Peak Complacency (Again)

As stocks have risen in recent weeks on the biggest short-squeeze in 7 years, so VIX – the expected volatility of the market – has dropped to 2016 lows. However, with VIX at around 20, remains almost double the peak-QE-suppression lows of July 2014. Complacency is peaking though as VVIX – the expected volatility of VIX – has collapsed to its post-QE lows and erased all fear since before China’s August 2015 devaluation.

This post was published at Zero Hedge on 02/29/2016.

‘There’s never been a change this big, nor so many people unprepared.’

I had an amazing time this weekend sharing the stage at an investment conference in Miami, with other speakers like Robert Kiyosaki, Peter Schiff, and G. Edward Griffin among others.
During a panel on the future of money and banking we discussed how the financial system is rapidly losing control of its own product, i.e. money, in the same way that the music industry has lost control of its product.
In the past there used to be a handful of large record labels that controlled the distribution of music across the world.
In the same way, our financial system was set up for a handful of banks to tightly control the distribution of money across the world to the point that no financial transaction could occur without a bank inserting itself in the middle.
But like music, this model is rapidly changing.
Just as you can have now access an unlimited catalog of albums without ever setting foot in a record store, we are now in a position to conduct financial transactions entirely outside of the banking system.

This post was published at Sovereign Man on February 29, 2016.

Keynesian Youth? Boston Fed Unleashes “Wishes & Rainbows” Children’s Story Book

“Designed to stimulate students’ imagination as they explore the economic problem of scarce resources, various methods of allocation, and how societies react to alleviate such problems,” The Boston Fed has unleashed a chidren’s story book called “Wishes and Rainbows” indoctrinating the American youth into the ways of the Keynesian.

This post was published at Zero Hedge on 02/29/2016.

Miami’s Epic Condo Boom Turns into Glut

Real estate agents see ‘looming’ condo price correction.
Home prices overall are still rising in Miami and surrounding cities. The median price jumped 11.6% in January from a year ago, to $240,000. But according to real estate broker Redfin: unit sales plunged 11.9% from a year ago. The fourth month in a row of declines.
It wasn’t because the market was low on inventory: after an enormous and ongoing construction boom, 6,000 new listings hit the market in January, based on data on the Multiple Listing Service (MLS). This pushed inventory up to the highest level recorded in ‘at least’ two years.
This already high number of ‘new listings’ may be under-reporting the true number with a sleight of hand: the number of new condos, according to Redfin, ‘is difficult to measure and may be much higher than what is recorded in industry data, because developers tend to list only a sample of available units on the MLS.’
And most of these units ‘come in the form of high-end beachfront condos.’

This post was published at Wolf Street by Wolf Richter ‘ February 29, 2016.

The Oil Price Ceiling Has Been Set: “Above $40 And We Start Pumping Again”

Last week we reported that in what has been Saudi Arabia’s biggest victory to date in its war against U. S. oil and gas producers, both Whiting Petroleum, which is North Dakota’s largest oil producer, and Continental Resources would indefinitely suspend fracking operations for the foreseeable future. The reason was simple: oil prices are too low to make incremental drilling and pumping profitable, and instead most shale companies are now entering hibernation, limiting cash outlays in the form of dividends and capex spending, in hopes of weathering the crude oil storm, which has already gone on far longer than even the most pessimistic mainstream pundits expected it would.
Which, of course, is the right response: as the saying goes the cure for low oil prices is low oil prices, and as more shale companies halt drilling, exploring and production, the 3 mmb/d oversupplied oil market will slowly return to equilibrium.
There is logically a flipside to that as well: as those companies which have recently mothballed operations either voluntarily or because they had to when they went bankrupt when oil was at $30, return to market the previously oversupplied market condition will promptly return as well, thereby pressuring oil lower yet again.

This post was published at Zero Hedge on 02/29/2016.

Silver Eagle Sales Set A February Record

Betting against gold is the same as betting on governments. He who bets on governments and government money [fiat currency like the U. S. dollar] bets against 6,000 years of recorded human history. – Charles De Gaulle
Silver, for 6,000 years of human recorded history, has been ‘poor man’s gold.’ In fact, based on everything I can find on the topic, silver was used as currency before gold. Buying silver with the gold/silver ratio at 80 is like buying gold on steroids.
Charles De Gaulle is the person who is credited with forcing Nixon to ‘close the gold window’ in 1971. De Gaulle had figured out the U. S. had issued far more debt to foreigners than it had in gold to back that debt, per the requirement of the Bretton Woods Agreement. De Gaulle had been quietly exchanging Treasury debt purchased by the French Government for gold, per the terms of Bretton Woods. Before De Gaulle had a chance to clean out the Treasury’s gold, Nixon unilaterally and illegally terminated that portion of Bretton Woods. To this day I have not read a reasonable analysis which explains why the rest of the world enabled the U. S. to get away with this.

This post was published at Investment Research Dynamics on March 1, 2016.

Valeant Bond Price Pukes As Moody’s Threatens Downgrade Over Weak Performance

With CDS markets implying around a 40% probability of default, Moody’s has issued a warning over Valeant’s deleveraging prospects (and ability to deliver sustainable growth) putting $31 billion of biotech debt on watch for downgrade. VRX bonds are down dramatically on the day.. not the forst day back at work Pearson was hoping for.
As Moody’s writes, this rating action reflects concerns that Valeant’s underlying operating performance is weaker than Moody’s previous expectations, potentially impeding the company’s deleveraging plans, the agency said.

This post was published at Zero Hedge on 02/29/2016.

Six Reasons To Buy Gold In 2016

‘Betting against gold is the same as betting on governments. He who bets on governments and government money bets against 6,000 years of recorded human history.’ – Charles De Gaulle, Leader of the French resistance during WWII and 18th President of France
Gold bullion and gold mining stocks have rallied 18% and 51%, respectively, in recent months after a brutal bear market over the last five years.
Given gold’s proven ability to hold its value in the face of rising inflation and reckless monetary policy, we believe it plays an important role in any diversified portfolio.
At Evergreen Gavekal, we believe it may be time to to start initiating or adding to additional gold holdings for six reasons.
Technical trading patterns suggest gold may finally be breaking out into a bull market (we do caution, however, that it appears to be temporarily over-bought). Gold remains out of favor despite the recent rally. The Fed’s ability to hike nominal interest rates is constrained. The overpriced US dollar has limited room to run. Real interest rates are heading lower around the world as central banks get creative. Physical gold may be difficult to acquire in the coming years.

This post was published at Zero Hedge on 02/29/2016.


Gold: $1,233.90 up 14.10 (comex closing time)
Silver 14.89 up 20 cents
In the access market 5:15 pm
Gold $1238.50
silver: $14.92
options expiry:
for the Comex: Wednesday Feb 24 expired
for OTC and LBMA: today at midnight
At the gold comex today, we had a GOOD delivery day, registering 1 notice for 100 ounces for February. Thus the month of February ends up with 256,900 oz delivered upon for 7.99 tonnes of gold. Silver saw no more notices for February and surprisingly only 5 notices for 20,000 oz for the active March delivery month. They must have problems sourcing silver!
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 211.05 tonnes for a loss of 92 tonnes over that period.
In silver, the open interest fell by 4,243 contracts down to 169,013. In ounces, the OI is still represented by .845 billion oz or 121% of annual global silver production (ex Russia ex China). Generally as we go into an active delivery month the liquidation is much bigger.
In silver we had 5 notice served upon for 25,000 oz.
In gold, the total comex gold OI fell by 3,587 contracts to 438,516 contracts as the price of gold was down $18.40 with Friday’s trading.(at comex closing)
We had another change in gold inventory at the GLD, a good sized deposit of 2.08 tonnes / thus the inventory rests tonight at 762.40 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. Our 670 tonnes of rock bottom inventory in GLD gold has been broken. It looks to me that China has taken the last amounts of physical gold from the GLD. I guess the only place left for China to receive physical gold, after they deplete the GLD will be the FRBNY and the comex. In silver,/we had no changes in inventory tune of and thus the Inventory rests at 311.618 million oz
First, here is an outline of what will be discussed tonight:

This post was published at Harvey Organ Blog on February 29, 2016.

How To Beat The Market Trading Just 30 Minutes Per Day

Trading is was easy. Sleep in. Don’t fight The Fed. Grab some lunch with friends. Then execute the following two trades…
For those used to the ubiquitous 330ET Ramp, there is some nuance that – if you were willing to make 2 trades, not just 1 each day – could have doubled your profits in the last 7 years.
At 1530ET “Buy Stocks” and cover at 1545ET. At 1545ET “Short Stocks” and cover at the close. Simple, and all that while taking no overnight exposure at all…

This post was published at Zero Hedge on 02/29/2016.

The Economy Is In Freefall – Episode 906a

The following video was published by X22Report on Feb 29, 2016
Greek Vice President says that the Greek people are at their limit, no pension cuts. The European debt problem could destroy the Euro zone. More corporations layoff employees. The tech bubble is popping as more companies layoff. Pending homes sales decline, signalling the real estate bubble has popped. Chicago PMI collapses and the Dallas Fed reports that the economy is in freefall and we are already in a recession. Obama is continually pushing the idea that the economy has recovered, he wants everyone to believe him.

Global Anarchy: Woman Waves Severed Head, Man Stabs 10 Schoolchildren, Burnt Horse Head Found In Box

When we reviewed the most popular Zero Hedge posts of 2014, we weren’t entirely surprised to learn that civil unrest was one of the themes readers were most interested in discussing.
Indeed, polite society seems to be breaking down all over the world and in 2015, we got what certainly looks like evidence that anarchy beckons – even in the US, the supposed bastion of modernity and human ‘advancement’.
There were, for instance, the riots that reduced parts of Baltimore to smoldering ash in April…

This post was published at Zero Hedge on 02/29/2016.

Mexico’s Oil Giant Posts Record $32 Billion Loss, Cuts Crude Price Forecast To $25

For a long time, the impact of the collapsing Petrodollar was concentrated almost entirely on African and Mid-east oil exporting nations, of which none has been impacted more perhaps that ground zero itself, Saudi Arabia, which has seen a record surge in its budget deficit as a result of collapsing oil revenue – the result of its ongoing war with the U. S. oil and gas sector and low cost “marginal” producers around the globe. Then slowly, the commodity woes spread to supposedly unshakable, developet nations, such as Norway and Canada, both of which are currently troubled by the impact of plunging crude prices on state revenues and downstream budgets.
Today, another country exposed just how troubled its energy sector has become when Mexico’s largest, state-owned company, Petroleos Mexicanos also known as Pemex, announced not only its 13th consecutive quarterly loss amounting to $9.3 billion, 44% bigger than the previous year, as revenue tumbled by 28% to $15.8 billion, but also a gargantuan $32 billion annual loss and at the same time announced it would slash capex spending to preserve cash and optionality for a future which suddenly looks very bleak.
In a budget report issued today, Pemex also pledged to meet the government’s request that it trim its 2016 budget by 100 billion pesos ($5.5 billion). Pemex will cut as much as $3.6 billion in spending by delaying projects, including expensive offshore wells, Jose Antonio Gonzalez Anaya, the company’s CEO, said in a conference call with investors. Pemex will pursue partners for any future deepwater development, Gonzalez Anaya said.

This post was published at Zero Hedge on 02/29/2016.

Previewing The Winners And Losers From Today’s MSCI Rebalance

As MSCI reported on February 11, today is the day when the previously announced quarterly rebalancing will take place, one which Credit Suisse estimates will see approximately $7.8bn gross trading in DM and $1.2bn in Emerging Markets.
As a reminder, this is how MSCI previewed today’s torrid end of today activity:
MSCI Global Standard Indexes: Thirteen securities will be added to and ten securities will be deleted from the MSCI ACWI Index. In the MSCI World Index, the three largest additions measured by full company market capitalization will be Jardine Matheson (Hong Kong), Worldpay Group (United Kingdom), and Waste Connections (USA). The two additions to the MSCI Emerging Markets Index will be Axis Bank (India) and Sibanye Gold (South Africa).

This post was published at Zero Hedge on 02/29/2016.

Gold Daily and Silver Weekly Charts – Goodbye to February, Non-Farm Payrolls on Friday

And so we close the door on the leap year-lengthened month of February, which was a particularly good month for gold.
And as always with the end of one month and the beginning of another, there will be a Non-Farm Payrolls report at the end of this week.
Gold is clearly in a symmetrical triangle, trying to decide which way to break, up or down, from this potential ‘cup and handle’ formation. And remember right now it is all potential, not having set a firm handle and broken up and out from that retest.
I included some material from a few years ago that shows the formation when it works in both a textbook and a ‘real life’ example. You may read about it here.
I have included the box scores from The Bucket Shop, both for the end of February and the piddling deliveries seen so far on the March contracts.
It turns out that the little dog we ‘rescued’ from the mean streets of Newark is not a shih tzu after all, a breed with which we are familiar. She is indeed a mix with a good dose of Japanese Chin, and is exhibiting all the characteristics of one. She does not have an ‘undercoat’ and her hair is much more like a Chin than a Shih Tzu. She even did the ‘Chin spin’ for us yesterday.

This post was published at Jesses Crossroads Cafe on 29 FEBRUARY 2016.

Gold and Silver Market Morning: Feb-29-2016 — Real Currency Wars on the way?

Gold Today -Gold closed in New York at $1,222.80 down from $1,233.00. In Asia on Monday, it rose to $1,231.25 ahead of London’s opening. It then rose further to be set by the LBMA at $1,234.15 up from $1,231.00. Since Friday’s setting, gold fell to $1,212 but not on physical selling. The dollar index is stronger at 98.25 up from 97.39 on Friday.
The dollar is up against the euro at $1.0895 up from $1.10248 on Friday. The gold price in the euro was set at 1,132.77 up from 1,116.65.
Ahead of New York’s opening, the gold price was trading at $1,232.00 and in the euro at 1,131.05.
Silver Today -The silver price closed in New York at $14.65 down 48 cents. Ahead of New York’s opening the silver price stood at $14.80.
Gold (very short-term)
The gold price will consolidate with a stronger bias in New York today.
Silver (very short-term)
The silver price will consolidate with a stronger bias in New York today.

This post was published at GoldSeek on 29 February 2016.

“Extreme Downside Leadership”: Investech Shows Why This Is Just Another Bear Market Rally

When it comes to stock market, one thing never changes: price action determines the newsflow, and not the other way around and the recent 7% rebound off the 1812 lows two weeks ago which has pushed the S&P to nearly 1960 (or over 21x on a GAAP P/E basis as we showed this weekend) has been interpreted by many as an “all clear” to any imminent downward drop.
And yet, as Investech reports in their latest weekend note, there is nothing normal about this rebound, or rather, bear market short squeeze aka “rally”, for many reasons of which the most prominent one is that there has been absolutely no upside leadership through the entire bounce.

This post was published at Zero Hedge on 02/29/2016.