The Dark Wave of Brexit Uncertainty

The UK voted to part ways with the EU in June. Since then Brexit uncertainty has left the UK’s market in disarray as the pound sterling’s fallen 18% since the referendum. While what happens in the UK might seem like ‘just something across the pond,’ the coming months of Brexit negotiations could impact your money, investments and global trade.
The Bank for International Settlement (BIS) and the International Monetary Fund (IMF) have identified banks that are ‘systemically important’ to the world economy. Under those same principles, the United Kingdom is a systemically important country for financial markets. What happens in the UK matters worldwide.
Why the UK Matters
The IMF’s World Economic Outlook report noted, ‘the Brexit vote implies a substantial increase in economic, political, and institutional uncertainty, which is projected to have negative macroeconomic consequences.’ The organization has since reduced its global forecast for 2017 by 0.1 percentage point, down to 3.4 percent. The IMF also reduced Britain’s 2016 GDP forecast to 1.9%.
The UK is the second largest economy in the EU system (for now anyways). According to the World Bank’s GDP index for 2015 the UK holds the fifth largest economy in the world. To see a systemically important world economy make such a move will have real repercussions.

This post was published at Wall Street Examiner by Craig Wilson ‘ October 27, 2016.

What’s Really Different this Time: Business Investment Drops to Lowest September since 2010

Why isn’t the economy in an official recession yet?
What if it’s really different this time? What if eight years of radical monetary policies have altered the way things work to such an extent that the normal economic patterns no longer apply, that the economy has entered far into a new territory where ultra-cheap credit sloshes around, and where – instead of short, sharp recessions that clean out the cobwebs and help economic actors slough off excess debt at the expense of creditors – we get years of quagmire interrupted by mild declines and false-hope rises, even as the debt burden continues to grow and grow to suffocate all hopes at economic growth?
There have been plenty of symptoms of this. Here is one more: business investment – which plays an outsized role in economic growth. And it just booked its worst September since 2010.
The Census Bureau reported today that orders for durable goods – products and equipment designed to last over three years – inched up $2.4 billion in September, or 1% from a year ago (not seasonally adjusted), on a $4.5-billion year-over-year surge of defense capital goods. So excluding defense, orders fell 2.3% year-over-year.
Excluding defense and aircraft – to approximate business investment – orders fell 3.6% year-over-year (not seasonally adjusted).

This post was published at Wolf Street by Don Quijones ‘ October 27, 2016.

OCT 27/COMEX GOLD DELIVERIES IN OCTOBER SURPASS 30 TONNES: (30.24 TONNES STANDING)/HUGE WITHDRAWAL OF 5.987 MILLION OZ FROM THE SLV/ANOTHER FALL IN THE CHINESE YUAN/HUGE FALL IN DEUTSCHE BANKS DE…

Gold $1267.90 UP $3.10
Silver 17.60 UP 1 cents
In the access market 5:15 pm
Gold: 1269.00
Silver: 17.63
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
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 26 (10:15 pm est last night): $ 1272.76
NY ACCESS PRICE: $1267.40 (AT THE EXACT SAME TIME)
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1273.38
NY ACCESS PRICE: 1268.80 (AT THE EXACT SAME TIME)
HUGE SPREAD TODAY!! 5 dollars
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: OCT 27: 5:30 am est: $1269.30 (NY: same time: $1269.30: 5:30AM)
London Second fix OCT 27: 10 am est: $1267.70 (NY same time: $1267.70 , 10 AM)
Shanghai premium in silver over NY: 80 cents.
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.

This post was published at Harvey Organ Blog on October 27, 2016.

Gold Daily and Silver Weekly Charts – Capped Again at 1270 – Election Speculation

Gold and silver managed to move higher despite the stronger dollar, with gold showing a little more strength.
With the VIX also climbing, this looked like a flight to safety of some modest proportion.
Gold is obviously caught in a short term trend. Silver as well, although it is not as easy to see this on the weekly chart.
Over 800,000 ounces of gold have been taken off the Brink’s accounts in Hong Kong over the past two days. Perhaps not significant in the bigger picture of things. But still worth noting if such a trend to take physical out of the ‘Comex warehouses’ there and not replace it.
Quite a few traders are busying themselves by trying to figure out with way assets will move if Trump or Hillary win the election.
I am giving it some thought myself, but for now the only people making money in doing this are those who sell their opinions in one way or another.

This post was published at Jesses Crossroads Cafe on 27 OCTOBER 2016.

Next ‘Bad Bank’ to IPO in Spain, after 2 Prior IPOs Imploded

‘There will be no Bad Bank in Spain, and we will establish procedures that will not be burdensome for taxpayers.’ Those were the infamous words of Spanish PM Mariano Rajoy during the first few months of 2012. Months later Spain’s bad bank, Sareb, was born, and Spanish taxpayers were left holding the tab for the biggest bank bailout in Spanish history.
When Sareb was created, its creators assured Spain’s taxpayers that their money would be returned; some even claimed that the State would make a tidy profit from the operation. Since then, the losses have kept piling up. It is estimated that over 2.1 billion of public funds have been poured into the bank so far and a further 2 billion was provisioned for this year’s accounts alone.
Slowly but surely, the tune is changing. According to Jaime Ponce, the president of Spain’s Fund for Orderly Bank Restructuring (FROB), which has already splashed tens of billions of euros of public funds on bank rescues, taxpayers probably won’t get their money back until 2027, at the earliest. And even then, the plan to recoup public funds is based on hypotheses that are not ‘infallible.’ They depend on the future cost of financing and the evolution of Spain’s real estate market, which in turn depends upon the buying power of Spain’s lost generation (its current unemployment rate: 47%).
In other words, Spanish taxpayers, don’t hold your breath.

This post was published at Wolf Street by Don Quijones ‘ October 27, 2016.

21st Straight Month of Declining Core Durable Goods Orders YoY (Business Spending YoY Down 8 Straight Months)

The US economy just set a record: 21st straight month of declining core durable goods orders YoY. This is a record for non-recessionary periods (core durable goods order plunge during recessions).
Core durable goods orders ex-transportation are typically higher paying jobs than the alternative jobs which have been prevalent since The Great Recession.
While not as bad as core durable goods orders YoY, Capital Goods New Orders Nondefense Ex Aircraft & Parts YoY have fallen for 7 straight months and 20 out of the last 23 months.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ October 27, 2016.

Are Silver Prices Going to Rise?

Silver has been rising in the last couple of trading days, especially as certain economic data from Europe has been bullish.
So are silver prices going to rise higher by the end of the year?
Before we get to my silver price prediction, here’s how the price of silver is trending this week.
How Silver Prices Are Trending This Week
Silver prices popped on Monday to an intraday peak of $17.79, then quickly retreated back to the $17.55 level. But then early Tuesday it rallied up to $17.75, and kept bumping up against that resistance level.
Since then, the price of silver has mostly been flat, and it’s trading today at $17.75 still.
Manufacturing numbers have surprised on the high side recently. That points to improving economic activity, potentially helping demand for industrial metals.
Silver’s uses run the gamut from solar panels to smartphones, and its consumption has climbed as much as 35% in the first half of 2016.

This post was published at Wall Street Examiner by Peter Krauth ‘ October 27, 2016.

Tronc Crashes After Banks Pull Gannett Acquisition Financing

Earlier today, Politico reported that something was not right with the ongoing $1 billion merger between Gannett, the largest newspaper chain by circulation in the U. S., and Tronc, formerly known as Tribune (but decided to appeal to Millennials by changing its name), the publisher of such papers as The Los Angeles Times, the Chicago Tribune and the Baltimore Sun. According to the report filed earlier today, the Tronc board had been scheduled to meet Wednesday afternoon, presumably with the deal a prime topic, but that meeting was cancelled on short notice. Politico speculated that one of the likely reasons for the meeting cancelation was to discuss the complicated structure to preserve the independence of the L. A. Times and to keep one of its major investors around.
The answer was simpler, if perhaps more surprising: as Bloomberg reported moments ago, banks financing Gannett’s takeover of Tronc Inc.have backed out, putting a merger of the newspaper companies in doubt.

This post was published at Zero Hedge on Oct 27, 2016.

KKR Calls The Top: PE Giant Selling Distressed Debt It Bought Earlier This Year

One of the best trades of the year (in addition to buying beaten down, pre-bankruptcy coal stocks or our ongoing favorite trade, going long a basket of the most shorted names), was buying up distressed energy debt at the start of the year, when fears of mass defaults and liquidity events pushed debt prices to historical low levels. Some, like Oaktree, bought all they could. However, having ridden the wave higher, those same bottom-pickers are now calling the top.
Case in point, KKR is now selling distressed debt that it bought earlier this year, including in the energy sector, as the assets have appreciated more quickly than expected, credit co-head Nat Zilkha said in an interview with Bloomberg’s Erik Schatzker.
‘We are in a very significant monetization cycle, particularly in more of the distressed investments that we made,’ said Nat Zilkha, who oversees the 40-year-old firm’s credit investments, adding that ‘we got involved in some situations in energy and coal and other commodities earlier in the year, and those have played out quite well — frankly faster than we thought.’
Well, nothing like having jawboning central banks and jawboning OPEC eager to help out the thesis.

This post was published at Zero Hedge on Oct 27, 2016.

Why Hedge Funds Are Bleeding, and Why You Need to Pay Attention

As I told you earlier, investors are fleeing hedge funds in droves due to gross underperformance in the face of over-the-top fees.
In fact, the industry as a whole hasn’t seen anything like this since 2009 – maybe ever.
Ironically, the pain hedge funds are facing, based on the pain their trades have inflicted, holds the answer not only to their survival, but to an almost sure miraculous revival.
Understanding what’s gone wrong at hedge funds, how crowding into the same trades, staying too long in trades when cash registers should have been ringing, and how underperformance led to fee wars and investors fleeing for passive index funds, produces the roadmap funds have to follow to make a comeback.
And it shows average Joe investors how they can play the same profitable future.
Let me show you what I mean…

This post was published at Wall Street Examiner by Shah Gilani ‘ October 27, 2016.

Bonds Are Signalling Something Big Is Lurking In The Shadows – Episode 1112a

The following video was published by X22Report on Oct 27, 2016
Less spending, less people going to resturants and consumer confidence is down, but initial jobless claims are still at historic lows. Pending homes sales did not hit expectations. US mortgage activity falls to the lowest since May. Core durable goods declining for 21st straight month. Bonds are signalling that something is lurking right around the corner and the economy is about to implode. Depositors are fleeing Deutsche bank.

Caught On Tape: How Russian Soldiers Prepare For Nuclear War

The first images of the Russia’s recent nuclear attack drill have been released, confirming the massive scale of the preparations…

An unprecedented 40 million Russian citizens, as well as 200,000 specialists from “emergency rescue divisions” and 50,000 units of equipment took part in a four day-long civil defense, emergency evacuation and disaster preparednessdrill last week, the Russian Ministry for Civil Defense reported on its website.
As The Sun reports, radiation-ready Russian soldiers prepare for nuclear war in the first footage to emerge of a terrifying practice drill involving up to 40 million people.
Emergency services wore hazchem suits and gas masks during the four-day trial run in Moscow.


This post was published at Zero Hedge on Oct 27, 2016.

The Next Big Shoe to Drop – Student Loans

More than 40 million young Americans carry federal and private student loan debt – amounting to over $1 trillion. Defaults are on the rise and the issue has grown to become a nasty wealth transfer mechanism, as well as sad example of the failure of finance in general.
This week, President Obama announced a new initiative framed as a way of addressing the issue. Sadly, it is far from the mark, and just one more indication that monetary masters are the real puppeteers.
Many have pointed out that the student loan debt bubble could be the next subprime crisis.
Perhaps so, but it is potentially much worse, acting as an anvil when considered in the context of other consumer debt like car loans and credit cards.
The student debt debacle has the potential of corrupting not only education, but a generation as well.
It risks becoming the blight on a generation of would-be productive and innovative work force.
Furthermore, the workforce declines, and falls behind, as more students return home to live with parents. And the extra burden on multi-generational households adds yet another deflationary force to the natural trend.

This post was published at Silver-Coin-Investor on Oct 27, 16.

Are Gold Prices Going to Rise?

Gold managed its first weekly gain in five weeks last Friday, and it has remained mostly flat so far this week.
And one of the biggest questions on the minds of investors has been ‘are gold prices going to rise from here?’
Gold prices today are down 0.04%, or $0.50, to $1,273.60 in early trading.
The story for gold this month has been all about the dollar. It’s been strong and keeps heading higher, continuing a trend that began in early October.
The rallying U. S. dollar has provided a challenging environment for gold prices in October. And despite the run we’ve seen already in the dollar index, I’m not sure that it’s quite over yet.
Counterbalancing that has been ongoing interest by investors in owninggold ETFs and other similar investments.
The Essential Guide to Buying Gold & Silver
In our new 2016 report, you’ll find…

This post was published at Wall Street Examiner on October 26, 2016.

SP 500 and NDX Futures Daily Reports – Big Profits in ‘Finance,’ Not So Much In Real Things

Stocks were weak most of the day driven by lackluster earnings and the quality of those earnings calculations.
The markets were cheered during the day when a story broke that a small group of traders in interest rate derivatives was able to score a cool $300 million profit for the quarter.
Of course that spectacular amount was not obtain from ‘prop trading’ which the Banks have been told to exit, but from just ‘serving their customers’ and holding ‘certain positions for inventory.’
Yeah, right. Well, I am sure the NY Fed has their back, or something like that.
After the bell Amazon laid an earnings egg, and tech stocks moved lower in the futures markets. The stock was down a bit over six percent.

This post was published at Jesses Crossroads Cafe on 27 OCTOBER 2016.

Next Leg In The Rally? Extreme Positioning In Gold, Silver, 10-Year Bonds Has Moderated

Since the summer of 2015 the long gold, long 10-year US treasury trade bonds has basically been one in the same (silver and treasury bonds have moved in tandem as well).
Investors saw gold rally from under $1100 to nearly $1400 (silver from $15 to $21) as 10-year treasury yields fell from 220 bps to less than 140 bps. As the momentum of this trade really gained steam, we saw commercial traders aggressively position themselves for gold prices (and silver prices) to decline and for yields to back up.

This post was published at Zero Hedge on Oct 27, 2016.

Venezuela Throws In The Towel On Hyperinflation: Will Print 200x Higher-Denominated Bills

While several years ago it was perhaps debatable in polite society that Venezuela’s socialist economy would collapse ultimately unleashing hyperinflation, any doubt was put to rest early this year when the IMF’s own inflationary forecast confirmed as much.
However, while the international community had long accepted the inevitable fate of Maduro’s socialist paradise, the local government sternly refused to admit reality and to avoid confirming what the local population already knew, it insisted on keeping the highest denomination bill in circulation at 100 bolivars, whose worth is approximately 8 cents on the black market, turning the most basic transactions into logistical nightmares and saddling banks with crippling money-handling costs. Economists and central bank employees say Mr. Maduro didn’t want to acknowledge the country’s inflation problem by printing bigger notes.
This has finally changed, and as the WSJ reports, Venezuela’s government, slammed by hyperinflation has finally thrown in the towel, and is planning to issue new bills in December with larger denominations – up to 200 times higher than the current biggest bill, according to people familiar with the plans. The move marks an implicit acknowledgment by the government that skyrocketing prices have slashed the value of the currency

This post was published at Zero Hedge on Oct 27, 2016.