Previewing This Week’s Most Interesting Central Bank Decision (No, Not The Fed)

While most attention over the next week will be focused on the fascinating slow-motion-train-wreck developments in the US political arena over the next week, let’s please think of the central banks, which are used to being the key source of public fascination. And while the Fed’s November 1-2 meeting will come and go, with Yellen paralyzed with fear and certain to change nothing just 6 days before the election, a far more interesting central bank meeting due later this week, is that of the BOJ which addresses the market on November 1, and which over the past few months has set the global bond market on edge with its attempts to steepen the JGB yield curve which in turn led to the VaR-shocked early September stock selloff, inspiring other central banks to contemplate tapering long-end purchases resulting in a the biggest global debt selloff since the Fed’s 2013 taper tantrum.
This is what to expect from the BOJ according to Goldman Sachs:
We expect the Bank of Japan (BOJ) to maintain current monetary policy at its October 31-November 1 Monetary Policy Meeting. Here, we look at this and other points in a Q&A format.
Q1: Will the BOJ ease further at the next monetary policy meeting?
A1: We expect the BOJ to maintain the status quo.

This post was published at Zero Hedge on Oct 30, 2016.

The Debt Is No Problem – Here, Even My Phony Statistics Say So

Only stupid idiots care about the national debt.
That’s Paul Krugman’s more or less explicit point this week.
Climate change threatens to destroy civilization, and we’re worried about the national debt?
Sure, someday we may have to cut back on spending, Krugman admits, but that day is way, way in the future. For now, only a fool worries about the debt.
Krugman then goes on to share a chart purporting to show only modest levels of debt increase in the coming years.

This post was published at The Tom Woods Show on 30th October 2016.

Oil Tumbles To 1-Month Lows As OPEC Deadlock Shatters Deal Hopes

Confirming the swirling rumors from Friday, WTI crude is leaking lower (near $47 handle) in early asia trading afer Bloombergreports OPEC’s internal disagreements over how to implement oil-supply cuts agreed to last month prevented a deal to secure the cooperation of other major suppliers.
More than 18 hours of talks over two days in Vienna yielded little more than a promise that the world’s largest oil producers would keep on talking. Discussions will continue in late November, just days before the Organization of Petroleum Exporting Countries is supposed to finalize the accord that lifted oil prices to one-year highs.
Non-OPEC nations ended talks with the group on Saturday without making any supply commitments, Brazil’s Oil and Gas Secretary Marcio Felix said after the meeting. Brazil won’t restrict its oil production, though it’s willing as early as next year to host future OPEC conferences with the world’s biggest producers, he said in a phone interview.

This post was published at Zero Hedge on Oct 30, 2016.

South Korea’s Presidency Rocked By Oddly Familiar “Influence-Peddling”, “Charitable Foundation” Scandal

While various prominent politicians in the US, who shall remain nameless, are seeminly made out of Teflon when it comes to policy-peddling scandals, South Korea is less lucky and, as the WSJ reports, South Korea’s president Park Geun-hye has accepted the resignation of her chief of staff and four other senior aides, following public outcry over the influence of a friend of Geun-hye’s in state affairs. The move comes after the president’s public approval ratings plunged to historic lows and thousands of street protesters called for her resignation Saturday after she said recently that her friend, Choi Soon-sil, had helped her prepare speeches early in her presidential term.
The two women have been friends for more than 40 years and became connected through Ms. Choi’s father, who created a religious cult and was close to Ms. Park’s father, former South Korean president Park Chung-hee. The cult connection in Ms. Choi’s family has increased public suspicions of her motives.
So wait, someone else writing the president’s speeches, and people riot over that? Americans, used to a far greater degree of drama in recent months would merely gloss over, as they would over the allegation by a South Korean broadcaster that Ms. Choi was also given access to confidential government documents, based on files it retrieved from a tablet computer that it says it recovered from an office she used. In a South Korean newspaper interview, Ms. Choi, who has no position in government, denied accessing material other than the speeches.

This post was published at Zero Hedge on Oct 30, 2016.

“China’s Debt Has Grown $4.5 Trillion In Past 12 Months, More Than The US, Japan And Europe Combined”

While concerns about China’s debt load, capital flows, and depreciating currency have been pushed to the backburner in recent months, perhaps facilitated by a welcome rebound in global inflation – perceived by markets and global central bankers that monetary policy is finally working – it is worth a quick reminder of how we got here.
First, a quick trip through memory lane to remind us how much has changed in just the past year.
In a note by Morgan Stanley’s Chetan Ahya released on Sunday, the strategist reminds us that a little more than a year ago, the global economy was facing intense disinflationary pressures. Global commodity prices were declining significantly and the slowdown in China and other major commodity-producing EMs had led to some concerns that it could pull developed markets into recession and drag inflation down along with it. At the same time, in China, producer prices fell by almost 6%Y and the regime change in its currency management approach meant that China was no longer absorbing disinflationary pressures from abroad.
And while this seems like a distant memory today, thanks to China which has played a pivotal role in driving the global inflation cycle – this time on the upside – as the cyclical recovery has both lifted China’s own inflation and transmitted it globally, here is how this happened: the recovery in China has been driven by yet another round of debt indulgence. Debt in China has grown by US$4.5 trillion over the past 12 months, by far the highest amount of debt creation globally as compared to US$2.2 trillion in the US, US$870 billion in Japan and US$550 billion in the euro area. Indeed, China on its own has added more debt than the US, Japan and the euro area combined.

This post was published at Zero Hedge on Oct 30, 2016.

Negative Divergence in Gold Stocks Bodes for Lower Prices

You have heard it before from us and probably elsewhere. The miners lead Gold. We have seen this every major turn dating back 16 years and it can also be the case with respect to short and medium term trends. While the precious metals sector has rallied over the past few weeks, the rally has been weak and the gold stocks relative weakness in recent days bodes negatively for the sector.
Consider the daily chart (below) and the overall performance from this past week. Gold gained $9/oz or 0.7% on the week but GDX and GDXJ lost 3.3% and 5.3% on the week. Silver gained 1.7% on the week while SIL lost 4%. More importantly, the gold stocks peaked seven sessions ago and are trading 4%-5% below that peak while Gold closed Friday at its highest level in October. This is not the type of action typical of a sustainable rebound.

This post was published at GoldSeek on 30 October 2016.

How To Position For November 9th: BofA’s 4 Post-Election Scenarios

With polls still indicating that a Clinton win and split government are the most likely outcomes, we have witnessed increased complacency around election results. But, as BofA warns, risks to market multiples and to earnings growth are typically elevated in an election year, with volatility generally rising ahead of the election, and business investment typically slowing as corporations adopt a wait-and-see attitude.

This post was published at Zero Hedge on Oct 30, 2016.

26 Feet to Revolution: From Berkeley to Kent State, 1964 to 1970

Here is a video of a recent protest at the University of California, Berkeley, the nation’s most academically prestigious tax-funded university. It is the premier state school today. It was in 1964. It was in 1880.

This is not a threat to the social order. It is an annoyance for students who want to go to class.
On September 10, 1964, the Free Speech Movement began at Berkeley. Almost no one remembers why.
The University’s Board of Regents had long imposed restrictions on what kinds of recruiting were possible on school property. Everyone involved in student government knew the rules. Every group had to be approved: fraternities, sororities, religious groups, and political activists. The underlying motivation, more than anything, was to restrict religious proselytizing: the church/state separation issue.

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

5 Drug Price Increases That Will Have You Seeing Red

Outrageous drug price increases by pharmaceutical companies may seem like exceptions – but they’re more common than you think.
While only a few make the news, drug price hikes have become standard practice in the pharmaceutical industry.
Last year DRX, a unit of Connecture Inc. (Nasdaq: CNXR), studied one-year drug price changes on 3,000 brand-name drugs. The study found 60 had drug price increases that were double the year before.
For 20 of the drugs, prices more than quadrupled…
In a separate study, DRX also looked at 21,000 generic drug price changes. More than 3,500 had prices that had doubled or more since 2007.
The widespread drug price increases are putting pressure on hospitals as well as individual patients. Many of the drugs are lifesaving.
But it’s the truly mammoth drug price hikes that have drawn the most attention…
Drug Price Hikes So Bad Congress Got Involved
The Daraprim episode last year may have been the most notorious drug price increase ever.
Daraprim has been around for 63 years and is used to treat a life-threatening parasitic infection as well as AIDS and cancer. Martin Shkreli, the CEO of Turing Pharmaceuticals, acquired the drug from Impax Laboratories (Nasdaq: IPXL) in 2015 and immediately raised the price per pill from $13.50 to $750 – an increase of 5,455%.

This post was published at Wall Street Examiner on October 28, 2016.

Sterling Set To Slide: BOE Declines To Dismiss Speculation Carney May Announce Decision To Leave

As noted here yesterday, citing reports in British newspapers such as The Times and Mail Online, Mark Carney’s “self-imposed deadline” for declaring whether he will stay in office beyond 2018 is fast approaching, and the central banker may decide to step down as soon as next week. Reportedly, the 51-year old Canadian may announce his decision “within days” at his next scheduled public appearance on Thursday, when the BOE announces its policy decision and the governor holds a press conference in London.
Today, the FT followed up with a report that suggests Carney’s tenure at the BOE may indeed be coming to an end, when it reported that “the BoE declined on Sunday to dismiss speculation that the governor might announce his decision this week alongside the quarterly inflation report.”
The FT’s Chris Giles prefaced this by saying that “ardent supporters of Britain’s vote to leave the EU believe they are on the verge of another victory by forcing Mark Carney to resign as governor of the Bank of England before the end of his term in 2018.”
The impact on sterling will likely be rather adverse when it opens for trading:

This post was published at Zero Hedge on Oct 30, 2016.

ABC / Wapo Clinton “Lead” Shrinks To 1-Point As New York Times Sees 4-Point Trump Advantage In Florida

NBC/WSJ/Marist Poll
Among those who haven't voted yet:
Trump 51 ( 9)
Clinton 42
North Carolina:
Trump 44 ( 2)
Clinton 42
— Political Polls (@PpollingNumbers) October 30, 2016

Yesterday we revealed that the ABC / Wapo poll is a complete farce after even their own pollsters admitted that the recent 10-point convergence between Clinton and Trump, in a matter of just a couple of days, was “not mainly about people shifting in their candidate preference, but about changes in who’s intending to vote“…so it wasn’t about voter preference but about how ABC / Wapo chose their “oversamples.”
In any event, the latest results, out today, show Hillary’s lead shrinking further to just 1-point. The poll was conducted October 25-28, so, in theory, it includes 1 day of the FBI announcement. That said, the FBI announcement didn’t really hit the media until late in the day on Friday so it’s unclear if it has impacted this particular poll as of yet. To be sure, ABC / Wapo clearly made an effort to maintain a slight Hillary lead in this latest poll by expanding their democrat “oversample” margin from 8-points yesterday to 9-points in today’s poll.
METHODOLOGY – This ABC News/Washington Post poll was conducted by landline and cellular telephoneOct. 25-28, 2016, in English and Spanish, among a random national sample of 1,160 likely voters. Results have a margin of sampling error of 3 points, including the design effect. Partisan divisions are 37-28-30 percent, Democrats-Republicans-independents.

This post was published at Zero Hedge on Oct 30, 2016.

“Things Have Become Quite Precarious”

The popular economic theme being reported by the popular press still remains. That the economy is grinding higher. That growth is improving, albeit slowly. That blue skies are just over the horizon.
Naturally we have some misgivings. As far as we can tell, business is not humming along. Earnings are stagnant. Profits are slim. Moreover, corporate reductions in force (RIFs) are being executed with the imprecise targeting of a sledge hammer. Even Google’s laying off staff.
Most notably, if the economy were improving there’d be demand for raw materials and new construction equipment to fabricate it into stuff. This doesn’t appear to be the case at the moment.
Earlier this week, for example, Caterpillar CEO Doug Oberhelman remarked that, ‘Economic weakness throughout much of the world persists and, as a result, most of our [Caterpillar’s] end markets remain challenged. In North America, the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, and around the world there are a significant number of idle mining trucks.’

This post was published at Zero Hedge on Oct 30, 2016.

The story of inflation between 1996 and 2016 is of rising prices in things that you need: Prices skyrocket for middle class goods and services.

Inflation is rarely discussed in the mainstream press. Most people wake up every day and simply believe that prices go up as a natural state. These deeply held assumptions usually crack when new revelations happen like centuries ago with new scientific discoveries showing that our planet is not the center of the universe. Yet somehow people hold on tightly refusing to acknowledge that inflation is caused directly by banks, governments, and central banks. It is interesting to look at inflation data over a 20 year period, form 1996 to 2016. What you will find in the data is that prices are soaring in the items people need, especially those items to enter into the middle class. Since wages are not keeping up, it is no surprise then that the middle class over this time has shrank into a minority class.

This post was published at MyBudget360 on October 30 2016.

Trump ‘Will Probably Win’ and Gold ‘May Rise $100’ Overnight – Rickards

Jim Rickards: Trump ‘Will Probably Win’ and Gold ‘May Rise $100′ Overnight
The US election is just two weeks away on November 8th, and one of Hillary Clinton’s most vocal critics on the business side is finance commentator and monetary expert Jim Rickards. Jim is in Sydney this week, armed with his latest book, hot off the press entitled ‘The Road to Ruin – The Global Elites’ Secret Plan for the Next Financial Crisis’ and gave an interesting television interview to ‘The Business’ on ABC Australia.
Rickards says that Trump ‘will probably win’ and, if he does, stock markets will crash 10% and gold will rise $100 over night.
The markets and polls believe Clinton will win and that is priced into markets in the same way that a ‘Bremain’ was priced into markets prior to the ‘Brexit’ vote.

This post was published at Gold Core on October 28, 2016.

“It’s As If The Whole City Fell Down” – Towns Collapse After Strongest Quake In 35 Years Hits Italy

On Wednesday, when we reported on the latest set of powerful, shallow quakes to strike central Italy, which themselves were aftershocks of the deadly August 24 earthquake which killed 300 people and injured many more, we quoted Salvatore Mazza, the National Institute of Geophysics and Volcanology who said that “The earthquake today has further disrupted the tectonic plates, and in the coming hours we may see aftershocks of today’s earthquake on top of those from August 24”, and concluded that it is likely that more quakes are coming.
We didn’t have long to wait, and overnight central Italy was hit by another powerful earthquake Sunday, toppling buildings that had recently withstood other major quakes and sending panicked residents back into the streets, but luckily causing no immediate loss of life. That there were no reports of deaths was largely due to the fact that thousands of residents left their homes after two strong jolts last week shook the same mountainous area.
As AP reports, the quake with a preliminary magnitude of 6.6 was the strongest to strike the country in nearly 36 years.

This post was published at Zero Hedge on Oct 30, 2016.

Social Media Blackout? FBI Emails Are Not ‘Trending’ On Twitter, Facebook, Buzzfeed, Or Snapchat

They are not known as ‘weapons of mass distraction’ for nothing…
In the 24 hours since FBI Director Comey dropped perhaps the biggest bombshell of the entire Presidential campaign, sending Democrats (and media) scrambling headless-chicken-like for answers (and blame-scaping), does anyone else find it odd that ‘FBI Emails’ does not appear to be a hot topic, trending, big deal on any social media?

This post was published at Zero Hedge on Oct 30, 2016.