China’s Blowing Out TED-Spread Has Traders Bracing For A Cash Shortage

This past July, we lamented that as a result of the now implemented money market reform which sent Libor soaring, Wall Street had lost one of its most dependable, forward-looking crisis indicators: the TED-Spread (the difference between LIBOR and 3 month TSYs), something which Bloomberg also figured out last week.

Specifically, we said that “now the regulatory intervention is set to pressure what have traditionally been reliable metrics indicative of funding stress and systemic risk, among them swap spreads, the TED-Spread and the FRA-OIS spread, the market is about to lose the last metric indicative of underlying tensions. After all, with central bank intervention having broken all conventional signalling pathways, including equities, corporate bonds, Treasuries, and VIX, there will no longer be any reliable sources hinting at fundamental risk in the market, certainly for the short-term and perhaps over an indefinite amount of time.”

This post was published at Zero Hedge on Oct 29, 2016.

Minimum Wage Proposals On 2016 Ballot Will Lead To Over 250K In Job Losses

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
Fairfax County Virginia has a 2016 ballot initiative to raise a prepared meals tax of 4%, used to fund public schools (70%) and County services, capital improvements and property tax relief (30%). Let’s hope it works better than the minimum wages initiatives on the ballots in several states.
Minimum wages sound great … if you don’t think about it too hard. But raising the minimum wage has to be paid for by somebody and it is usually the same group of people that the minimum wage is allegedly trying to benefit.
A simple example might help. You have a fast food restaurant with 3 workers. With a higher minimum wage, you are likely to see 2 happier workers (unless they have to work longer hours) and 1 worker that loses their job. Alternatively, the fast food restaurant could raise prices and try to pass the minimum wage increase on to consumers (passing the ‘tax’ onto consumers). Of course, the minimum wage cheerleaders usually hope the the owner of the fast food restaurant will take a decrease in profits to fund the higher minimum wages.

This post was published at Wall Street Examiner by Caleb Crawdad ‘ October 29, 2016.

Italy’s Banking System on Verge of Nervous Breakdown

The ‘Doom Loop’ resurges.
One of the best indicators of whether a financial crisis is in full swing is when senior insiders begin to lose it in public. That’s precisely what happened in Italy on Thursday when Italian senior banker Giuseppe Guzzetti gave a speech at a conference in honor of World Savings Day, an international event that, unbeknownst to 99.9% of mankind, takes place every year on Halloween (Oct. 31).
During his address, Guzzetti admitted that Atlante II – one of two bad bank funds created to provide much-needed support to Italy’s crumbling banking sector (the other being its predecessor, Atlante I) – is chronically underfunded. The fund, set up in the spring to help Italy’s most fragile banks, in particular Monte dei Paschi, remove some of the most toxic debt off their balance sheets, has experienced six intense months of activity, ‘but is now out of breath,’ Guzzetti lamented.
The admission is particularly important in light of Guzzetti’s current role, not only as the chairman of ACRI, an association of Italian savings banks and foundation, but also as the top man at Fondazione Cariplo, an influential ‘charitable’ banking foundation. Cariplo is the largest shareholder of Quaestio Holding S. A whose deeply opaque Luxembourg-based subsidiary, Quaestio SGR, is the proud owner of Atlante I.

This post was published at Wolf Street by Don Quijones ‘ October 30, 2016.

The Last Chapter Problem

This is a syndicated repost courtesy of The Baseline Scenario. To view original, click here. Reposted with permission.
Like many analytically minded liberals, I’m good at identifying problems and less good at coming up with solutions – a common disease sometimes called the ‘last chapter problem.’ I recently finished reading The Reconnection Agenda by Jared Bernstein (which you can even download from his blog), which takes the opposite approach.
The problem he addresses is one that we all know about – inequality, stagnant real wages, the divergence between productivity gains and living standards, etc. Bernstein recalls a meeting with a group of insiders in 2014, when a pollster interrupted a discussion of the post-Great Recession economic recovery to say:
If you mention the word ‘recovery’ to people, they don’t know what you’re talking about. And they conclude you don’t know what they’re talking about. It’s not just that they feel disconnected from an economy that’s supposedly growing. It’s that they don’t think anyone understands or knows what to do about their situation.

This post was published at Wall Street Examiner by James Kwak ‘ October 29, 2016.

Come Hillary or High Water, It’s Just About Hell Week for the Economy

Election week is only about a week away. No matter who wins, rage will break out across the US landscape because, for the time being, the flames are kept minimally under a lid by hope on each side that their candidate will win. If Hellary Clinton loses, the establishment will come unhinged. If Trump loses, the Tumpettes are already sounding their charge against the election results. Nothing is going to settle down no matter who wins; but to give Trump’s supporters some encouragement, should the worst befall them, I offer the following silver lining:
As unendurable as I believe a Hillary presidency would be – with its suffocating smog of endless scandals and swirl of smoke clouds from all the wars she would continue to instigate – as she so clearly did while senator and then secretary of state – a Hillary presidency would have one great benefit: it would in fairly short order bring clarity for the entire nation to the fact that the nation’s economic ruin is the fault of the establishment that they’ve been electing for years (something about which many are obviously in great denial or they wouldn’t vote for Hillary in the first place).
Hillary is as establishment as you get; so is Obama; so was George Bush (both of them); so are most of the Republicans and Democrats in congress. While that is stating the obvious, the point I am working up to is that a Hillary victory is a chance for a total flush in all parts of government four years from now.

This post was published at GoldSeek on Sunday, 30 October 2016.

BOE’s Carney May Announce Decision To Step Down This Week

In November 2012, the central bank-watching world was rocked when instead of Paul Tucker, a three decade veteran at the Bank of England replacing outgoing governor Mervyn King as many expected, the new head of the central bank was revealed to be former Goldmanite Mark Carney, something we had anticipated previously despite realizing that the optics of Goldman dominating European politics and finance, left quite a bit to be desired.

This post was published at Zero Hedge on Oct 29, 2016.

“Global Economy Is Not Improving” – Anxious CEOs Blame Poor Data On Weak US Consumer

Each week the CEO of Avondale Asset Management, Scott Krisiloff, publishes some of his observations from commentary provided by public company executives during earnings calls. Despite expectations for the usual rosy outlooks, Krisiloff notes that he was surprised to find that “comments from consumer facing businesses were somewhat troubling.”
In particular, among the large consumer-facing businesses, both McDonalds and Brinker (Chili’s) warned of reduced discretionary expenditures by consumers on the back of “broader macroeconomic issues of consumer confidence” and a “slight squeeze” on consumer budgets with gas and healthcare costs rising. Meanwhile, staffing giant Robert Half noted that seasonal upticks in hiring generally experienced in September and October failed to materialize this year.
Visa (Payments): ‘On the negative side, the global economy is not improving. Geopolitical tensions are high. The U. S. election is a wild card, and we continue to watch the impact of Brexit. ‘ McDonald’s (Fast Food): ‘I think there are broader macroeconomic issues of consumer confidence and just uncertainty of wage increases, the slight squeeze on discretionary spend with gas prices aging back up and healthcare costs going back up. So, I think those are sort of things that we see affecting customers and basically the spare cash they have in their pocket’

This post was published at Zero Hedge on Oct 29, 2016.

Platinum Takes The Lead

A very choppy weak for stocks as we continue to get mixed earnings which means stocks are all over the pond and giving us no trend at all.
I went to cash early in the week, then tried a few small trades only to be stopped out, so I continue to wait.
Last weekend I talked about some 3 days tight patterns in the miners and I was looking for a nice continuation higher Monday, but it never came.
I was stopped out of my miners near cost so no big deal.
Patterns work sometimes, but sometimes they don’t, especially in a non-trending market such as we have now.

This post was published at GoldSeek on Sunday, 30 October 2016.

How Much Time do we have Before the Next Economic Crisis?

Not much time.
Since early July, the 30-year US Treasury Bond Price Index has plunged 8.3%. It’s now called ‘the rout’ in longer-dated government bonds. One of the specters is rising inflation at a time of ultra-low yields.
What has become the number one predictor of a bear market in stocks over the past many decades? The US Treasury yield curve. It drives bank lending – which can strangle the economy. But this time, the risks are much higher, and the potential economic consequences steeper.


This post was published at Wolf Street by Wolf Richter ‘ October 29, 2016.

The Coming Bond Market Crash – An Interview With Eric Hadik

The Coming Bond Market Crash – An Interview with Eric Hadik
First introduced to the financial markets in 1979, Eric Hadik is a trader and analyst who has been intimately involved with commodities and investing for over 35 years. His work gained wide recognition from the outset, where throughout the late-1980’s Eric worked closely with and provided market analysis to major institutions such as BP, Arco, Occidental, Royal-Dutch Shell and Chase Manhattan as well as AMAX Gold and Handy & Harman. In the early 1990’s Eric laid the groundwork for what is now INSIIDE Track Trading – founded in 1994. In that capacity, Eric publishes research, analysis and trading strategies with the expressed goal of teaching, educating and sharing his insights with thousands of individual and corporate traders around the world. His articles and interviews have been featured in major financial media over the years, including CNBC, Forbes, Inside Wall Street and Investor’s Daily.
E Tavares: Thank you for being with us again today. Last time we spoke we discussed some stock & commodity market calls you had made in terms of timing and magnitude which seemed to go against consensus and yet were remarkably accurate. You have recently followed suit calling for a major gold price correction, beginning in July 2016 at a time when the charts and indeed many renowned investors were suggesting that it was going higher. Before we get into the main topic, can you briefly remind us again of your methodology for trading the markets?
E Hadik: My approach to analyzing and trading the markets is a multi-stage process that begins with the more subjective cycles and indicators and then moves through to more specific and objective indicators that repeatedly hone this analysis and ultimately formulate it into a usable trading strategy.

This post was published at Zero Hedge on Oct 29, 2016.

AMAZON.CON – ROFLMAO

If this is the case, the true reality beneath Bezo’s fraudulent accounting had to have been horrific:
Amazon’s quarterly profit misses estimates, shares tumble
From Reuters – LINK:
Amazon.com Inc reported a lower-than-expected quarterly profit on Thursday as expenses rose and the company provided a disappointing fourth-quarter revenue forecast.
The growth of AMZN’s cloud business is rapidly slowing down. This has been one of my key arguments about the insanity of the market cap attributed to AMZN’s cloud business. It’s tiny compared to AMZN’s overall revenues. And competition in the cloud space is going to become ferocious as Microsoft, Google and Oracle begin to really flex their muscles.
The only question left for me is to determine which between AMZN and TSLA is biggest Ponzi scheme in history. AMZN is maybe a $10 stock and TSLA is likely worth $2.

This post was published at Investment Research Dynamics on October 27, 2016.

What’s next for Crude Oil; Higher prices or Crash

If the doors of perception were cleansed everything would appear to man as it is, infinite. For man has closed himself up, till he sees all things thru chinks of his cavern.
William Blake
2106 started with all the Drs of Gloom stating that oil was heading lower and many even predicted that it would trade down to $10.00. It was kind of interesting to watch this circus as there is a saying the cure for low prices is usually low prices. It would have made sense to take a firm stance against oil when it was trading above $100, but not when it was trading in the $30.00 ranges. These same experts were busy proclaiming higher prices when oil was trading north of $100.00. Only when oil was close to putting in a bottom, did they muster the courage to issue even lower prices; they would have been well served by simply keeping quiet. Experts were all trying to outdo each other; each one is releasing lower prices and a gloomier scenario. Here are some examples of the stories being put out at the time:
Get Ready for $10 Oil: Bloomberg on Feb 2016
Oil could crash to $10 a barrel, warn investment bank bears: telegraph.co.uk on Jan 2016
Oil Seen Heading to $20 by Morgan Stanley on Dollar Strength: Bloomberg on Jan 2016
Goldman Sees Risk of Oil Below $20: Bloomberg Feb 2016
At that point, we knew that a bottom was close at hand and on the 20th of January, 2016 we penned the first of many articles on oil. This is what we said back in Jan:
As it has closed below the psychological level of $30 on a weekly basis, it is likely it will experience one more downward wave before a tradable bottom is in place. A move to the $23-$25 ranges is now a strong possibility, and as long as oil does not close below $23.00 on a weekly basis, oil will start putting in a slow bottoming formation.

This post was published at GoldSeek on 28 October 2016.

BREAKING: OREGON STANDOFF LEADERS ACQUITTED FOR MALHEUR WILDLIFE REFUGE TAKEOVER

Portland, OR – The group of men who seized the Malheur National Wildlife Refuge, in rural Oregon were found not guilty late Thursday, vindicating brothers Ammon and Ryan Bundy after the 41-day standoff that brought nationwide focus to long-running dispute over federal control of rural land in the Western United States.
According to a report in by the Associated Press:
A jury found brothers Ammon and Ryan Bundy not guilty a firearm in a federal facility and conspiring to impede federal workers from their jobs at the 300 miles southeast of Portland where the trial took place. Five co-defendants also were tried one or both of the charges. Ammon Bundy has a house in Emmett.
Despite the acquittal, the Bundys were expected to stand trial in Nevada early next year on charges stemming from another high-profile standoff with federal agents. Authorities rounding up cattle at their father Cliven Bundy’s ranch in 2014 because of unpaid grazing fees released the animals as they faced armed protesters.
The Bundy family initially made headlines in 2013 when the Bureau of Land Management brought armed agents in to seize rancher Cliven Bundy’s cattle after his refusal to pay federal authorities a massive debt – which he claims is illegitimate.

This post was published at The Daily Sheeple on OCTOBER 28, 2016.

But There’s No Voter Fraud!

Oh, there’s no fraud eh?
Miami-Dade State Attorney Katherine Fernandez Rundle in Florida said that one woman, 74-year-old Gladys Coego, had been working as an absentee ballot opener when a supervisor allegedly saw her marking ballots that had been left blank to show votes for a Miami-Dade County mayoral candidate. Prosecutors said that Coego admitted to marking the ballots, and was charged with two felony counts of marking or designating the ballot of another.
Well, you know, that was just an “aberration.”
Uh huh.
How about this one?

This post was published at Market-Ticker on 2016-10-28.

There will never be a sound currency system

As the gold market takes a break in its journey to much higher levels, it is good to step back a bit and understand why gold has appreciated so dramatically in the last 100 years and why this will continue for many years to come. Most people have no idea what money is. They believe that if they have 100 dollars or euros, that this represents real value as well as durability. Few people realise that their currency which they call money has nothing to do with real money at all. All paper currencies are ephemeral and return to their intrinsic value of zero. This is because reckless governments cling on to power by printing or borrowing endless amounts of fiat money in the hope that they will placate the people and buy votes. Fiat money as the name indicates, can never be real money. It is issued by edict and is not backed by anything but debt and liabilities.
Power corrupts and money corrupts.
It is a lethal combination which not only destroys people but also nations. And sadly, we have now reached a point in history when the unlimited amounts of fiat money that have been created will also destroy continents.
Zimbabwe type hyperinflation to hit most currencies
To understand what money is and isn’t, we can just look at the example below.
Most people in Zimbabwe believed that their currency was money and that it represented reward for labour and or production. But as the irresponsible regime started to run out tricks to cover up their total mismanagement of the economy, they had to print endless amounts of money until the point when even the 100 trillion-dollar note was totally worthless. Inflation in Zimbabwe rose exponentially. In 2008 annual inflation was estimated at 90 to the 21 percent (or roughly a 10 with 40 zeros).

This post was published at GoldSwitzerland on October 28, 2016.

Temporary Euphoria: New York Fed’s Nowcast GDP Forecast For Q4 At 1.40%

I was excited when I saw the Q3 GDP print at 2.9%, the highest real GDP print since Q3 2014. But if we look at YoY GDP, real GDP grew at only 1.5%.

But what about Q4 real GDP growth? The New York Fed’s Nowcast forecast model puts Q4 real GDP growth at … 1.4%. This is only slightly lower that Q3 YoY growth of 1.5%.

This post was published at Wall Street Examiner by Caleb Crawdad ‘ October 28, 2016.

The 2016 Political Cartoon That Gets It Right, Sadly

Political cartoonists are among the most creative artists in the world. How do they do it, day after day? How does anyone come up with that many creative ideas?
There have been hundreds of thousands of them over the years. They stretch back two centuries.
The cartoons that Thomas Nast drew of New York City’s “Boss” Tweed in the early 1870’s still get into American history textbooks. They brought him down, as he feared they would. Tweed offered to pay Nast to stop drawing them: $500,000 — at least $20 million in today’s money.
We see political cartoons. We smile inwardly. Maybe we smile outwardly. Occasionally, we laugh. Then we forget them.
Political cartoons are like leaves in autumn. They float downward, pile up on the lawn, and either get bagged or they rot. They are as memorable as last year’s newspaper. They are immediate. Therefore, they don’t last.
There is one political cartoon that may have shaped American politics. Had it not been for the Web, I would not know who drew it:

This post was published at Gary North on October 29, 2016.

Sun’s Drop in Energy Output Stronger than Expected

I have been warning that global warming is really a hoax, for the major issue is that the sun is a thermodynamic system, which means that it does not provide a steady output. There is a 300-year cycle to this entire phenomenon.
Experts say that solar activity has fallen to levels not seen since the mini-ice age that took place between 1645 and 1715 known as the Maunder Minimum.
While the global warming advocates want to blame everything on CO2 levels, hard evidence from ice core samples indicate that spikes in CO2 levels trailed increases in global temperature by about 200 years. This has caused people to question the validity of their theories. Of course, the cycle with CO2 level spikes predates human activity with combustion engines by hundreds of thousands of years.

This post was published at Armstrong Economics on Oct 29, 2016.