Brainard Comments Push Likelihood of Rate Hike to December

The drama at the Fed continues to unfold after another high-ranking official, Governor Lael Brainard, expressed comments suggesting the US economy was still too vulnerable for a rate hike. At this point, the governing body seems divided about the health of the economy, which seems odd given their self-proclaimed ‘data dependency’. Either the data is indicating a growing economy or a shrinking one. Lack of consensus suggests a division in leadership and a delay in any rate hike at least until the end of the year.
Brainard spoke yesterday at the Chicago Council on Global Affairs, stating:
Today’s new normal counsels prudence in the removal of policy accommodation,’ and that the lack of full strength of the labor market makes ‘the case to tighten policy preemptively less compelling.’


This post was published at Schiffgold on SEPTEMBER 14, 2016.

Here’s a great example of how they’ll default on Social Security

On March 5, 1997, I signed up for the American Airlines ‘AAdvantage’ loyalty program.
I was 18 years old and didn’t know anything about travel. Back then it was exciting to even set foot on a plane.
But over the years travel has become a huge part of my life.
I’ve been all over the world to more than 120 countries and have travelled millions of miles, including on American Airlines.
Last night, in fact, American Airlines sent me an email informing me that I had just crossed the two million mile threshold.
It took 19 years from the time I originally signed up for the program in 1997.
Now, 2 million miles on American comes with a lot of unique benefits.
For example, I now have ‘platinum’ elite status for life.
This is common across just about every airline – they reward frequent travelers with various tiers of elite status.
So if you travel a fair bit, they reward you with ‘gold’ status. If you travel even more, they give you ‘platinum’ status.
And if you fly a LOT, you achieve ‘executive platinum’ status, which is what I currently have with American (and several others).
Each tier is supposed to come with certain perks.

This post was published at Sovereign Man on September 14, 2016.

Expect Higher Correlations and Volatility in This Fed Manipulated Market

We’re trading in some truly interesting times.
Check out the index below from Credit Suisse depicting contagion risk across global markets and asset classes. It’s now showing that global markets and assets are at their highest correlation since the index was created.

It’s interesting because normally correlations rise during a bear market. But right now we’re hitting record highs while many global markets are still in an old cyclical bull.
Read Forward-Looking Data Show Growing Risks of Recession
These high linkages are why, on Friday’s sell-off, there was hardly a drop of green in any market around the world. Take a look at the heat maps below.

This post was published at FinancialSense on 09/14/2016.

Self-Driving Vehicle Revolution to Wipe Out 4 Million Jobs

But we’re not prepared.
Tesla made headlines the other day with the first traffic fatality caused by its ‘Autopilot’ system, which had failed to ‘see’ a big tractor-trailer rig that had pulled right in front of the car. But humans fail to see things too, and gruesome accidents are happening with humans behind the wheel. Last year, 38,300 people were killed in traffic accidents in the US, up 8% from 2014, and 4.4 million were insured enough to require medical attention.
Other manufacturers all have similar or better systems than Tesla’s beta version, but they’re more conservative in their hype and what they allow drivers to do.
On Tuesday, Ford, touting its plans for self-driving taxis and other autonomous-vehicle services, took reporters on a spin through the neighborhood in its self-driving cars. It will roll out its services in big cities first, such as New York and Detroit, and will initially limit the service to cities.
Uber is now starting to test about two dozen partially self-driving Ford Fusions in Pittsburgh, and surely there will be some accidents too. There are always accidents once you put enough vehicles into motion.
Ford is doing it because that’s where the future is. And the money. It’s expecting 20% profit margins from these services, rather than the razor-thin margin in its regular business. Sales of autonomous vehicles might account for 20% of its total sales in the US by the end of this decade, it said. That would be huge, and fast!

This post was published at Wolf Street on September 14, 2016.

The Bank Of Japan Unleashes Chaos

Last week we wrote an article in which we explained “How The Bank Of Japan May Be About To Unleash A Global Selloff.” While some may argue if what we have seen in the past few days is a global selloff or just a significant repricing of risk, one thing is clear: as Kuroda plans his next step, he has certainly unleashed nothing short of global chaos.
Before we get into the specifics, consider the following apt summary courtesy of RBC’s Charlie McElligott, who writes the following in his morning wrap:
“The BoJ ‘trial balloon’ media-blast is being cranked-up to ’11’ in the past 24 hours, with headlines in both Nikkei and Reuters have touted their desire to go even more negative on rates (as stated in the ‘RBC Big Picture’ first) and now this morning, we get headlines that PM Abe adviser Nakahara is calling for BoJ purchases of 10T yen-worth of foreign bonds in an effort to weaken the Yen (despite Abe saying just last week that such purchases are illegal under Bank of Japan law if they are meant as a form of currency intervention). Funny convo with a customer – basically stating that even if we have the press release listing exactly what the BoJ was going to do, the market response to various policy mixes is such a coin-flip that it’s nearly impossible to prognosticate.”
Confused? You should be, but perhaps not as much as the BOJ itself, which days after leaking intentions to implement a “reverse operation twist” as first explained here, is realizing this may not be the most optimal route.

This post was published at Zero Hedge on Sep 14, 2016.

Gold and Silver Market Morning: Sep-14-2016 –Gold and silver looking for direction still!

Gold Today -New York closed yesterday at $1,318.00 yesterday. London opened at $1,323.00.
– The $: was slightly weaker at $1.1232: 1 the same as $1.1232: 1 yesterday.
– The Dollar index was stronger at 95.52 from 95.30 yesterday.
– The Yen was stronger at 102.68: $1 up from 102.18: $1 yesterday against the dollar.
– The Yuan was slightly weaker at 6.6733: $1 from 6.6800: $1 yesterday.
– The Pound Sterling was weaker at $1.3201: 1 from yesterday’s$1.3263: 1.
Yuan Gold Fix
Shanghai went $7 higher than New York but London pulled it back but not far. This is the second day that we have seen pricing in Shanghai separating itself from New York. London’s pricing seems to respect Shanghai and could be asking the same question. Exchange rates appear to have a key influence on prices at the moment.
We are often the victims of the media’s views on China. They have led us to believe that all in not well in China’s economy. However, we see wages rising, house prices moving higher and industrial production climbing, factors that are the envy of the developed world. This insinuates that the middle classes are thriving and in a position to buy more gold.

This post was published at GoldSeek on 14 September 2016.

Central Banks Hold Steady in August, No Sign of Rate Hikes

August is now behind us, and as a sign of the fear central bankers share over the weakness found in the world’s major economies, there is no sign of any effort to rise target rates at central banks.
From the Fed to the European Central Bank, to the Bank of England and beyond, there appears to be no appetite for attempting to return to more “normal” monetary policy. We’re apparently in a state of virtual permanency when it comes to “extraordinary” monetary policy which involves keeping the target interest rate at zero or near zero for years on end.

This post was published at Ludwig von Mises Institute on September 14, 2016.

What’s the Real Unemployment Rate? That’s the Wrong Question

Numbers like gross domestic product (GDP) and the unemployment rate no longer provide insight into how our economy works.
As the status quo narratives and metrics lose their explanatory value, defenders of the status quo frantically leap into attack mode, declaring any skeptical inquiry as a “conspiracy” or “hoax.” A recent example can be found in that high-brow defender of the privileged status quo, The New Yorker. (We can identify a new socio-pathological syndrome called The New Yorker Syndrome: if all is right on the Upper West Side, all is right with the world. In other words: since me and my top 2% pals are doing great, everything’s going great.) The New Yorker writer defended the way the unemployment rate is calculated by saying “we’ve got top people on this–top people:” we should accept the official metrics as meaningful because they’re the work of PhD economists– you know, “top people” who are far above peasants’ non-expert skepticism.

This post was published at Charles Hugh Smith on TUESDAY, SEPTEMBER 13, 2016.

‘WHOSE BLOOD WILL BE SHED?’: KY GOVERNOR SAYS HE’S WORRIED A HILLARY PRESIDENCY WILL START A CIVIL WAR

Speaking at an annual voter summit in Washington, Kentucky’s Republican governor Matt Bevin effectively said ‘there will be blood’ if Hillary gets elected (via WAPO).
‘I do think it would be possible, but at what price? At what price? The roots of the tree of liberty are watered by what? The blood, of who? The tyrants to be sure, but who else. The patriots,’ Bevin said, referencing a quote from Thomas Jefferson. ‘Whose blood will be shed? It may be that of those in this room. It might be that of our children and grandchildren. I have nine children. It breaks my heart to think it might be their blood that is needed to redeem something, to reclaim something that we through our apathy and indifference have given away.’

This post was published at The Daily Sheeple on SEPTEMBER 14, 2016.

Why A JPM Trader Just Said “This Is The Most Uncomfortable I’ve Felt Investing In 35 Years”

In a repeat of what we said in our market wrap this morning, namely that the market’s attention is transfixed on two things: long bond-yields (specifically if curve steepening will continue), and what the BOJ may or may not do, the WSJ writes that “speculation continued around the Bank of Japan, following a Nikkei report that the Japanese central bank will consider cutting interest rates further into negative territory.”
The WSJ then writes that despite the recent spike in long-dated yield, “some investors expect government bond yields to resume their downward trend as the European Central Bank and Bank of Japan remain on an easing path. ‘Without growth or inflation, the gravitational pull is lower in yields and tighter in spreads,’ said Bob Michele, global head of fixed income at J. P. Morgan Asset Management.”
He is probably right, however it is the confusion and chaos unleashed by central banks, first and foremost the BOJ, that led to his next statement:
Still, he said, ‘in the 35 years I’ve worked, this is the most uncomfortable I’ve felt investing in the market.’

This post was published at Zero Hedge on Sep 14, 2016.

Recessions, Elections, and Republicans: 1945-2016

The following chart surveys industrial production in the United States. It was produced by the Federal Bank of St. Louis.
The gray vertical bars mark recessions
Below, I list those recessions that took place in, or shortly before, Presidential election years. As you will see, except for the 1980 Presidential election, recessions since 1945 have led to a Presidential defeat for Republicans when they hit in an election year or shortly before.
1945: this took place immediately after Roosevelt died. Truman was President. He removed price and wage controls in October 1946. The economy boomed. It was over by 1948. Truman defeated Dewey in 1948.

This post was published at Gary North on September 14, 2016.

WELLS FARGO AND OTHER BANKS NOW JUST OUTRIGHT STEALING PEOPLE’S MONEY

Centuries ago banks actually stored real money (gold) and gave their customers paper receipts which made transferring and transporting easier.
Then as time went by, banks just began storing currency. Unbacked fiat paper is not money.
In those days the term ‘bank robbery’ used to mean a man with a gun would come in and steal the currency from the bank.
Now, in the 21st century, the term ‘bank robbery’ has a completely different meaning. Now, to quote the popular Russian turn of phrase, the bank robs you!
What occurred in Cyprus in 2013, was the most overt form of daylight robbery. Over the weekend the banks closed and upon reopening, anyone with substantial funds had approximately 50% less than they previously owned.

This post was published at Dollar Vigilante on SEPTEMBER 14, 2016.

China Crushes Yuan Shorts As HIBOR Explodes 190% To 7 Month High

One week ago, with the Yuan having traded within fractions of what many consider a key psychological level for the USDCNY at 6.70, we reported that as many traders expected that following the just concluded G-20 meeting in China, the PBOC would finally relent in its devaluation defense, and let the currency slide on through to the other side. Not only did that not happen, but last Thursday the Chinese Central bank unleashed an unexpected and aggressive attack on currency Yuan shorts, the biggest since the January devaluation scare when the cost of borrowing yuan in Hong Kong soared to a seven-month high amid. The overnight HIBOR, or Hong Kong Interbank Offered Rate, jumped – seemingly without reason – by 3.88% points to 5.45%, the most expensive since February, according to Treasury Markets Association data. Other tenors joined with the one-week rate rose 2.09% points to 4.06%.

This post was published at Zero Hedge on Sep 14, 2016.

Correction May Continue Through September

First published Sat Sep 10 for members : The market action this past week started out quite strong, and raised many hopes. However, since I do not have a clear 5 wave structure confidently developed off the recent lows, I have to put hopes aside, and view the market in a dispassionate manner. And, that dispassionate manner sees strong potential for another drop in the complex.
Last week, I noted that I can become aggressively bullish again should we see a clear 5 wave structure complete off the recent lows. While I can make a colorful attempt at classifying the recent rally in the metals complex as a 5 wave structure, I have to be honest in my analysis and state that, to me, it did not look like a clear 5 wave structure. So, the immediate bullish count will only be an alternative to me at this time, which the market will have to prove to me.
That means I have moved into the current market action representing a wave ii in the larger GDX count, whereas silver and gold still seem to present as a wave 2 in wave iii. However, should the GDX be able to strongly break out impulsively over the recent highs, then I will view everything in the heart of a wave iii higher. This is my simplified perspective.
Now, before we move into the individual charts, I want to note something I have suggested in the past. For those that remember back to 2015, I was suggesting we would see a paradigm change in our markets. In fact, I noted that we would likely see the metals trade in tandem with the equity markets, especially since most assumed the exact opposite would occur. And, 2016 has, thus far, proven me correct in my expectations.

This post was published at GoldSeek on Wednesday, 14 September 2016.

Global Market Rout Abates As Bond Selloff Pauses, Oil Rebounds

After a sudden rout in financial markets that wiped $2 trillion in global market cap over the past week showed signs of easing, overnight stocks tried to stage another “BTFD-type” comeback with European stocks climbing for the first time in five days as oil and metals prices gained. S&P futures were modestly in green, although they faded earlier gains, on the back of a slide in the USDJPY which initially spiked to 103.31 only to fade back to the mid 102-range.
As DB’s Jim Reid summarizes, markets have been busy since the end of last week and after no – 1% sessions for 43 days we’ve now seen 3 in a row as the S&P 500 (-1.48%) closed at its lowest level since July 7th. The VIX ( 18% to 17.85) closed at its highest since June 28th and 10y Treasuries ( 6.4bps) are now at their highest level since June 6th. So a lot has happened in a short space of time.
The moves haven’t just been confined to the US though with markets in Europe having also been sent into a tailspin in the last few days, while emerging market equities have tumbled nearly 4.5% since the close on Thursday. On this side of the pond the Stoxx 600 (-1.03%) was down for the fourth consecutive session yesterday and to the lowest level since August 4th while 10y Bund yields ( 3.3bps) rose to 0.068% and are now at the highest yield since June 23rd. Yesterday was in fact the second day that we’ve seen bond and equity markets tumble in tandem since Friday and it’s interesting to see that the 20-day correlation between the 10y Treasury yield and the S&P 500 is now the most negative since 2007 (at -0.626).

This post was published at Zero Hedge on Sep 14, 2016.

Silver Bullion Market – ‘Most Bullish Story Ever Told?’

Silver Bullion Market – ‘Still The Most Bullish Story Ever Told?’
Interview with Ted Butler from SilverSeek.com
Cook: What’s happening in the silver market is hard to understand right now. Can you simplify it for us?
Butler: First you must understand the price of silver is set on the COMEX by two large opposing forces. On the short side are the big banks or traders led by JPMorgan. Four of these big traders are short 72% of the total commercial short position.

This post was published at Gold Core on September 14, 2016.

The Economy: It’s Worse Than I Thought

I got an email from a colleague today that said, among other things: ‘The economy is tanking and, while you may be the most pessimistic around, you may not be pessimistic enough.’
To that I would say that I’m significantly more bearish than is reflected in my public analysis. I spoke to a couple people today who offered anecdotal stories about their particular business niches – businesses in which new orders are somewhat tied to discretionary spending – and they both said that new business activity is unusually slow and that the last time they experienced new order flow this slow this was in 2008.
I’ve been suggesting for most of this year that retail sales were slowing and would fall off a cliff heading into fall. I presented RL as a short idea in my Short Seller’s Journal on August 14th at $108 after visiting the Ralph Lauren store in Aspen. I was the only person in the entire store and I was being hounded by the salesperson to the point of being uncomfortable. RL is at $100.80 as I write this, which is a 7.2% ROR in 4 weeks for anyone who shorted the stock. Based on the point of last trade and where I recommended them, the January 2017 $85-strike puts are up 35% – so far. But the bigger gains will be made holding RL short when it drops to $40, where it was in early 2009 before the Fed’s money printing stimulated credit-induced retail spending.

This post was published at Investment Research Dynamics on September 13, 2016.

Sorry, You Can’t Have Your Gold: Jeff Thomas

In this publication, we warn regularly of the risk involved in storing wealth in banks. They’ve made the removal of your deposits increasingly difficult in addition to colluding with governments to allow them to legally freeze or confiscate your money. To add insult to injury, they’re creating reporting requirements with regard to the contents of safe deposit boxes and restricting what can be stored in them – again, at risk of confiscation.
More and more, banks are becoming one of the more risky places to store wealth in any form. Not surprising, then, that many people are returning to those facilities that treat wealth storage the way the first banks did millennia ago – vault facilities that store your wealth for a fee but engage in no other banking activities.
But, in suggesting to our readers that such facilities are a better bet, I’ve also repeatedly warned readers that many such facilities don’t store actual, physical gold. They instead provide a contract to you that states that they will deliver an agreed-upon amount of gold upon demand. The trouble with this idea is that it becomes tempting for such facilities to sign such a contract with you and collect the purchase price but never actually purchase and store any gold. It’s been estimated that the total worldwide value of such contracts equals 150 times the amount of gold in existence in the world.

This post was published at International Man