Take Cover Now – -They Don’t Ring A Bell At The Top

This is getting downright stupid. After the minor 8% correction in October, the dip buyers came roaring back and the shorts got sent to the showers still another time. Earlier this morning the S&P 500 was pushing 2050 – – or up 12% in less than a month.
So the great con game remains in tact. The casinos run by the Fed and other central banks can’t go down for more than a few of days – until one or another central banker hints that more free money is on the way.
A few weeks ago it was James Bullard hinting at a QE extension. Next was Mario Draghi pronouncing that the whole ECB is unified behind a plan to expand its already swollen balance sheet by another $1.2 trillion. And then Haruhiko Kuroda, the certifiable madman running the BOJ, not only announced his 80 trillion yen buying scheme, but soon averred that falling oil prices – – a godsend to Japan – – were actually a threat to his mindless 2% inflation goal that might necessitate even more money printing. That is, after buying up 100% of the massive Japanese government bond market, the BOJ would not hesitate to monetize ETF’s, stocks, securitized real estate debt and, apparently, sea shells, if necessary.
Accordingly, bounteous wealth is seemingly to be had by the three second exercise of clicking ‘buy’ on the SPU (basket of S&P 500 stocks). Indeed, for the past 68 months running, the stock market has blown through every mini-correction, and has been traversing a near parabolic rise

This post was published at David Stockmans Contra Corner on November 13, 2014.

Oil Price Plunge To Economy/Stock Market: LOOK OUT BELOOOOW

The price of oil (West Texas) dropped nearly $3 and hit it’s lowest level since the 2nd half of 2010. It’s dropped 31% since July. The explanations being promoted by the mainstream blogosphere for the price decline is either 1) the U. S. has manipulated the price lower to punish Putin/Russia or 2) the Saudis have flooded the market with supply to drive U. S. oil shale/fracking out of business.
Both of those rationales are nonsense. Too be sure, I have no doubt whatsoever that the price of oil can be teased lower by manipulative activities. But for the reasons below, I believe that the price of oil can be driven lower for only a very short period, especially if global demand requires at least as much oil as is profitably being produced.
First, it is more difficult to drive the price of oil lower using futures – as is done with gold/silver – because oil is a depletable commodity and the entity shorting paper oil risks the probability that the long side will ask for actual physical deliver. Second, IF the price of oil were being manipulated lower using artificial mechanisms, sophisticated oil traders – Wall Street banks, big hedge funds, sovereign funds and oil companies – would buy up this supply and store the oil until the price bounced back. It’s an asymmetry of information arbitrage play, if you will, and sophisticated entities have superior information to the market in this regard. Also, please note that several banks have invested in oil storage terminals for this purpose. Third, I find it very hard to believe that greedy multi-national oil companies would agree to piss off Putin at the expense of profits. And, by the way, Russia is clearly not hurting given that it bought 37 tonnes of gold with cash in October.
Instead, the plunge in the price of oil reflects the collapsing global economy, which – by the way – includes the U. S. economy:

This post was published at Investment Research Dynamics on November 13, 2014.

Italy is at War with ECB

Beppe Grillo has come out and stated the obvious: ‘We are not at war with Russia, but with the ECB’. Beppe Grillo is launching a campaign for Italy to exit the Euro. Since the introduction of the euro, all economic parameters have deteriorated, the founder of the five-star movement in Italy is absolutely correct. The design or the Euro was a disaster. There is no fixing this any more. We have crossed the line of no return. Beppe is now calling for referendum on leaving euro. Will he be assassinated by Brussels? It is unlikely that the EU Commission will allow such a vote.

This post was published at Armstrong Economics on November 13, 2014.

China’s Industrial Output Growth In 2014 Worst In Over A Decade

Having told the world that it will not be undertaking system-wide rate cuts or stimulus – focusing more on idiosyncratic safety nets – last night’s data from China is likely to have the PBOC frowning. Fixed Asset Investment (lowest growth since Dec 2001) and Retail Sales (lowest growth since Feb 2006)missed expectations, but it was the re-slump in Industrial Production (after a small ‘huge-credit-injection-driven’ bounce in September) that is most worrisome as China’s 2014 output is growing at its slowest since at least 2005. As Michael Pettis previously noted “China will be no different… growth miracles have always been the relatively easy part; it is the subsequent adjustment that has been the tough part.” Of course, this is not the ‘soft-landing’ so many bulls have expected, which, if enabled by moar credit, as Pettis warned “will inevitably lead to a very brutal hard landing.”
China Fixed Asset Investment YoY Growth slumps to 13 year lows…

This post was published at Zero Hedge on 11/13/2014.

Silver prices doing ‘weird stuff’ and paper market set to fold in on itself predicts Silver Wheaton CEO

There’s been some ‘weird stuff’ going on in the paper market for silver this CNBC interview reminds us today as prices hover near four-year lows. Silver Wheaton president and CEO Randy Smallwood predicts that the silver paper market will be ‘folding in on itself’ sending prices much higher.
His company is set to benefit with an average silver production cost of $4.50 so he is already making a 70 per cent profit margin on every ounce sold…

This post was published at Arabian Money on 13 November 2014.


Some light musings on the usually incomprehensible economic prognostications of the Maestro, the notoriously fickle pronouncements of career politicians, and the direction of gold pricing in the near future.
1.) February 11th, 2003, Washington, D. C. Chairman Alan Greenspan — Federal Reserve Board’s semiannual monetary policy report to the Congress, Before the Committee on Banking, Housing, and Urban Affairs, U. S. Senate and the Committee on Financial Services, U. S. House of Representatives (Feb. 12th, 2003):

‘Indeed, the heightening of geopolitical tensions has only added to the marked uncertainties that have piled up over the past three years, creating formidable barriers to new investment and thus to a resumption of vigorous expansion of overall economic activity.
The intensification of geopolitical risks makes discerning the economic path ahead especially difficult. If these uncertainties diminish considerably in the near term, we should be able to tell far better whether we are dealing with a business sector and an economy poised to grow more rapidly–our more probable expectation–or one that is still laboring under persisting strains and imbalances that have been misidentified as transitory. […] If instead, contrary to our expectations, we find that, despite the removal of the Iraq-related uncertainties, constraints to expansion remain, various initiatives for conventional monetary and fiscal stimulus will doubtless move higher on the policy agenda.’

This post was published at TF Metals Report on November 13, 2014.

Applied Mind-Control: How to Deal With Muggers Derren Brown-Style

21st Century Wire says…
Mind control master, illusionist and all-purpose showbiz wizard, Derren Bown, the man who always makes it look so easy, says he once used a simple linguistic trick (see story below) which immediately reduced a mugger to tears. What a great little trick to have in your handbag, right?
This is the Age of Austerity, where double digit unemployment and drug use are the norm – so muggings will be an issue, especially in big cities. Your first option is to relent, and hand over your wallet, the watch and the phone. For those of us who don’t want the hassle of canceling the cards, phone and losing all your contacts, then you must consider the full spectrum of possible actions and outcomes…
If you happen to be unarmed, then yes, you would need to resort to either of the following: evasive action (run), Aikido, or just use ‘the old noggin’ (your brain) to fend off that mugger at night. Obviously, your options will be more limited in Europe, where people do more, and travel more on foot and take public transit through town and city centers late at night, and where it is illegal to carry certain defensive tools – like a knife or gun, although muggers seem to have absolutely no problem carrying them (that’s a debate for another article).
Does mind control really work? Perhaps Brown has simply done the psychology research and therefore understands the underlying thought processes of the mugger (of which he’d never say on TV, because that might reveal his tradecraft).
One example out of a vast array of academic studies, would be the work of social psychologist, Muzafer Sherif, who developed ‘Realistic Conflict Theory’, which takes into account many underlying factors – aside from ‘fight or flight ‘survival situations – factors like negative prejudices, and stereotypes as being responsible for street competition for perceived limited resources. Sherif then validates this theory in his most famous experiment, ‘The Robber’s Cave’.
Beware of over-simplified, Jedi mind tricks though. Brown’s middle class, anti-mugging mind control techniques are only useful against a certain type of mugger, in a certain physical situation, and one must be able to evaluate horses-for-course, or risk getting badly injured – or worse. Bear in mind here, that many a savvy street hustler and seasoned smack addict are also well versed in pedestrian mind-control methods as they also deploy them on a daily basis to score basic vice needs.

This post was published at 21st Century Wire on NOVEMBER 13, 2014.

And This Is How Central-Planning Broke Housing

First, they broke the capital markets. Then, the money-printing central-planners broke the housing market too. Here, in under 200 words, is a real-life case study of just how they did that.
The surge in home prices across Sydney has come even as the supply of properties for sale expanded, according to RP Data Pty. About 70 percent of homes that go to auction each week are sold, the researcher said in a Nov. 3 statement.
The boom, coming amid weakness in other parts of Australia’s economy, poses a quandary for the central bank.

This post was published at Zero Hedge on 11/13/2014.

October Home Sales In Southern California 17.7% Below Average

October SoCal home sales – new and existing combined – were at the slowest pace in three years for the month of October (LINK). The median price paid fell month-over-month for the second month in a row. Homes sales dropped 4.4% year over year in October and were 17.7% below the average for the month of October.
This data is based on actual closings as opposed to data samples collected by the National Association of Realtors (existing home sales) and the Census Bureau (new home sales), both of which tease the data artificially higher by seasonally adjusting it and then calculating an annualized rate for the specific month.
Q4/Fiscal Year Q1 (Oct – Dec) could be ugly for the homebuilders… Homebuilder Research Reports.

This post was published at Investment Research Dynamics on November 12, 2014.

SP 500 and NDX Futures Daily Charts

Stocks were ranging all over the place today, finishing up with a little to the upside.
There are rumours of a deal in the oil patch, Halliburton to acquire Baker-Hughes.
Nordstrom beat but lowered guidance and JC Penney missed.
There is no broadly based organic recovery. There are only illusions and appearances based on accounting fraud, control frauds, and money printing.

This post was published at Jesses Crossroads Cafe on 13 NOVEMBER 2014.

Oilpocalypse Now Sends Small Caps To Worst Day In 3 Weeks

WTI Crude plunged another 3.75% to as low as $74.06 today – the lowest since Sept 2010 and dropping at the fastest rate of collapse since Lehman. Airlines popped and Energy stocks dropped 2.7% (now worst sector of the year) but Small Caps were the worst performing major index of the day (turning first around 1030ET and dropping most in over 3 weeks). The S&P tested back into the red for the week but was VWAP-rescued twice. AAPL once again bid saved the Nasdaq. Treasury yields slid lower all day (down 2-3bps across the complex) but remain up 4-5bps on the week. The USD weakened very marginally (still up 0.25% on the week) led by EUR strength. Gold and silver were flat but copper tumbled back below $300 – its lowest close in a month (near lowest close since Jul 2010). HY Credit diverged bearishly this afternoon as stocks ramped to VWAP. VIX rose for the 3rd day in a row, back over 14. Dow record close, Russell biggest drop in 3 weeks.
It was a weak day in stocks… so what do u think happened to trading volume… But of course, it wouldn’t be the US equity market without a late-day panic buying algo surge to VWAP??!!

This post was published at Zero Hedge on 11/13/2014.

The Chart That “Amazes” SocGen How The Fed Has Broken The Market

6 years ago, nobody, and we mean nobody, would admit that the Fed was manipulating the “market”, and especially that subset which has served as a policy tool to boost consumer confidence: equities. Now, one has to look hard to find the braindead “financial pundit” (usually a econ Nobel prize winning economist or an English major) who still doesn’t get it. Ironically it has gotten so bad, some of the banks are now eager to show to the world just how “amazed” they are – in this case SocGen – by just how completely and totally the central banks have crushed anything to do with fundamentals.
From SocGen’s Andrew Lapthorne
Aided and abetted by QE, the last three years has seen the MSCI World Index rise by 38% whilst reported profits have risen by just 3%. This complete disconnection with fundamentals has been painful for short-funds looking to generate returns out of companies with weak business models.

This post was published at Zero Hedge on 11/13/2014.

“World’s Richest Restaurateur” Sees An Imminent Crash In America’s “Crazy” Real-Estate Market

When it comes to the fair value of assets, especially cash-flow generating real estate, few are as qualified to opine as the man dubbed ‘World’s Richest Restaurateur’, billionaire Tilman Fertitta, chairman of Landry’s Restaurants which counts among its properties such brand names as Morton’s, Rainforest Cafe, Bubba Gump Shrimp Co., McCormick & Schmick’s, Saltgrass Steak House, Claim Jumper, Chart House, The Oceanaire, Mastro’s Restaurants, Vic & Anthony’s Steakhouse and many more.
Which is why his dire warning about the state of the “crazy” US real estate market, which he believes set for an imminent crash, are likely worth keeping in mind as all the panglossian permabulls see nothing but a 4th dead housing cat rebound ahead. That, and his take on inflation: “There is huge inflation going on right now.”
From his interview on Bloomberg TV yesterday:

This post was published at Zero Hedge on 11/13/2014.

Next Phase in Currency Wars: Yen Plunge, Yuan Devaluation, and “Tidal Wave of Westbound Deflation”

The Yen currently trades about 115 to the US dollar. At the end of 2011 the Yen was about 77 to the dollar. That is a decline of roughly 33%.
Yet, Japan’s inflation barely budged. Japan’s prime minister Shinz Abe is not pleased.
On October 31, the Bank of Japan pledged “Unwavering Determination” to Get 2% Inflation. The Yen plunged and Nikkei futures rose limit up.
What’s Next?
To quote Yogi Berra, “It’s tough to make predictions, especially about the future.” I know full well, having made some spectacular calls but also some very bad ones over the past few years.
Nonetheless, via email, Society General’s Albert Edwards expects a “Tidal Wave of Westward Deflation” and “Yen at 145 to US Dollar by March“.
145/$ by end of March – Albert Edwards
Forecast timidity prevents anyone forecasting 145/$ by end of March – so I will.
We revisit the most important chart investors should be focused on, namely the yen/dollar chart. The market still does not seem to have grasped the significance of this phase of currency wars. It reminds me of the 2006/07 period when falling US house prices and then widening corporate bond spreads were totally ignored by upbeat equity investors until it was too late. The yen is set to follow the US dollar DXY trade – weighted index by crashing through multi-decade resistance – around 120. It seems entirely plausible to me that once we break 120, we could see a very quick 25 move to 145, forcing commensurate devaluations across the whole Asian region and sending a tidal wave of deflation westwards.

This post was published at Global Economic Analysis on November 13, 2014.

Marc Faber: Gold Price, US Dollar & the Swiss Gold Initiative

Marc Faber is the editor and publisher of The Gloom, Boom and Doom Report (Gloomboomdoom.com) and he is the author of Tomorrow’s Gold – Asia’s Age of Discovery. Marc Faber earned a Ph. D. in economics at the University of Zurich, Switzerland. He lives in Asia since 1973. In 1990, he set up his own business, Marc Faber Ltd., which acts as an investment advisor and fund manager.
– Is the US dollar coming out of a major bear market started in 1995?
– Is it possible for gold to go under $1,000?
– Could Russia and other emerging market central banks sell gold?
– Is the US dollar in a new major bull market?
– How will the Swiss gold referendum affect the gold market?
– China and gold reserves: How much gold does China have?
‘I own my physical gold. I am my own central banker’

This post was published at Gold Broker on Nov 13, 2014.

Putin “Prepares For Economic War”, Buys Whopping 55 Tonnes Of Gold In Q3

Just as China is buying ‘cheap’ oil with both hands and feet, so Russia, according to the latest data from The World Gold Council (WGC) has been buying gold in huge size. Dwarfing the rest of the world’s buying in Q3, Russia added a stunning 55 tonnes to its reserves, as The Telegraph reports, Putin is taking advantage of lower gold prices to pack the vaults of Russia’s central bank with bullion as it “prepares for the possibility of a long, drawn-out economic war with the West.”
Bottom line: Russia bought more gold in Q3 then all other countries combined (of course, nobody know what or how much China is buying).

This post was published at Zero Hedge on 11/13/2014.