Weekend Reading: Fed Saves The Bulls

Submitted by Lance Roberts via RealInvestmentAdvice.com,
As I noted on Thursday, the Fed non-announcement gave the bulls a reason to charge back into the markets as ‘accommodative monetary policy’ is once again extended through the end of the year.
Of course, it is not surprising the Fed once again failed to take action as their expectations for economic growth were once again lowered. Simply, with an economy failing to gain traction there is little ability for the Fed to raise rates either now OR in December.
However, it was the docile tones of the once again ‘Dovish’ Fed that saved market bulls from a ‘bearish’rout. The recent test of the bullish trend line from February lows combined with a move back of the 50-dma clears the way for the markets to retest, and potentially breakout, to new highs.

This post was published at Zero Hedge on Sep 23, 2016.

U.S. Imports Record Amount Of Gold From Switzerland In July

It seems as if the tide has changed as the U. S. imported a record amount of gold from Switzerland in July. Normally, the flow of gold from the United States has been heading toward Switzerland. For example, when the U. S. exported a record 691 metric tons (mt) of gold in 2013, Switzerland received 284 mt, which accounted for 41% of the total. Compare that to the paltry 3 metric tons of gold imported from Switzerland that very same year.
However, something has changed in the market dynamics as the U. S. imported a record 23.8 mt of gold from Switzerland in July:

This post was published at SRSrocco Report on September 23, 2016.

Fed Up Friday: Sept. 17 – 23

In light of the Fed rate hike news finally dropping this week, we can start looking ahead to the rest of the year. It’s a great time to be Fed Up with the election looming and global central banks making moves to preserve their economic health into next year.
Fed Holds Interest Rates ‘For the Time Being’’
In her press conference Wednesday afternoon, Janet Yellen said the Fed decided to keep rates at their current target but pushed that a hike before the end of the year was likely. The delay suggests Yellen and policy makers are continuing to keep up the illusion of economic health by maintaining an undercurrent of optimism despite the bad data continuing to come in.
‘The case for an increase in the federal funds rate has strengthened,’ she said, citing a need to ‘wait for further evidence of continued progress’ in the economy. Despite the renewed optimism express by Yellen, most economists are still skeptical of a November hike, given that it’s just before the election.

This post was published at Schiffgold on SEPTEMBER 23, 2016.

Conference Board Leading Economic Index Declined in August, Disappoints Expectations

The Latest Conference Board Leading Economic Index (LEI) for August decreased 0.2 percent to 124.1 from July’s 124.3 and a downward revision was made to June’s number. The latest indicator value came in below the 0.1 month-over-month percent forecast by Investing.com.
Here is an overview from the LEI technical press release:
The Conference Board LEI for the US declined in August. Large negative contributions from average weekly manufacturing hours and new orders, more than offset positive contributions from the financial components. In the six-month period ending August 2016, the leading economic index increased 0.9 percent (about a 1.8 percent annual rate), faster than the growth of 0.2 percent (about a 0.3 percent annual rate) during the previous six months. However, the weaknesses and strengths among the leading indicators are somewhat balanced. [Full notes in PDF] Here is a log-scale chart of the LEI series with documented recessions as identified by theNBER. The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale.

This post was published at FinancialSense on 09/23/2016.

NY Fed Slashes GDP Forecast, Now Sees Weakest Growth Since Financial Crisis

Just in case the Fed needed an “out” to its “hawkishly holdish” December rate hike, it got it moments ago when the NY Fed slashed its Q3 and Q4 GDP estimates, and now expects just 2.3% annualized growth in Q3 and 1.2% Q4, down 0.5% each from the previous forecasts of 2.8% and 1.7%.
In its latest report, the NY Fed explained that “negative news since the report was last published two weeks ago pushed the Nowcast down 0.5 percentage point for both Q3 and Q4. The largest negative contributions over the last two weeks came from manufacturing, retail sales, and housing and construction data.” So, pretty much everything.
As usual, the forecast was overly optimistic, and as a result has been sharply dragged down for both Q3…

This post was published at Zero Hedge by Tyler Durden/ Sep 23, 2016.

Gold Unleashed by Fed

Gold surged sharply this week after the Yellen Fed yet again chickened out on raising its benchmark interest rate. Gold-futures speculators’ irrational fear of Fed rate hikes has been a major drag on gold. And rate-hike risks just plummeted in the coming months, since the Fed can’t risk acting heading into this year’s critical US presidential election. So gold’s next major upleg was likely just unleashed by the Fed.
Oddly, Wall Street’s expectations for a rate hike at this week’s latest meeting of the US Federal Reserve’s Federal Open Market Committee were surprisingly high. The interest-rate target directly controlled by the FOMC is the federal-funds rate. Commercial banks are required to hold reserves at the Fed. They lend these reserves to other banks overnight in the federal-funds market, at the FOMC’s federal-funds rate.
This market is so important that federal-funds futures contracts trade on the CME. No one has more knowledge about federal funds than the hedgers and speculators trading in this market. Parsing their collective bets yields the implied odds of Fed rate hikes, which the CME conveniently calculates and summarizes in real-time with its FedWatch Tool. It revealed this week’s rate-hike expectations were totally wrong.

This post was published at ZEAL LLC on September 23, 2016.

Asian Metals Market Update: Sep 23, 2016

The next three days till Tuesday is very crucial for gold and silver. Either they rise or else they will fall five percent and below. People in India are refraining from buying jewelry. Law enforcement officials are over the past few months on a hot pursuit of jewelers to give them information of people who have purchased jewelry in cash or by check and above a certain value. Jewelers in India have been harassed to disclose all information about purchases and selling. As a result people are also postponing their jewelry purchases in India. The government has achieved twin objectives of reducing gold imports and unearthing black money. However the cost has been the massive layoffs of unorganized jewelry sector workers. Right from day one the Modi’s government’s policy in India is to convert India into an oligopolistic market and it is leaving no stone unturned for the same. People are looted in the long run under oligopolistic market conditions.
Technically gold and silver are mildly bullish. One needs to remain on the sidelines. There are lots and lots of key US economic data releases next week. Traders will not start taking positions for next quarter.
MCX GOLD DECEMBER 2016 -previous day close Rs.31448
Failure to break 31705 by next week will result in a fall to 31110 and 30795 first. Today gold is bullish as long as it trades over 31255. Today I prefer to buy gold if it trades over 31525 with a stop loss below 31430 and a price target of 31605 and 31705.
(all prices in Indian rupees above).

This post was published at GoldSeek on 23 September 2016.

Canadian Housing Bubble, Debt Stir Financial Crisis Fears

Their bone-chilling chart. Everyone is fretting about the Canadian house price bubble and the mountain of debt it generates – from the IMF on down to the regular Canadian. Now even the Bank for International Settlement (BIS) and the Organization for Economic Co-operation and Development (OECD) warn about the risks.
Every city has its own housing market, and some aren’t so hot. But in Vancouver and Toronto, all heck has broken loose in recent years.
In Vancouver, for example, even as sales volume plunged 45% in August from a year ago – under the impact of the new 15% transfer tax aimed at Chinese non-resident investors – the ‘benchmark’ priceof a detached house soared by 35.8%, of an apartment by 26.9%, and of an attached house by 31.1%. Ludicrous price increases!

This post was published at Wolf Street by Wolf Richter ‘ September 23, 2016.

Falling Mortgage Rates Increase Buyer Subsidy But Don’t Stimulate Sales

There were two important releases on the US housing market today. One is the widely followed Existing Home Sales report from the NAR and the other is a lesser known but more in depth report from the online real estate brokerage Redfin.com. The Wall Street Journal reported that ‘Existing-Home Sales Fall for Second Straight Month,’ referring to the NAR report. Redfin’s report took a more positive slant on its data, but it gets more media coverage. Redfin also pointed out, correctly, that calendar factors played a significant role in the August numbers.
Summarizing the data, the Journal reported that, ‘Sales of previously owned homes fell 0.9% from a month earlier to an annual rate of 5.33 million, the National Association of Realtors said Thursday. Economists surveyed by The Wall Street Journal projected home sales would reach a rate of 5.46 million in August.’ Oops, there’s the bugaboo of seasonally adjusting a month and then multiplying that number by 12 to magnify whatever adjustment error is inherent in the monthly report.

This post was published at Wall Street Examiner by Lee Adler ‘ September 23, 2016.

The Problem With Helicopter Money

Helicopter money requires central banks to make choices they cannot make while undermining their independence and inflation-targeting mandate. Attempts at explicit fiscal coordination may not be feasible and may create unresolvable conflicts between central banks and political governments.
In the post-financial crisis world, unconventional monetary policy has become so mundane that the name is a contradiction in terms. Everybody does it, few know when they’ll stop it and it has probably been stretched beyond the scope of its abilities. The frustration brought about by the realization of the latter point is such as to make it now popular to consider a more direct version of quantitative easing.
What Is Helicopter Money?
‘Helicopter Money’ (HM) is an idea named after a parable of monetary policy described by Milton Friedman in 1969. At its core is the idea of bi-passing the intermediation of the financial system in order to give cash created by the central bank directly to consumers. After lying dormant for decades, the idea received attention in 2003 when it was discussed by Ben Bernanke in relation to Japan and again by then-EBRD Chief Economist Willem Buiter.
However, it is only as a result of the recent failures of the already unorthodox liquidity traps they find themselves in that the idea has been gaining traction in policy and financial research circles. Among others, Adair Turner, Willem Buiter, and strategists at Deutsche Bank, have recently advocated the policy. The fact that it was not outright.

This post was published at FinancialSense on 09/23/2016.

EU Collapse on Schedule

Merkel admitted that the European Union is in a ‘critical situation’ as the EU leaders met in Slovakia. I greatly appreciate all the emails asking why I do not go to Europe to push our solution to save the continent. But what you have to understand is we will ONLY get a call when there is blood on the streets and there is absolutely no other choice. I am not sure we could do much at that late stage in the game. Typically, you have to just capitulate in order to reverse the trend.
As we move into 2018, Europe is going to go through some very hard times. This is all being caused by bureaucrats in Brussels who are not willing to give up their pensions and jobs. They found the promised land for themselves and are determined to hold on til the end. Former Greek Finance Minister Yanis Varoufakis is now calling for ‘a pan-European movement of civil disobedience and state that grows into a broad democratic opposition to the actions of the European elite at local, national and at EU level.’

This post was published at Armstrong Economics on Sep 23, 2016.

Oil Tumbles To $44 Handle After Saudis Confirm “No Decision” Next Week, Feds Crackdown On Bank Commodity Holdings

We hinted earlier and now Saudi Arabia has confirmed that it “doesn’t expect any decision” next week when oil producers meet in Algiers. Oil’s reaction was swift with WTI tumbling to a $44 handle very quickly:
SAUDI ARABIA SAID TO SEE ALGIERS MEETING AS CONSULTATION SAUDI ARABIA DOESN’T EXPECT DECISION AT ALGIERS: DELEGATE This move was exaggerated by the report that The Fed is clamping down on bank holdings of commodities:
1) the ban on ‘investing in non-financial companies’, which is highly ironic given that other central banks are directly buying massive stakes in the world’s corporate entities; and

This post was published at Zero Hedge on Sep 23, 2016.

Gold and Silver Market Morning: Sep-23-2016 — Gold and silver challenging overhead resistance!

Gold Today -New York closed at $1,337.10 after the previous close of$1,334.00 yesterday. London opened at $1,335.20.
– The $: was slightly stronger at $1.1212: 1 from $1.1232: 1 yesterday.
– The Dollar index was stronger at 95.41 from 95.26 yesterday.
– The Yen was slightly weaker at 100.84: $1 down from 100.64: $1 yesterday against the dollar.
– The Yuan was barely stronger at 6.6693: $1 from 6.6696: $1 yesterday.
– The Pound Sterling was weaker at $1.2968: 1 from yesterday’s $1.3057:1.
Yuan Gold Fix
New York, Shanghai and London were roughly in line, while exchange rates calmed down with the dollar slightly stronger, in a normal market correction.
The gold price in global gold markets is holding higher levels.
LBMA price setting: The LBMA gold price setting was at $1,335.90against yesterday’s $1,332.45.
The gold price in the euro was set at 1,191.12 against yesterday’s 1,186.35.
Ahead of the opening of New York the gold price was trading at $1,338.30and in the euro at 1,193.21. At the same time, the silver price was trading again at $19.82.

This post was published at GoldSeek on 23 September 2016.

Hillary Emailgate: How One Twitter User Proved The “Intent” That The FBI Missed After Months “Investigating”

Earlier this week, a twitter user named “Katica” seemingly proved the “intent” of the Hillary campaign to destroy and/or tamper with federal records by revealing the Reddit thread of Paul Combetta (aka the “Oh Shit” guy; aka “stonetear”). But what’s most crazy about this story is that“Katica” was able to discover the greatest “bombshell” of the entire Hillary email scandal with just a couple of internet searches while the FBI, with unlimited access to government records, spent months “investigating” this case and missed it all. The only question now is whether the FBI “missed” this evidence because of gross incompetence or because of other motivating factors?
Now, courtesy of an opinion piece posted on The Daily Caller, we know exactly how “Katica” pieced her “bombshell” discovery together…the folks at the FBI may want to take some notes.
Per the twitter discussion below with @RepStevenSmith, “Katica” discovered Combetta’s Reddit thread on September 16th. But while she suspected that Paul Combetta and the Reddit user known as “stonetear” were, in fact, the same person, she had to prove it…

This post was published at Zero Hedge on Sep 23, 2016.

The Pension Crisis is Global

The worldwide pension crisis is the next great notch in the belt of how socialism is collapsing. If anyone in the private sector promised workers pensions and did not fund them, they would go to jail and labelled as a fraud. Yet this is standard operating procedure for government. When they claim to be some hero for reforming a Ponzi Scheme, they expect to be hailed by the media and they typically are given a gold star.
Canadians are now being forced to save more for their retirement and it does not matter what they want to do personally. As always, the scam involves forcing others to pay more so they can pay today what they promised. Ultimately, what they have done to Canadians is to compel changes to benefits from 25% of covered earnings to a third. They also raised the ceiling on covered earnings from what would have been $72,500 in 2025 to $82,700. The bottom-line is rather stark. Some Canadian workers will actually be paying as much as 40% more in CPP contributions by that date.

This post was published at Armstrong Economics on Sep 23, 2016.

Former Goldman Chief Economist Jim O’Neill Quits UK Government

While the UK has so far avoided to implode in a depressionary supernova in the aftermath of Brexit contrary to what most of the “experts” and Tokyo-owned UK journalists had predicted, changes are taking place, mostly among the top echelons of power. Earlier today, the latest political fallout from the Brexit vote was the news that former Goldman economist, and BRIC acornym creator, Lord Jim O’Neill, resigned from the U. K. government, weeks after newspaper reports suggested he was disappointed with Prime Minister Theresa May’s policy toward China.
In a letter to May released on Friday, the Manchester native who was a key advocate of the UK forging strong links with China and was commercial secretary for 18 months, said he joined the government in 2015 to help improve the economy of northern England and to boost ties with emerging markets such as China. Admitting that David Cameron’s and the BOE’s forecasts for a post-Brexit apocalypse were wrong, As Bloomberg reports, O’Neill wrote to the new Prime Minister that ‘the case for both to be at the heart of British economic policy is even stronger following the referendum, and I am pleased that, despite speculation to the contrary, both appear to be commanding your personal attention.”

This post was published at Zero Hedge on Sep 23, 2016.

World Trade Grinds Lower, Hits 2014 Levels

Volatile and ugly.
World trade in merchandise is a reflection of the global goods-producing economy. And it just can’t catch a break.
The CPB Netherlands Bureau for Economic Policy Analysis, a division of the Ministry of Economic Affairs, just released the preliminary data of its Merchandise World Trade Monitor for July. The index fell 1.1% from June to 113.4, the lowest since May 2015 – a level it had first reached on the way up it in September 2014.
The chart shows that merchandise world trade isn’t falling off a cliff, as it had done during the financial crisis, when global supply chains suddenly froze up. But it’s on a slow volatile grind lower. And compared to the fanciful growth after the Financial Crisis, it looks outright dismal:

This post was published at Wolf Street by Wolf Richter – September 22, 2016.

Market Report: Weak policies equal higher

This week, both the Bank of Japan and the Fed announced their interest rate policies.
The BoJ came up with an underpinning of 10-year JGBs at zero yield, and the Fed came up with, well – nothing. Except, the FOMC reckoned long-term real GDP growth was likely to be about two per cent, rather than previous hoped-for rates of three or four per cent.
That bit of the FOMC statement didn’t get much publicity, but it represents the Fed throwing in the towel on monetary policy. Japan has no more significant policy tweaks either. So what we are seeing is an admission that interest rates will have to be kept at zero and negative respectively for a prolonged period of time, because neither central bank really knows what else it can do.
Gold and silver had begun to rally ahead of the interest rate announcements, and following the Fed’s on Wednesday night, gold jumped 2%, and silver by 4%. Silver in particular has had a good week, with the dollar price rising from a low of $18.78 to a high yesterday (Thursday) of $20.07, up nearly 7%. This morning it had eased to $19.80 in early European trade. Gold rose from a Monday low of $1309.5 to a high of $1343.7 yesterday, a rise of 2.6%. This morning it opened at $1335, after some profit-taking. Taking into account the confirmations of continuing weak interest rate policies, there is a good chance that we can say support above $1300 for gold has held, and it is now ready for a challenge of this year’s high at $1370. If gold can clear the $1345-50 level, this outlook will be confirmed. The technical position is shown in our next chart.

This post was published at GoldMoney on SEPTEMBER 23, 2016.