Texans Are Cutting Back, Wheels Come off Houston Economy

Five-year retail boom implodes.
Retail sales in Texas boomed for five years straight, from March 2010, their low point during the Great Recession. Sales tax collections jumped 46% from the first half of 2010 through the first half of 2015 – dizzying growth for a mature market! Given the size of the Texas economy, it helped prop up US retail sales. But by May 2015, 10 months into the oil bust, things began to sag.
Sales tax collections in September for sales that occurred in August dropped 3.5% year-over-year, according to the Texas Comptroller of Public Accounts. And in August, sales tax collections had dropped 3.0% from two years earlier. This was only the second time since the depth of the Financial Crisis that collections were lower than two years earlier, the first time having been in June!
Year-to-date, sales tax collections fell 2.5% to $21.4 billion, and were practically flat with collections two years ago. On a per-capita basis, given the growth of the Texas population (up 8% since 2010), it looks even worse.

This post was published at Wolf Street by Wolf Richter ‘ October 8, 2016.

Tailspin! US Economy Peaked In 1995 And Velocity Has Been Tanking Ever Since

his is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
The US economy peaked in 1995, according to one measure: M2 Money Velocity (GDP/Money Supply).
Here is a chart of M2 Money Velocity and the 10 year Treasury Constant Maturity rate. Notice that M2 Money Velocity peaked in Q3 1997 after a dramatic rise starting in 1987.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ October 8, 2016.

U.K. Currency Shock Sees Sterling Gold Surges 5% in One Minute ‘Flash Crash’

08 October 2016 – Saturday
The gold price traded a few dollars either side of unchanged until the COMEX open in New York yesterday morning. There was a bit of a pop on the job numbers, but that was over and done with by 9:01 a.m. EDT. It headed lower from there – and ‘da boyz’ set a new low tick for this move down around 11:30 a.m. in New York. Then, for the most part, it rallied quietly from there into the 5:00 p.m. close of the thinly-traded afters hours market.
The high and low ticks were recorded as $1,267.60 and $1,243.20 in the December contract.
Gold finished the Friday session in New York at $1,257.60 spot, up $2.40 from Thursday’s close. Net volume was extremely heavy at 247,000 contracts.

This post was published at GoldSeek on Sunday, 9 October 2016.

Republican National Committee Begins To Redirect Funds From Trump

‘Our party is in its deepest crisis since Watergate in 1974,’ – Ron Nehring, former chairman of the California Republican Party
In the aftermath of the “Trump Tape”, there has been a surge in GOP officials who have either rescinded their support for Trump or have openly called for him to step down. As the WSJ put it, “the speed and breadth of the abandonment of Mr. Trump’s candidacy shocked some long-time party members and exposed a shattered party without a clear path forward.” The latest full list of republicans bailing on Trump is shown in the table below courtesy of Taniel, and can be tracked on The Hill’s website.

This post was published at Zero Hedge on Oct 8, 2016.

US Dollar Crawl

The US Dollar has been crawling along its rising 110 weekly moving average. This is not a bullish pattern and suggests a fall down to the US Dollar’s next lower support zone.

This post was published at GoldSeek on Sunday, 9 October 2016.

Ray Dalio Warns A 1% Rise In Yields Would Lead To Trillions In Losses

Last week, we shared with readers a fascinating presentation that Bridgewater’s Ray Dalio made to NY Fed staffers at the 40th Annual Central Banking Seminar held on Wednesday, October 5, 2016. In it, Dalio pointed out that thoughts which dared to question the economic orthodoxy, and which were once relegated to the fringe blogs, have become the norm, pointing out that it is no longer controversial to say that:
…this isn’t a normal business cycle and we are likely in an environment of abnormally slow growth …the current tools of monetary policy will be a lot less effective going forward …the risks are asymmetric to the downside …investment returns will be very low going forward, and …the impatience with economic stagnation, especially among middle and lower income earners, is leading to dangerous populism and nationalism. He further notes that the debt bubble which was not eliminated during the financial crisis of 2008, has since grown to staggering proportions, and notes that “the biggest issue is that there is only so much one can squeeze out of a debt cycle and most countries are approaching those limits.”

This post was published at Zero Hedge on Oct 8, 2016.

What Tools Does the Fed Have Left and How Could They Affect the Gold Market?

Although the U. S. economy is currently expanding, we cannot rule out the possibility of a significant slowdown in the next few years. Some analysts argue that the Fed would be out of ammunition during the next crisis. Is that true? ‘Not necessarily,’ as it turns out – the whole issue is a bit more complicated. We will now analyze what monetary weapons could the Fed use to stimulate the economy when the next recession strikes. The table below presents a short summary of available tools.
Table 1: The summary of Fed’s potential monetary tools during next recession

First and most obvious, the U. S. central bank could drop any plans to raise interest rates further or even to cut them. However, with the federal funds rate still close to zero, it would not relieve the economy significantly. The change of the Fed’s stance should be positive for the shiny metal, as gold prices have recently been under downward pressure from the expected monetary tightening and accompanying greenback’s strength.

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

Podesta Emails Reveal Illegal Coordination With David Brock Super PAC

Another startling discovery from the “Podesta Emails” seems to indicate that the Clinton campaign openly coordinated with the “Correct The Record” Super PAC run by David Brock…which we believe is technically a felony. That said, we’re sure the FBI could find a way to argue the intent.
Per the email below, Podesta wrote to Jennifer Palmieri, Hillary’s Director of Communications, among others in the campaign, in March of last year asking whether the campaign should be coordinating with “Brock” to attack the “Clinton Cash” book as a “Murdoch Special.” Palmieri clearly agrees with the coordination by responding with a simple “Yes.”
Of course, all of these conversations were conducted via gmail accounts rather than official campaign accounts…better luck next time keeping the shady stuff off the record…

This post was published at Zero Hedge on Oct 8, 2016.

World Gone Mad, Part 2: ‘Perpetual Preferred’

Towards the end of a credit bubble, ideas that might have seemed crazy in more boring times are not just accepted but embraced by investors desperate to keep the high that comes from effortless bull-market profits.
In the junk bond bubble of the late 1980s, for instance, there was the ‘PIK preferred,’ a kind of stock/bond hybrid that paid its holders in more securities (PIK stood for ‘payment in kind’). Companies could issue them with zero near-term cash flow consequence while credulous investors bought them for their ‘high yields.’
In the 2000s – as fans of The Big Short already know – bonds backed by mortgages written to people with no or unknown incomes were snapped up by pretty much everyone from major European banks to mainstream US mutual funds.
These and many other past credit bubble ‘innovations’ eventually blew up, decimating nest eggs and imparting useful life lessons to savers and money managers.

This post was published at DollarCollapse on OCTOBER 8, 2016.

Anarchast with Josh Sigurdson: World Alternative Media

Jeff interviews Josh Sigurdson of World Alternative Media, topics include: confronting those in power, democracy is coercion, government is immoral, the manipulation of state power, individual freedom, the high cost of ‘free’ healthcare, corporatism, the death of mainstream media, bizarre and destructive socialist ideas, deconstructing the state peacefully, spreading the message effectively, getting it out to the wider world, weaving an ever expanding web…

The Dollar Vigilante

This post was published at Dollar Vigilante on OCTOBER 7, 2016.

The Week in Review: October 8, 2016

During our Boston Mises Circle last weekend we discussed the real state of the US economy, and the solutions that lie beyond politics. This week, America’s continued economic stagnation was further illustrated by another lack-luster jobs report – showing that the government can’t even rig its own statistics enough to project a strong economy. What the government is good at, however, is causing trouble – as Uncle Sam threatens to push the floundering Deutsche Bank over the edge. Whilemainstream American economists continue to entertain thoroughly-debunked economic policy, and political activists advocate for overly simplistic reforms, perhaps Americans should really look to Spain, where the country is enjoying the lack of a functioning national government. After all, as we will be reminded once again during Sunday’s presidential debate, successful democracies usually just benefit bad people.

This post was published at Ludwig von Mises Institute on October 8, 2016.

Multiple Part-Time Jobs and Central Bank Lies

If anything, today’s BLSBS reveals that the average US citizen is now working multiple, part-time jobs in a desperate attempt to make ends meet. And this “robust economy” that is “near full employment” is the supposed rationale for the Federal Reserve to raise the Fed Funds rate as soon as next month. What a perverted lie and scam this all is!
But we all knew there wasn’t going to be a rate hike in November anyway and December is at worst 50/50. Today’s “jobs report” only confirmed that:
However, let’s get back to the internals of the BLSBS because I want you to stew on this for a while. We’re told through and endless barrage of analysis, punditry and jawboning that The Fed will soon embark on a series of FF rate hikes…primarily because the US job market is so strong that it is near full employment. The thought goes that this will increase pressure to raise wages and, thus, spark inflation.

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

Deutsche Bank Raises $3 Billion In Debt, As Hedge Fund Explains What Its “Bail-In” Would Look Like

While speculation that Qatar investors may come to Deutsche Bank’s rescue came and went on Friday (especially after the market recalled that the alleged “white knight” may himself be nursing a massive margin loan from its first rescue of Deutsche Bankwhich included a $2 billion margin loan), the German lender quietly took advantage of the relentless global appetite for yield and on Friday evening Deutsche Bank issued its first US dollar-denominated bond in five months when its raised $3 billion in five year paper, following reverse inquiry from investors according to IFR.
The senior unsecured bond priced just below par with a generous coupon of 4.25% and at a spread of 300bp over Treasuries. The bond is the first sold by Deutsche Bank in the US dollar market since May when it raised $3.6 billion from three and five-year debt, and follows a sharp widening in its spreads.
According to Reuters, in the latest example of collecting pennies in front of a steamroller, several investors had asked about the possibility of a new debt issue from Deutsche Bank as they sought to pick up some yield. Deutsche Bank responded to those queries on Friday, and sold the bond to a limited number of accounts after gauging interest on where a new deal would come.
However, reflecting concerns about DB’s current distressed state, the new bond was sold at a sizable new issue concession of about 50bp over Deutsche Bank’s similarly dated outstanding debt. Its 3.375% senior unsecured 2021 bond, which was priced in May, was trading at a G-spread of around 240bp earlier on Friday, according to MarketAxess, after widening close to 300bp last week.

This post was published at Zero Hedge on Oct 8, 2016.

Twitter Sale Process Said To Be “Almost Dead”

For Twitter shareholders it may be easy come, easier go.
After TWTR’s stock soared during the past two weeks on news reports the company had hired Goldman to find a willing suitor, with substantial preliminary interest from a group of potential buyers including Google, Salesforce and Disney despite some stern warnings from the sellside, especially Citigroup, that a sale may be problematic at best, and fetch a far lower price than many had expected, last week Twitter shares tumbled after several reports that some of the more prominent buyers, such as Google and Disney, had gotten cold feet about the process and had backed out, but at least Salesforce still tentatively remain part of the process.
Twitter’s search for buyers began after several quarters in which sales growth and user growth slowed. The company received interest from one potential buyer, which led the board to hire Goldman Sachs Group Inc. and Allen & Co. to pursue a sale in September. CEO Jack Dorsey opposed a sale, while Williams, favored a deal, according to Bloomberg.
Now, according to a new report from Bloomberg, not only is Salesforce also out, but the Twitter sales process is all but dead “as top bidders lose interest amid pressure from their investors, according to people familiar with the matter.”
Citing “people”, Bloomberg reports that neither Google, nor Disney or Salesforce are likely to make a bid. On Friday. As confirmation that the process was unwinding, Bloomberg notes that “Twitter had planned to have a board meeting with outside advisers on a sale but canceled, one of the people said.”

This post was published at Zero Hedge on Oct 8, 2016.

Doug Noland: Matthew, Near Misses and Flash Crashes

This is a syndicated repost courtesy of Credit Bubble Bulletin. To view original, click here. Reposted with permission.
Clearly, the National Hurricane Center, The Weather Channel, meteorologists and disaster consultants have succumbed to the cult of fear mongering. ‘Extremely dangerous’ Matthew was poised to deliver death and vast destruction. A Thursday afternoon headline from CNBC: ‘Hurricane Matthew could inflict $200 billion in damage to coastal homes.’
While the damage will be significant, at least much of the Florida coastline dodged a bullet. The storm drifts 25 to 30 miles west and it’s a very different outcome. Yet most people will forget the seriousness of such a Close Call. Instead they’ll imbed the notion of ‘fear mongering’ further into their thinking. The complacency that developed over a decade of no hurricane encounters will become only more instilled. Surely the next dangerous storm warning will be readily dismissed.

This post was published at Wall Street Examiner on October 8, 2016.

China Mocks “Chaotic” US Presidential Race

With the scandals surrounding both presidential candidates surpassing anyone’s wildest predictions, and the rest of the world just as stunned at ongoing developments in the US political system, one country has decided the time has come to take a direct stab at what it dubs America’s “arrogant democracy” and “flawed politics”- China.
In an op-ed published in the party’s mouthpiece, People’s Daily editor Zhong Sheng writes that “scandals have dogged the two main candidates throughout the 2016 election, which has further increased dissatisfaction among U. S. citizens”, adding that “U. S. citizens are becoming more and more frustrated by the political campaign.”
The tax-related questions for Trump, as well as worries over Clinton’s health and her use of a private email server, have all led to the current state of the election. In their first presidential debate, the two candidates focused more on personal attacks than policies. The Times commented in an editorial that the candidates have neglected the widening gap between the American dream and social reality.

This post was published at Zero Hedge on Oct 8, 2016.

‘Gold Prices Fall Just In Time For Diwali’

Holding physical gold and silver remains the primary hedge in preserving the purchasing power and liquidity of one’s wealth and assets in the difficult times ahead. The hedge needs to be held into and through the crisis, in order to provide its full benefit. – John Williams, Shadowstats.com
I can’t figure out if the Fed/Wall Street bullion banks understand that every time they smash the price of gold with fraudulent paper gold contracts, it creates massive physical delivery demands in India and Asia. But based on the market data in India/Asia, it would appear that the latest price take-down of gold has aroused the a sleeping gold giant in India.

This post was published at Investment Research Dynamics on October 8, 2016.

Goldman: Physical Demand Will Support

Gold prices have fallen for eight sessions, marking the yellow metal’s worst losing streak in a year, but investment bank Goldman Sachs said further downside was likely limited this year.
The spot gold price was flat around $1,254 an ounce around midday Friday in Asia, not far from the four-month low of $1,249.68 hit in the previous session on increased expectations for a U. S. interest rate hike by year end after U. S. filings for unemployment benefits fell to a 43-year-low last week.
Goldman analysts said they continued to expect U. S. real rates rise into the year-end, weighing on gold prices, but they added that demand for the precious metal will still give some support.

This post was published at TruthinGold on October 7, 2016.

Chinese holiday spurs Gold drop

Gold continues to drift lower following Tuesday’s crash through the $1,300 an ounce level to its lowest since June, before the Brexit vote lit a fire under the metal.
December futures trading on the Comex market in New York touched a low of $1,255.10 an ounce, the sixth down day in a row.
Gold’s leg down is being blamed on looming interest rate hikes in the US which boosted the dollar (the gold price usually moves into the opposite direction of the currency) and speculation of a scaling back of the European Central Bank’s $10 billion a month bond purchase program.
Expectations of a normalization of the interest rate environment and higher returns on government bonds is a negative for gold as the metal provides no yield and investors are only rewarded via price appreciation.

This post was published at TruthinGold on October 7, 2016.