Trial Lawyers’ Wheel Of Fortune: Scalped $1.2 Billion From 2013 Disability Claims

Jon

Social Security’s financial woes due to an aging American population are hardly news. However, the elderly are not the only group covered by Social Security. Since 1956, disability has been included as a part of Social Security, providing income to those who are physically unable to work. Along with the American with Disabilities Act of 1990 (ADA), these two programs have provided a booming industry for attorneys, according to a report from the Manhattan Institute’s Center for Legal Policy.

This post was published at David Stockmans Contra Corner on December 8, 2014.

The Currency War Accelerates

Jon

As suggested in last week, one should expect sovereign currency wars to do nothing but accelerate moving forward as more and more countries slip into recession, with China’s surprise rate cut on Friday the next domino to fall. And again, this trend should do nothing but accelerate as crack up boom process unfolds, which will continue until something like political revolution that destabilizes the establishment pops the bubbles. This move on the part of China was a result of Japan’s recent actions that forced the issue, which will in turn force other major players to react sooner rather than layer as well. The next distinguishable move should come from the ECB, which would also be surprising considering Draghi is being accused of impotence in this regard due to inaction.
No sooner are those words out of my mouth, and Draghi announces the implementation of direct asset purchases, which didn’t take very long at all – no? The question then arises, how long can the States keep up deception the US economy and corporate earnings are growing? Because it’s all a lie, achieved by statistical trickery and corporate buybacks. If these actions on the part of the PBOC, BOJ, and ECB are any indication (with more to come), the answer to this question is maybe not as long as central planners were hoping. Clearly the plan was to push the present agenda (propelling the dollar[$] higher) in the hope declining economies would strengthen with weaker currencies, however this is not working out due to larger structural / lifecycle issues, citing demographics at the core.
And while some would simply blame a failed Keynesian Model (think diminishing marginal returns on money printing) on what are now mature and floundering ‘modern economies’, such an accounting is too simplistic, while at the same time being a profound factor. No, the problem(s) are structural at the core, lifecycle related, that are being papered over with increasingly ineffective monetary policy. And again, nowhere is this more apparent than in Japan, where the yen has been cut in half over the past two years to no avail in the economy – now caught in the most profound liquidity trap in the history of mankind. But central planners (Keynesians), on the advice of ‘ideological hacks’ like Paul Krugman, just keep turning screws on the printing presses no matter how many times they are proven wrong.
Weather it be the yen’s (Japan’s) meltdown, or kabuki theater in Congress, or the statisticaltheater of the absurd in official numbers anywhere these days, there’s one thing you can say for sure – it’s not boring out there. But perhaps most interesting (meaning telling) when it comes to the ‘condition our condition is in’, is apparent S&P 500 (SPX) futures buying, along with the necessity to bang the VIX down every day in order to keep US stocks from falling, suggestive it might get a little more interesting sooner rather than later – surprising a great number of people. Of course this is just par for the course daily as part of thefinancial repression everybody supposedly knows about, but magically goes unnoticed and / or is not discussed except by ‘tinfoil hatters’ like me.

This post was published at GoldSeek on 8 December 2014.

WHY WALL STREET AND GOVERNMENTS HATE GOLD

Jon

Gold is hated more than ever by both governments and the financial services community. This is because it has now become imperative to keep the illusion of confidence in sovereign debt and paper currencies. To that end, a gentleman by the name of Willem Buiter, Citigroup’s chief economist, shot into the media spotlight by writing a note on the day before Thanksgiving stating his belief that gold is in a six thousand year-old bubble.
Citi’s chief economist penned this ‘brilliant’ commentary in the days just prior to the Swiss referendum on increasing the percentage of gold reserves held by its central bank. In a clear attempt to influence the gold vote, Mr. Buiter also stated on November 26th that, “The Swiss vote is ridiculous and no self-respecting central bank should ever be putting a large chunk in a single commodity.”
This hatred for gold spurs from his belief that gold has no intrinsic value. But how can one individual have the hubris to believe he can erase thousands of years of human experience and knowledge that has maintained gold’s intrinsic value stems from the fact it is the perfect store of wealth?
Mr. Buiter went on to exclaim that, ‘Gold has become a fiat commodity or a fiat commodity currency, just as the U. S. dollar, the euro and the yen.” He continued, ‘The main differences between them [fiat currencies] are that gold is very costly to produce, while the production of additional paper money has an extremely low marginal cost.” So, here we have this paragon of the Wall Street and banking community saying that gold is no different from fiat currencies.

This post was published at Gold-Eagle on December 8, 2014.

6 Reasons 2015 Will Be Defined By Market Volatility

Jon

Markets spent most of 2014 calmly moving up, but 2015 may be a different story.
Outside of a brief surge in volatility in October, markets were complacent throughout 2014. Even with geopolitical crises popping up in Iraq and Ukraine, an accelerating US economy and low interest rates across developed economies were able to ease any concerns of investors. But nothing lasts forever.
The way events are lining up, 2015 will be the Year of Volatility. Markets will be waiting for major decisions from the world’s central banks and uncertainties in macro and commodity markets to broach. Here are 6 reasons volatility is poised to make a comeback.
1. The Federal Reserve will raise rates
The US economy is doing well, and excuses to keep rates low past the mid-part of next year are quickly disappearing. GDP for the third quarter was revised up to 3.9 percent, better than the 3.25 percent that was expected, unemployment continues its downward trend, and the first signs of wage growth are beginning to appear.
The only uncertainty left is when the Fed will raise rates.
The most hawkish members of the FOMC are pushing for a first quarter increase, while doves like Narayana Kocherlakota are doing all they can to prevent that. These dynamics throw a wrench in when the committee will agree to hike, leaving bond traders waiting with bated breath.

This post was published at FinancialSense on 12/08/2014.

BEIJING WE’VE GOT A PROBLEM

Jon

The Chinese stock market hit a four year high today at 3,020. This is up 53% since the middle of 2013 low and up 48% in the last six months. I guess this must mean the Chinese economy is operating on all cylinders. If you think so, you’d be wrong. Barron’s interviewed a no-nonsense woman who has lived, worked and analyzed China from within since 1985. Anne Stevenson-Yang has spent the bulk of her professional life there working as a journalist, magazine publisher, and software executive, with stints in between heading up the U. S. Information Technology office and the China operations of the U. S.-China Business Council. She’s now research director of J Capital, an outfit that works for foreign investors in China doing fundamental research on local companies and tracking macroeconomic developments.
This lady is about as blunt as you can get about Chinese fraud, lies, mal-investment, and data manipulation. The entire Chinese economic miracle is a fraud. The reforms are false. The leaders are corrupt and as evil as ever. The entire edifice is built upon a Himalayan mountain of bad debt. The slave labor manufacturer for the world’s mal-investments since 2008 make Japan look like pikers.
China, for all its talk about economic reform, is in big trouble. The old model of relying on export growth and heavy investment to power the economy isn’t working anymore. Sure, the nation has been hugely successful over recent decades in providing its people with literacy, a decent life, basic health care, shelter, and safe cities. But starting in 2008, China sought to counter global recession with huge amounts of ill-advised investment in redundant industrial capacity and vanity infrastructure projects – you know, airports with no commercial flights, highways to nowhere, and stadiums with no teams. The country is now submerged by the tsunami of bad debt that begets further unhealthy credit growth to service this debt.

This post was published at The Burning Platform on 8th December 2014.

UBER: $40 billion Start-Up ‘Will Replace Car Ownership’

Jon

21st Century Wire says…
It’s the latest, greatest Silicon Valley IPO to hit the headlines, now emerging from its humble beginnings in a San Francisco niche market – into a potential global powerhouse brand…
The Switch
As it puts together its latest round of fundraising, Uber has been valued at [40] billion. Many have found that figure eye-popping for a six-year-old ride-on-demand company. But at least some transportation scholars say that that figure isn’t so crazy. To understand why, it helps to think of Uber’s competition in the market not as taxi companies, nor even other alternative transportation options like Lyft or Zipcar.
Instead, says Arun Sundararajan, a professor at New York University’s Stern School of Business, Uber’s value is based on the bet that it will soon ‘become a meaningful substitute for people owning cars.’

This post was published at 21st Century Wire on DECEMBER 8, 2014.

Andy Hoffman: Central Banks Have Confused Investors About the Value of Gold

Jon

Introduction: Andrew (“Andy”) Hoffman, CFA joined Miles Franklin, one of America’s oldest, largest bullion dealers, in October 2011 and serves as Marketing Director. For a decade, he was a US-based buy-side and sell-side analyst, most notably as an II-ranked oil service analyst at Salomon Smith Barney from 1999 through 2005. Since 2002, his focus has been entirely on precious metals, and since 2006 has written free missives regarding gold, silver and macroeconomics. Prior to joining the company he spent five years working as an investor relations officer or consultant to numerous junior mining companies. Andy’s articles can be found on the Miles Franklin Blog, at http://www.milesfranklin.com.
Daily Bell: What a month for gold. What’s going on?
Andy Hoffman: Remember, all markets are now manipulated on a 24/7 basis. It is the only way TPTB have been able to maintain their fiat Ponzi scheme this long, by “painting” markets like stocks and precious metals to tell the story they want told. Of course, not all markets – like crude oil and Treasuries – are not cooperating. Nor, for that matter, the physical gold and silver markets, which tell a dramatically different story than the suppressed paper markets. This particular month, the paper-based raids were more aggressive, as TPTB were terrified the Swiss referendum would be passed, forcing the SNB to buy 1,500 tonnes of gold.
Daily Bell: The Swiss gold referendum was soundly defeated. What happened?
Andy Hoffman: In a nutshell, even the “world’s smartest 0.1%” regarding the value of gold have been brainwashed by central bankers and market manipulation into believing the referendum was a bad idea. Heck, these were the same people that allowed constitutional gold backing to be surreptitiously removed, enabling the SNB to sell 1,500 tonnes of their gold at less than $400 per ounce and subsequently, to peg the Franc to the dying Euro in 2011, preceding an historic 16% plunge that is on the verge of getting much worse. The reason given was to improve Switzerland’s competitiveness, but Swiss GDP growth has averaged a paltry 0.4%/quarter since its cost of living is so high, they had a referendum this year about raising the minimum wage to $25/hour! In other words, TPTB still have the Swiss duped – which I assure you, they’ll understand more clearly sooner rather than later.

This post was published at The Daily Bell on December 07, 2014.

SWOT Analysis: The PBOC Circulates Draft Plan to Further Ease Import Restrictions on Bringing Gold into China

Jon

Strengths
Gold trading in China’s largest physical exchange is accelerating. For the first ten months of 2014, the volume of contracts on the Shanghai Gold Exchange was 12,077 tonnes, compared with all of 2013 at 11,614 tonnes. Klondex Mines announced a second toll milling agreement this week for its Midas Mill, where it has spare capacity. Klondex will process high grade ore, in excess of 1.5 ounces per ton from and pay the provider the value of the recovered gold less all toll milling charges. Such deal structures are accretive to Klondex, which essentially is buying gold below the market price and processing it with a positive carry on the profit margin. NGEx Resources announced its maiden resource for its 100 percent owned Filo del Sol project on the Chile-Argentina border of 280.5 million tonnes of copper. With the associated gold content, the copper equivalent grade comes in at 0.66 percent. Many of the older copper discoveries in South America are being depleted and are becoming more arsenic rich. With the size of the alteration zone at Filo del Sol and with the resource drilling only testing a small part of it, NGEx expects that further drilling will grow the resource. Weaknesses
U. S. employment data released on Friday by the Bureau of Labor Statistics calculated the economy created 321,000 new jobs in November, 90,000 more than expectations and thus pushing gold below $1,200 for the close of trading this week. Interestingly, ADP’s Employment Change report released on Wednesday came in at just 208,000 which was a miss versus the consensus estimate of 222,000.

This post was published at GoldSeek on 8 December 2014.

Stack Smart, Not Hard, Pt. 2: Make the Golden Pendulum Your Ally

Jon

Not much Time Left
First off, the Free Gold giveaway has been great fun all week, but time is running out to enter to win. Remember, if you’ve already entered, you can visit the post, and re-tweet it each day, to earn even more entries. On Tuesday, a winner will be chosen, so we’re getting down to the last 36 hours to participate. If you’ve been thinking about entering, or would like to earn more entries, we’re going down to the final stretch to do so! Good luck to all!
Two Dreaded Words
The two words that I’ve learned to dread more than most, are: ‘Watch this!’
Now, sometimes those can be fantastic words, right?
Sometimes, following those words, we are shown something truly magnificent, surprising, or even hilarious!
But when you have a 2 year-old(like the Watchman has)….those two words can induce some sheer, agonizing, teeth-grinding terror!
Each time I hear it, I smile and nod at my son, while my mind plays through all the possibilities of which physician we might have to visit once this scenario plays out.
You laugh, but adults are the exact same way though, are we not? I’m sure most of you have read stories about those crazed alchemists in the Middle Ages. Those poor, misguided souls, determined to play god, by locking themselves up in the dark tower of some castle or keep, pouring over ancient manuscripts, and even dabbling in forbidden ‘studies’. They’d stare, eyes twitching at the latin or egyptian texts, whiling away the hours, as they determined to turn lead into gold.
Time after time, they miserably failed!
Sometimes, many of them would think they were so close, only to be left with nothing in the end, every time.
Years and years were pitifully wasted this way. Whole lives expired, chasing a terrible and pointless dream.
A few of these folks suddenly realized they chose the wrong career, when something went horribly awry:
We chuckle at these people now, but we’re just as ridiculous!
For modern central bankers are very much like these alchemists, in that they all believe they’ve found a way to ‘turn debt into gold’. Yet, astonishingly, most well-educated individuals in the West, hang upon every word that these fools utter!
And, just like the poor, unfortunate soul in the painting above, I promise you that it will end in a fiery, monetary explosion.
That is, after all, why we’re stacking, is it not?
We’re all being forced to stand in said laboratory, while some ‘sage’ tells us:
‘Watch this!’
Just because we’re all being forced to watch another terrible, alchemical experiment gone wrong, doesn’t mean that we can’t do it safely from behind our silver and golden shields! Right?

This post was published at The Wealth Watchman on DECEMBER 8, 2014.

Hedge Funds Most Long The S&P500, Most Short The 10 Year In Six Months, Still Long Crude

Jon

Once upon a time hedge funds were actual rational, sensible, intelligent creatures whose PMs – rightfully – collected 2 and 20 (i.e., hundreds of millions) for not only outperforming the market but for providing a natural hedge to collapsing asset prices. Since then they have devolved into sniveling, expert network and insider trading-constrained, “beta is the new alpha”, leveraged momentum chasing E-trade babies (which have underperformed the S&P for 6 years in a row).
As such we doubt anyone will find it one bit surprising that as Bank of America observes in its latest weekly hedge fund monitor, “S&P500 longs increase to six month high” with all equities bought. And alongside that, and confirming that the short squeeze in the Treasury market will continue indefinitely, “10-yr contracts were sold at a strong pace to increase net short positioning to largest in six months.” Why? Because that imminent economic recovery which everyone has been betting on since the second half of 2013 is just not coming, seasonally adjusted low-paying temp, retail, teacher and secretary jobs notwithstanding.

This post was published at Zero Hedge on 12/08/2014.

NIRP Arrives In The US: TBTF Banks Tell Customers To Move Their Cash Or Be Charged Fees

Jon

Back in June, the world was speechless when Goldman’s head of the ECB, Mario Draghi, stunned the world when he took Bernanke’s ZIRP and raised him one better by announcing the ECB would send deposit rates into negative territory, in the process launching the Neutron bomb known as N(egative)IRP and pushing European monetary policy into the “twilight zone”, forcing savers to pay (!) for the privilege of keeping the product of their labor in the form of fiat currency instead of invested in a global ponzi scheme built on capital market so broken even the BIS can no longer contain its shocked amazement.
Well, the US economy may be “decoupling” (just as it did right before Lehman) and one pundit after another are once again (incorrectly) predicting that the Fed may raise rates, but when it comes to the true “value” of money, US banks have just shown that when it comes to spread between reality and the economic outlook, the schism has never been deeper.
Enter US NIRP.
As the WSJ reports, far from paying for the privilege of holding other people’s cash (and why would they with nearly $3 trillion in positive carry excess reserves sloshing around) US banks – primarily of the TBTF variety – “are urging some of their largest customers in the U. S. to take their cash elsewhere or be slapped with fees, citing new regulations that make it onerous for them to hold certain deposits.”
The banks, including J. P. Morgan Chase & Co., Citigroup Inc., HSBC Holdings PLC, Deutsche Bank AG and Bank of America Corp. , have spoken privately with clients in recent months to tell them that the new regulations are making some deposits less profitable, according to people familiar with the conversations.

This post was published at Zero Hedge on 12/08/2014.

Where is the turning point for gold & silver?

Jon

Precious metals markets are under pressure once again as those long gold look for evidence of a sustained turnaround. ‘Gold as a safe haven asset has been sold off since the S & P broke the 2000 mark,’ said Tony Davis, sector analyst at Atlanta Gold and Coin. ‘But for those looking at metals as a long term investment, these are clearly some of the best levels we have seen in years and the current trends mark a very good opportunity to start building exposure.’
In the shorter-term, bearish trajectory has been driven by the latest round of macroeconomic figures. Non Farm Payrolls for the month of November came in at a very strong 321,000 jobs for the period, far exceeding analyst expectations and removing the need for investors to buy into safe haven assets. But whether or not these types of moves can sustain themselves is another question, and here we look at the longer term historical averages to determine where the key price points can be found in the SPDR Gold Trust ETF (NYSE: GLD) and iShares Silver Trust ETF (NYSE: SLV).

This post was published at TruthinGold on December 8, 2014.

Oil Prices Collapse To New Cycle Lows, Canada Heavy Tumbles Under $50

Jon

The crude carnage continued overnight with oil prices across the entire complex crashing through support to new cycle lows. Despite recent strategic reservce demand in China, the world’s oil glut continues as global growth expectations plunge leaving WTI trading as low as $64.10, Brent $66.77 (narrowing the Brent-WTI spread to $2.68 from $3.23 on Friday), and most stunning of all, Canada Heavy as low as $49.24. Speculators and money managers appear to be BTFD as they increased net long positions last week (amid the price slump) but comments from Kuwait Petroleum’s CEO and Iran officials suggest ‘lower for longer’ on prices will be the norm. As Morgan Stanley notes, “with OPEC on the sidelines, oil prices face their greatest threat since 2009 and appear on track for an extremely volatile 2015″
WTI has retraced the entire dead-cat-bounce from last Monday…

This post was published at Zero Hedge on 12/08/2014.

McDonalds Implodes, Reports Worst US Sales In Over A Decade

Jon

If one ignores all traditional, staple indicators of a growing economy, such as stable (not plummeting) crude demand, stable (not plummeting) holiday spending and stable (not plummeting) McDonalds comp store sales, then indeed the US economy has “decoupled” from the rest of the world, and those who wish to demonstrate the same intellectual capacity as Tim Geithner, will welcome you to the (latest non-)recovery.
And yet for those, who are leery of seasonally-adjusted government data (showing soaring low-wage jobs offset by crashing employment in the energy sector and M&A synergies which mysteriously are never captured), or sentiment surveys and confidence polls (of Wall Street executives and government workers), here is the latest data from McDonalds. Showing the worst US comp store sales in nearly 12 years at -4.6%, one does wonder if following America’s inability to even pay for sub-$1 meals, mass starvation will follow?
McDonalds US comp store sales:

This post was published at Zero Hedge on 12/08/2014.

Gold Prices Kept Low But Only For Americans

Jon

The SGT Report interviewed GoldCore’s Head of Research Mark O’Byrne over the weekend. The video was released yesterday evening and has already had over 5,300 views.
Click on image or here to watch
Topics covered in the interview included:
Gold performing well in all currencies in 2014 A yes vote to Swiss gold referendum would have been ‘icing on cake’ for gold market Existing fundamentals sound due to India and China demand and Russian, Chinese and other central bank demand Germans can’t get their gold reserves. Do how did the Dutch get their 122 tonnes of gold? Is Germany being prevented from holding gold to prevent independent foreign policy action? The mind boggling scale of the U. S. $18 trillion national debt and over $100 trillion to $200 trillion in unfunded liabilities How humongous is a billion, a trillion and a quadrillion? The illusion of digital ‘wealth’ and the coming wealth transfer when system implodes Here is a transcript of the first 11 minutes of the 26 minute interview.
SGT Report: What I wanted to do gentlemen is start with a headline that we rarely see and it’s this one which I haven’t written yet – “Strong dollar keeps gold prices low for Americans” and the reason I’m saying that is that according to your own blog at Goldcore.com Mark ( GoldCore blog ), gold is up 14.3% in japanese yen this year, 12.3% in euros, 5.8% in British pounds and of course only 0.4% when priced in dollars.
And that’s the real story, isn’t it – gold continues to be real money and act as real money around the globe as fiat currencies are printed and annihilated.
Mark O’Byrne: ABSOLUTELY and I think it speaks to the dollar-centric nature of the world today.
We all look at things in dollars – not just in America, you guys do that naturally enough, but throughout the western world, particularly in the investment and finance sphere, the dollar is still king and everything is looked at in terms of pricing in dollars. That’s created the perception that gold has been weak this year when in reality, it has been anything but.
It’s actually slightly higher in dollar terms ytd in 2014. So it’s performed quite well versus other things, obviously not the stock markets which have roared ahead again but it has performed very well in all the other major fiat currencies.

This post was published at Gold Core on 8 December 2014.

TWO COMEX GOLD DEPOSITORIES: Registered Inventories Decline 25% In One Day

Jon

In a surprising update, there were two large gold withdrawals from the Comex on Friday. Not only were these large withdrawals, they came from Brinks and Scotia Mocatta’s Registered inventories. Even though the Comex holds a total of 7.7 million ounces of gold, only 10% of this amount is stored in the registered category.
On Thursday, Brinks held 257,290 oz of gold and Scotia held 339.993 oz in their registered inventories. Then on Friday, when CME Group released an update on its Comex gold warehouse stocks, Brinks registered inventories declined 62,259 oz and Scotia Mocatta fell 87,849 oz.
In one day, Brinks registered gold inventories fell 24% and Scotia Mocatta’s dropped 26%. While both of these depositories experienced a large percentage decline of their registered gold inventories, it impacted Brinks a great deal more than Scotia.

This post was published at SRSrocco Report on December 6, 2014.

The Bells Will Be Silent

Jon

Still too Much Debt A faint breeze blew through the US stock exchanges on Friday. A few leaves fluttered. But Diary readers want to know: When is the next hurricane coming?
Alas, we get the newspaper no earlier than anyone else. It always has yesterday’s news… not tomorrow’s. That leaves us wondering and guessing and trying to figure out what comes next.
The storm that raged in 2008 was fundamentally deflationary. It was so predictable that we didn’t need tomorrow’s headlines; the weather forecast was obvious.
After decades of taking on debt, Americans started to stagger under the weight of their debt-service costs. When house prices fell, their knees buckled and their backs broke.
Households cut spending and reduced borrowing. But they are still heavily in debt. In 1971 – before the big credit bubble began inflating under the new fiat currency regime – American households had $5 of income for every $4 of debt.
Now, for every $5 of household income they have $12 of debt. That’s down from the ‘peak debt’ of 2007 – at $13 for every $5 of disposable income – but still much more than the historic average.

This post was published at Acting-Man on December 8, 2014.