. Buffett getting carried away by his own optimism?
The Challenge by Buffett: Check the Math
Warren Buffett knew as he predicted Dow One Million that this would seem unbelievable to many people or even ridiculous. Which is why he also said this “is not a ridiculous forecast at all if you do the math”.
In this analysis, we will do that math using two key assumptions.
First, we will use an absolutely average historical rate of inflation.
We will also take a look at the Dow Jones Industrial Average in the same terms that Mr. Buffett was talking about – which is price changes in an index (but not including dividends). In the process we’re going to learn some valuable lessons with a great deal of real-world applicability not just going out 100 years, but also for the next 10, 20 and 30 years when it comes to retirement financial planning and other forms of long-term investment.

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

Asian Metals Market Update: October-17-2017

Diwali greetings to all
The inability of gold and silver to trade over $1311 and $1750 is not a very positive sign in the short term. If by Friday gold and silver are unable to break and trade over $1311 and $1750 on a daily closing basis, then short sellers could dictate prices. Incoming US economic data releases suggest a firm and sustained US economy at least till the first quarter of next year.
In the short term gold and silver will always fall whenever focus shifts to economics. Gold and silver are in the short term just supported by continued geopolitical risk and demographic changes caused by geopolitical events. People’s movement, forced national boundary changes among other events take time to materialize. Corrections in gold and silver are a part and parcel of a long term bull rally.

This post was published at GoldSeek on 17 October 2017.

Marc Faber Racist Diatribe Costs Him CNBC, Fox Slots; Sprott Board Seat

Update: as previewed earlier, Sprott announced that at the request of the Board of Directors and Sprott management, Marc Faber has resigned as a director of the Company effective immediately.
‘The recent comments by Dr. Faber are deeply disappointing and are completely contradictory with the views of Sprott and its employees,’ said Peter Grosskopf, CEO of Sprott. ‘We pride ourselves on being a diverse organization and comments and behavior of this sort will neither be condoned nor tolerated. We are committed to providing an inclusive workplace for all of our employees and we extend the same respect to our clients and investors.’
Separately, both CNBC and Fox Business Network, cable channels where he had appeared in the past, said they won’t invite him on in the future.
* * *
Marc “Dr. Doom” Faber is in trouble, only this time it’s not for yet another doomsday forecast which hasn’t come true, but for launching into a racially charged diatribe telling subscribers to his newsletter that he was glad that ‘white people populated America, and not the blacks.’

This post was published at Zero Hedge on Oct 17, 2017.

Morgan Stanley: “Client Cash Is At Its Lowest Level” As Institutions Dump Stocks To Retail

The “cash on the sidelines” myth is officially dead.
Recall that at the end of July, we reported that in its Q2 earnings results, Schwab announced that after years of avoiding equities, clients of the retail brokerage opened the highest number of brokerage accounts in the first half of 2017 since 2000. This is what Schwab said on its Q2 conference call:
New accounts are at levels we have not seen since the Internet boom of the late 1990s, up 34% over the first half of last year. But maybe more important for the long-term growth of the organization is not so much new accounts, but new-to-firm households, and our new-to-firm retail households were up 50% over that same period from 2016.
In total, Schwab clients opened over 350,000 new brokerage accounts during the quarter, with the year-to-date total reaching 719,000, marking the biggest first-half increase in 17 years. Total client assets rose 16% to $3.04 trillion. Perhaps more ominously to the sustainability of the market’s melt up, Schwab also adds that the net cash level among its clients has only been lower once since the depths of the financial crisis in Q1 2009:

This post was published at Zero Hedge on Oct 17, 2017.