“We Haven’t Seen This Since The Great Depression” – Gallup CEO Destroys The “Recovery” Lie

The Invisible American
I’ve been reading a lot about a “recovering” economy. It was even trumpeted on Page 1 of The New York Times andFinancial Times last week.
I don’t think it’s true.
The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today.

This post was published at Zero Hedge on Sep 20, 2016.

The Economy, the Stock Market and the Fed

John Hussman on Recent Developments
We always look forward to John Hussman’s weekly missive on the markets. Some people say that he is a ‘permabear’, but we don’t think that is a fair characterization. He is rightly wary of the stock market’s historically extremely high valuation and the loose monetary policy driving the surge in asset prices.
The S&P 500 Index and the NYSE advance-decline line. Most market internals weakened steadily until early February 2016, but strengthened noticeably thereafter. The a/d line is just one of many examples. A major reason for this was that market participants reassessed the likely future path of the Fed’s monetary policy – click to enlarge.
As he reminds his readers in this week’s market comment, he altered his short term outlook on the stock market when the improvement in market internals shown in the chart above asserted itself after the February 2016 low. Not only the a/d line, but a whole host of market internals improved. The advance after the February low was broad-based and the trend in internals went counter to the negative technical evidence that had accumulated earlier.
This does of course not change the probability that the market will deliver very poor long term returns based on current valuations. This week Hussman warns that several of the trend-following components of market internals he focuses on have begun to deteriorate. We don’t know which combination of indicators precisely he is looking at, but a number of internals have indeed begun to diverge negatively from prices lately.

This post was published at Acting-Man on September 21, 2016.

‘Or We’ll Lose the Whole Middle Class’: Gallup CEO

Economic recovery, but not for the ‘Invisible Americans’
Jim Clifton, Chairman and CEO at Gallup, who presides over endless surveys of American consumers and businesses and knows a thing or two about them, has a message for the media and the political establishment that seem to be clueless: this meme about the recovering economy – ‘It was even trumpeted on Page 1 of The New York Times and Financial Times last week,’ he says – ‘I don’t think it’s true.’
In an article posted on Gallup’s website, he made his case:
The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today.
Ten percent of 250 million adults in the U. S. is 25 million people whose economic lives have crashed.
What the media is missing is that these 25 million people are invisible in the widely reported 4.9% official U. S. unemployment rate.
Let’s say someone has a good middle-class job that pays $65,000 a year. That job goes away in a changing, disrupted world, and his new full-time job pays $14 per hour – or about $28,000 per year. That devastated American remains counted as ‘full-time employed’ because he still has full-time work – although with drastically reduced pay and benefits. He has fallen out of the middle class and is invisible in current reporting.

This post was published at Wolf Street by Wolf Richter ‘ September 20, 2016.

How Italy’s Banking Woes Could Crush Already Faltering Domestic Demand

The Italian Dilemma.
The sudden panic about a potentially imminent Italian banking sector collapse back in July has somewhat subsided for now, but sooner or later the issue will inevitably rear its ugly head again.
Two months after Italian bank stocks collapsed even further in the aftermath of the Brexit vote, fears of an imminent need for a bail-in have receded as the Italian government works on plans to shore up its weakest bank, Monte dei Paschi di Siena (MPS). This will be achieved via an alternative but rather ambitious method culminating, if all goes according to plan, in a new capital injection.
However, MPS, which came up short in July’s ECB stress tests, has already received capital injections in the past. Such plans to patch up banks have tended to involve kicking the can down the road rather than providing a more definitive solution to the 360 EUR billion of non-performing loans (NPLs) weighing down Italy’s banking sector – equivalent to one fifth of its GDP.

This post was published at Wolf Street by Caroline Gray ‘ September 20, 2016.

Markets Need To Realize That Nothing Is Forever

Last week, Bloomberg’s Richard Breslow debated whether it’s the size or speed of moves that more unsettle markets. It seemed particularly pertinent as investors were struggling to make sense of the dramatic steepening of sovereign yield curves across the globe.
The answer is, it’s always the speed. And when it involves a reversal of direction, the fear factor is multiplied.
Central banks have done their utmost to make the trend your friend. No matter how distasteful or unwarranted the price levels.

This post was published at Zero Hedge on Sep 20, 2016.


Gold $1313.70 up $0.20
Silver 19.20 down 1 cent
In the access market 5:15 pm
Gold: 1314.80
Silver: 19.25
The Shanghai fix is at 10:15 pm est and 2:15 am est
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
Shanghai morning fix Sept 20 (10:15 pm est last night): $ 1320.03
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1320.03
London Fix: Sept 20: 5:30 am est: $1315.40 (NY: same time: $1315.37: 5:30AM)
London Second fix Sept 16: 10 am est: $1313.80 (NY same time: $1313.80 , 10 AM)
It seems that Shanghai pricing is higher than the other two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.
Also why would mining companies hand in their gold to the comex and receive constantly lower prices. They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.
For comex gold:The front September contract month we had 0 notices filed for nil oz
For silver: the front month of September we have a total of 105 notices filed for 525,000 oz
Let us have a look at the data for today

This post was published at Harvey Organ Blog on September 20, 2016.

Gold Daily and Silver Weekly Charts – Modern Monetary Madness

The precious metals are in a kind of a lockdown ahead of the FOMC meeting tomorrow.
Watching the august Senators questioning the CEO of Wells Fargo today was emetic.
Keep an eye on the European Banks, especially in Germany and Italy.
The US Banks with the Fed effectively are in control, so do not worry about them. Rather, be concerned for yourselves.

This post was published at Jesses Crossroads Cafe on 20 SEPTEMBER 2016.

How Big An Impact Will A Rate Hike Have On Oil Prices?

Oil prices could be facing a significant jolt after Federal Chair Janet Yellen, in her annual speech at the Jackson Hole economic symposium in Wyoming, said that the case to increase interest rates had strengthened. The extent of the jolt that may be felt is far from certain however.
Due to the quotations of crude oil in U. S. dollars, there is often a bind between the fate of the greenback and the costs of oil per barrel, as the balance of oil trade and the effect on market psychology can be hugely influential.

This post was published at Zero Hedge on Sep 20, 2016.

What’s Happening With Gold?

I have a core position in Miners that I started early in 2016. As a trader, I have sold most of my shorter term trading positions and I am waiting for the fat pitch to reload. Are we there or is there further selling likely? I believe that we are very close to another run higher in the Precious Metals sector, but we also have the Fed Mtg on Wednesday that could affect things short term. Are there any clues pertaining to short term direction? Please read on…
GOLD WEEKLY : Using cycle timing, we should be close to a low for GOLD, but I am expecting an ICL. An ICL is a quick sharp sell off into a low, and then a move higher. It shakes out the bulls. I have pointed out Prior ICL’s on the chart below, and you can see that they come roughly 4-5 months apart lately. We are 4 months from the ICL at the end of May, and I have been calling for a Deep Meaningful Trade-able LOW at the end of September / early October for several weeks.
Here I am pointing out the 1 week deep candle in May that came out of nowhere. Couldn’t we get that on a Fed Week? I drew that one in September in as an idea of what we might see this week. I am trying to be patient.

This post was published at GoldSeek on 20 September 2016.

Retirement Crisis Looms As Average U.S. Household Has Saved $2,500 For Retirement

The global demographic crisis expected to play out over the coming years has been a frequent topic of ours (you can read our most recent post on the topic here: “DB Warns 35-Year Economic Super Cycle Is Officially Ending“). The problem, of course, is that baby boomers all over the globe are on the verge of transitioning out of their highest wage earning years and into retirement. That transition brings with it all sort of negative consequences ranging from the detrimental impact on average incomes and GDP to exposing the epic ponzi schemes that workers have heretofore referred to by their more common names of pension plans, social security, medicare and medicaid.
A report from the National Institute on Retirement Security (NIRS) recently pointed out just how ill prepared American’s are for retirement. The study by the NIRS found that the average American household has $2,500 saved for their retirement. Even worse, the study found that even people near retirement (aged 55-64) have only set aside $14,500 which should allow them to live very comfortably for about 2-3 months.

This post was published at Zero Hedge on Sep 20, 2016.

Great Causes, a Sea of Debt and the 2017 Recession

Great Cause
NORMANDY, FRANCE – We continue our work with the bomb squad. Myth disposal is dangerous work: People love their myths more than they love life itself. They may kill for money. But they die for their religions, their governments, their clans… and their ideas.
Famous French hippie and author Voltaire. He wears the same sardonic grin in every painting, whether he’s depicted at a young or an old age, doesn’t matter. His real name was Franois-Marie Arouet; he adopted the pen name Voltaire (one of 178 different ones he used) after spending 11 months incarcerated in a windowless cell in the Bastille, following the publication of a satirical verse in which he insinuated that the French regent practiced incest with his own daughter. Said regent was the infamous Duc d’Orleans, who shortly thereafter conspired with John Law to utterly ruin the country’s currency and economy in an early central banking experiment. Voltaire’s decision to insult him in advance reveals his excellent foresight and character judgment. The aristocracy was never sure whether it should fear Voltaire for his anti-authoritarian streak, or love him for his wit.
Some people think that even an idea as abstract as ‘freedom of speech’ is worth dying for. It was Voltaire who said: ‘I disapprove of what you say, but I will defend to the death your right to say it.’
Most people jump onboard the train of a Great Cause with enthusiasm and conviction. But many have the good sense to hop off quietly before their lives are in real danger. We suspect that Mr. Voltaire would have done the same.
That’s why the deadliest myths are those that you can ride along with at no personal risk. Foreign wars, for example, are always a favorite.
When Pericles proclaimed that the honor of Athens was at stake, and that it must take up the imperial burden and continue its war with Sparta, he was not offering to invade Sicily himself. Nor was George W. Bush, in announcing his War on Terror, suggesting that he would personally march into Mosul.

This post was published at Acting-Man on September 20, 2016.

With Trump Regaining North Carolina Lead, Hillary Unexpectedly Postpones Local Fundraiser “Without Reason”

If there was a time Hillary needed to make a public appearance in the key battleground state of North Carolina to drum up voter support, it was today, if for no other reason than a just released Elon University poll finding Trump now has a modest 44% advantageamong likely voters in the Tar Heel State, with 43% going to Clinton.

This post was published at Zero Hedge on Sep 20, 2016.

Broken Politics, Broken Economics

[Jeff Deist’s comments at the 2016 Mises Supporters Summit in Asheville, North Carolina, September 16.] Before we hear from Judge Napolitano, I’d like to speak briefly tonight about where we are as a society, and what role the Mises Institute plays, or ought to play, in that society.
Most of the country is caught up in the presidential election, following the latest news about Hillary’s health or Trump’s pronouncements.
But there’s an opportunity here.
Because no matter who wins, millions of people – maybe 40 percent of the country – are going to view the winner as illegitimate and irredeemable.
Millions of Americans think Hillary should be in jail rather than the White House. And millions more view Trump as nothing more than a reactionary leader of the deplorables.
In fact a recent Gallup poll cites that fully one-third of Americans won’t trust the election results anyway – which is to say they don’t trust government to hold an honest election.
So forget any nonsense about ‘the most important election of our lifetime’ in the conventional sense.
Trump vs. Hillary represents something much bigger: what we might call the end of politics, or at least the limits of politics. Americans, and Europeans too, are witnessing the end of the myth of democratic consensus. Democratic voting, so called, doesn’t yield some noble compromise between Left and Right, but only an entrenched political class and its system of patronage.
We know this already – but now millions of ordinary people are waking up to see that our problems – with government debt, with wars, with currencies, with entitlements, with taxes and regulations, with intractable social issues – cannot be solved politically. It’s not necessarily an ideological awakening, but simply a recognition of reality.

This post was published at Ludwig von Mises Institute on Sept 20, 2016.

All 4 Signals That Have Led To A Recession Before Are Present Again: Just One Thing Can Stop It

According to Deutsche Bank, four signals are in place that have been associated with US recessions in the past:
The US profit recession: US NIPA margins peaked in Q2 2014 and have been on a declining path for the past eight quarters. Since 1950, the average gap between a peak in margins and the start of a recession has been eight quarters (as falling margins typically lead corporates to cut back on hiring and investment);

This post was published at Zero Hedge on Sep 20, 2016.

East Coast Gasoline Prices Plunge After Leaking Pipeline Bypass Completed

In what was clearly not ‘government work’ Colonial has completed the bypass of its leaking pipeline early and has told shippers it will restart supplies tomorrow. This has sent near-term gas prices to the east coast tumbling. Great news amid claims from Alabama’s governor of price-gouging by retail gas suppliers.
As Bloomberg reports, Colonial Pipeline has finished construction, fabrication and positioning of bypass connector pipeline segment around leak site west of Pelham, Ala., co. says in e-mailed statement.
Colonial in process of carrying out hydrostatic test of new segment Segment is approx. 500ft in length Co. says it will take ‘several days’ for fuel delivery supply chain to return to normal when Line 1 restarts Some markets should expect intermittent service interruptions But the market is pricing out disruptions…

This post was published at Zero Hedge on Sep 20, 2016.

US federal debt expanding at fastest rate since the crisis

A few days ago, the federal debt of the United States rather quietly and unceremoniously passed the $19.5 trillion mark.
And while that figure may seem absolutely confounding, what’s even more alarming is how rapidly the US government is racking up this debt.
In fact, for the 2016 fiscal year that ends in just ten more days, the US government’s debt growth of $1.36 trillion is on track to be the third biggest annual increase ever.
The only two years in all of US history that posted higher US debt growth were 2010 and 2011 – the peak of the financial crisis.
Even more acutely, last month the US federal debt grew by $151.5 billion.

This post was published at Sovereign Man on September 20, 2016.