Who Is Short Treasurys? (Spoiler: Pretty Much Everyone)

Once upon a time, news and fundamentals mattered.
Then the Fed came and ever since then the main question has been where the highest concentration of shorts is, just to squeeze the margin call daylights out of them, and generate alpha (a strategy we highlighted back in 2012).
And while shorting crappy, illiquid stocks has not worked for a long, long time because under ZIRP capital is misallocated with reckless abandon usually ending up promptly in the most worthless companies, it was not until the past year when the shorting brigade decided to assault the most liquid, allegedly, instrument: the US Treasury bond itself.

This post was published at Zero Hedge on 08/29/2014.

SP 500 and NDX Futures Daily Charts – Hubris R’ Us

The SP 500 futures managed to close at exactly 2000.00. Cute. There was a remarkable amount of complacency in the US trade today as the summer help took the markets into a three day weekend with plenty simmering on the geopolitical stove. As you know, today was the end of the month. Next week the pros come back from vacation and we may see a different tone to the daily trade

This post was published at Jesses Crossroads Cafe on 29 AUGUST 2014.

Stock Markets in their Third Bubble Since 2000

The S&P 500 just passed the 2,000-point psychological threshold, an absolute record for that index, created in 1950 and comprising the 500 largest companies traded on the U. S. stock market, thus being more representative than the famous Dow Jones Industrial Index, with its 30 companies. This new record would seem to show that the U. S. recovery is under way… but let’s step back a little in order to evaluate these numbers.
As can be seen on this 1950-end of 2013 graph (reaching 1,600 points), the S&P 500 has been quite erratic since the 2000s, with two bubbles that burst! But let’s get back to the ’80s… Back then was the triumph of Ronald Reagan’s ‘conservative revolution’, which led to a vast liberalisation of the economy with whole sectors being allowed to compete (air transportation and telecoms, notably), while at the same time income tax was reduced, thus encouraging wealth creation. Sound growth takes place and the United States comes out of the ’70s crisis on the way to two wealth producing decades.
In all logic, the S&P 500 starts to rise in 1982, with the 1987 October crash being just a glitch quickly forgotten. But, starting in 1995, the trend picks up, with the start of the ‘internet bubble’. Much hope is placed in the nascent network and heads are spinning a little too much. The bubble burst, beginning of 2000, and the S&P 500 went from a peak of 1,527 to a trough of 800 in 2002, almost down by half.

This post was published at Gold Broker on Aug 28, 2014.

5 Things To Ponder: Labor Day Edition

The financial markets are set to wrap up the month with roughly a 3.5% gain, depending on where today’s action ends, which is historically on the positive end of returns for the month. The histogram below shows the annual percentage change for the month of August. Since 1930, there have been a total of 47 positive months versus 38 negative (55% win ratio) with an average return of 1.47%. However, if we strip out the 37.7% gain in 1932, the one outlier, the average monthly return falls to just 1.04%.

This post was published at StreetTalkLive on 29 August 2014.

“Unrigged” Close Buying-Panic Saves S&P 2,000 For Long Weekend

For the 6th week of the last 8, Treasury yields declined with 30Y pressing to 3.05% (and 10Y 2.32%) handles to 15-month lows. US equity markets saw volume crater as the early high-stops were run in the EU session and low-stops run in the US session before the ubiquitous EU close ramp lifted futures to VWAP and S&P cash to 2000.xx where it stayed for the rest of the day in a wholly unrigged way. Trannies ended the week red and Russell the best. The USD Index closed at 13-month highs (up 7 weeks in a row). Despite USD strength, gold and silver rose 0.5% on the week but oil was the big winner 2.4% (testing $96) as copper tumbled 2%. Credit markets closed at their wides (as stocks closed at their highs). Interestingly, once the Sept POMO schedule was released, TSYs sold off on the day to close red (but end 4-7bps lower on the week). VIX closed unch today but the ridiculous late-day panic-buying spree in futures grabbed stocks back above the crucial 2000 level for the S&P. Year-to-date, Treasuries lead 16.75% as the S&P ( 8.5%) overtook gold ( 6.7%) in the last few days.

This post was published at Zero Hedge on 08/29/2014.

Comex Gold Warehouses Filling Up…With Paper

Willing or unwilling; we all now dwell in the fantasy-realm previously dubbed ‘the Wonderland Matrix’. For the small minority who still retain mental awareness; this all-encompassing illusion of propaganda is like a thick fog which blankets reality. However, for the legions of brainwashed drones in our societies, the Wonderland Matrix is reality.
Nowhere is this blanket of fog thicker than in the precious metals sector. Here perversity is a way of life, as the genesis of the Wonderland Matrix began with the fantasy-world constructed here by the propaganda of the Corporate media.
As must inevitably occur with such serial perversion (i.e. consistently reporting the precise opposite of reality), these perverse lies soon begin to contradict each other. We see a glaring example of this by simply viewing the Corporate media’s ‘perversion (2014 version)’ versus its ‘perversion (2013 version)’.
The insanity of last year began shortly after the Cyprus Steal, when a corrupt Western government rubber-stamped the first ‘bail in’. This, in turn, opened the floodgates to the unlimited confiscation (i.e. theft) of paper assets by our corrupt governments, as these puppet-leaders mumbled in unison about how this (act of theft) was now a ‘precedent’.

This post was published at BullionBullsCanada on 29 August 2014.

Keynesian Fairy Tale Alert: Establishment Citadel – Council On Foreign Relations – -Peddles Helicopter Money Plan

Folks, take economic cover. There is already a rabid financial mania loose in the land as reflected in the irrational exuberance of the stock market, but, in fact, the fairy tale economics fueling the current financial bubble is fixing to leap into a whole new realm of lunacy. Namely, an out-and-out drop of ‘helicopter money’ to the main street masses.
That’s right. The Keynesian brain freeze has so deeply infected the Wall Street/ Washington corridor that the grey old lady of the establishment, the Council On Foreign Relations, has lent the pages of its prestigious journal, Foreign Affairs, to the following blithering gibberish:
It’s well past time, then, for U. S. policymakers – as well as their counterparts in other developed countries – to consider a version of Friedman’s helicopter drops….. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.
I have actually checked, and, no, the publishing arm of the Council on Foreign Relations has not been hacked by writers from the Onion. This monetary insanity is for real!

This post was published at David Stockmans Contra Corner on August 29, 2014.

Low-Cost Transcontinental Gold

Back in 2001 Turkey produced less than 50k ounces of gold, an insignificant amount considering the geological potential of this transcontinental country. The prolific Tethyan Metallogenic belt, which covers a large part of it, offers an environment capable of hosting large precious-metals deposits. But strangely even though the ancient Romans found great success tapping this belt, the modern-day miners largely ignored it.
Two watershed events finally turned the miners on to Turkey. First was the enactment of a mining law designed to attract foreign investment, which led to large-scale systematic exploration and the discovery of some major gold deposits in the 1980s and 1990s. And second was the 2000s gold bull market, which ultimately encouraged the development of these discoveries.
As a result Turkey has seen steady growth in gold production over the last decade or so. It is now host to 7 commercial-scale mines. And in 2013 they collectively produced over 1.0m ounces. This represents a whopping 2200% increase in output since 2001. And Turkey anticipates a continued uptrend that’ll have it producing 1.6m ounces annually within the next couple years.
One of the biggest and best gold mines in the country is the Copler mine. Copler is 80%-owned by Alacer Gold (a local joint-venture partner owns the balance), one of the first foreign companies to venture into this rich land. This project first hit Alacer’s radar in the late 1990s. And it was early JV work with Rio Tinto that yielded the discovery of its strong zones of epithermal gold/silver/copper mineralization.

This post was published at Gold-Eagle on August 29, 2014.

Goldman Slashes EURUSD Forecast To 1.20

Having flip-flopped from forecasting EUR strength for the next 12 months in April (target 1.40), Goldman has rapidly ratcheted down its expectations for the flailing currency to 1.30 previously and now forecasts EURUSD at 1.20 in 12 months. As Goldman notes, “because we believe the dynamics of the Euro have fundamentally changed and because we expect cyclical outperformance of the US, a prolonged period of Euro undervaluation can be expected and this is reflected in our longer-term forecasts.” Trade accordingly…
Via Goldman Sachs,
1. We are revising down our EUR/$ forecast to 1.29, 1.25 and 1.20 in 3, 6 and 12 months (from 1.35, 1.34 and 1.30 previously). We are also revising our longer-term forecasts lower, bringing the end-2015 number down to 1.15 (from 1.27), that for end-2016 to 1.05 (from 1.23) and that for end-2017 to 1.00 (from 1.20). We switched from forecasting Euro strength to weakness in April, when we revised our 12-month forecast from 1.40 to 1.30, and the decline since then has been faster than we anticipated. Our latest forecast change aims to signal that the current move lower in EUR/$ has staying power and, in our view, is the beginning of a trend.

This post was published at Zero Hedge on 08/29/2014.

Summer Ends, Jackass Appears

In a continuance of our “holiday tradition”, Jim Willie stopped by Turdville yesterday to share his thoughts on current events and where he thinks this all headed.
The Jackass was his usual self, even if a bit under the weather. In this podcast, we discuss:
Yesterday’s announcement by Gazprom that they will begin accepting payment in rubles and yuan The escalation of US and EU sanctions against Russia and how they are failing/backfiring The growing isolation of the US as a economic superpower The eventual emergence of a new global currency regime This baby clocks in at slightly over 60 minutes so please try to pace yourself. You don’t want to overdo it.
TF
CLICK HERE TO LISTEN

This post was published at TF Metals Report By Turd Ferguson | Friday, August 29, 2014.

Should Retirement Plans For Individuals Hold Precious Metals And How?

Diversifying a portfolio is the first thing they teach you about investment, especially for retirement plans. With these funds, security is often prioritized over quick, short term speculation. For that reason, precious metals and other commodities have now become preferred choices for retirement plans for individuals. Traditionally, this is not allowed for qualified plans, but things have change and now investors are looking at innovative retirement plans for individualsto invest in commodities.
Why Precious metals work for retirement plans for individuals?
Retirement plans for individuals are often all about flexibility and security. Unlike a traditional 401k account with an employer, people look at retirement plans for individuals as it allows them to take better control of their retirement funds. Precious metals or commodities work because trading can be done quicker with less legality involved than other investments, say real estate for example.
A person can also choose to play safe with a buy-and-hold strategy, which can guard their nest egg against inflation. He or she can also choose to speculate and trade more often when opportunities arise.

This post was published at GoldSilverWorlds on August 29, 2014.

What the Heck Just Happened at the San Francisco Apple Store?

Not everyone is irrationally exuberant in my beloved and crazy San Francisco, serial epicenter of magnificent tech and real estate bubbles and their subsequent busts. The trench between those who are benefiting from the bubble and those who’re run over by it as it pushes rents into the stratosphere and inflates other essential costs of living just got a lot deeper with the arrest of security contractors for Apple who were protesting at the Apple Store downtown.
Ironically, just a few days ago, San Francisco was declared to have the fastest growing compensation for tech workers among 34 markets across the country: In 2013, the value of their wages, stock compensation, meals, and other benefits jumped 18.9% from prior year to an average of $156,500. The highest average compensation levels were in Santa Clara County in Silicon Valley at $196,000 and in San Mateo County in the middle of the Peninsula, at $291,500.
San Mateo County’s figures include the compensation of Facebook CEO Mark Zuckerberg. In addition to free lunches, a salary of $1, and some other benefits, he pocketed $3.3 billion via FB stock options, up from $2.3 billion the year before. Remove his stock option gains from the equation, and San Mateo County’s average tech compensation plummets to $210,000. If you then take the next 19 most remunerated individuals out, it’ll come down to a more realistic level.

This post was published at Wolf Street on August 29, 2014.

Can A National Quasi-Religion (Pro Sports) Go Broke?

Attending costly games is on the margins of the household budget. When the credit card gets maxed out, attending is no longer an option.
Please understand I’m not suggesting professional sports isn’t the greatest thing since sliced bread: I’m simply asking if attending pro sports games has become unaffordable to the average American.
Who cares as long as we can watch the games for free on television, right? That raises another issue: in the next recession, will advertisers still pay billions of dollars for broadcast TV ads on sports channels when ads on mobile devices distributed via Big Data analysis can directly target the (shrinking) populace who still has disposable income to spend?
Before we look at the money side of pro sports, let’s note the glorious shared experience of “our team” winning and hated rivals losing. Sports is one of the few experiences that unites a remarkably diverse populace, and one of the few spheres of life that isn’t politicized to ruination.
We all get to live vicariously through sports, and the stranger cheering beside us is suddenly a “friendly” in a largely hostile world.

This post was published at Of Two Minds on August 29, 2014.

HUI Timing Boxes

In the previous post it was mentioned that the 2013-2014 would-be bottoming grind in HUI has been almost exactly the duration of the 2010-2011 topping grind. Here is a visual to put with that statement.
The current yellow box is an exact duplicate of the 2010/11 box, which came with an over bought MACD crossed down. The breakdown candle implies that September would be the month that a break UP candle comes into play if this relationship has any predictive power.

This post was published at GoldSeek on 29 August 2014.

MUST READ: A Fraud By Any Other Name Is Still A Fraud

Once upon a time, there was a thing called a ‘free-market’ and for a time nations strove toward this ideal. To wit, a free market economy was a market-based economy where prices for goods and services would be set freely by the forces of supply and demand and allowed to reach their point of equilibrium without intervention by government policy, and it typically entailed support for highly competitive markets and private ownership of productive enterprises.
But power and belief shifted and faith now resides in governmental fiscal policy (spend more, tax less) and central banker interest rate policy (make money ever cheaper) to avoid the free markets down-cycles and extend its up-cycles infinitely. The central bank high priests have determined free markets are better replaced by command economies and further the priests’ purport they know appropriate levels of demand and supply…and absent the achievement of these levels, they will enforce their will even if the Fed’s programs are the likely cause that retards the Fed’s from achieving their stated goals!
But this has gone so far that now all we have is fiscal imbalances (the true nature is hidden by accounting fraud) and central bank centralized command of financial valuations. And I’m not being dramatic… I truly mean the Fed and central bankers are controlling the pricing of nearly everything financial (including sovereign debt / bonds, stocks, real estate, commodity prices, etc.) via interest rate targets and bond purchasing programs. The politicization and centralized control has turned the economic indexes into the central banks gauges which they actively ‘manage’.

This post was published at SRSrocco Report on August 29, 2014.

“Economic Pilot in Reverse”: US Consumer Spending Unexpectedly Dips; Zero for 79

Mainstream media headlines in the last two days offer an amusing look at GDP forecasts.
GDP Stronger Than Expected
Yesterday, the Financial Times reported US Rebound Stronger than First Thought.
The US economy’s second quarter bounce was stronger than previously thought, with the official annualised growth estimate increased from 4 per cent to 4.2 per cent.
The revision is more evidence of robust underlying growth in the world’s biggest economy as it swung back from a weather affected 2.1 per cent fall in the first quarter.

This post was published at Global Economic Analysis on August 29, 2014.

Chelsea Clinton is Quitting Her $600,000/Year NBC “Reporter” Job

Shortly after it was revealed by Politico that NBC had stooped to new lows in favoritist nepotism, having paid Chelsea Clinton an annual salary of $600,000 for “occasional” reporting work, in effect making her one of the highest paid if not the highest paid “reporter” in the world, the former first daughter quickly stunned everyone when, in the aftermath of her mother’s just as stunning commentary on personal wealth and what being “broke” in the New Normal apparently means, she stated rhetorically that “I was curious if I could care about money and I couldn’t.”
So, moments ago, to prove that she really no longer cares about such earthly things as money, since between her hedge fund husband and her parents, she has more than she can possibly spend in one lifetime, AP reported that Chelsea Clinton is finally quitting her job as a reporter at NBC News.

This post was published at Zero Hedge on 08/29/2014.

Stocks Catching Down To Treasury’s Fresh 15-Month Low Yields

It appears a combination of Cameron scaremongery and weak-spending-driven GDP downgrades has sparked a realization in stocks (for now) that maybe bonds are on to something. As 30Y Yields drop closer to a 3.05% handle (and fresh 15-month lows), stocks have rolled over notably this morning… Of course, it is Friday though and all that pent-up de-escalation buying power on the sidelines is just itching for new new highs in stocks.
Even short-term the divergence remains large…

This post was published at Zero Hedge on 08/29/2014.