• Tag Archives Fed
  • Stocks and Precious Metals Charts – Building a Dream

    “Seek the Lord, all you humble of the land,
    who have observed his law;
    Seek justice, seek humility;
    And perhaps you will be sheltered
    on the day of the Lord’s justice.
    This was the triumphal city, high and mighty,
    Saying to herself, ‘I am the one, and none dare stand beside me.’
    How desolate now has she become, a place fit only for wild beasts.
    Those who pass by her scoff, and shake their heads at her ruin.”
    Zephaniah 2:3,15
    I have a feeling that we are going to be seeing some real fireworks in the precious metals before the end of the year.
    But feelings really do not count in markets. But it is there, tempting my trading discipline. I know that you have never experienced that. lol.
    Stocks bobbled a bit today. I also think we will be seeing a slide in stocks. But let’s see how the earnings come out, and what the Fed does about their bloated balance sheet.
    While I am not so sure yet about where gold and silver and stocks are going, here are three things that I am pretty sure about.
    1. There is no sustainable recovery. Basic items like housing and healthcare are fast outstripping the growth in real wages.

    This post was published at Jesses Crossroads Cafe on 27 JULY 2017.

  • Demand for Physical Gold Up, Supply Down in First Half of 2017

    It’s easy to get caught up in what the Fed will do next, or the latest political brouhaha in Washington D. C. And of course, this stuff matters. But when it comes to gold, you should never lose sight of fundamentals.
    Nothing is more fundamental than supply and demand. Based on the GFMS Gold Survey 2017 H1 Update Outlook, the fundamentals for gold are trending in a positive direction. Demand is pushing upward, while supply is falling.
    Demand for physical gold rose to 1,895 tons in the first half of 2017, a 17% increase over the same period last year.
    Comparing the first and second quarter of this year also reveals an upward trend. Demand climbed in Q2 2017 to 957 tons. That was up from 938 tons in Q1, a 2% increase.
    Meanwhile, total supply dropped 5% in the first half of the year. Mine output was stagnant, falling by 0.2%. Production dropped precipitously in China and Australia, the world’s number one and number two producers. The amount of scrap gold also fell, helping to drive the decline in supply.
    In many ways, the demand increase signals a return to normalcy after a tumultuous 2016.
    After the rollercoaster ride of events for the gold market in 2016, from a jewelers’ strike to Brexit to Trump to demonetization, 2017 has avoided similar dramatic events in the first half, at least from a gold perspective with far right candidates seeing little success in a range of European countries. Indeed the first half of this year has arguably been more of a reversion to normality across much of the gold market, with neither the highs (of ETF demand) or lows (of truly pitiful Asian demand) that were recorded in the first half of 2016 being repeated.’

    This post was published at Schiffgold on JULY 27, 2017.

  • Bill Blain: “Are We In A Bubble About To Burst, Or Are We Facing Massive Equity Upside?”

    Are We In A Bubble About To Burst, Or Are We Facing Massive Equity Upside?
    ‘A liberal is a conservative who has been arrested.’
    No surprises from the Fed last night. Unchanged rate talk and hints about reducing the balance sheet ‘relatively soon’. We can go figure what ‘relatively’ means when inflation picks up. The stock market soared and VIX tumbled to a record low. Was that a warning about complacency? Since the 2008 crisis we’ve been here many times before – worrying about signals the economy is strengthening when suddenly its dived weaker.
    But, those us with longer memories can recall when the US economy has turned dramatically stronger – and in 1994, (yes, I remember it well), when the Fed acted prematurely, spiked the recovery and triggered what we’d now call a massive Treasury market TanTrum. This time it feels very different. I suspect we are very much still on course towards normalisation – a new kind of new normal: low rates, low inflation and steady state low growth.
    Stuff to watch today: Dovish Fed boosts stocks (record Dow) and dollar crashes. Lots of corporate results to wonder and worry about! Stuff the think about: Deutsche Bank results show it’s taken yet another thumping – difficult to see how it plays catch up and regains market relevance when it’s still swinging the headcount axe. Where is the US economy when inflation remains so low? What are the risks to Europe of the low dollar?

    This post was published at Zero Hedge on Jul 27, 2017.

  • World Stock Markets, Gold, Boosted By Dovish FOMC Statement Wed. PM

    (Kitco News) – Global stock markets were mostly firmer overnight in the wake of a U. S. Federal Reserve meeting that produced a statement most of the markets deemed as leaning to the dovish side of U. S. monetary policy. Recent corporate earnings reports have also been mostly upbeat. U. S. stock indexes are pointed toward higher and record high openings when the New York day session begins.
    Gold is posting solid gains Thursday in the wake of the dovish Fed statement that pushed the U. S. dollar index to a 13-month low. Reports overnight said India is moving to make ‘paper’ gold (such as sovereign gold bonds) more attractive to its domestic investors, in order to reduce demand for actual gold bullion.

    This post was published at Wall Street Examiner on July 27, 2017.

  • FOMC Preview: Just 2 Things To Watch For In Today’s Fed Statement

    Unlike the June Fed meeting, the FOMC announcement at 2pm today is expected to be an uneventful affair: as DB’s Jim Reid pointed out earlier, “given its late July and given the Fed will likely announce an end to balance sheet reinvestment in September (starting from October), this could be a relatively dull meeting.”
    Big picture: the FOMC is expected to keep interest rates unchanged at this meeting at 1.00%-1.25%, after hiking last month. According to RanSquawk, all analysts surveyed by Reuters expect the Fed to keep rates unchanged. The market agrees with them: Fed Funds currently price in a 0% chance of a rate hike today.
    And, as BofA notes, the market is clearly not expecting any Fed balance sheet reduction today either:

    This post was published at Zero Hedge on Jul 26, 2017.

  • Stocks and Precious Metals Charts – Nocturne

    “A horse walks into a bar, the bartender says, ‘Why the long face?’”
    And so we had both an FOMC and a precious metals option expiration on the Comex today.
    Stocks are continuing to edge higher, although with a big less verve than previously.
    Pundits are now saying that a crash is probably at least two months away, so now is a good time to buy more stocks.
    You cannot make this stuff up.
    I think that the theory is that when the Fed starts unwinding their balance sheet in September, that the air of liquidity, which is one of key components of these bubbles, is going to start coming out of the markets much faster than it went in.
    And the result may be terrific – not with a bang, but a whimper.

    This post was published at Jesses Crossroads Cafe on 26 JULY 2017.


    GOLD: $1249.85 DOWN $2.55
    Silver: $16.46 DOWN 9 cent(s)
    Closing access prices:
    Gold $1260.75
    silver: $16.67
    Premium of Shanghai 2nd fix/NY:$6.45
    LONDON FIRST GOLD FIX: 5:30 am est $1245.40
    LONDON SECOND GOLD FIX 10 AM: $1248.10
    For comex gold:
    TOTAL NOTICES SO FAR: 171 FOR 17100 OZ (.5318 TONNES)
    For silver:
    105,000 OZ/
    Total number of notices filed so far this month: 3170 for 15,850,000 oz

    This post was published at Harvey Organ Blog on July 26, 2017.

  • The Fed Delays Raising Rates As It Waits Patiently For The Economy To Collapse – Episode 1342a

    The following video was published by X22Report on Jul 26, 2017
    DR Horton posts slowest growth, this has to do with the housing market losing steam, not because of lumber prices or the weather. The Fed is holding steady on interest rates, they say they are going to unwind their balance sheet. They are waiting patiently for the economy to come crashing down, if rate increase didn’t trigger it, they will raise rates one more time. The USD is crashing as the Fed raise rates the dollar collapses further.

  • Outside the Box Hoisington Quarterly Review and Outlook, Second Quarter 2017

    I have often written about the Fed’s abysmal track record in managing the economy. In today’s Outside the Box, Lacy Hunt and Van Hoisington of Hoisington Investment Management give us an in-depth tutorial on the reasons for the Fed’s consistently poor record.
    They start by considering the Fed’s ‘dual mandate,’ which sets ‘the goals of maximum employment, stable prices and moderate long-term interest rates.’ (And yes, that is actually three goals, not two.) But a problem arises, the authors note, ‘because considerable time elapses between the implementation of the monetary actions designed to follow the mandate and when the impact of those actions take effect on broader business conditions.’ The time lag can easily be three years or longer, with the result that policy changes often end up being pro- rather than countercyclical. To make matters even worse, ‘the economic risks from adherence to this dual mandate are now much greater than historically due to the economy’s extreme over-indebtedness, poor demographics and a fragile global economy.’
    In the real world, the dual mandate can break down. Now, the Fed is tightening over concerns about wage pressure from a low level of unemployment, yet inflation has run consistently below the Fed’s 2% target for the past year or more. Enter the Phillips curve.

    This post was published at Mauldin Economics on JULY 26, 2017.

  • Is The Fed Poised To Ignite A Violent Dollar Rally?

    As ther world waits with bated breath for Janet Yellen’s statement this afternoon – whiche is uniformly expected to be a nothing-burger, some are wondering if the recent flip-floppery by Yellen, Draghi (and even Kuroda with his ‘actual’ tapering while lowering inflation expectations) does not leave today open to another modst shift back in The Fed’s ‘hawkishness’. As Bloomberg’s macro strategist warns, this sets the market up for a surprise and as he warns: “Dollar risks are starting to seem skewed all one way: toward an immediate rally.”
    There’s extremely bearish positioning, that’s failed to adapt to changing circumstances, into event risk that’s structured to surprise in the opposite direction. That’s an explosive mix.
    When something seems so obvious, your immediate instinct should be to ask, “what’s the catch?” My problem is that this time, I just can’t see one.

    This post was published at Zero Hedge on Jul 26, 2017.

  • Strong Demand For “Stopping Through” 5Y Paper, As Fed Looms

    While yesterday’s unexpectedly strong 2Y auction left many scratching their heads (recall 2Y net specs are the shortest on record, betting on ever higher short-end rates), today’s sale of $34 billion in 5Y paper was just as strong, if not quite as perplexing as neither technical positioning, nor a hawkish Fed announcement in less than an hour would have as negative an impact on the price of the tenor. This was the highest yield for a 5Y auction since the 1.95% yield in March.

    This post was published at Zero Hedge on Jul 26, 2017.

  • Beware The Ides Of October…

    – Mark Twain (maybe)
    We have been speaking a lot about how the liquidity in the market today is different than in the past. The chart below reflects this better than anything we have seen.

    The monetary base in the U. S. has exceeded M1, the most narrow definiton of money, since the financial crisis. The monetary base consists of money in circulation and reserves held at the Fed (see definition below).
    The M1 money multiplier is still less than one, which reflects that for every dollar created by the Fed – an increase in the monetary base – results in a less than one dollar increase in the money supply (M1). Credit and deposit creation of commercial banks is thus still impaired, though improving and its repairment may be one reason why the Fed is a bit nervous and in tightening mode.
    A rapid turnaround and improvement in the money multiplier, which may be also be reflected in improving bank net interest margins and growing balance sheets, could act as an early indicator of potential inflationary pressures and a flag that the massive amount of high powered money in the financial system is being converted to credit based money.

    This post was published at Zero Hedge on Jul 26, 2017.

  • Ahead Of The Fed: Strongest Demand For 2Y Paper Since 2015

    With the FOMC members currently huddling deep inside the bowels of the Marriner Eccles building, perhaps scheming how to spook markets by announcing a surprise rate hike tomorrow, one would have assumed demand for 2 Year paper in today’s auction would be less than stellar. One would be wrong, because moments ago the Treasury sold $26bn in 2 year paper to what was clearly an overabundance of demand: the high yield of 1.395% stopped through the When Issued 1.401% by 0.6 bps, and was the highest yield going back to October 2008.
    The bid-to-cover rose to 3.06 from 3.03 in June, and was above the six previous auction average of 2.84. It was also the highest Bid to Cover since November 2015.
    The internals were also rather impressive, with Indirects taking down 58.5%, above the 56.6% in June, and above the 6MMA of 54.1%. Directs were awarded 16.9%, down slightly from 18.4% last month and above the 6 month average of 13.7%. Combined these two meant record buyside interest, leaving Dealers with just 24.6% of the auction, down from 25.0% and below the 32.1% 6month average. This was the lowest Dealer award on record.
    In other words, if anyone was worried about a surprise announcement by the Fed tomorrow, one which would send 2Y yields spiking, it wasn’t to be found among the bidders for today’s auction.

    This post was published at Zero Hedge on Jul 25, 2017.

  • Markets On Hold Ahead Of FOMC Meeting Conclusion This P.M.

    This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
    (Kitco News) – World stock markets were mostly firmer in subdued trading overnight, as the marketplace awaits today’s FOMC meeting conclusion. U. S. stock indexes are slightly higher just ahead of the New York day session.
    Gold prices are moderately lower today on more profit-taking from the shorter-term futures traders, after recent price gains.
    Traders and investors are awaiting the conclusion of the Federal Reserve’s Open Market Committee meeting (FOMC) that began Tuesday morning and ends early this afternoon with a statement. No changes in U. S. monetary policy are expected. However, the Fed could indicate the timing of reducing its big balance sheet of U. S. securities. The tone of the FOMC statement will also be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U. S. monetary policy.
    In overnight news, the U. K.’s second-quarter GDP came in at up 0.3% on the quarter and up 1.7%, year-on-year. Those numbers were right in line with market expectations.

    This post was published at Wall Street Examiner on July 26, 2017.

  • Money Is Money, Wherever It Comes From

    One of the crucial things to understand about today’s world is that money is fungible. Whether it’s created in Japan, Europe, China or the US, once it’s tossed by a central bank into one or another part of the global economy, it eventually finds its way to a common pool of liquidity.
    So the modest US tightening of the past year (100 basis point increase in the Fed Funds rate, slight decrease in Fed balance sheet) has to be seen in a global context. And that context is still insanely easy. Here, for instance, is China’s ‘social financing’ – their term for total new debt:

    This post was published at DollarCollapse on JULY 25, 2017.

  • Bonds Battered Ahead Of Fed – 30Y Yield Back Above 2.90%

    In its ubiquitous manner, traders are selling bonds ahead of tomorrow’s ‘nothingburger’ from The Fed. While no rate move is expected, more color on balance sheet normalization is perhaps spooking bonds a bit as the long-end yields are up 7bps, back above 2.90%…
    Some key levels for the 30y Yield…

    This post was published at Zero Hedge on Jul 25, 2017.

  • Against Irredeemable Paper – Precious Metals Supply and Demand

    The Antidote
    Something needs to be said. We are against the existence of irredeemable paper currency, central banking and central planning, cronyism, socialized losses and privatized gains, counterfeit credit, wealth transfers and bailouts, and welfare both corporate and personal.
    When we write to debunk the conspiracy theories that say manipulation is keeping gold from hitting $5,000 (one speaker here at Freedom Fest claimed gold will go to $65,000), we are not trying to defend the Fed. When we discuss the flaws in predicting that kind of price, and the error in expecting to profit from it, we are not expressing a pro irredeemable dollar view.
    We are saying there are good arguments against the regime of irredeemable paper currency – but this is not one of them. Irredeemable currency has two fatal flaws. One is the interest rate is unhinged.
    It can skyrocket as it did from the end of WWII through 1980, or collapse as it has been doing since then. Two is there is no extinguisher of debt. Debt grows – must necessarily grow – exponentially. As it has been doing for many decades.

    This post was published at Acting-Man on July 25, 2017.

  • The Central Banker Transition Is Happening Quietly In The Background – Episode 1341a

    The following video was published by X22Report on Jul 25, 2017
    Eight state have not recovered jobs since the great recession, we need to remember this is the manipulated job numbers. Case-Shiller reports prices for homes in the 20 cities have surpassed the housing bubble prior to 2008. Fed very worried about commercial real estate, apartment building are being built at an extremely fast pace. The Fed is pushing for a real-time payment system. The IMF has already hinted that they will most likely move their office to China within the next couple of years. The transition from one system to another is happening ever so quietly. The corporate media is now pushing the reason why the economy has been downgraded, its because of Trump.

  • World Stock Markets Mixed, Quiet; FOMC Meeting In Spotlight

    This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
    Global equity markets were steady to narrowly mixed in quieter overnight dealings. U. S. stock indexes are pointed toward firmer openings when the New York day session begins. The U. S. indexes are at or near record highs with no early chart clues to suggest they are topping out.
    Gold prices are moderately lower in pre-U. S. session trading, on some normal profit taking from recent gains that saw prices hit a four-week high on Monday.
    Focus of the world marketplace is on the Federal Reserve’s Open Market Committee meeting (FOMC) that begins Tuesday morning and ends early Wednesday afternoon with a statement. No changes in U. S. monetary policy are expected. However, the Fed could indicate the timing of reducing its big balance sheet of U. S. securities. The tone of the FOMC statement will also be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U. S. monetary policy.
    In overnight news, the closely watched German Ifo business sentiment index rose to a record 116.0 in July, from 115.2 in June. A July reading of 114.9 was forecast.

    This post was published at Wall Street Examiner on July 25, 2017.

  • Stunning Lack of Market Decline Highlights Surreal New Normal

    Investors are conditioned to believe the Fed has got their back. But they might be wrong. To say the stock market is on a roll is an understatement. The Big Three indexes (S&P 500, Dow Jones Industrial Average, NASDAQ) are making fresh highs, mostly because of valuation expansion. That is what investors are focused on. But what about the lack of market decline? The dynamics behind this fact could speak louder than any stock rally could.
    The Wall Street Journal is reporting that major indexes haven’t gone a calendar year without a five-percent-or-more pullback in 20 years. The last time this happened was following the ‘Brexit’ referendum, which eked out a 5.2% peak-to-trough loss. While not quite a ‘calendar’ year, it was over a year ago that this happened. In fact, the 267-day streak with a five-percent decline is the longest going back to 1996.
    Additionally, the S&P 500 has only experienced a 2.8% drawdown year-to-date. This, in contrast to a historical average of 14.4%. If it holds, it would be the second smallest drawdown in 60 years.

    This post was published at Wolf Street on Jul 25, 2017.