Kyle Bass: “Today’s Market Resembles The 1987 Debacle On Steroids”

The US stock market celebrated the 30th anniversary of Black Monday with the 2017 version of a rocky trading day: Stocks sold off early, with S&P 500 futures recording their steepest post-midnight drop of the year. But the dip was reflexively and aggressively bought, and stocks even poked back into the green seconds before the close as algos mistook a repetitive Politico headline about Jay Powell’s chances of becoming the next Fed chair for news – leaving us with yet another record close.
Of course, the historical juxtaposition of the 1987 crash with today’s unnaturally placid markets practically forced even the most bullish of traders to question how much longer the present market paradigm – where markets listlessly drift through a seemingly interminable series of record highs while trading volume and volatility remain suppressed – can possibly last.

This post was published at Zero Hedge on Oct 20, 2017.


GOLD: $1279.35 DOWN $9.05
Silver: $17.03 DOWN 22 cents
Closing access prices:
Gold $1281.20
silver: $17.03
PREMIUM FIRST FIX: $8.00(premiums getting larger)
Premium of Shanghai 2nd fix/NY:$8.00PREMIUMS GETTING LARGER)
LONDON FIRST GOLD FIX: 5:30 am est $1280.25
For comex gold:
For silver:
25,000 OZ/
Total number of notices filed so far this month: 784 for 3,920,000 oz

This post was published at Harvey Organ Blog on October 20, 2017.

Possibly the Most Important Thing About Gold You’ll Read All Year

A German newspaper just published one of the most important things on gold you’ll read all year.
It’s an interview with Pierre Lassonde, one of the smartest guys in mining. One of the smartest guys in the world. Pierre is the billionaire founder of top mining royalty firm Franco-Nevada.
In an industry with plenty of pretenders and shady salesmen, Pierre stands very tall. He’s a brilliant deal maker, he has an incredible long-term track record, and he’s an all-around good guy. When Pierre talks about making money in natural resources, I listen. I hope you do too. (You can read my story about having dinner with him right here)
Recently, the German newspaper Finanz and Wirtschaft (translated to Finance and Economy) interviewed Pierre to get his take on gold and gold mining. I thought it was an excellent interview. Below, you’ll find what I believe are the biggest, most useful ideas he shared, along with some comments from yours truly. I hope you find this ‘one two’ punch combination from Pierre and myself useful.
Q: So where do you think gold will go from here?
Pierre Lassonde: My view has been between $1250 to $1350 per ounce for this year and then slightly ramping up next year to around $1300 to $1400. But for gold to get into the next real bull market we need signs of inflation. So far we haven’t seen them. The Federal Reserve and other central banks have piled up huge reserves. But there is no inflation because the money is sitting within the banks and they are not lending it. Therefore, you don’t get a multiplier effect. But what happened recently in the US – the one-two punch with respect to the hurricanes Irma and Harvey – is going to require an enormous amount of reconstruction. This could finally move the needle on inflation. Also, Europe is doing much better. So at some point I suspect we are going to see inflation start to pick up a little bit.

This post was published at GoldSeek on 20 October 2017.

Marc Faber Responds To Racism Accusations

Having been forced off the boards of Sprott, NovaGold, and Ivanhoe mines and excommunicated from mainstream business media following his comments earlier in the week, Gloom, Boom, & Doom Report writer Marc Faber responds to his racism allegations…
“I have been labeled by the mainstream media as a racist – I don’t think this corresponds at all with reality.
I wrote a report about capitalism and socialism and about private property rights, and I also wrote about the tendency nowadays to want to rewrite history.
In the US they are trying to tear down statues of people who had a different view from other people at the time… they also tried to tear down statues of Columbus..

This post was published at Zero Hedge on Oct 20, 2017.

ROBO Global Aims to Profit from AI Revolution

As a technology and business concept, AI is beginning to feel very similar to the type of euphoria towards the internet in the mid to late ’90s. This time, however, AI has way more hype, promise, confusion, mystery, and even fear – depending on your view of it – than the internet ever did.
Recently, Financial Sense Newshour discussed this topic with William Studebaker, President of ROBO Global, creator of the robotics and automation ETF, ROBO, on why this truly represents the next greatest revolution impacting the world economy.
AI Is Already Here
We’re already seeing AI applications taking form in smart appliances, online search algorithms, recession forecasting, autonomous weapons systems, and data collection and analysis. While many still think of AI in sci-fi terms, the reality is, AI is here and companies have embraced it, particularly in the financial industry.

This post was published at FinancialSense on 10/20/2017.

Stocks and Precious Metals Charts – To the Moon, Alice

“For we wrestle not against flesh and blood, but against principalities and powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.”
Ephesians 6:12
Stocks continued moving higher.
Where they’ll stop, nobody knows.
Asia is rolling out the most new stocks in the US since the Alibaba IPO. Making America great again.
And the pundits know plenty of reasons why this is still a good time to buy.

This post was published at Jesses Crossroads Cafe on 20 OCTOBER 2017.

Fun on Friday: No Gold Biscuit for You!

How would you celebrate the birthday of a government building?
Maybe send out a press release? Perhaps hold a little assembly and let some politician ramble for a while about how great the building is? Maybe host an open house for the public? Or here’s an idea. Just ignore it. After all, it’s a government building. Who really wants to celebrate that?
Well in India, they go for a little more swanky soire when it comes time to celebrate their government buildings. The Karnataka Assembly building will turn 60 this month and the state assembly secretariat proposed a lavish 2-day festival complete with a gift of gold biscuits for each lawmaker.
The cost for the shindig? Rs. 26-crore. If you don’t have your handy rupee to dollar calculator with you, that equals 260,000,000 rupees, or about $4 million U. S.
And yes. I did say a gold biscuit for every lawmaker.

This post was published at Schiffgold on OCTOBER 20, 2017.

Fired Tesla Workers Discover They Were Replaced With Cheap Temp Labor

Just last week, amid their Model 3 “production hell,” Tesla shocked the auto world with news that they would be firing hundreds of workers. Of course, firing seasoned production staff is somewhat atypical for a ‘growing’ company (shrinking cash flow aside) that was already having difficulty meeting their own production schedule. Of course, the irony was apparently ‘lost’ on Tesla who tried to dismiss the mass firings as “performance-based terminations.” Per Capital and Main:
Tesla announced the firings, which are reportedly still continuing, last week. Though no official number of terminations would be given, estimates range from 400 to 1,200. The company did not give advance notice under the WARN Act because, it insisted, they were performance-based terminations, not layoffs. ‘Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved during the performance period,’ said a Tesla spokesperson in an emailed statement. ‘As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures.’
As it turns out, we’re not the only ones who were surprised by Tesla’s mass termination event as laid off workers are now coming forward to say the decision was nothing more than an attempt to break up unionization efforts at the company’s Fremont, CA plant and replace seasoned employees with cheap, temporary contract labor.

This post was published at Zero Hedge on Oct 20, 2017.


The dollar is dead but the world doesn’t know it.
It has been a slow death and the final stages will be very painful for the US and for the rest of the world. The US empire is finished financially and militarily.
It all started with the establishment of the Fed in 1913 and escalated with Nixon. For anyone old enough to still remember him, they will think about the Watergate scandal. This was corruption and bribery at the highest level in the Nixon administration, including the president himself. In order to avoid impeachment which would have been a certainty, Nixon resigned. All this broke out 11 months after Nixon’s disastrous decision to take away the gold backing of the dollar on Aug 15, 1971. Nixon should not have been impeached for the Watergate scandal but for his decision to end the gold backing of the dollar. That disastrous decision is what will lead to a total collapse of the world economy and the financial system, starting sooner than anyone can imagine.
By 1971, the US had already been running chronic budget deficits for 10 years consecutively. At the end of the 1960s, President Gaulle of France realised what would happen to the dollar and demanded payment in gold instead which was his right. This led to Nixon closing the gold window since this was the only way that the US could continue to live above its means. And this is exactly what the US has done for more than half a century now. Not only have they run a real budget deficit every year since 1961 but also a trade deficit every year since 1975.

This post was published at GoldSwitzerland on October 19, 2017.

GE-Dip-Buying-Panic Sends Dow To ‘Most Overbought’ In 62 Years, Yield Curve Collapse Continues

As Bloomberg summarizes, the dollar rose, Treasuries sank and all three broad stock indexes are heading for a record close on bets a budget compromise will bring Washington closer to agreeing on Trump’s promise of tax reform. The dollar touched a three-month high and 10-year Treasury yields approached 2.4% while the Canadian dollar tumbled after inflation and retail sales missed estimates. Some clarity on a budget resolution, a good quarter of earnings and the anticipation of an announcement of the next Fed chair has led to market confidence. One stock clearly bucked the earnings trend; GE posted results before the bell, missing analysts’ estimates significantly and slashing its profit forecast. The stock erased losses after falling 7% in premarket trading.
So – GE did this…

This post was published at Zero Hedge on Oct 20, 2017.

Weekend Reading: Dow 24,000 By Christmas

This past week, the Dow crested 23000 sending the networks into a ‘tizzy.’ It took about 5-minutes of crossing that magical ’round number,’ before questions raised of how long before the markets cross 24,000, and 25,000.
The chart below shows the 1000-point milestones of the Dow going back to 2009. After a long break between 18,000 and 19,000 in 2015 through the election in 2016, the Dow has surged higher ticking off 4-more milestones in less than a year.
As I have shown previously, these late stage ‘melt-ups’ are not uncommon. In fact, as shown below, it is something witnessed prior to every market peak previously.

This post was published at Zero Hedge on Oct 20, 2017.

Why US Tax Reform Will Put Even More Pressure On Dollar Funding Markets

On Wednesday, we noted the renewed tightness developing in dollar funding markets. Ignoring embryonic signs of stress in the financial ‘plumbing’ can be dangerous. The divergence of LIBOR from Fed Funds on 9 August 2007, which occurred two months prior to the peak in the Dow, always comes to mind. Fast-forwarding to the present when Mark Cabana, Bank of America’s head of US STIR, has been fielding client questions about the impact of proposed US tax reform. In particular, clients asked for Cabana’s view on what effect dollar repatriation by US corporates might have on funding markets if favorable tax treatment is forthcoming.
Spoiler alert – negative for dollar funding markets (and of course positive for the dollar).
Cabana explains ‘As Washington has increasingly focused on tax reform, clients have asked questions about how repatriation might impact the front end of the US rates curve. While there are still many unknown elements of the plan, we believe repatriation could provide modest upward USD funding pressure for foreign banks but likely leave the overall stock of commercial paper outstanding little changed.’

This post was published at Zero Hedge on Oct 20, 2017.

Great Expectations – Stock Market Breaks 2017 Pattern in Strong Pre-Earnings Rally

A persistent theme for 2017 has been stocks surging to record highs during each quarterly earnings cycle. The first three quarters of 2017 earnings have seen a series of 6-week explosions to the upside: February, April-May, and July. In fact, removing these three 6-week surges would leave the stock market completely flat for the year through August. The current earnings cycle is different. The predictable 6-week run to record highs this time has occurred prior to the the deluge of earnings releases. Could the expected corporate profit reports have been overly anticipated, mostly reflected in the current peak?

Normally, we would look for a strong market rally to begin now and carry into late November or early December. However, with so much buying power used up before the earnings onslaught, we suspect that momentum will be waning as we move into November. Correction risk may be minimal until we get past the earnings release climax around the 2nd week of November. The surprisingly positive earnings reports by IBM and Adobe this week are examples of why it’s a fools errand to call a market top without seat belts. Are there areas of technical concern? Absolutely! The small cap stocks along with sentiment measures such as put/call option ratios and CNN’s Fear and Greed Index have clear negative divergences throughout October with the major indices of the Dow and S&P 500 Index.

This post was published at FinancialSense on 10/19/2017.

Trump Considers Bringing Both Powell And Taylor To The Fed Together

only one leaves
— zerohedge (@zerohedge) October 20, 2017

The farce is now complete.
What is the best way to run schizophrenic monetary policy in a schizophrenic country, where the Fed sees “mysterious” deflation everywhere even as most ordinary consumers can’t afford to pay their health insurance, resulting in Fed chair candidates ranging from the extremely hawkish end to the dovish one? Simple: if you are Donald Trump, you bring both of them in.

This post was published at Zero Hedge on Oct 20, 2017.

TIPS Auction Points to Inflation Below Fed Target for Decades

(Bloomberg) – As traders prepare to underwrite $5 billion of inflation-linked Treasuries on Thursday, they’re as confident as ever that the Federal Reserve’s predicted inflation rebound won’t materialize at any point in the next 30 years.
Low inflation, which Fed Chair Janet Yellen last weekend called ‘the biggest surprise in the U. S. economy this year,’ has been a fact of life for years in the $1.29 trillion market for Treasury Inflation Protected Securities. The market-implied inflation expectation signaled by five-year TIPS has rarely been above the 2 percent mark since 2013.

This post was published at Wall Street Examiner on October 19, 2017.

US Spent A Record $4 Trillion In Fiscal 2017, Pushing Deficit To $666 Billion

One year ago, the CBO forecasted that the Fiscal 2017 US deficit (for the year ended September 30), would be in the mid-$500 billion range. It was not meant to be, however, and on Friday the Treasury reported that with outlays of $341 billion in the last month of the fiscal year, offset by $349 billion in receipts, the full year deficit grew to a nice, round and very memorable $666 billion in fiscal 2017, up $80 billion or 14% from fiscal 2016. The government ran an $8 billion surplus in September, much smaller than the $33 billion surplus in September 2016. Receipts fell 2% while outlays grew 5% last month compared with the same period a year earlier.
For the full year, federal tax receipts reached a record high $3.315 trillion, thanks to slightly faster growth, according to a Treasury official quoted by the WSJ. But government outlays also hit a record high last year at nearly $4 trillion ($3.981 trillion to be precise), 3% higher than they were in the previous fiscal year, thanks to increased spending on Social Security, Medicare and Medicaid, as well as higher interest payments on the public debt. And that’s with interest rates that were near all time lows. We can’t wait until the $20+ trillion in Federal debt starts really hitting the bottom budget line as the Fed starts pushing rates higher.

This post was published at Zero Hedge on Oct 20, 2017.

Silver Stocks Comatose

The silver miners’ stocks have mostly drifted sideways this year, looking vexingly comatose. Such dull price action repels speculators and investors, so they’ve largely abandoned this lackluster sector. That weak trader participation has led to silver stocks’ responsiveness to silver price moves decaying. What can shock silver stocks out of their zombified stupor? And how soon is such an awakening catalyst likely?
Silver stocks’ flatlined behavior so far in 2017 is surprising and odd. Silver-stock prices are ultimately driven by silver-mining profits, which are overwhelmingly driven by prevailing silver price levels. Silver in turn is slaved to gold’s fortunes, the yellow metal is the white metal’s dominant primary driver. With gold faring quite well this year despite the euphoric record stock markets, silver and its miners’ stocks should be shining.
Since silver is a tiny market compared to gold, silver’s moves tend to leverage gold’s. The best global silver and gold supply-and-demand fundamental data available comes from the Silver Institute and World Gold Council respectively. According to them, worldwide silver and gold demand last year ran 1027.8m ounces and 4337.4 metric tons. Along with average prices, these can be used to approximate market sizes.

This post was published at ZEAL LLC on October 20, 2017.

Institutions Are Selling To Retail Investors At An Unprecedented Pace

According to the latest EPFR fund flow data compiled by BofA’s Michael Hartnett, the great “institutional to equity” stockholding rotation is accelerating, with another $8.8bn allocated to equities, more than all of it from retail investors, and another $5.8bn going into bonds, offset by a $0.4bn outflows from gold.
Ironically, the one place where active investors are still putting back at least a token fight against the robots is in bonds, where $3.6bn went into active bond funds this week vs “only” $2.2bn into passive bond ETFs. And, as Hartnett writes, active AUM is fighting back, if only in bondland, where there have been $1.04tn in active bond inflows past 10 yrs vs. $0.93tn into passives…

This post was published at Zero Hedge on Oct 20, 2017.

Conference Board Leading Index Sees First Decline in Over a Year

The latest Conference Board Leading Economic Index (LEI) for September decreased to 128.6 from 128.8 in August and saw its first decline in over a year, partially due to the impact of the hurricanes. The Coincident Economic Index (CEI) came in at 115.7, up fractionally from the previous month.
The Conference Board LEI for the U. S. declined slightly for the first time in over a year. Negative contributions from initial claims for unemployment insurance (inverted), building permits and average weekly manufacturing hours more than offset the positive contributions from the ISM new orders index and the financial components. In the six-month period ending September 2017, the leading economic index increased 1.7 percent (about a 3.5 percent annual rate), slower than the growth of 2.2 percent (about a 4.4 percent annual rate) during the previous six months. In addition, the strengths among the leading indicators became somewhat less widespread. [Full notes in PDF] Here is a log-scale chart of the LEI series with documented recessions as identified by the NBER. The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale.

This post was published at FinancialSense on 10/19/2017.