Hope for the Dead

What is the connection between personal freedom and rising from the dead?
When America was in its infancy and struggling to find a culture and frustrated at governance from Great Britain, the word most frequently uttered in speeches and pamphlets and editorials was not ‘safety’ or ‘taxes’ or ‘peace’; it was ‘freedom.’ Two acts of Parliament broke the bonds with the mother country irreparably.
The first was the Stamp Act, which was enforced by British soldiers who used general search warrants issued by a secret court in London to rummage through the personal possessions of any colonists they chose, ostensibly looking to see whether they had purchased the government’s stamps.
A general search warrant, as the Foreign Intelligence Surveillance Act court issues in America today, did not specifically describe the person or place to be searched – which our Constitution now requires. Rather, these warrants were authority for the bearer to search wherever he pleased and seize whatever he wanted – and it remains so today despite what the Constitution says.

This post was published at Lew Rockwell on March 24, 2016.

The Broadest US Equity Index Is Hitting Resistance

The broadest U. S. stock index has reached an area of significant potential resistance.
This will be our last in a series on major U. S. stock indices encountering areas of potential key resistance on their charts – any more would really be redundant. The post-February rally has been impressive in its breadth and pace. One by one, however, the averages have been reaching levels on their respective charts that, in our view, represent significant potential areas of resistance. That includes small caps, big caps and, as we point out in today’s Chart Of The Day, a big index.
The Wilshire 5000 is the broadest index of U. S. stocks. In fact, it cannot get any broader as it encompasses all actively traded stocks in the United States. The index was dubbed the Wilshire 5000 because that was the approximate number of issues trading at the time of its launch in 1974. However, as of June 30, 2015, the index contained 3,691 issues (though, it has retained its name as ‘Wilshire 3691′ does not have the same ring to it). Although the index is market cap-weighted, its value as a gauge of the broad stock market is obvious.
As mentioned, like prior indices we’ve looked at, the Wilshire is presently hitting an area encompassing several points of potential resistance on its chart, including:

This post was published at Zero Hedge on 03/24/2016.

Cruz to Introduce Visa Requirement for all Europeans

The ramifications for the refugee crisis in Europe are crossing the ‘pond’ and arriving in the USA. There are mainstream politicians now calling for visa requirements for EU citizens because they do not know who are terrorists among them. Even Ted Cruz has been forced to jump sides after adopting Trump’s positions in part. Where Trump wanted to ban Muslims, Cruz is looking to ban all Europeans by forcing them to get a visa to visit the USA.

This post was published at Armstrong Economics on Mar 24, 2016.

The Stock Market Is A Monetary Policy Junkie – Quantifying The Fed’s Unprecedented Impact On The S&P

Executive Summary
One of the stated goals of the policies that the Fed has been pursuing since the Global Financial Crisis is to raise asset prices. In this short note we show that this has been standard operating procedure for the Fed since Greenspan’s tenure began. However, the transmission mechanism doesn’t appear to be lower rates, lowering the discount rate. Rather, it seems to come from the influence that the FOMC announcements have on market sentiment or ‘animal spirits.’ We do find that Federal Reserve influence on the stock market has become particularly pronounced since the onset of its unconventional policies. We construct an alternative valuation measure (the Monetary Policy-Adjusted CAPE) that modifies Robert Shiller’s Cyclically-Adjusted P/E ratio (CAPE) in order to gauge the impact the Federal Reserve policies have been having on the S&P500.
The Stock Market As Monetary Policy Junkie – Introduction
Jeremy Grantham has a lovely saying that resonates deeply with us, and it is, ‘Always cry over spilt milk.’ Analyzing past errors and mistakes is crucial to improving our understanding, and vital if we are to stand any chance of avoiding making similar errors in the future. Indeed, ‘Always Cry Over Spilt Milk’ was the title of an internal investment conference we held at GMO towards the end of last year. The deeper subject was seeking to understand why our forecast for the S&P 500 had been too pessimistic over the last two decades or so.
In August 2015, we shared some of the work that emerged from that event in the white paper, ‘The Idolatry of Interest Rates, Part II.’ We would like to highlight two elements from that work that are of particular relevance for this note. First, we showed that our basic valuation framework has tended to underestimate the returns to the U. S. market of late because the market has simply turned out to be more expensive than we had expected (see Exhibit 1). Second, we showed that despite many protestations to the contrary, low interest rates didn’t really seem to be a viable explanation for the market’s high P/E.

This post was published at Zero Hedge on 03/24/2016.

Share Buybacks: destructive innovation that’s keeping stock market bull alive

A man sits as many risks as he runs.
Henry David Thoreau
Robin Hood robbed the Rich to help the poor; in the modern day version the Rich rob both Robin Hood and the poor to become even richer. The rich in this case are the greedy corporations and the officers that run the show behind the scenes. In this lazy world, the only thing that matters is money and how to make as much of it as fast as possible. Hence, the best way to boost earnings without doing anything is to buy back boatloads of shares and in doing so artificially boost earnings. It is a perfect scam.
Companies in the S&P 500 Index are poised to purchase over $165 billion of stock this quarter, bringing us dangerously close to taking out the 2007 record. While Mutual funds and the masses are selling the corporate world is buying, proving that the dumb money is not in the know, even though their actions are based on valid data. Logic does not drive the markets; it’s emotions that are the main driving force behind the markets. $40 billion flowed out the markets via mutual fund sales or individual redemptions, but the corporate world more than covered that slack. One could call this is a positive divergence as the corporate world pumped this money into stocks when the markets were tanking, and the masses fled for the exits.

This post was published at GoldSeek on 24 March 2016.

Mapping The Belgium Terrorist Attacks: The Full Recreation Of The Brussels Bomb Explosions

Now that over 48 hours have passed since two bomb explosions at Brussels’ main airport and a downtown subway station killed at least 31 and injured hundreds more, there is enough information to piece together the complete chronology of these terrorist attacks.
Here, courtesy of the NYT, are the full details.
Two Belgian brothers, Ibrahim el-Bakraoui and Khalid el-Bakraoui, and an unidentified third man blew themselves up in the attacks. The blasts occurred four days after the capture of Salah Abdeslam, believed to be the sole surviving direct participant in the Paris attacks in November.
7:58 a.m.: Airport explosions
Two suicide bombers carrying large suitcases believed to contain explosives struck a departure hall at Brussels Airport. One of the bombers at the airport was Ibrahim el-Bakraoui, according to Frdric Van Leeuw, the Belgian federal prosecutor. The two explosions were about nine seconds apart, the authorities said, and both hit check-in rows near the entrance, where video footage showed passengers were gathered.

This post was published at Zero Hedge on 03/24/2016.

US Oil Rigs Resume Slide, Drop By 15 In Past Week To New Record Low

After posting the smallest possible rebound in the past week, moments ago Baker Hughes reported that in the holiday shortened week (in which there was some extrapolation) the decline in US oil rigs has resumed, and as of this moment there were only 372 oil rigs operating in the US, down 15 weekly and the biggest drop in the past moth, to the lowest number in recent history.

This post was published at Zero Hedge on 03/24/2016.

The Next Critical Level For The S&P: Stay Above 2,028 Or Channel Support Is Broken

Yesterday we presented the latest note from UBS’ technical analysts, Michael Riesner and Marc Muller, who said now that the S&P had hit their near-term top target of 2,050, it was time to “sell” the “most overbought market since 2009.” We suggested that, based on their recent accurate track record, that it would be prudent to follow their advice instead of Gartmaning it. So far they have been correct.
So what are the key technicals levels from this point on, and what do the charts say now? For the answer we turn to BofA technical analyst Stephen Suttmeier who has just released a note in which he warns that “daily price & breadth momentum waning. Watch S&P 500 channel support at 2028 – a close below would be a bearish sign.” He also adds that “similar to early November, daily MACD at 1998-2000 overbought as breadth momentum shows a bearish divergence.”
In other words, the technicals are going from bad to worse, that another round of unexpected flip-flop jawboning from a Fed president may be needed to prop up the S&P 500 as it prepares to turnaround once again, putting all the central banks back in the corner once again.

This post was published at Zero Hedge on 03/24/2016.

Diversify Into Gold As An ‘Insurance Policy’

‘Investors could be forgiven for heading for the hills given the tumultuous start to 2016,’ so writes Andrew Oxlade in The Telegraph today who advises investors to diversify into gold as an ‘insurance policy’:
We have long been advocates of exposure to gold as an insurance policy. This was demonstrated once again in the recent sell-off when the price of bullion surged from $1,061 (762) an ounce on New Year’s Day to $1,246 (895) by early February. In times of fear, gold is in demand. The price also rises when inflation becomes a danger.
Deflation remains the bigger threat for now, which is partly why gold has been a poor investment in recent years, but the money printing excesses of central banks could yet unleash inflation. In the meantime, the gold price offers some protection during repeat episodes of buckling confidence.

Gold in GBP – 5 Years
The Telegraph, like GoldCore, had warned of such turbulence at the start of the year. John Ficenec, editor of the Questor column, warned of the real risk of volatility and falls in stock markets.
We believe that the tragic events in Brussels show the continued very high degree of geopolitical risk and the need for an insurance policy.
Further attacks are quite possible, including in the U. S., and this should support gold.

This post was published at Gold Core on March 24, 2016.

Chinese Take Over Canada’s Real Estate Market, Buy One-Third Of All Vancouver Homes Sold In 2015

‘Housing in Vancouver is insane – it was insane when I left and it’s more insane now.’ That’s from 33-year-old Kevin Oke, co-founder of LlamaZoo Interactive who left Vancouver for Victoria two years ago because he couldn’t afford to buy a home in his native city even while earning a generous salary as a lead designer at a video-game company whose clients included Atari and Ubisoft Entertainment SA.
Kevin isn’t the only one leaving. Vancouver added only 884 net new people age 18-24 last year according to Statistics Canada, and many observers worry the soaring cost of housing will eventually strip the city of its burgeoning tech economy.
(a representative listing from Point Grey)
We’ve spilled quite a bit of digital ink documenting the ‘three-alarm fire’ (to quote Bank of Montreal chief economist Doug Porter) that’s burning in British Columbia’s housing market. Here, for those who missed it, are some informative posts:
Vancouver Real Estate Goes Full-Retard; Average Home Price Now $1.8 Million How Vancouver Is Being Sold To The Chinese: The Illegal Dark Side Behind The Real Estate Bubble Meanwhile In Canada, A Real Estate Bargain Emerges… Calgary’s Housing Market Collapses While “Three-Alarm Blaze” Burns Next Door In Vancouver According to the Greater Vancouver Real Estate Board, residential property sales in Greater Vancouver rose 31.7% in January, 46% above the 10-year sales average for the first month of the year and the second highest January ever. The benchmark price for a detached home in Vancouver: $1,293,700. The benchmark price for an apartment: $456,600. The latest data from the Canadian Real Estate Association shows the average price of a home in Canada rose an astonishing 16% Y/Y last month to more than $500,000. Underscoring the extent to which British Columbia and Ontario are driving the market, stripping out those two provinces pulls the national average down to under $300,000.

This post was published at Zero Hedge on 03/24/2016.

Housing Bubble Altert! Palo Alto Is Considering Subsidized Housing For The ‘Rich’

How expensive is the San Francisco housing market? It is so expensive that the home of Stanford University, Palo Alto, is considering subsidized housing for the ‘rich’ (as in $250,000 annual income).
PALO ALTO (CBS SF) – Palo Alto is seeking housing solutions for residents who are not among the Silicon Valley region’s super-rich, but who also earn more than the threshold to qualify for affordable housing programs.
The city council has voted to study a housing proposal that would essentially subsidize new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year.

This post was published at Wall Street Examiner on March 24, 2016.

Why “It’s Hard Being A Bear”

Global stock markets, especially in the US, have made a furious comeback from the lousy start of the year. At its worst level the S&P 500 was down 11% year to date and 15% from its peak late last spring. At that nadir the market was trading at roughly the same level as November of 2013, over two years of gains wiped out by what appeared to be a nascent bear market. Since bottoming on the 11th of February, the S&P has traded up 13% and is now positive on the year, albeit a small gain. Has the bear been vanquished? Or is he just hibernating?
Despite that rally the market still trades at about the same level as November of 2014, a year salvaged from the lows. You could have collected 10 year Treasury coupons and made about the same as collecting the S&P dividend during that time, avoided the stock market volatility and be sitting on a capital gain to boot. Over the last two years the returns from the 10 Year Treasury and the S&P 500 are not that dissimilar. The 10 year Treasury has produced a total return of about 11.25% versus the S&P 500’s 12.4%. When one considers the volatility of the stock market versus the bond market, the clear risk adjusted winner is the bond market. So, while the rally has been nice, it hasn’t been enough – yet – to change the math of a decision to remain bearish and underweight stocks.
So, despite the title of the post, it should have been pretty easy being a bear – if you made the decision to own longer duration bonds as an alternative. Of course, not many people have done that as, paradoxically, investors have been almost more afraid of bonds than stocks. I’ve been reading articles about a bond bubble for several years now and that talk pushed investors to the short end of the curve, scared to death that rates were about to spurt higher. This fear of higher rates also pushed investors into floating rate funds, junk and corporate bond funds. And wouldn’t you know it, short term Treasuries have been the worst performing part of the Treasury curve, floating rate funds are barely floating, junk took a big hit although it has made a decent comeback and corporate bonds have offered nothing over the coupon. Beware the consensus trade.

This post was published at Zero Hedge on 03/24/2016.

Too Fast of a Sentiment Swing

The latest numbers out of Investors Intelligence show that bulls are now up to 47.4% in their survey of newsletter writers and investment advisors, and bears are now down to 27.8%. That takes the bull-bear spread up to its largest value since August 2015, and higher than the peak is seen at the November 2015 price highs.
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On its own, the bull-bear spread is not yet at a super-high level which would mandate a price top. But there is additional information in the rapid nature of the change in that spread. When the bull-bear spread changes rapidly in a short amount of time, that can sometimes be more important than the actual level to which the spread moves.
Here is a chart showing the 4-week change in the bull-bear spread:

When it goes outside of /-20 percentage points, it says that sentiment has changed too quickly, and thus an exhaustion event is happening. Following the exhaustion event should be a rest period lasting a few weeks, to restore balance to The Force. It is hard to keep a move going after this indicator posts this rare and extreme reading. It is much more sustainable when excessive bullishness or bearishness develops more slowly.

This post was published at FinancialSense on 03/24/2016.

Are ‘Wealthy’ Americans Scrambling To Find Cash To Cover Their Tax Bill?

Every year around this time, Americans face the certainty of tax time, and that means – in general – finding the cash to pay Uncle Sam his just deserts. This scramble for cash is seasonally evident in the variable-rate tax-exempt (Muni) bond market, where the typically wealthy stash their cash, as rates rise into tax time and fall after (as flows come and go). This year however, the scale of the outflows is enormous, spiking money-market fund rates from 1bp to 29bps…

This post was published at Zero Hedge on 03/24/2016.

The System Will Implode When Central Bank Intervention Fails

The economic reports released this morning added to the near-continuous flow of information reflecting a U. S. economy that is likely contracting, for the most part. Perhaps the only ‘fundamental’ variable not contracting is the hot air coming from the Fed.
In today’s release of its ‘services’ PMI, Markit explains: ‘The US economy is going through its worst growth spell for three and a half years…and the worst may be to come as the greatest concern is the near-stalling of new business growth.’
The core durable goods new orders index released today dropped for the 13th month in a row – Zerohedge points out that it is the longest ‘non-recessionary’ stretch of consecutive monthly drops in 70 years.
In fact, a good argument can be made that if a bona fide rate of inflation was applied to the Government’s GDP calculations, the U. S. economy has not produced real, inflation-adjusted economic growth since 2006. Review the work of John Williams’ Shadowstats.com for evidence of this fact.
The Swiss National Bank admitted that it has spent $470 billion on currency manipulation since 2010. Given the Fed’s refusal to disclose any information about its currency swap programs – including denying all FOIA requests on this matter – there can be no doubt that the Fed has been actively funding the SNB’s endeavors. The same goes for the SNB’s huge U. S. stock portfolio, which includes insanely overvalued gems like AAPL and AMZN.
We are witnessing the western Central Banks’ last gasp at preventing total systemic collapse. The Fed et al were able to defer this event in 2008 with many trillions of direct money printing – deceptively marketed as ‘Quantitative Easing’ – and many more trillions of direct Government income and spending subsidization. After all, a Government willing to underwrite and guarantee 3% down payment, subprime credit mortgages is creating nothing more than a form of ‘helicopter money’ dressed in drag.

This post was published at Investment Research Dynamics on March 24, 2016.

Altanta Fed GDP Forecast Tumbles To 1.4% To Justify Fed’s Downbeat Outlook On Economy

Some time in the second week of February, when the market was tumbling on, among other things, fears of a U. S. recession, the Atlanta Fed was scrambling to give the all clear signal on the US economy when it surprised watchers by releasing a far stronger than consensus Q1 GDP nowcast of 2.7%.
Since then things have once again not gone quite as planned, and following the latest flurry of poor economic data, the Atlanta Fed just confirmed that the current US economy is about as weak as it was when the Atlanta Fed first started estimating it at the start of February with a paltry 1.2% forecast.
As of moments ago, this is where we are now:

This post was published at Zero Hedge on 03/24/2016.

Desperate Chinese Investors Flood US, Canadian Housing Markets, But Real Numbers Are Taboo

Vancouver: 33% of sales are to investors from China
Buying a home in the US or Canada has been an effective way for foreign residents to launder some money and get their wealth out of harm’s way. In the trophy markets on the US West Coast and in the Canadian cities of Vancouver and Toronto, rumors of a massive influx of Chinese money have swirled with growing intensity for years.
The Chinese economic elite are worried about a devaluation of the yuan. They’re worried about getting rolled up by their own government. They’re worried about markets collapsing. They’re worried about pollution. They’re worried about a million things. They have one foot out the door. If push comes to shove, they’re ready to make the move.
So capital flight from China has turned into a tsunami. And this money has to go somewhere.
The meme is this: These desperate buyers prefer a higher price because it’s more efficient for them to get their money out. This pumps up prices. Which impresses other Chinese investors, and they flock in ever greater numbers to those markets. American-Chinese businesses have sprung up to cater to them with special packages that take care of everything, including travel arrangements.

This post was published at Wolf Street on March 24, 2016.

Core Durable Goods Tumble For 13th Month, Longest Non-Recessionary Stretch In 70 Years

Durable Goods New Orders (Ex-Transports) or so-called “Core” durable goods dropped 0.5% YoY, extending its losing streak to 13 months. This is the longest streak in the history of the series with no recession. All segments of the durable goods report saw negative MoM moves with headline down 2.8% (small beat) but preior data was revised dramatically lower, Capital goods orders were drastically revised lower but still fell more than expected (-1.8% MoM) and finally shipments ex-aircraft dropped 1.1% MoM (missing the expedcted rise of 0.3% notable) with significant downward revisions once again.
Durable goods new orders down -2.8%, exp. -3.0%; prior revised down to 4.2% for Jan. from 4.7% New orders ex-trans. down 1%, Exp. -0.3%; prior revised to 1.2% from 1.7% Capital goods orders ex-aircraft down 1.8%, Exp. -0.5%, prior revised to 3.1% from 3.4% Capital goods shipments ex-aircraft down 1.1%, Exp. 0.3%, prior revised to -1.3% from -0.4% And just like that, all the exuberant “bounce” hope has been eviscerated thanks to a broadly disappointing report, and steep downward revisions of last month’s euphoric data.

This post was published at Zero Hedge on 03/24/2016.

Five Years That Changed Silver Forever

Ask any casual observer of the silver market what happened to the metal over the past five years and you’re likely to hear how the price fell from nearly $50 in April 2011 to under $14 at recent lows – a stunning decline of 70%. If you inquire further, you’ll likely hear a number of reasons for the decline, ranging from an oversupply of the metal, a strengthening dollar, falling inflation rates, and the collapse of the commodities markets.
What you will not hear is how a specific development has transpired over the past five years that ensures a coming explosion in the future price of silver beyond the most bullish predictions and optimistic upside targets. You’re also not likely to hear that the stunning decline in the price of silver over the past five years was a deliberate feature of an unusually bullish development that promises to change forever the future price landscape.
While I have closely researched the silver market for more than 30 years, uncovering more original findings (including silver’s price manipulation) than anyone, I fully admit that I did not immediately see the monumental change that began to occur five years ago. This astonishing development that had begun in 2011 did not come clear to me until late 2013.
I discovered that the largest U. S. bank, JPMorgan Chase, began to accumulate massive amounts of physical silver starting in 2011 and has continued that accumulation to this day. All told, I believe JPMorgan has acquired somewhere between 400 and 500 million ounces, the largest privately held stockpile of silver in history.
What this means is that the future price of silver is now destined to move far higher in price than anyone can imagine. I wasn’t looking for something to come along that would supersede my already ultra-bullish outlook on silver, but that is what occurred. That’s because the obvious motive JPMorgan has whenever it acquires a large investment position is to profit on that position to the greatest degree possible. And since JPMorgan is now in position to profit enormously when silver prices soar, that means anyone holding silver will profit as well.

This post was published at SilverSeek on March 24, 2016 –.