Two Boxes Of Hillary Emails Mysteriously Disappear

Almost every market participant out there has at least one horrific war story on a crash that profoundly affected their portfolio or world view.
For example, one unnamed stock broker I know had himself and his clients in a soaring gold stock called Bre-X in 1997. There was way less connectivity at this time, and this person was on a trip to Vegas for some sun and fun. Staying at Caesar’s Palace, he went out for a short while as the stock was trading near its highs of $286.50 per share.
When he got back to the hotel, he found out that news had already spread quickly: during a due diligence test, mining company Freeport had twinned seven drill holes, finding not even a trace of economic gold. The deposit was not real, and panic swept the market. His hotel phone had been ringing off the hook for three hours but he missed all the calls. Shares plummeted 83% that day, but he was already too late to get out of the stock.
It’s easy to rationalize the series of events that led to the fall of Bre-X in hindsight, but as Visual Capitalist’s Jeff Desjardin notes, at the time many traders and experts like this broker were caught by surprise. A company worth around $4.5 billion basically went to zero almost overnight as its claim of 70 million ounces of gold vanished into thin air. That’s a ‘black swan’, and this one in particular changed the mining and finance industries forever.

This post was published at Zero Hedge on Oct 7, 2016.

The Next Recession Looms Large

Currently economists and market watchers roughly fall into two camps: Those who believe that the Federal Reserve must begin raising interest rates now so that it will have enough rate cutting firepower to fight the next recession, and those who believe that raising rates now will simply precipitate an immediate recession and force the Fed into battle without the tools it has traditionally used to stimulate growth. Both camps are delusional, but for different reasons.
Most mainstream analysts believe that the current economy can survive with more normalized rates and that the Fed’s timidity is unwarranted. These people just haven’t been paying attention. The ‘recovery’ of the past eight years hasn’t been just ‘helped along’ by deeply negative real interest rates, it is a singular creation of those policies. Since June 2009, when the current recovery began, traditional economic metrics, such as GDP growth, productivity, business investment, labor force participation, and wage growth, have all been significantly below trend. The only strong positives have been gains in the stock, bond and real estate markets. We have had an ‘asset price’ recovery rather than a bona fide economic recovery. This presents unique risks.
Asset price gains have been made possible in recent years because ultra-low rates have driven down the cost of borrowing, encouraged speculation, and pushed people into riskier assets. Donald Trump was right in the presidential debate when he noted that the whole economy is ‘a big fat ugly bubble.’ Any rate hike could hit those markets hard across the financial spectrum and can tip the economy into contraction. Look what happened this January when the market had a chance to digest the first rate increase in 10 years. The 25 basis point increase in December 2015 led to one of the worst January’s in the history of the stock market. Since then, the Fed has held off from further tightening and the markets have treaded water. There is every reason to believe that the sell-off could resume if the Fed presses ahead.

This post was published at Euro Pac on Friday, October 7, 2016.

Central Banks: One Failed Attempt After Another

This is a syndicated repost courtesy of Economy and Markets. To view original, click here. Reposted with permission.
After a quiet summer in the markets, volatility finally picked up in both stocks and bonds. From early July through late August virtually no movement occurred in the Treasury market and stocks barely budged.
During this quiet period, central banks around the world sat on their hands.
They may have talked a lot, but they didn’t actually do anything.
Then again, what could they do…?
Liquidity moves markets!
Click here to learn how you can follow the money. The Bank of Japan (BoJ) has tried just about every trick in the book to kick-start inflation and prompt lending, which would grow their economy. Nothing worked.
When it introduced a negative rate, the markets punished the decision by selling Japanese bonds and firming up the currency – the exact opposite of what they tried to accomplish.

This post was published at Wall Street Examiner by Lance Gaitan ‘ October 7, 2016.

Fed Vice Chair Fischer Admits Fed is Waiting for Godot

The Fed’s fourth mandate. In his keynote speech on the usual suspects of central-bank topics at the Institute of International Finance’s big shindig in Washington DC today, Fed Vice Chair Stanley Fischer nevertheless managed to develop a new theory for a fourth Fed mandate.
This new mandate would come on top of the third mandate: inflating asset bubbles at all costs (unlimited asset price inflation). The other two mandates are ‘full employment’ (whatever that means) and ‘price stability,’ which is ironically defined as consumer price inflation, the way the Fed counts it, of at the moment 2%, and a lot more in most people’s real-life experience.
Fischer has been grumbling about the slow growth of the US economy for a while – ‘Everybody is trying to find out what is going on,’ he said today, and then went on to explain what’s going on. Turns out, what’s restraining economic growth and investment is a lack of ‘confidence’ and ‘animal spirits.’

This post was published at Wolf Street on October 7, 2016.

Consumer Credit Has Second Biggest Jump On Record, As Student And Car Loans Soar

It will likely not come as a big surprise that at a time when US personal savings are once again declining, perhaps as a result of soaring health insurance costs, that US consumers are forced to borrow increasingly more to make ends meet. And, as expected, the latest consumer credit report confirmed this, when moments ago the Federal Reserve announced that in August, total US credit surged by $25.9 billion on a seasonally adjusted basis, smashing expectations of a $16.5 billion increase, and the third biggest monthly jump since 2001.

This post was published at Zero Hedge on Oct 7, 2016.

Gold Daily and Silver Weekly Charts – ‘Goldilocks’ and The Recovery

The Jobs Report came in weakly this morning, almost surprisingly so, all things considered. It was heavily touted on the financial infomercials that pass as business news as a ‘goldilocks’ report.
If the Fed did not want to get off the ZIRP boundary so badly I would be guessing that they would be doing nothing much until there was a real indication from the economy that it was warming up. But since they do want higher rates for their own policy purposes then a one-and-done in December still feels like a viable option.
Gold and silver were hammered this week. The notion that this was normal market action is risible nonsense if one looks at the actual tape of the huge sales at market in quiet hours. It was classic market manipulation.
The problem for the bullion bullies was the huge overhang of longs in the October and December contracts, stacked up against the steadily shrinking supplies of freely available metal.

This post was published at Jesses Crossroads Cafe on 07 OCTOBER 2016.

Inflation – The Simple Explanation is Theft

Inflation is theft. It is a simple concept that a single mother and a retiree understand but a PhD in Keynesian Economics probably does not. Examples:
In 1971 take $1,000 in crisp new $20 bills and place them in a safe while watching President Nixon blame speculators for the loss of Fort Knox gold. (He ‘temporarily’ severed the last connection between gold and the U. S. dollar.)Spend those dollars in 2016 and you will feel ripped off because they would have bought most of a car in 1971, and in 2016 they might buy only four tires.
Take $400,000 and purchase an airplane in 1971. Today that $400,000 will purchase the helmet for an F-35.
A cup of coffee in 1971 probably cost about $0.25. Today it is $2.00.

This post was published at Deviant Investor on October 7, 2016.

Bonds and safe havens choppy

The nature of this morning’s payrolls number is that it really does not clarify things as much as many of us would like. It is strong enough to keep the potential for a Fed rate hike in December but not strong enough to produce a rate hike next month when the FOMC meets, at least for now.
This is leading to very choppy, two-sided trading in the bonds, in the Dollar, in the Yen and in gold.
Here is a two hour chart of the long bond. Look at the long shadows on the those candlesticks.

This post was published at Trader Dan on October 7, 2016.

A Look Inside The Pound Flash Crash: What Really Happened In Those 30 Seconds

At just after 7 minutes after hour, whether 7pm on the east coast, midnight GMT or early Friday morning in Asian trading, pound sterling plunged by more than 6%, in the span of 2 minutes although the bulk of the plunge took place in just 30 seconds: from 7:16 to 7:46, when the market became “disorderly” in technical parlance, or in simple terms, broke. And since earlier today the Bank of England mandated none other than the BIS (specifically the bank’s “Head of Foreign Exchange & Gold“, Benoit Gilson) to explain what happened, here is a place to start trying to reverse engineer the latest flash crash.
For the best forensic analysis piecing together what happened last night, we go to Citi’s Daniel Randall who tells the overnight story of the GBP, who also shows that the key pair involved in the selling was indeed cable…

This post was published at Zero Hedge on Oct 7, 2016.

A ‘Cat 5’ Financial System Hurricane Swirls Offshore

One of the biggest benefits I get from writing newsletters (Mining Stock and Short Seller’s Journal) is that I get ‘grassroots Main Street’ intel from subscribers. This has led to some invavluable insights into the housing market and the general economy all over the country.
Yesterday I received this email:
Heard from a friend east of the Atlantic that things are worse than are even being reported by alternative media. I bet the only thing the banks would like more is if the Chinese took another week off! I also heard next week could be big trouble.
‘My friend’s employer is a financial institution in Europe – you can probably guess which country. Words used were ‘chaos’ and ‘possible shutdown.’ Advised to buy silver as much as possible.

This post was published at Investment Research Dynamics on October 7, 2016.

Oct 7

Gold $1252.50 down $0.50
Silver 17.42 up 12 cents
I will be back on Monday and I will bring you my normal commentary. I will
a short version on Tuesday night and then report to you very late Wednesday night
As for gold, we will see a rise in the gold and silver price starting Monday as China will be back from their one week holiday and they will have a feast on the low price
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON Shanghai fix closed this week for holiday
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 Oct 3 (10:15 pm est last night): $ holiday
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ holiday
London Fix: Sept 30: 5:30 am est: $1255.40 (NY: same time:1255.40 $: 5:30AM)
London Second fix Sept 30: 10 am est: $1258.55 (NY same time: $1258.55 , 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 total number of notices filed today : 3 for 300 oz
For silver:
for the Oct contract month: 9 notices for 45,000 oz.
Let us have a look at the data for today

This post was published at Harvey Organ Blog on October 7, 2016.

Doomed to Failure

Larded Up and Larded Over We’ve been waiting for the U. S. economy to reach escape velocity for the last six years. What we mean is we’ve been waiting for the economy to finally become self-stimulating and no longer require monetary or fiscal stimulus to keep it from stalling out. Unfortunately, this may not be possible the way things are going.
As Milton Jones once revealed: ‘A month before he died, my grandfather covered his back in lard. After that, he went downhill quickly’ (his other grandfather drowned in a bowl of cheerios). A similar fate may await the larded up US economy.
In short, the U. S. economy may never reach ‘escape velocity’ unless it is first allowed to crash. It has been too larded up and larded over with debt for any real sustainable growth to take root. More evidence, to this effect, was revealed this week.

This post was published at Acting-Man on October 7, 2016.

Central Banks Continue to Sell Dollars to no Avail

The capital flows into the dollar are rather staggering. Central banks continue to try to sell the dollar to keep their currencies afloat. China’s foreign-exchange reserves are most notable in the fight against a rising dollar. China’s foreign-exchange reserves declined again in September, and they try to support the yuan and the Fed clearly cannot stop the dollar rise by itself.

This post was published at Armstrong Economics on Oct 7, 2016.

Some Of The World’s Best Investors Are Putting Their Money In An Unexpected Place

A curious group of markets – India, Indonesia, The Philippines and Vietnam – have been identified as the best investing opportunities by a group of leading Asia macro strategists, who think that Asia and the emerging markets will considerably outperform the developed world.
While everyone is focused on the US Presidential election, Real Vision TV recently brought together some Asian market experts, to explain why they have recently turned bullish on the region and why institutional money has been underweight the Asian markets for the past five years. A video compilation of the highlights is shown below:
It features some diverse views around the common theme that there are some good opportunities for investors to get in now ahead of the curve. One common theme in the conversations is that investment flows are set to take off in the region, sparked by positive demographic and infrastructure stories, alongside political reform for growth.
Underweight Emerging Market Positions Slam into Reverse
Asia hedge fund heavyweight Paul Krake, who worked for Goldman Sachs Asia and managed for Moore Capital and Caxton Associates, before setting up his own macro hedge fund and independent research ‘View from the Peak’, said that these underweight positions are now being reversed as a number of pension fund RFPs for large emerging market mandates are being seen all over the place.

This post was published at Zero Hedge on Oct 7, 2016.