Spain Sells First-Ever 50 Year Bonds At 4% Coupon

Perhaps in order to celebrate its manufacturing PMI dropping from 53.9 to a below expectations 52.8, refuting the “growth story” promoted by its definitionally re-revised GDP (where the long overdue boost from hookers and blow is finally leading the country to new and improved Keynesian growth curves), moments ago Spain joined the likes of Canada, Caterpillar and Goldman and just issued, for the first time in its history, 50 Year bonds in a private placement. From Bloomberg:
SPAIN SELLS EU1B 50-YR BONDS SPAIN TREASURY SELLS FIRST-EVER 50-YR BONDS, COUPON 4%

This post was published at Zero Hedge on 09/01/2014.

Bloomberg Primes the Pump of the Deflationary Dialectic

Germany to Europe: Help Isn’t on the Way … German Finance Minister Wolfgang Schaeuble has bad news for anyone hoping the European Central Bank will ride to the rescue of the ailing euro region: Monetary policy has come to the end of its instruments. I don’t think ECB monetary policy has the instruments to fight deflation, to be quite frank. What we urgently need is investments, regaining confidence by investors, by markets, by consumers. His comments, in an interview with Bloomberg Television today, coincide with figures showing annual inflation slowed to 0.3 percent in the euro zone this month. That was the weakest rate of growth since October 2009 and marks 11 consecutive months of prices growing by less than 1 percent. The deflationary danger policy makers have been denying for months may be upon them. – Bloomberg View
Dominant Social Theme: Everything is going to be okay, really …
Free-Market Analysis: Bloomberg offers two editorials on Europe that tell us economic growth is not going well. The one above speaks to the issue of Mario Draghi’s lack of courage in terms of implementing a program of aggressive money printing.
The other one, which we excerpt below, is a kind of call to arms by Bloomberg itself – via its editorial staff – demanding that Europe’s leaders scrap the fiscal pact negotiated in 2012 that mandates certain austerity measures.
Taken together, they seem to be indicating a certain level of distress, and yet there are other ways to regard this double-barreled explosion of concern over the EU’s still-eroding economic condition.

This post was published at The Daily Bell on September 01, 2014.

The Fall Is Golden For Bullion Bulls

September is the hottest month of the year for gold prices, rising on average 3% over the past 20 years. As the yellow metal tests hovers off 2-month-lows, Bloomberg notes that “Indian jewelers and dealers will be stocking up in the coming weeks,” ahead of the festival period, which runs from late August to October (andis followed by the wedding season) when bullion is bought for part of the bridal trousseau or in jewelry form as gifts from relatives. As GoldCore’s Mark O’Byrne notes, “a lot of traders are aware of this trend towards seasonal strength… They tend to buy and that creates momentum.”
Some color on the week’s Precious Metals Trading from Alasdair Macleod of GoldMoney,
The pattern of trading in precious metals changed for the better this week. After London’s bank holiday on Monday, for the first time in a long time the market opened in London’s pre-market with higher prices. This indicated Asian or Middle-Eastern physical demand was returning to the market. Predictably, prices drifted lower during London hours as paper trading took over, and all the gains were more or less lost by close of play on Comex in New York.
It was a similar story on Wednesday. Yesterday, (Thursday) started the same way, but this time the move gained more traction; but volumes remain pitifully low, in common with open interest. Today this pattern was not repeated with gold kicking off unchanged on overnight levels. However, gold is up $15 on the week and feels more firmly based.

This post was published at Zero Hedge on 08/31/2014.

Eurozone Currency Dispute Intensifies: France Wants More ECB Action to Correct Overvalued Euro, Germany Doesn’t

The currency and fiscal battleground front lines in Europe remains the same. France wants QE, fiscal stimulus, and more leeway on meeting fiscal deficit targets. Germany doesn’t. And the fighting has strengthened.
The idea that ECB can produce nirvana by devaluing the euro is ridiculous. Yet, that’s the battle cry of the day.
Bloomberg reports France Asks for More Action From ECB to Correct Overvalued Euro.
French Prime Minister Manuel Valls called for more action from the European Central Bank to lower the value of the euro, amid concerns the 18-nation region might be headed toward deflation.
‘The monetary policy has started to change,’ Valls said today in a speech made at the Socialist Party’s summer school in La Rochelle, France. While he called the ECB’s package of measures taken in June a ‘strong signal,’ he also said that ‘one will have to go even further.’
Valls’s comments come after ECB President Mario Draghi, who’ll meet French President Francois Hollande tomorrow in Paris, signaled that declining inflation expectations are pushing the central bank toward introducing quantitative easing. Policy makers will gather in Frankfurt on Sept. 4 for their monetary-policy meeting.

This post was published at Global Economic Analysis on Sunday, August 31, 2014.

The War on Airbnb

The web startup Airbnb is finding itself in hot water lately. A peer-to-peer service that matches renters with rentiers, the company is under attack by entrenched lodging businesses such as hotels. It’s easy to see why. The company, which is fairly decentralized, breaks through the thicket of established chains. It matches real people with real people, each seeking to mutually profit from one another. As Jeffrey Tucker writes, Airbnb allows ‘regular people to cut through stultifying regulations and make better lives for themselves.’ It breaks a sacred rule of economics: anything that bypasses the hold of legacy businesses is bound to garner unwanted interference.
In a confusing column for Bloomberg View, Leonid Bershidsky encourages government regulation of Airbnb for reasons totally unclear. As a resident of Berlin, Bershidsky feels crossed by the startup’s business model. He thinks that local governments give too much leeway to Airbnb hosts, and doesn’t gouge them enough for ransom payments known as taxes. He complains that it’s hard to find liveable, long-term apartments in Berlin because a service like Airbnb emphasizes short-term rentals. He writes: ‘I’m pleased that Berlin has banned short-time rentals without express permission from the city government.’
Why so much angst? Apparently, Bershidsky had a tough time finding an apartment in the most populated area of the city. But rather than chalk it up as a fact of condensed living environments, he pins the blame on Airbnb. Since the peer-to-peer network makes it easier to rent out extra rooms or beds, it makes it profitable to do so on a continual basis. People with larger apartments can have a continuous flow of guests fill their space, make some extra cash, and overall assist in the dynamic market process.

This post was published at Mises Canada on Friday, August 29th, 2014.

Your Wall Street Slumlord Arrives in Europe – Goldman and Other Financial Firms Launch ‘Buy to Rent’ in Spain

Liberty Blitzkrieg was early in reporting on the trend of financial firms entering the U. S. residential real estate market with ‘all-cash’ bids for tens of thousands of homes with the intention of turning former homeowners into permanent sources of rental income. The first of many pieces I published on the topic was in January 2013, titled: America Meet Your New Slumlord: Wall Street.
Now that the financial oligarchs have had their way with the U. S. property market, to the point that average citizens can’t even afford to own a home (Zillow recently showed that 1 in 3 homes are unaffordable), it appears they have turned their sights overseas. What better market for bailed-out bankers to feast on than Spain, with its 50% youth unemployment rate and a continued depressed real estate market.
We learn from Bloomberg that:

This post was published at Liberty Blitzkrieg on Aug 29, 2014.

“Sand Is The New Gold”?

Thanks to the growing use of fracking, or extracting oil and natural gas from shale formations, shares of U. S. companies which supply sand to energy producers are surging, and as Bloomberg reports, it does not look set to stop anytime soon. ‘Sand is the new gold,’ says Ivaylo Ivanov, founder of Ivanhoff Capital, as Ole Slorer, a New York-based analyst at Morgan Stanley, expects demand for fracking sand in 2016 will be 96 percent higher than last year’s level.

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

S&P Futures Surge Over 2000, At Record High, On Collapsing Japanese, European Economic Data, Ukraine Escalations

Following Wednesday’s laughable tape painting close where an algo, supposedly that of Citadel under the usual instructions of the NY Fed, ramped futures just over 2,000 to preserve faith in central planning, yesterday everyone was expecting a comparable rigged move… and got it, only this time milliseconds after the close, when futures moved from solidly in the red, to a fresh record high in seconds on no news – although some speculate that Obama not announcing Syrian air strikes yesterday was somehow the bullish catalyst – and purely on another bout of algo buying whose only purpose was to preserve the overnight momentum. Sure enough, this morning we find that even as bond yields around the world continue to probe 2014 lows, and with the Ruble sinking to fresh record lows as the Ukraine situation has deteriorated to unprecedented lows, so US equity futures have once, driven by the now generic USDJPY spike just after the European open, again soared overnight, well above 2000 and are now at all time highs, driven likely by the ongoing deflationary collapse in Europe where August inflation printed 0.3%, the lowest since 2009 while the unemployment remained close to record high, while the Japanese economic abemination is now fully featured for every Keynesian professor to see, with the latest Japanese data basically continuing the pattern of sheer horror as we reported yesterday.
As a result, with the Fed firmly in tapering mode for now, all hopes are once again firmly pinned on Draghi, and as Bloomberg says the European economic crash is “increasing pressure on the ECB to take action to kindle the bloc’s faltering recovery” even as Germany’s finance minister poured cold water overnight on more action out of the ECB, in line with the Reuters headline earlier this week. In short, complete confusion reigns in the Fed’s “Mutant, broken market” in which nothing really matters and where a green EOD print is now a matter of urgent national security and policy.

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

German Finance Minister Tells EU Leaders: Free Money Party’s Over

Has Germany had enough? Hot on the heels of Mario Draghi’s ‘demands’ that EU leaders undertake “structural reforms” to boost competitiveness and overcome the legacy of Europe’s debt crisis, German Finance Minister Wolfgang Schaeuble unleashed perhaps the most worrisome statement tonight for all the free-money-party-goers – the music is about to stop. In an interview with Bloomberg TV, Schaeuble blasted “Europe needs to find ways to foster growth,” adding that “the ECB has reached the limit in helping the Euro Area.” In a clear shot across the bow of his ‘core’ cohort, Schaeuble said he “understood” Hollande’s demands but shot back that “monetary policy can only buy time.”
As WSJ notes, the French are seeking aid…

This post was published at Zero Hedge on 08/28/2014.

Bloomberg Shock: Economics Is Storytelling, Not Science

Economics Isn’t Science or Literature … Economists use many of the same tools as scientists and engineers — matrix algebra, multiple regression, control theory. But they don’t use them in the same way. In economics — especially macroeconomics — the goal is often to persuade other people of your point of view. As Federal Reserve economist Kartik Athreya writes in his 2013 book “Big Ideas in Macroeconomics”: My view is that a part of what we do is “organized storytelling, in which we use extremely systematic tools of data analysis and reasoning, sometimes along with more extra-economic means, to persuade others of the usefulness of our assumptions and, hence, of our conclusions…This is perhaps not how one might describe “hard sciences[.]” – Bloomberg Editorial
Dominant Social Theme: Even though economists don’t really know anything and can’t, it’s still a swell science.
Free-Market Analysis: Bloomberg’s Noah Smith is back with an editorial explaining that even though economics isn’t a science, it’s still a swell “culture.”
What’s funny about this article is that Smith’s admission as to what economics really is corresponds entirely to the points that Austrian economists have made regarding economics: It’s not a science and not especially predictive.
Of course, Mr. Smith would not mention Austrian, free-market economics in his current column, as he doesn’t like Austrian economics.

This post was published at The Daily Bell on August 28, 2014.

The Five Cities Most At Risk For The Next Big Earthquake

Damages from the earthquake that hit the San Francisco area this weekend are estimated to be as high as $4 billion. For many cities around the world, particularly coastal cities situated on the geologically active Ring of Fire, an earthquake could be catastrophically destructive. Bloomberg looks at the five cities that are most vulnerable to earthquakes.
Don’t get too excited about what happened on Sunday. Scientists assure us that it is only a matter of time before “the Big One” hits California.
In fact, the 6.1 magnitude earthquake that hit northern California on Sunday was not even the largest earthquake along the Ring of Fire this weekend. According to the U. S. Geological Survey, a 6.4 magnitude earthquake shook the area around Valparaiso, Chile on Saturday and a 6.9 magnitude earthquake struck Peru on Sunday.

This post was published at Zero Hedge on 08/27/2014.

Get Back To Work Mr. Hollande; French Jobseekers Surge To Record High

Despite all the ‘promises’ French joblessness has risen every month since April 2011… July’s jump is the 2nd biggest sinmce April 2013 and at 3.424 million is a fresh record high. One can only hope (though good luck with that) that the new cabinet – same as the old cabinet – will turn things around. With 80% of French people believing that Hollande cannot fix the economy, we suspect things get worse before better…
French ministers are piling the pressure on Draghi to do something…
*VALLS SAYS NEW FRENCH GOVT STANDS FOR ECONOMIC CLAIRITY *VALLS ECB NEEDS TO GO FURTHER IN FIGHTING INFLATION *VALLS SAYS NEW FRENCH GOVT STANDS FOR ECONOMIC CLAIRITY *VALLS SAYS LOW INFLATION THREATENS EUROPEAN PROJECT Charts: Bloomberg

This post was published at Zero Hedge on 08/27/2014.

Gold Seeker Closing Report: Gold and Silver End Slightly Lower

The Metals:
Gold dipped down to $1274.40 in early Asian trade before it popped back to $1280.75 in London and then drifted back lower by late morning in New York, but it then bounced back higher in early afternoon action and ended with a loss of just 0.33%. Silver slipped to as low as $19.333 and ended with a loss of 0.56%.
CME Opens Electronic Futures Trading After 4-Hour Delay Bloomberg
Euro gold remained at about 967, platinum lost $5 to $1413, and copper climbed a couple of cents to about $3.22.
Gold and silver equities fell about 1.5% by late morning and remained near that level for the rest of the day.

This post was published at GoldSeek on AUGUST 25, 2014

Expect Currency War to Continue in 2013

Author of Currency Wars, Jim Rickards explains that the Fed’s easing programs have thus far failed to create their desired inflation, which, in their view, is required to boost US exports.  Although Japan will be allowed to weaken their currency, all the other currencies of the world will be strengthened as the US strives to further weaken the US dollar. Of course, gold is still the currency of choice to preserve wealth.




Expanding the discussion, Lauren Lyster interviews Jim Rickards, where he clarifies the Fed’s tactics:

  • The economy has failed to recover despite the Fed’s actions so far because the consumer has not been willing to spend or invest.  Hence money velocity has remained nil.
  • The Fed is trying to induce more spending by: (1) Forcing a negative interest rate as an incentive for more borrowing, and (2) Scaring the public into buying stuff through the threat of future inflation.
  • The inflation, they hope, will be the result of all the currency wars with other nations, especially China – cheapening the dollar will make imports more expensive.

It’s a race between the Fed trying to achieve their goals and the whole system imploading because of a loss of confidence in the dollar.

Ron Paul on the Fed’s Decision Today

Today the Federal Reserve gave the markets exactly what they had been expecting – more money printed out of thin air to purchase US debt (US Treasury and Mortgage Backed Securities).

  • Fed to buy $40 Billion in MBS per month
  • Fed to continue Operation Twist
  • Fed expects interest rates to remain at low levels until at least 2015
  • Fed gives no time limit on this easing policy, but will continue indefinitely

Read the complete Fed press release and see the full recording of Ben Bernanke’s press conference. Bloomberg’s wide array of commentators on today’s Fed decision included Ron Paul, who explains how all this money printing is destroying the value of the US dollar.




An Opinion on Clive Maund

June 8, 2012

After the precious metals were hit hard after reaching a high of $1920/ounce on September 6, 2011, the market has been in a mini-bear mode ever since.  The fundamentals for high precious metals prices were still in place and indeed they are even stronger today.  So, what caused the rout?

Through other reading on the net, I got word that Clive Maund had successfully called the price decline in advance for his subscribers.  I had also heard that he had previously correctly predicted the May 1, 2011 silver smack down.  I thought perhaps my negative judgements on technical analysis were premature and that maybe I could learn something from this prospective sage.

So I decided to try his service.

After signing up, he did correctly call the bottom and advised his subscribers to get out of their short positions at pretty much the perfect time.  However, since then, Clive’s success rate reveals that he’s no sage – indeed, he and his unwitting subscribers are more likely the poor stooges on which the commercial players are feeding.

Admittedly, the markets since September, 2011 have been difficult, especially for buy-and-hold investors.  Volatility has been extreme and it’s been a trader’s market, if anything.  The problem for Clive’s subscribers is that he changes his mind frequently and it’s not always clear whether new positions are in addition to or instead of older positions.  When the trade goes bad, he’s rather silent, even leaving his subscribers in the dark.  But when a call ends up to be correct, he’s quick to advertise.  In fact, sometimes he advertises his calls in reports available to the general public, usually when subscribers already have their positions in place, but not always. Specifically, more than one time he has reversed a decision and went public immediately, before subscribers were able to get out of their positions, leaving them potentially exposed to opposing actions by public readers of his report.

A good example of silence after a bad call was Clive’s alert on the natural gas sector in the beginning of February 2012. His charts showed a major reversal coming in the sector and advised subscribers “buy aggressively.”  To be fair, the report advised that stop-losses be set “directly below support” shown on the chart.  Still, after recommending buying natural gas along with specific investments in GaStar Exploration (GST), United States Natural Gas Fund (USNG), and ProShares Ultra DJ-UBS Natural Gas ETF (BOIL), when the market went the opposite direction almost immediately, not one word from Clive to subscribers went out.  He assumes his subscribers’ stop-losses were set and gives no further report on what happened or why his original analysis was incorrect.

If Clive has a gift, I would guess that it lies in reading charts and converting that analysis into some technical perspective.  But he doesn’t stick to that technical analysis alone – he utilizes the emotional economic backdrop of the European/American crisis to justify his chart analysis.  In fact, his alerts to subscribers frequently portray the same scary themes one would expect from free services such as Bloomberg or ZeroHedge.

With all the problems in Europe at present, Clive’s calls have been echoing all the terror evident in the blogosphere. The emotion has run high in his reports on the precious metals markets.  Twice in less than a month starting at the end of May 2012, in his effort to show an imminent price explosion to the upside for precious metals, he’s used the term “This is it!”  His advice was to go long on GLD and SLV call options and even the 2X and 3X silver vehicles like AGQ and USLV.  Unfortunately, both times the prices went the other direction, causing him to send out a warning on possible price declines even further. And worse for his paid subscribers, his last warning was open to the general public – again making it even more difficult for subscribers to get out of their positions with minimal losses.  Just what are subscribers paying for, anyway?

Now, stepping back and looking at Clive’s technical analysis over the past 8 months, I have to wonder if chartists like Clive and their subscriber-sheep are really the patsies that the commercial traders have been fleecing in their market manipulations. When the simple folk invest in 2X and 3X gold and silver ETF vehicles, or take options positions in GLD or SLV, just who is taking the opposite side of those investments? Could it be the same small and large speculators in the commodities futures/options markets that always seem to get fleeced by the commercial institutions?

According to Ted Butler, who’s been studying the commodity futures/options Commitment of Traders (COT) reports for more than 30 years, commercial traders manipulate the market against the small and large technical traders whenever they smell blood – that is, when the commercials have a net short position and the the technical funds have a net long position. They ‘manage’ the market lower and trigger the technical funds’ stop-losses forcing even lower prices as the technical funds sell their positions.  The commercial traders easily soak up all these contracts at a profit on their short positions.

Could it be that those small and large speculators are selling equities and options in the stock markets to the sheep, then taking the proceeds and buying commodity futures contracts with leverage?  Under this scenario, it’s the sheep, not the small and large commodity futures speculators that end up being fleeced – they’re only ‘betting’ the money they got from the sheep. But if the sheep end up making money, the small and large commodity speculators make even more money because they have leverage on their futures positions. So that’s the motivation for the small and large speculators to keep coming back for more in the rigged futures markets – they’ve got nothing to lose and much to gain.  It’s the sheep that always end up losing.

The prices of precious metals are currently set in these commodities futures markets. It is a paper contract that is traded, NOT the physical metal. This ‘mechanism’ cannot last forever.  At some point, the physical metal will become too scarce.

Conclusion: It would be much better if the sheep stopped following the advice of clowns like Clive, using paper vehicles to trade in the precious metals markets.  Instead of buying ETFs like GLD, SLV, USLV, AGQ, or worse buying commodity futures/options contracts with leverage, investors should go out and buy the physical metals.  When the physical metals are no longer available in the marketplace, the prices will have nowhere to go but up!  Until this happens, the commercials and trading institutions will continue to reap most of the paper profits.

Contact the author, JonK or comment below.