“Unequivocally Bad?” Gas Prices Soar Over 20% YoY – Most Since 2011

In December 2014, as gas prices had plunged over 20% YoY, Janet Yellen proclaimed “from the standpoint of the U. S… the decline we’ve seen in oil prices is likely to be, on net, a positive,” and that narrative of slumping gas prices being “unequivocally good” for Americans was spewed everywhere across linear-thinking mainstream media. So we wonder, with gas prices up 22% year-over, the fastest spike since 2011, is that “unequivocally bad” for America?
Remember when Janet Yellen, and all the tenured economists in her circles said that plunging gas prices are great for the consumer?
The dramatic plunge in oil prices might be spooking some investors, but Janet Yellen isn’t worried at all.
The Federal Reserve chief believes oil tumbling is like a tax cut for American consumers.

This post was published at Zero Hedge on Jan 8, 2017.

Yuan Is Crashing (Again)

The volatility in the Chinese currency has gone from the sublime to the ridiculous. After exploding 21 handles stronger in the biggest PBOC-engineered short-squeeze in history – erasing the entire post-election sell-off – offshore Yuan is now collapsing once again, down 350 pips tonight (and over 10 big figures from Thursday’s highs). While interbank rates have calmed down, the rush to exit the currency has not…

This post was published at Zero Hedge on Jan 8, 2017.

Are Social Media’s “Ads For Eyeballs” Valuations About To Be Eviscerated?

There’s a peculiar tone emanating from the social media space. It’s a little hard to hear, but if you listen closely, it’s there none the less. That sound is the sudden gasp of realization that the most dominating reasoning and defense that encompassed the entire social media space may in fact being laid-to-waste right before their screens. That horror?
The eyeballs for ads model doesn’t work. And – it’s being stated by one of their own. (Insert the scary music tones here)
In a blog post the online publishing platform Medium stunned what I refer to as ‘The Valley’ (i.e., the everything social and disruption purely for its own sake devotees) when it announced two stunning proclamations. The First: It was jettisoning about one-third of its workforce. Second: The reasoning behind it, Here’s an excerpt, to wit:
‘We also saw interest from many big brands and promising results from several content marketing campaigns on the platform.
However, in building out this model, we realized we didn’t yet have the right solution to the big question of driving payment for quality content. We had started scaling up the teams to sell and support products that were, at best, incremental improvements on the ad-driven publishing model, not the transformative model we were aiming for.

This post was published at Zero Hedge on Jan 8, 2017.

CDG and CDS

As we begin 2017, it’s more important than ever to be clear about what we discuss here. To that end, today we add two new acronyms to the TFMR glossary…CDG and CDS. No longer will be discuss the paper derivative price of “gold” or “silver”. Instead, we will refer to these issues as CDG (Comex Digital Gold) and CDS (Comex Digital Silver).
Let’s just cut to the chase. When you regularly observe charts such as this one…

…isn’t it appropriate to ask yourself just what you are following? How in the world can anyone continue to call what you see trading on the Comex “gold”? It’s not gold. Instead, it is simply an electronic derivative contract that HFTs and hedge funds utilize to give themselves “gold exposure” or a “hedge”. No physical metal ever changes hands. Even the bi-monthly “delivery” process is nothing but a Bullion Bank circle jerk where warehouse receipts and warrants are shuffled to and fro.
So, why should we continue to refer to what is traded there as “gold”? Well I, for one, will no longer do so. Oh sure, I may slip up from time to time and, by force of habit, still call what is discovered on Comex the “gold price”. However, going forward I will make every effort to instead refer to it as CDG for Comex Digital Gold. As the same situation exists in silver, henceforth the Comex silver price will be referred to as CDS for Comex Digital Silver.

This post was published at TF Metals Report on January 6, 2017.

On Russian Hacking, The Only Narrative That Matters Is Truth

Excuse me for wanting to point out the obvious, but sometimes the obvious gets very lost in the web of narratives spun by the master narrator inside the White House. Forgive me, but are we not losing the idea that the only narrative that really matters is that all of the information ‘LEAKED’ was obtained through a simple fishing e-mail sent to John Podesta. See their own words here:

This post was published at Zero Hedge on Jan 8, 2017.

Black Magic Fraud to be exposed in 2017 – Gold up 300x

At the beginning of a new year it would be totally natural to forecast what the likely events and trends will be for 2017. A lot of experts around the world will predict a number of ‘new’ events as if a lot of things will change just because we are entering a new year.
But sadly, I will disappoint everyone and not change direction in any single area that I have been talking about for many years. Trends don’t change because we are in a new year. The principal long term trends take a long time to develop and even longer to reach a turning point.
The Alchemy or Black Magic started in 1913
What started with the creation of the Fed in December 1913, led to the biggest experiment in Alchemy that the world has ever experienced. Alchemy is the process of turning base metals to gold. But Alchemy also means a seemingly magical process of transformation and creation. Alchemy derives from Greek with a bit of Arabic (‘Al’) and simply means Black Magic.
And Black Magic or Alchemy is exactly what the bankers who met on Jekyll Island practised in order to set up the Federal Reserve Bank. This would be the central bank of the US that would be owned by private bankers and for the benefit of these bankers. This extremely clever and devious conspiracy followed the words of Mayer Amschel Rothschild who 100 years earlier had said: ‘Give me control of the nation’s money and I care not who makes its laws.’

This post was published at GoldSwitzerland on January 6, 2017.

The Problem With Forecasts

The Problem With Forecasts
We can’t predict the future – if it was actually possible fortune tellers would all win the lottery. They don’t, we can’t, and we aren’t going to try. However, this doesn’t stop the annual parade of Wall Street analysts from pegging 12-month price targets on the S&P 500 as if there was an actual science behind what is nothing more than a ‘WAG.’ (Wild Ass Guess).
In reality, all we can do is analyze what has happened in the past, weed through the noise of the present and try to discern the possible outcomes of the future.
The biggest single problem with Wall Street, both today and in the past, is the consistent disregard of the possibilities for unexpected, random events. In a 2010 study, by the McKinsey Group, they found that analysts have been persistently overly optimistic for 25 years. During the 25-year time frame, Wall Street analysts pegged earnings growth at 10-12% a year when in reality earnings grew at 6% which, as we have discussed in the past, is the growth rate of the economy.
Ed Yardeni published the two following charts which shows that analysts are always overly optimistic in their estimates.

This post was published at Zero Hedge on Jan 8, 2017.

The end of an era: Economist Thomas Sowell says ‘farewell’

After writing a weekly (sometimes semi-weekly) column for the last 25 years (here’s an archive of his columns back to 1998), economist, scholar, author and national treasure Thomas Sowell made this announcement in his column today (‘Farewell’):
Even the best things come to an end. After enjoying a quarter of a century of writing this column for Creators Syndicate, I have decided to stop. Age 86 is well past the usual retirement age, so the question is not why I am quitting, but why I kept at it so long.
Here’s a link to Thomas Sowell’s second column today (‘Random Thoughts, Looking Back’), here’s some of the reaction on Twitter and the Internet to Sowell’s retirement, here’s Thomas Sowell’s webpage, and here’s his Wikipedia entry. Milton Friedman once said, ‘The word ‘genius’ is thrown around so much that it’s becoming meaningless, but nevertheless I think Tom Sowell is close to being one.’
In my opinion, there is no economist alive today who has done more to eloquently, articulately, and persuasively advance the principles of economic freedom, limited government, individual liberty, and a free society than Thomas Sowell. In terms of both his quantity of work (at least 40 books and several thousand newspaper columns) and the consistently excellent and crystal-clear quality of his writing, I don’t think any living free-market economist even comes close to matching Sowell’s prolific record of writing about economics. And I don’t think there is any writer today, economist or non-economist, who can match Thomas Sowell’s ‘idea density’ and his ability to consistently pack so much profound economic wisdom into a single sentence and a single paragraph.

This post was published at Mises Canada on JANUARY 6, 2017.

Fiat Chrysler To Invest $1 Billion In The US, Add 2,000 Jobs

Suddenly the coolest thing in corporate America is announcing major capital investments in the US while adding thousands of American jobs, i.e., the opposite of the globalization trend of the past 30 years, and the latest to jump on the bandwagon is none other than Fiat Chrysler, the Italian carmaking giant which ironically acquired US automotive icon Chrysler’s assets after just a 42 day stay in bankruptcy during the financial crisis.
Just days after Ford scrapped plans to build a $1.6 billion plant in Mexico and invest $700 million in a factory in Michigan, following threats from Trump aimed at General Motors to focus on the US instead of Mexico which would be repeated just days later targeting Toyota, Fiat Chrysler (FCA, or Fiat) on Sunday said it will invest $1 billion to modernize two plants in the U. S. Midwest and create 2,000 jobs, in an attempt to placate the president elect as well as upping the ante as automakers respond to threats from President-elect Donald Trump to slap new taxes on imported vehicles.
Fiat announced that a plant in Warren, Michigan, near Detroit, would make the Jeep Wagoneer and Jeep Grand Wagoneer SUVs, while a Toledo, Ohio, factory would produce the Jeep pickup. The company said the production plans in Ohio and Michigan were “subject to the negotiation and final approval of incentives by state and local entities.”

This post was published at Zero Hedge on Jan 8, 2017.

Shaun Chamberlin: Surviving The Aftermath Of The Market Economy

The following video was published by ChrisMartensondotcom on Jan 8, 2017
Historian and economist David Fleming undertook the writing of Lean Logic a grand vision that projected out the likely path of collapse for our currently unsustainable way of life, as well as the key success factors society will need to cultivate to come out the other side. Sadly, he died in 2010 with the 350,000-word manuscript still in draft form.
Following his death, his writing partner Shaun Chamberlin distilled the book’s prime conclusions into the more accessible Surviving The Future: Culture, carnival, and capital in the aftermath of the market economy. Shaun, who has also been deeply involved with Rob Hopkins in the Transition Movement since its inception, stresses that localized communities that pursue developing as much independence from the central economy as possible will be the foundations for creating a sustainable, enjoyable future.

Martin Shkreli Suspended From Twitter For “Harassing” Female Teen Vogue Essay Writer

I would rather eat my own organs pic.twitter.com/IgeCRZqk8w
— Lauren Duca (@laurenduca) January 5, 2017

While hardly considered an “alt-right” personality (despite his professed support of Donald Trump), Martin Shkreli today encountered the full fury of the Jack Dorsey social media apparatus scorned, when his Twitter account was suspended. The suspension, reported first by The Verge, is allegedly in retaliation for Shkreli’s “targeted harassment” against freelance reporter Lauren Duca.
As Verge notes, Duca had recently made the media spotlight after penning a Teen Vogue essay titled ‘Trump is Gaslighting America’ which went viral because, ostensibly, Teen Vogue is one of the few media outlets in the US not considered “fake news” by either part of the ideological divide. She was subsequently invited to a face-off with Fox News’ Tucker Carlson. That clip in turn also went viral due to Carlson’s statement that Duca should stop talking about politics and ‘stick to thigh-high boots.’ Following her media appearances, Shkreli, a professed Trump supporter, has decided to troll her.
The (sexual) tension between the two escalated last week when Duca tweeted a screenshot of a direct message from Shkreli, who in 2015 was briefly described as “the world’s most hated man” after hiking the price on an anti-parasitic drug 56 times (before it emerged that virtually every other pharma company does the same if to a slighly less shocking extent), refusing to answer questions about alleged fraud, getting arrested on charges of securities fraud (he remains free on $5 million bail), and asking celebs to listen to a rare Wu-Tang Clan album with him.

This post was published at Zero Hedge on Jan 8, 2017.

TrimTabs Says “Insatiable” ETF Buying Is Unlike It Has Anything Ever Seen, Issues A Warning

On Fruday, while confirming that the meme of “Fake News” has officially gone too far, Goldman Sachs slammed the talk of a Great Rotation from bonds into stocks (yes, calling it fake news), and writing that “the political rotation occurring in Washington, D. C. will not be mirrored in financial portfolios: despite the sharp fall in bond values during the past six months and the prospect of further losses in 2017, Goldman expects minimal asset rotation away from debt and into equities for two reasons. i) Many categories of investors are restricted from allocating assets away from bonds; ii) Investors such as pension funds and households that have latitude to shift assets have debt allocations that are currently at the lowest level in 30 years. Mutual funds may see a migration of assets from bonds to stocks, but the pace and magnitude of any rotation will be limited.”
For now, however, this particular piece of “fake news” appears all too real, at least as shown in a dramatic reversal in fund flows since the election.
Case in point: last week, TrimTabs Investment Research reported that U. S. equity exchange-traded funds issued a record $59.9 billion in December, easily surpassing the previous record of $50.7 billion in November.

This post was published at Zero Hedge on Jan 8, 2017.

Five Key Factors for Investors to Focus on in 2017

1. Will we finally get inflation?
For eight years now global central banks have been working to create inflation via quantitative easing – with little success in the US and outright deflation in Europe and Japan. Trump’s election has rekindled ‘animal spirits’ amongst market participants due to multiple inflationary prospects: billions in infrastructure spending, cash repatriation, tax cuts and immigration reform. However, the market appears too sanguine on the chances of full passage given typical government gridlock. With many stocks fully pricing in reflation, investors need to be wary of heightened expectations heading into first-quarter earnings.
2. Macro or micro?
It seems the baton has finally been passed from monetary stimulus to fiscal stimulus as the Fed fades into the background. The central bank era – whether truly over or not – has been tough for stock pickers as highly-correlated markets move in a ‘risk-on, risk-off’ fashion. Will some of the best trades this year be macro-based or should investors focus primarily on individual company analysis? Year-end 2016 showed that sector rotation was the theme as investors moved out of ‘yieldy’ consumer staples, REITs and utility stocks into basic materials and industrial stocks. This will likely continue and investors need to analyze beyond daily index performance (S&P 500/Dow) as there is plenty of movement ‘under the surface.’

This post was published at FinancialSense on 01/06/2017.

In Shocking Move, Beppe Grillo Calls For UKIP Split, Urges Hook Up With European Federalist Liberals

In a stunning post on his blog published on Sunday, the founder of Italy’s Five-Star Movement (M5S), Beppe Grillo, said his political movement should cut ties with Nigel Farage’s anti-EU UK Independence Party (UKIP) in the European Parliament, and seek a hook up with the European liberals led by European Federalist Guy Verhofstadt.
Should this unexpected switch go ahead, it could, according to Reuters, see 5-Star “enter mainstream European politics and move away from the anti-system fringes“, a shift that might reassure other EU capitals that have grown uneasy about its rising popularity.
In his blog post, Grillo said in a post on his blog that since Farage had led Ukip to Britain voting to leave the EU, the two parties no longer shared common goals and he recommended leaving the Europe of Freedom and Direct Democracy (EFDD). ‘Recent events in Europe, such as Brexit, have led us to reconsider the nature of the EFDD group,’ Grillo wrote. ‘With the extraordinary success of the leave campaign, Ukip achieved its political objective: to leave the European Union.
In some ways the recommendation is forward-looking, and anticipates the departure of UK MEPs from the next legislature. As Grillo said ‘let’s discuss the concrete facts: Farage has already abandoned the leadership of his party and British MEPs will leave the European parliament in the next legislature. Until then, our British colleagues will be focused on developing the choices that will determine the UK’s political future.’

This post was published at Zero Hedge on Jan 8, 2017.

8/1/17: Corporate Cash: Organic Capex Still Sluggish

In 2016, based on data from Goldman Sachs, 26 percent of aggregate S&P500 company cash went to fund shares buybacks, matching 2013 ratio of buyback to cash for the highest in 9 years. At the same time, Dividends rose to 19 percent of cash compared to 18 percent in 2015, and M&As contracted to 14 percent of cash from 18 percent in 2015. As the result, CAPEX and R&D spending by S&P500 companies managed to rise to 41 percent of cash in 2016 from 40 percent in 2015, making this the third (after 2015) lowest CAPEX & R&D spend year (as a share of total cash) since 1999. CAPEX & R&D represent organic investments by the firms and are jobs additive. M&As and Buybacks are forms of financial allocations and are not supportive of jobs creation. In 2016, based on the data, the split between financial and organic investment was 40:41, which is slightly better than in 2015 (42:40), but still represents the fourth worst year on record (since 1999).

This post was published at True Economics on Sunday, January 8, 2017.