Best And Worst Performing Hedge Funds In August And Year-To-Date 2014

Superficially, there are two amusing observations to make about a New Normal in which the S&P, courtesy of its Chief Risk Officers Yellen, Draghi and Kuroda, continues to vastly outperform virtually all hedge funds for a 6th year running: the first is that one of the very few funds in our universe which is doing better than the broader market is named Tulip Trend Fund, which in itself speaks volumes, while the other fund that is creating outsized “alpha” is Bill Ackman’s Pershing Square, which has made the bulk of its gains on the back of the Allergan deal where he frontran the investing public, knowing full well Valeant would make a hostile bid, a transaction which the SEC better strike as illegal or else the farce of a market will get even more farcical.

This post was published at Zero Hedge on 09/03/2014.

Just How Bad Is Europe’s Banking System? ESI Bonds Bid At Just 2% Of Face

Just three months ago, everyone was a believer: bonds traded well above par, Europe’s recovery was on track, and Portugal’s banking system was a shining example of how Europe’s bailout program worked (andGoldman was pitching SPVs full of this crap to any and all greater fools). Today – the ugly truth is exposed as Bloomberg reports, Espirito Santo International debt attracted potential buyers at just 2% of face value. Of course, the words “contained” are trotted out to explain how this is a one-off and not at all representative of the rest of the European banking system. But… Howard Marks’ Oaktree Capital seems to disagree – “We continue to think Europe will provide a substantial quantum of attractive investment opportunities for all of our strategies and in particular distressed debt,” as a record amount of bad loans are being offloaded by European banks ahead of the stress tests.

This post was published at Zero Hedge on 09/03/2014.

Where To From Here?

I know this super highway. This bright familiar sun. I guess that I’m the lucky one…
~ Steely Dan
The financial markets were certainly correct in dismissing that rather abysmal first quarter 2014 GDP print, no? After all, the current 4.2% GDP growth snapback revision in Q2 is proof positive Q1 was just a one-off fluke. Right?
The fact is: for a good five years now, economic pundits have been both hoping for, and then repeatedly disappointed by, the US economy’s inability to achieve “escape velocity’.
From the ‘misery loves company’ department, the “good” news is that the other major global economies have experienced relatively worse economic outcomes than the US. So, in the land of global perceptual relatives, the US economy remains one of the lead sled dogs.
But, until proven otherwise, we remain in a slow growth macro environment, as has been the exact character of this historically subdued growth cycle since its start coming out of the 2008 crisis.
Is it all bad, though? Of course not. There is some good along with the bad, yet there also exists some outright ugly. It’s the balance, rhythm and interplay between The Good, The Bad and The Ugly over time that shape both the headline economic stats as well as theoretically support financial asset prices. Indeed, the manner in which this unprecedented global slow growth cycle has impacted global flows of capital has been much more responsible for raising the prices of financial assets prices than any actual economic realities.
So what lies ahead for the US economy? And for the financial markets? Are things going to get better or worse from here?

This post was published at PeakProsperity on September 3, 2014,.

WHY BURGER KING’S EXPATRIATION IS THE MORAL THING TO DO

It was announced last week that Burger King had bought a famous Canadian restaurant franchise known as Tim Horton’s to reduce the amount of taxes they “owe” to the US government. An upcry arose!
As usual the mainstream media and the people who watch it have the story totally wrong. Burger King is not giving US taxpayers a “raw deal” by looking to move abroad so as to save on profits which are not repatriated. Instead, the iconic fast food burger chain is doing the moral thing by moving its tax-base outside the war-mongering, highly socialist US federal government’s reach.
The mainstream media will never give you this side of the story. This obvious trend towards expatriation terrifies the talking heads. You have to come to alternative media sources like The Dollar Vigilante (TDV) Blog and others to get the truth. As Howard Kurtz writes at Fox News,
I feel confident in saying that most Americans are disgusted by the perfectly legal practice of US companies avoiding taxes by incorporating in another country.
If this is the case, it is because Americans love bombing other countries. They lust for blood. I can think of no other logical explanation Americans would want the machine in Washington to continue being fed. Burger King is not the first company to make the moral decision to leave the US tax farm. Many American companies are going abroad – as many as 70. These so-called “inversions”. Even the most American of investors stand behind the inversion. Iconic American billionaire, Warren Buffet, coughed up $3 billion so the hamburger chain could buy the Canadian donut outfit Tim Hortons. Buffett did this just one month after Obama denounced ‘inversion’ tactics as an ‘unpatriotic tax loophole’, ordering regulatory changes to undermine them.

This post was published at Dollar Vigilante on September 2, 2014.

Saxo Bank Warns Swiss Franc Tail Risk Is Concerning

In a nutshell: The chance of EURCHF breaking the peg at 1.2000 have increased from 10% to 25-30% based on European Central Bank monetary policy, geopolitical risk and a lack of policy choices for the Swiss National Bank. This means that the weighted risk is now 9 figures – significantly up from 2 figures when I did a similar calculation back in 2011/12. ((1.2000-.9000= 30 figures) x 30% = 9 figures of risk) . This means that being long EURCHF no longer is a safe bet and although the 70% chance of the floor being both defended and protected is still high, the tail-risk involved is becoming to concerning.

This post was published at Zero Hedge on 09/03/2014.

An “Austrian” Bill Gross Discusses Credit Creation

This month’s Bill Gross letter, notably shorter than usual, is as close to the bond manager discussing an Austrian economics worldview as we will likely ever see him: in brief, it’s all about the credit/money creation, with an emphasis on the use of proceeds of said creation under ZIRP, i.e., malinvestment , or as Gross puts it: “credit growth is a necessary but not sufficient condition for economic growth. Economic growth depends on the productive use of credit growth, something that is not occurring.”
From Pimco’s Bill Gross:
For Wonks Only
A credit-based financial economy (as opposed to pure cash) depends on an ever-expanding outstanding level of credit for its survival. Without additional credit, interest on previously issued liabilities cannot be paid absent the sale of existing assets, which in turn would lead to a vicious cycle of debt deflation, recession and ultimately depression. It is this expansion of private and public market credit which the Fed and the BOE have successfully engineered over the past five years, while their contemporaries (the ECB and BOJ) have until now failed, at least in terms of stimulating economic growth.
The unmodeled (for lack of historical example) experiment that all major central banks are now engaged in is to ask and then answer: What growth rate of credit is enough to pay prior bills, and what policy rate/amount of Quantitative Easing (QE) is necessary to generate that growth rate? Assuming that the interest rate on outstanding debt in the U. S. is approximately 4.5% (admittedly a slight stab in the dark because of shadow debt obligations), a Fed governor using this template would want credit to expand by at least 4.5% per year in order to prevent the necessary sale of existing assets (debt and equity) to cover annual interest costs. That is close to saying they would want nominal GDP to expand at 4.5%, but that’s another story/ Investment Outlook.
How are they doing? Chart 1 shows outstanding credit growth for recent quarters and all quarters since January 2004. The chart’s definition of credit includes the standard Fed definition of private non-financial credit (corporations, households, mortgages), public liabilities (government debt), as well as financial credit. The current outstanding total approximates $58 trillion and has been expanding at an average annual rate of 2% for the past five years, and 3.5% for the most recent 12 months.

This post was published at Zero Hedge on 09/03/2014.

Will asian gold demand continue?

To give you an idea of how important gold is considered in Malaysia, the prime minister was delivering the keynote speech in a recent gold conference.
Can you imagine David Cameron or Barack Obama giving a keynote entitled ‘Gold: Sustaining Future Growth’ It just wouldn’t happen.
The episode has got me thinking about the vastly different attitudes to gold between East and West – and that’s what I want to look at today…
Looking at worldwide gold demand trends, two things are pretty clear. Asian demand is increasing and Western demand is falling.
In fact, world gold mine production (averaging about 2,800 tonnes per year over the last five years) only just manages to cover Asian demand. In the chart below (from Nick Laird at Sharelynx), we see Asian demand in red. It has risen almost inexorably since the early 1980s, while Western demand (the blue line) has been falling since 2003.

This post was published at TruthinGold on September 3, 2014.

Scotland Independence Risk Sees British Pound Dive

Scotland Independence Risk Sees British Pound Dive
Mel Gibson in Braveheart
Sterling fell sharply yesterday as traders became nervous of a possible vote for Scottish independence. The referendum on Scottish independence from the United Kingdom takes place on Thursday 18th September.
While the referendum and the potential impact of an independent Scotland have been on the horizon for some time, the approaching vote in two weeks is causing upheaval for the British pound in currency markets, and also more general macro uncertainty in the regional economic and monetary system.

This post was published at Gold Core on 3 September 2014.

Bill Holter-US Broke-Crash Mathematical Certainty

The following video was published by Greg Hunter on Sep 2, 2014
Bill Holter of MilesFranklin.com says a crash of the financial system is on the way. Holter says, ‘I believe that many things that are real will be revalued many multiples higher. Silver and gold I see being revalued eight to ten times higher or more if we have a closure of the banking system and the stock market, a reset so to speak . . . How likely is a crash in the financial system? Holter thinks, ‘From a probability standpoint, whether it’s tomorrow morning or next week, or next month, or next year, mathematically, ask yourself this question: Is the U. S. broke? The answer is yes, the U. S. is broke. There is no way the U. S. can pay the promises, the interest and etcetera on everything that is out there. I’ve seen a number of $240 trillion in total promises and debt. There is no way that can be paid. So, from a mathematical standpoint, sooner or later, there is going to be an all-out collapse. That is a mathematical equation. It is no longer if, it is only a question of when.’

Indian physical demand seen high

Indian gold imports and premiums are likely to surge during the rest of the year as buying picks up for the wedding and festival season, the head of the country’s biggest gold refiner said on Tuesday.
Premiums could jump to $10-$12 an ounce over the global benchmark from the current levels of $4-$5, said MMTC-PAMP Managing Director Rajesh Khosla.
Imports could climb to 60-70 tonnes per month for the rest of the year from about 40 tonnes in July, Khosla said, adding that August imports were probably around 63 tonnes.
India has not yet released its trade figures for August.

This post was published at TruthinGold on September 2, 2014.

Central Bank Monetary Policy Enables Us to Put Off Real Reforms

This cycle of entrenched interests protecting their skims and scams via central bank monetary policy is self-liquidating.
I finally figured out that the core purpose of central banks’ monetary policy is to enable vested interests to avoid desperately needed reforms in the real economy. This might have been blindingly obvious to others, but I finally caught on to the dismaying reality: the only purpose of central bank monetary policy is to keep the bloated, corrupt, inefficient and self-liquidating vested interests of the state-cartel crony capitalism from having to suffer the consequences of real reforms.
Japan ably serves as Exhibit #1 of this core dynamic. The broad narrative in Japan is a template for state-cartel crony capitalism everywhere: after World War II, the system of state-managed cartels was re-instated with modest structural changes. The Central State and bank enabled the expansion of export-sector cartels–an expansion that followed the classic S-Curve of expansion, maturity and stagnation with great precision:

This post was published at Charles Hugh Smith on TUESDAY, SEPTEMBER 02, 2014.

Gold subdued

The yellow metal price in global market eased on back of correction in international inventories besides dull interest of international and domestic buyers. It closed at $1,264 an ounce with $23 per ounce down in value as compared to previous trading session while domestic bullion price also witnessed correction. Gold in tola term down by Rs 949 per tola to stay at Rs 48,403 per tola while in grammage value, gold dipped by Rs 815 per ten grams to close at Rs 41,541 per ten grams respectively on Tuesday, dealers said.
The gold price remained in correction phase, as leading traders in international and domestic markets were eyeing on future output however potential buyers in India and Pakistan remained busy in hedging.

This post was published at TruthinGold on September 3, 2014.

‘Hoarding Money’ – A New Meme?

Fed: US consumers have decided to ‘hoard money’ … One of the great mysteries of the post-financial crisis world is why the U. S. has lacked inflation despite all the money being pumped into the economy. The St. Louis Federal Reserve thinks it has the answer: A paper the central bank branch published this week blames the low level of money movement in large part on consumers and their “willingness to hoard money.” – CNBC
Dominant Social Theme: This money hoarding has got to stop for the economy to get better.
Free-Market Analysis: Sometimes Federal Reserve white papers attract attention and this one does because of the term “hoarding money.” This is a startling phrase and – who knows – perhaps it marks the beginning of a new meme.
Certainly the word “hoarding” is a popular one with government officials. When governments are uncomfortable with the actions of citizens for whatever reason, the term “hoarding” is often applied to stigmatize certain behaviors and encourage others.
In this case, the authors of this paper don’t seem to have in mind stigmatization so much as explaining the phenomenon they are analyzing and suggesting ways monetary policy can alleviate the behavior.
Here’s more:
The paper also cites the Fed‘s own policies as a reason for consumers’ unwillingness to spend. Though American consumers might dispute the notion that inflation has been low, the indicators the Fed follows show it to be running well below the target rate of 2 percent that would have to come before interest rates would get pushed higher.
That has happened despite nearly six years of a zero interest rate policy and as the Fed has pushed its balance sheet to nearly $4.5 trillion. Much of that liquidity, however, has sat fallow. Banks have put away close to $2.8 trillion in reserves, and households are sitting on $2.15 trillion in savings – about a 50 percent increase over the past five years.

This post was published at The Daily Bell on September 03, 2014.

Gold Holds Long-Term Bearish Technical Pattern

This is an excerpt from the daily StockCharts.com newsletter to premium subscribers, which offers daily a detailed market analysis (recommended service).
Spot Gold fell to around 1270 on Monday and extended the decline that began in early July. Before looking at the medium-term picture, let’s review the weekly chart for a long-term perspective. The first chart shows gold peaking around 1900 in September 2011 and quickly falling to the 1550 area. The metal then embarked on a long consolidation and broke support with a sharp decline in April 2013. Gold then moved into another consolidation that looks like a descending triangle, which is a bearish continuation pattern.

This post was published at GoldSilverWorlds on September 2, 2014.

Did US Macro Just Jump The Shark?

For the past five years there has been a very clear and significant cycle to US macro data – a slight rise to start the year, notable weakness into the middle of the year, a rapid recovery into the fall, then generally flat to year-end. A year ago, we explained this cycle appears to be created by government agencies need to spend, spend, spend their budgets out ahead of fiscal year-end (Sept).

This post was published at Zero Hedge on 09/02/2014.

The 60 Day Countdown Begins, Will This Lead To The False Flag Event? – Episode 457

The following video was published by X22Report on Sep 2, 2014
The manufacturing around the world starts to decline, meanwhile the US manufacturing is improving. Gold has been pushed down once again to give the illusion that the dollar and economy are strong. US Senator wants to take passports away from US fighters who fight in Syria. Ebola is hurting the economies of West Africa and pushing food prices higher. NATO soldiers reported fighting in Ukraine. Libya tribes have now taken over government buildings. Obama notifies congress of strikes in Armeli Iraq, this gives Obama 60 days to use military assets in the region. Afterwards he will need approval from congress, this time frame brings us to Oct-Nov. Islamic State has reportedly beheaded Sotloff in a new video. This is just another event to push the main event.

Precious Metals And Internationalization Are The Antidote To The Keynesian Endgame

When looking at today’s economic situation, it is amazing how the debt situation remains underexposed. It is truly the ‘elephant in the room’. In this article we will review the most recent economic data and what that data could mean for the coming years.
When asked about his view on the economic situation, Claudio Grass, managing director of Global Gold, answered with this quote from German economist Wilhelm Rpke:
‘The theories men construct, and the words in which they are framed, often influence their mind more strongly than the facts presented by reality’.
This sentence nicely describes today’s mindset amongst most people in the Western word since we are raised in amounts to a government-controlled educational system! We are not taught to question [authority]. The problem is that the actual system we live in focuses only on the effects but never discloses the underlying causes, let alone tries to connect the dots. This research needs to be taken upon by the individual. However, research requires a healthy portion of curiosity and bravery, as well as independence and self-confidence to stand up for one’s own opinion, which will be in contrast to the story we are told by governments and the mainstream media.
Linking this view to today’s economy, it goes without saying that anyone with a basic level of curiosity can find the following data:
The U. S. currently has total debts outstanding (incl. unfunded liabilites) which are close to 900% of its GDP. America hasn’t passed a budget since April of 2009. As a country, the U. S. has had a budget deficit in 42 out of the last 47 years. The U. S. has paid 14.8% of its yearly revenue to servicing its debt (interest payments).

This post was published at GoldSilverWorlds on September 2, 2014.

sept 2/raid on gold and silver/GLD loses another 1.8 tonnes of inventory gold/no change in silver/ Conditions inside Pakistan heating up/Escalation in the Ukraine vs Russia/Ebola spread/

Gold closed down $22.10 at $1263.70 (comex to comex closing time ). Silver was down 33 cents at $19.07
In the access market tonight at 5:15 pm
gold: $1265.00
silver: $19.19
GLD : a loss of .1.8 tonnes of gold (inventory now at 793.20 tonnes)
SLV : no change in silver inventory at the SLV/now 331.528 million oz
Every time we have a long weekend, the banksters whack gold and silver. They did not disappoint us again with their antics.
The game will end once China/Russia can no longer receive any physical gold and silver from the West.
Today we have commentaries concerning the Ukraine, Russia, Pakistan, China, Japan and the terror of ISIS and Ebola.
We will discuss these and other stories
So without further ado………………
Let’s head immediately to see the data has in store for us today.
First: GOFO rates/
All months basically moved slightly towards the negative needle. Again, they must have found some gold to lease..
London good delivery bars are still quite scarce.
Sept 2 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
.082000% .1000000% .11800% .14600% .220000%
August 29.2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
08800% .102000% .12000% .1500% .228000%
end
Let us now head over to the comex and assess trading over there today,

This post was published at Harvey Organ on September 2, 2014.