Traders: Millions By The Minute – Part 2

n the second (and final) part of BBC’s ‘Traders: Millions By The Minute’ 2-part documentary (part 1 here) goes inside the competitive world of financial traders to meet the men and women who play the markets in London, New York, Chicago and Amsterdam.
As The BBC describes, this show offers a rare, personal portrait of what life is like for the people who do this lucrative but relentless job…

This post was published at Zero Hedge on 09/25/2014.

Mr. Cohan Responds On His Silver Rigging Expos – Two US National Publications Refused the Story

This is starting to make more sense.
Apparently Mr. Cohan did look at all the relevant information, and decided to write a story about rigging in the silver markets. It was submitted and refused by at least two US publications which refused to run it.
Based on past history, one might assume the two national publications that refused to publish it were on the order of The New York Times, and perhaps Bloomberg News or even possibly Forbes.
The actual reasons that they gave for refusing to publish the story are not stated. One can assume they were not sufficient for Mr. Cohan to decide to take his name off of it in his professional judgement, so we can only surmise. So we cannot tell if this was editorial scruples, a failure in fact checking, or just good old fashioned minding of one’s place.
Insiders never speak ill of insiders.
Bill was good with publishing the piece at ZeroHedge with his name on it. So he apparently still had confidence in what he had written.
That speaks volumes.
At that point the whistleblowing parties, if one might call them that, deferred, feeling perhaps that printing something like this on the web alone, even on a large and widely read site, would relegate it to something easily dismissible by the status quo. The Very Serious Players choose to read only properly vetted, fully credible and approved mainstream sources.

This post was published at Jesses Crossroads Cafe on 25 SEPTEMBER 2014.

Keynes, Lenin, and Hyperinflation

In 1919, John Maynard Keynes became an international figure of considerable influence because of his book, The Economic Consequences of the Peace. It was a critique of the Versailles Treaty’s imposition of reparations payments on Germany in the aftermath of World War I.
In that book, Keynes made the following observations.
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers’, who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

This post was published at Tea Party Economist on September 25, 2014.

Why The Fed Doesn’t Care About The Poorest Half Of Americans (In 1 Simple Chart)

Despite her platitudes to the unemployed (here) and the poor (here), it is clear Janet Yellen’s Federal Reserve policies are aimed squarely at only one segment of the US population – the wealthy. The reason is simple… with an economy built on the back of conspicuous consumption, it’s only the top quintiles of the population’s income earners that spend-spend-spend to keep the dream alive. What’s good for the ‘wealthy’ is good for America, right?

This post was published at Zero Hedge on 09/25/2014.

Research Shows Positive Correlation Between Economic growth And Gold Demand

This seventh edition of ‘Gold Investor’ is out. The report, released by World Gold Councile, discusses gold’s positive link to economic growth, explore its value as a hedge in times of duress, and discuss the impact that ETFs have had on the gold market. The report includes three articles:
The growth dividend: how rising GDP lifts gold consumer demand A practical hedge: less exotic, multipurpose, lower cost Ten years of gold ETFs: a wider and more efficient market Below are some excerpts. Readers who want access to the full report should register herebefore downloading the report.
Executive summary:
Current data on the world’s economies is mixed. There is both positive and negative news about developed and emerging markets but many investors – particularly in the US – are optimistic about a return to growth. Conventional wisdom says this will be bad news for gold. We believe the true picture is more complex. Gold benefits from both the growth and contraction phases of the business cycle, and our analysis, based on new third-party research, highlights the positive link between economic growth and consumer demand for gold.
The positive impact of economic growth on gold demand:

This post was published at GoldSilverWorlds on September 25, 2014.

Yet another good sign: the ENTIRE board of the Bank of Cyprus forced to resign

Sovereign Valley Farm, Chile
It was only 18-months ago that one of the brokest banking systems in the world became the first modern example of financial cannibalism.
I’m sure you remember how it all went down in Cyprus last year… but I’ll review it anyhow because it just never gets old.
For days, weeks, months leading up to the big event, banks were operating as usual. People could log on to a bank website, check their account balance, and see a number printed on the screen.
As it turns out, though, there’s a huge difference between a number on a screen and a well-capitalized bank.
Cypriot banks didn’t actually -have- the money. They had huge liabilities, minimal assets, and were roundly insolvent.
Worse, they no longer had the ability to borrow money. Cyprus is part of the eurozone, and consequently, its central bank didn’t have the ability to print money in order to bail out the insolvent banking sector.

This post was published at Sovereign Man on September 25, 2014.

Gold Seeker Closing Report: Gold Gains While Stocks Drop

The Metals:
Gold dropped $10.06 to $1207.14 by a little after 3AM EST, but it then rose to as high as $1224.40 in New York and ended with a gain of 0.31%. Silver slipped to as low as $17.393 before it also rallied back higher at times, but it still ended with a loss of 1.07%.
Euro gold rose to about 958, platinum lost $5 to $1309, and copper dropped a couple of cents to about $3.04.
Gold and silver equities fell over 1% at the open, but they soon rallied back to about unchanged and ended mixed on the day.

This post was published at GoldSeek on 25 September 2014.

Gavekal Warns Of “Clear And Present Danger” For Stocks

There are four developments in the fixed income markets that represent a clear and present danger for stocks.
First, high yield spreads continue to widen, diverging from the upward movement in stocks prices. In the chart below we plot high yield spreads against the S&P 500 over the last ten years. Until today the equity market seemed unfazed by the widening in spreads.

This post was published at Zero Hedge on 09/25/2014.

SP 500 and NDX Futures Daily Charts – Whoops!

Today we got something a little unexpected. I have to admit it caught me by surprise, and brought back at least a little twinge of seller’s regret.
Russia’s new draft law permitting them to seize foreign assets and to offer compensation for their nationals who suffer from the Western sanctions shook up the markets a bit, starting with some tremors in the Dax, but achieving their full blossom in US equities. The popular indices were down about 1.5 to 2 percent.
Some pointed to the very low durable goods number this morning, which is fashionably dumb. Durable goods is notoriously volatile because of airplane sales. If you back those out of this morning’s figures, then the number was not notable.
And AAPL has reported some problems with their new iPhone6. The cases are bendably thin, and they are having some software problems.
Our market are this fragile? It was more likely geopolitical jitters triggering profit taking from the tech bubble fostered by debubbling in AAPL and BABA.
And these sorts of big moves are characteristic of the narrow market we are in, as shown by the NDX/RUT and SPX/RUT ratios.
The same line of dumb thinking says that if we get a revision to 2Q GDP tomorrow it might be over 5 percent, and that would prompt the Fed to tighten more quickly next year, due to our remarkable recovery.
A revised 2Q GDP with no supporting trend, a stagnant median wage, and a recovery that is so selective that it is almost embarrassing if you don’t spend all your time talking to the ‘right class of people.’ Are you kidding me? I cannot believe the level of groupthink that possesses the financially aloof and their spokesmodels on financial television. It’s pathetic.
The next move of the markets may be lower, and the support levels are obvious. We are still in a formation that looks like a large inverse head and shoulders consolidation. So we would be looking for any market moves that either negate or activate that formation.

This post was published at Jesses Crossroads Cafe on 25 SEPTEMBER 2014.

sept 25/SLV adds another 3.98 million oz/inventory now at 345.244 million oz with silver falling again / OI in silver falls slightly/gold rises today to $1221/GLD remains constant/Russia may free…

Gold closed up 2.60 at $1221.20 (comex to comex closing time ). Silver was down 26 cents at $17.38
In the access market tonight at 5:15 pm
gold: $1221.00
silver: $17.53
GLD : no change in gold inventory at the GLD (inventory now at 773.45 tonnes)
SLV : today we had a big addition of silver inventory of 2.398 million oz (inventory 342.846 million oz)
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 towards the positive needle. On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates
London good delivery bars are still quite scarce.
Sept 25 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
.11000% .11250000% .112500% .1200% .2225000%
Sept 24 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
10500% .1075000% .1075000% .1200% .217500%
Let us now head over to the comex and assess trading over there today,

This post was published at Harvey Organ on September 25, 2014.

“The Gig Is Up”

In a switch from what are typically only one-sidedly dovish comments, NY Fed President Dudley was balanced this week, even citing reasons for why the Fed would want to hike rates.
Dudley stated that ‘being at the zero-lower-bound is not a very comfortable place to be’, because it ‘limits’ flexibility and has ‘consequences for the economy’. He said it ‘hurts savers’, and while acknowledging ‘what is happening’ to financial markets, he avoided directly citing risks to financial stability. Anxiety-riddled conversations about financial instability are probably implicitly restricted to a ‘behind-closed-doors-only’ rule.
FOMC members are slowly and carefully trying to change the conversation. Yellen completely diluted away any meaning behind ‘considerable period’ to make it all but meaningless. Bullard said to that he still ‘sees the first tightening at the end of the first quarter’.
A March 18th hike seems reasonable to me, since US economic improvement appears to remain on track (at least for the moment) and since the FOMC seems more anxious to begin the normalization process. Actually though, by waiting even until March, it is possible that the FOMC risks missing its window of opportunity in terms of using US economic momentum as its cover (what irony).

This post was published at Zero Hedge on 09/25/2014.

Standard & Poor’s Warns on Germany as Anti-Euro Political Party Soars in Popularity

The German political party known as the AfD, or ‘Alternative for Germany,’ first came to my attention a year ago. Upon reading about it, I became so interested in this new party (it has only been around since early 2013) that I composed a post titled: Anti-Euro Party in Germany Makes Significant Headway into Parliamentary Elections. Here’s an excerpt:
German parliamentary elections are coming up on Sept. 22, and Chancellor Angela Merkel has a problem on her hands. A euro-skeptical political party known as AfD is rising in the polls and could deny her Christian Democratic Union and its coalition partners the majority they need to continue governing.
AfD, or Alternative for Germany, currently holds no seats in the Bundestag, and until recently it barely registered in public-opinion polls. But a survey released on Sept. 4 by the Forsa polling group showed it with 4 per cent support – just shy of the 5 per cent needed to win Bundestag representation.

This post was published at Liberty Blitzkrieg on Sep 25, 2014.

Why Isn’t Innovation Driving Growth Anymore?

Average growth in Europe, Japan and the United States keeps slowing down when compared with previous decades: It is near zero in Europe and Japan, and 2% in the U. S. Inasmuch as, in those countries, innovation is still thriving, many new services are being offered, many start-ups are going public and raising funds, and scientific research is still leading to new discoveries. So why isn’t this inventiveness (being able to do more with less) producing any economic growth?
Sadly, of course, there is one purely economic reason: The growing weight of government in the economy, high taxation and a mountain of red tape to discourage entrepreneurs and stifle initiative. But let’s get back to innovation…
Innovation has drawbacks, one of which would be ‘creative destruction’, a term coined by the economist Joseph Schumpeter: At first, it renders obsolete products that were selling well, thus pushing some complacent companies toward bankruptcy and destroying jobs. This is how capitalism normally functions in a society under economic freedom. This is the only way to bring wealth to a country, a higher standard of living and full employment, notwithstanding any growing pains.
However, more and more, governments are trying to intervene in order to protect existing corporations. We’ve seen it with the banks in the 2008 crisis, and this goes on today with central banks keeping interest rates near zero in order to facilitate the re-financing of the banking system.

This post was published at Gold Broker on Sep 25, 2014.

Homebuilders: Look Out Below

KB Home released its Q3 earnings report yesterday. This is what the stock market thought of KBH’s numbers (click on graph to enlarge):

The stock is down nearly 10% in two trading days despite the ‘bullish’ new home sales report from the Census Bureau (more on that later). KBH reported another decline in actual deliveries. It also implemented some serious earnings ‘management’ devices to make its net income appear larger than it really was. I suspect that when they get around to releasing their 10-Q with a cash flow statement in it, we’ll see that it once again generated a cash flow loss from operations…

This post was published at Investment Research Dynamics on September 25, 2014.

Thoughts from the Frontline: Where’s the Growth?

In 1633 Galileo Galilei, then an old man, was tried and convicted by the Catholic Church of the heresy of believing that the earth revolved around the sun. He recanted and was forced into house arrest for the rest of his life, until 1642. Yet ‘The moment he [Galileo] was set at liberty, he looked up to the sky and down to the ground, and, stamping with his foot, in a contemplative mood, said, Eppur si muove, that is, still it moves, meaning the earth’ (Giuseppe Baretti in his book the The Italian Library, written in 1757).
Flawed from its foundation, economics as a whole has failed to improve much with time. As it both ossified into an academic establishment and mutated into mathematics, the Newtonian scheme became an illusion of determinism in a tempestuous world of human actions. Economists became preoccupied with mechanical models of markets and uninterested in the willful people who inhabit them….
Some economists become obsessed with market efficiency and others with market failure. Generally held to be members of opposite schools – ‘freshwater’ and ‘saltwater,’ Chicago and Cambridge, liberal and conservative, Austrian and Keynesian – both sides share an essential economic vision. They see their discipline as successful insofar as it eliminates surprise – insofar, that is, as the inexorable workings of the machine override the initiatives of the human actors. ‘Free market’ economists believe in the triumph of the system and want to let it alone to find its equilibrium, the stasis of optimum allocation of resources. Socialists see the failures of the system and want to impose equilibrium from above. Neither spends much time thinking about the miracles that repeatedly save us from the equilibrium of starvation and death.
– George Gilder, Knowledge and Power: The Information Theory of Capitalism and How It is Revolutionizing Our World
And to that stirring introduction let me just add a warning up front: today’s letter is not exactly a waltz in the park. Longtime readers will know that every once in a while I get a large and exceptionally aggressive bee in my bonnet, and when I do it’s time to put your thinking cap on. And while you’re at it, tighten the strap under your chin so it doesn’t blow off. There, now, let’s plunge on.
Launched by Larry Summers last November, a meme is burning its way through established academic economic circles: that we have entered into a period of – gasp! – secular stagnation. But while we can see evidence of stagnation all around the developed world, the causes are not so simple that we can blame them entirely on the free market…

This post was published at Mauldin Economics on SEPTEMBER 24, 2014.

Stocks Slump Most In 2 Months, Bonds & Bullion Safe-Haven Bid

US equities suffered their biggest drop in 2 months today, with the S&P 500 closing a glaring 30-point divergence with high-yield credit markets which also sold off dramatically. The S&P 500 broke (and closed) below its 50DMA (as did the Nasdaq, Dow Industrials, and Transports). Russell 2000 dropped to beyond 4-month lows (-4.4% in 2014). Early USD strength gave way as stocks started to leak lower and closed unchanged ( 0.5% on the week) led by JPY and EUR strength. Treasury yields plunged 4-6bps on the day (led by the long-end) with 10Y testing the critical 2.50% handle once again. VIX broke above 16, its 4th biggest rise of the year. Gold rose as stocks lost ground but silver, oil and copper slipped lower. HY Credit spreads closed at 8 month wides. Investors also piled into safe-haven short-squeeze ‘camera-on-a-stick’. Stocks closed not “off the lows.”

This post was published at Zero Hedge on 09/25/2014.

Is Apple Watch a Needle Mover?

The investment community has been up in arms over a lack of innovation from Apple. After all, the company hasn’t launched a new product line in quite some time… that is, until now. Meet the company’s brand-new smart device: Apple Watch. Investors hope the product will send Apple’s stock to new heights. Is that wishful thinking?
Apple brings its new product into a hotly contested space, with the likes of Sony, Nike, and Samsung all offering a competing smartwatch. But there’s a common theme with reviews for these gadgets: not enough features, not enough style. Apple aims to fill this void… and will charge a premium for doing so, of course.

This post was published at GoldSeek on 25 September 2014.

What Wall Street Thinks About Today’s Selloff

Aside from Russian threats, weaker-than-expected Durable Goods, and #Bendgate, here are nine other reasons for today’s sell-off…
Via FBN Securities’ Michael Naso,
Thoughts from the Options Desk and the Technical Desk about this Mornings Action
Month End: It’s the last day for underperforming or performing hedge funds to get names off the books so they don’t show up in quarterly report which equates to selling pressure.
Position Closing: Chatter that there was and maybe still is a massive asset allocator selling equities and buying bonds to rebalance books as the equity move made them a bit too long equities which again equates to selling pressure.
Holiday: There is very little liquidity because of the Jewish holiday making any selling pressure magnified however as of noon the S&P 500 is running 20% vs its 30 day average volume.

This post was published at Zero Hedge on 09/25/2014.

Yet another reason why FATCA is utterly retarded

September 25, 2014 Sovereign Valley Farm, Chile
For the last four years we’ve been railing against the Foreign Account Tax Compliance Act as one of the dumbest, most arrogant laws ever passed in the history of the world.
FATCA, as it’s known, was signed into law in 2010 in an effort to ‘clamp down’ on tax evasion. That’s the official story.
There’s no shortage of statistics out there which say there’s anywhere from $21 to $32 TRILLION ‘hidden in offshore accounts.’
I always retain a healthy skepticism of these numbers.
I mean, that’s 30% of the entire WORLD GDP. It’s more than TEN TIMES the amount that Google, Apple, and all the big tech companies are hoarding in cash (also overseas).
It’s more than SEVEN TIMES the size of the US Federal Reserve’s balance sheet. And it’s TWO THOUSAND TIMES the current M2 money supply of US dollars.
These estimates are seriously unrealistic, and I’m throwing the bullshit flag.

This post was published at Sovereign Man on September 25, 2014.