Why You Might Want To Prepare Your Portfolio For A Time ‘When Doves Cry’

It turns out Prince was a gold bug. According to a recent statement filed in Minnesota court regarding the settlement of his estate, at the time of his death he owned no stocks or bonds but he did own nearly a million dollars worth of gold bars along with 12 separate tracts of bare land worth over $25 million. He also held very little cash so it might be more accurate to say he was a fan of ‘real assets’ over financial ones.
Investors have literally been partying like it’s 1999 in the markets for financial assets recently. The total value of corporate debt and equity relative to gross value added is now just as high as it was back then during the peak of the dotcom bubble. So it’s hard to blame Prince for favoring real assets at a time when they have never been cheaper relative to these extreme valuations in financial assets.

This post was published at Wall Street Examiner by Jesse Felder ‘ January 10, 2017.

US Intel Told Trump Russia Had Compromising Personal And Financial Information About Him

In a report that will likely set much of the liberal media on fire in the coming days, CNN reports, citing “multiple US officials”, that top intelligence officials last week briefed President-elect Donald Trump about Russian operatives’ claims that they have compromised Trump’s personal and financial information. The two-page document which was presented to Trump as an appendix to last week’s briefing on alleged Russian interference in the presidential election, also noted allegations that there was an exchange of information between Trump surrogates and intermediaries for the Russian government during the campaign.
Supposedly the information is far more damaging than audio recording of Trump talking about “grabbing women by the pussy”, and yet one wonders how nobody in the Clinton campaign, with all its extensive connections, was able to get to it.
According to CNN, the allegations have emerged from memos compiled by a former British intelligence operative, “whose past work US intelligence officials consider credible.” The FBI is investigating the credibility and accuracy of these allegations, which are based primarily on information from Russian sources, but has not confirmed many essential details in the memos about Trump.
In other words, just like the report about Russian interference has yet to provide any evidence, so this latest accusation is mostly based on the analytical work of a source some “officials consider credible.” Still, even without proof, the implied allegation in the CNN report, namely that Trump is a puppet of the Kremlin, will promptly become a fact, and will be used to escalate the anti-Russian sentiment in the US. That this report comes just ten days before Trump’s inauguration is probably not coincidental.
Why was the 2-page synopsis included?


This post was published at Zero Hedge on Jan 10, 2017.

Gold Prices Are Being Hacked

Major U. S. and international banks cheat their customers and rig markets. Revelations have been piling up since the 2008 financial crisis. Hundreds of billions have been paid in fines, penalties, and settlements. The fraud, price manipulation, lying, and theft – once considered conspiracy theories – are now incontrovertible conspiracy facts.
This reality is dawning now in the precious metals industry. GATA, the Gold Anti-Trust Action Committee, labored for years making the case for price manipulation in the markets. They, and others, made a powerful argument complete with price charts and trading patterns that simply could not be explained in free and fair markets.
But their argument was universally disregarded by regulators and largely ignored by major players inside the industry. Gold and silver miners, refiners, and users never took meaningful action to combat price rigging, even as price volatility wreaked havoc in their business. GATA lacked enough ‘smoking gun’ evidence, and most people simply assumed their claims couldn’t be true.
The recent settlement deal in which Deutsche Bank handed over 350,000 pages of internal documents and more than 70 voice recordings is changing that. Attorney’s behind class action suits against a handful of major banks say the trove of information is ‘smoking gun’ evidence of a widespread and systemic campaign to cheat customers and rig markets.
It is one thing to look at trading data and surmise that someone is trying to manipulate prices. It’s another to see chat logs where traders laugh about actually manipulating prices and sticking it to unwitting market participants:

This post was published at GoldSeek on 10 January 2017.

What’s Going on with the Banks? Citi Cuts Goldman to ‘Sell,’ after Goldman Cut Citi to ‘Neutral’

But bank stocks have skyrocketed over the past three months.
Citigroup hit back at Goldman Sachs, after Goldman Sachs had slammed Citigroup in September. Citi analyst Keith Horowitz, in a note to clients, downgraded Goldman from the already dismal ‘hold’ to a rare ‘sell’ rating, citing Goldman’s valuation. He said Goldman would need an additional $4 billion in full-year revenues above current estimates – which, according to Reuters, are pegged at $32.3 billion – to get to a return on equity (ROE) that would justify the valuation.
‘While we expect Goldman will see improved trading revenues going forward, the path is relatively uncertain and the bar is relatively high,’ he wrote.
Goldman is scheduled to report earnings on January 18. So time to take profits and move on, according to Citi.
Shares of Goldman Sachs have jumped 55% since early October when the possibility of a Trump victory started moving into the foreground. Stock market participants have been betting that Trump would be a boon to Goldman, and they drove up the stock price. It was one of the big winners of the ‘Trump Trade’ (via Investing.com):

This post was published at Wolf Street by Wolf Richter ‘ Jan 10, 2017.

Gundlach Calls Gross A “Second Tier Bond Manager” And Other Highlights From His Presentation

While Gundlach spoke for an hour and a half in his first webcast of 2017, perhaps his longest presentation to the broader public yet, and covered many areas in the presentation titled “Just Markets“, one line will be remembered: his direct attack at Bill Gross, whom he called a “second tier bond manager” for calling 2.6% on the 10 Year an important level.
As a reminder, earlier today Bill Gross issued his monthly outlook in which he suggested that 10Y yields rising above 2.60% would spell the end for the bond bull market, and would likely have further dramatic consequences on asset prices:
“This is my only forecast for the 10-year in 2017. If 2.60% is broken on the upside – if yields move higher than 2.60% – a secular bear bond market has begun. Watch the 2.6% level. Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important that the Dollar/Euro parity at 1.00. It is the key to interest rate levels and perhaps stock price levels in 2017.”
Gundlach, obviously, disagreed noting ‘the last line in the sand is 3 percent on the 10-year. That will define the end of the bond bull market from a classic-chart perspective, not 2.60%’ as Gross suggested. He then added that ‘almost for sure we’re going to take a look at 3 percent on the 10-year during 2017, and if we take out 3 percent in 2017, it’s bye-bye bond bull market. Rest in peace.’ Such a jump would would have “a real impact on market liquidity in corporate bonds and junk bonds.”

This post was published at Zero Hedge on Jan 10, 2017.

Are Gold Prices Going Up in 2017?

Are gold prices going up in 2017?
The recent gold price volatility has metals investors asking that question. After all, gold prices have dropped 10.6% since November following a nine-month gain of 23.2%. Now there’s concern that gold prices will continue their slump this year.
The biggest reason why gold prices are down over the last two months is the rising U. S. dollar. Following the presidential election and December FOMC decision to raise interest rates, the dollar has soared. It’s up 4.3% since the Nov. 8 election and hit an all-time high of 103.25 basis points a week after the Dec. 14 rate hike.
Since gold is priced in dollars, the dollar’s rising value decreases the price of gold. That’s because the metal becomes more expensive to consumers who use other currencies, thus lowering demand.
But there’s another metric that’s even more important to consider when looking at the future of gold prices.
In fact, this metric is one of the world’s oldest financial tools – and it’s also nearing its highest level ever…

This post was published at Wall Street Examiner on January 10, 2017.

Charts For a Quiet Tuesday – US Government’s Key Role In India’s Crash Cash Suppression Fiasco

“The business interests of the US-companies that dominate the global IT business and payment systems are an important reason for the zeal of the US-government in its push to reduce cash use worldwide, but it is not the only one and might not be the most important one.
Another motive is surveillance power that goes with increased use of digital payment. US-intelligence organizations and IT-companies together can survey all international payments done through banks and can monitor most of the general stream of digital data. Financial data tends to be the most important and valuable.
Even more importantly, the status of the dollar as the worlds currency of reference and the dominance of US companies in international finance provide the US government with tremendous power over all participants in the formal non-cash financial system. It can make everybody conform to American law rather than to their local or international rules.”
Norbert Haering, A Well Kept Open Secret
“…and where they make a desert, they call it peace.”
Tacitus
I hear that the speculation which I had about the US government’s involvement in India’s heavy handed program of cash suppression may in fact be true.
Thanks to Harald Malmgren et al. for passing along this blog which was originally published in German.
I certainly concur with the various motives ascribed to the India crash cash suppression campaign. The rentiers want everyone hooked on their digital dollars: one ring to rule them all. And to them, the public at large is just collateral damage, and their national interests are at best irrelevant, and most likely a genuine impediment to the broader ‘globalisation’ of the system ruled by the Anglo-American Banks.

This post was published at Jesses Crossroads Cafe on 10 JANUARY 2017.

Wal-Mart To Cut “Hundreds” More Jobs Before End-January

Despite the proclamations from The White House and its lackeys that this is the best jobs recovery ever and we are at full employment, it appears all is not well at the world’s third largest employer.
We’ve discussed many times the fact that Walmart had been overly eager to boost everyone’s wage in order to appease the living wage crowd, and as a result the company had to move forward with massive layoffs and store closings to try and mitigate the impact on profits. Earlier last year we also noted that Walmart is testing out drones that when operational, will be able to carry out what once were human tasks in its large distribution centers. This effort will further position the company to be able to shed more labor and benefit expense in the future. That said, Walmart isn’t waiting for the drone initiative to come online.

This post was published at Zero Hedge on Jan 10, 2017.

JAN 10/GOLD RISES A BIT BUT SILVER SHINES, UP 17 CENTS/BOTH OF TURKISH LIRA AND THE MEXICAN PESO PLUMMET/RUSS AND PAM MARTENS EXPLAINS WHY TRUMP IS PICKING GOLDMAN SACHS ALUMNI TO HELP HIM RUN TH…

Gold at (1:30 am est) $1184.20 UP $0.70
silver at $16.80: UP 17 cents
Access market prices:
Gold: $1188.00
Silver: $16.84
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
.
The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning
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:
TUESDAY gold fix Shanghai
Shanghai morning fix Jan 10/17 (10:15 pm est last night): $ 1203.90
NY ACCESS PRICE: $1185.20 (AT THE EXACT SAME TIME)/premium $18.70
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1205.96
NY ACCESS PRICE: $1186.60 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD 2ND FIX TODAY!!: $19.36
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Jan 10/2017: 5:30 am est: $.1183.20 (NY: same time: $1183.90 5:30AM)
London Second fix Jan 10.2017: 10 am est: $1189.50 (NY same time: $1188.90 (10 AM)
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 January 10, 2017.

Venezuelan President Raises Minimum Wage and Unemployment

In his weekly radio address to his citizens, Venezuela’s post-Hugo Chavez leader, President Nicolas Maduro, announced he would raise the minimum wage for the fifth time over the last year. The bump puts the minimum salary at 40,683 bolivars or $60 per month, according to Reuters.
The new minimum wage represents a 322% cumulative increase since February 2016 and is an attempt to protect citizens’ wages from ‘mafia attacks,’ according to Maduro. The President attributed his country’s woes to anti-socialist political opponents and capitalists who have created an ‘economic war’ to foment disorder and unrest.

This post was published at Schiffgold on JANUARY 10, 2017.

Richmond Fed’s “Uber-Hawkish” President Jeffrey Lacker To Retire

Just three months after Atlanta Fed president Dennis Lockhart announced he would step down as president effective February 28, moments ago another (non-voting) FOMC member, the uber-hawkish president of the Richmond Fed, Jeffrey Lacker, 61, also decided to call it quits as well, and on Tuesday said he will retire as president and chief executive officer of the Federal Reserve Bank of Richmond on Oct. 1, after 28 years at the Richmond Bank.
“It’s been an honor to serve the Federal Reserve,” Lacker said. “I feel fortunate to have spent time throughout the Fifth District learning first-hand about people’s economic experiences, and to have participated in some of the most extraordinary policy deliberations in our nation’s history. It’s been my deepest privilege to lead the Richmond Fed and the dedicated people who work here.”
Lacker joined the Richmond Fed in 1989, where he served in various positions prior to his appointment as president in August 2004. Previously, Lacker was an assistant professor of economics at Purdue University, and also previously worked at Wharton in Philadelphia.
Continuing his hawkish ways, Lacker, who is not a policy voter in 2017, on Friday said that recent data supports further Fed rate hikes, when he said that improvement in inflation compensation measures, strong employment growth, and possible fiscal stimulus support case for higher rates.

This post was published at Zero Hedge on Jan 10, 2017.

The Extraordinary Size Of Amazon In One Chart

What has more value: all major publicly traded department stores in the United States, or Amazon?
As Visual Capitalist’s Jeff Desjardins illustrates, Amazon takes the cake, and its no contest.
Add together the market caps of Walmart, Target, Best Buy, Nordstrom, Kohl’s, JCPenney, Sears, and Macy’s, and they amount to a significant $297.8 billion.
However, it’s not enough to beat the Amazon machine.
The online retailer alone is worth $356 billion, making it one of the largest companies by market capitalization in the world.
THE DEATH OF TRADITIONAL RETAIL
Ten years ago, the future of brick and mortar retail sill looked bright. The aforementioned retailers were worth a collective $400 billion, and Amazon was only valued at $17.5 billion.

This post was published at Zero Hedge on Jan 10, 2017.

Chinese Professor Fired After Criticizing Mao, Leading To Violent Protests

While in the US, the economist profession has seen a devstating drop in reputation over the past few years as the accuracy of economists’ predictions has drastically suffered under the “New Normal”, at least they are allowed to opine on virtually every matter without fear of consequences. That, however, is not the case in China where a local professor has been fired after criticizing Chairman Mao Zedong on his 123rd birthday in a commentary he posted online that has enraged leftists.
Mao, who died on Sept. 9, 1976, is still officially venerated by the ruling Communist Party as the founder of modern China and his face appears on every yuan banknote. But, as Reuters notes, he is particularly respected by leftists who believe the country has become too capitalist and unequal over three decades of market-based reforms, and attitudes towards Mao and his legacy mirror differences between reformers and traditionalists.
So when Deng Xiaochao, 62, an art professor at Shandong Jianzhu University in central China, posted a commentary on his Weibo social media site, dated Dec. 26, Mao’s birthday, suggesting Mao was responsible for a famine that led to 3 million deaths and the Cultural Revolution in which 2 million died, the outrage was immediate. “The only thing he did right was die,” his post said.


This post was published at Zero Hedge on Jan 10, 2017.

We’re All Low-Skilled Workers Now

The news headlines after last Friday’s jobs report proved it again: Life is hard (and getting harder) for low-skilled workers. Illegal immigrants take their service industry jobs. Robots take their manufacturing industry jobs.
According to the media, many low-skilled workers have simply given up. They’re dropping out of the labor force, going on welfare, overdosing on drugs. Their lives are terrible, and everyone wants to help.
Here’s an idea how to help low-skilled workers: Stop calling them ‘low-skilled’ workers!
It’s not only insulting but also often inaccurate. Words matter. The way we describe people makes a difference.
I would probably drop out of the labor force too, if politicians, economists, and journalists called me ‘low-skilled’ every day. Nobody wants that label.
And thinking about it, I really am low-skilled in some ways. We all are.
Defining Terms
Exactly what is a low-skilled worker?
Usually, the term refers to those with little formal education – high school dropouts or high school graduates with no college.

This post was published at Mauldin Economics on JANUARY 10, 2017.

Paul Krugman Flip-Flops…Again

Presented with little comment…
In other words, 5 months after telling the world “it’s time to borrow,” …
..investing more in infrastructure would clearly make us richer. Meanwhile, the federal government can borrow at incredibly low interest rates: 10-year, inflation-protected bonds yielded just 0.09 percent on Friday.
Put these two facts together – big needs for public investment, and very low interest rates – and it suggests not just that we should be borrowing to invest, but that this investment might well pay for itself even in purely fiscal terms. How so? Spending more now would mean a bigger economy later, which would mean more tax revenue. This additional revenue would probably be larger than any rise in future interest payments.
Suddenly the esteemed ‘economist’ says – after Trump’s election – ‘this time is different’…

This post was published at Zero Hedge on Jan 10, 2017.

How the Yellen – Trump Relationship Could Play Out

A review of the Fed’s toolkit consisting of interest rate hikes to fight inflation, and a litany of tools to fight deflation (helicopter money, financial repression, negative real rates, rate cuts, negative nominal rates, QE, forward guidance, currency wars, and gold), shows that the Fed will be fully engaged in manipulating the U. S. economy for an indefinite period of time.
Even the simple act of normalizing the Fed’s balance sheet by allowing its Treasury securities to run-off at maturity without selling those securities would take at least five years.
The odds of the U. S. avoiding both a recession and inflation for five years are small and the Fed will intervene in markets again if either of those outcomes emerges. Fed intervention and manipulation of markets seems to be a permanent feature of the U. S. economy.
This raises the question of potential cooperation or conflict between the Fed and the White House, or more specifically between Janet Yellen and Donald Trump in the coming year. Initial indications are that this relationship is more likely to be one of conflict than cooperation. This is a danger sign for markets and investors.

This post was published at Wall Street Examiner on January 10, 2017.

Mario Draghi’s Email Was Hacked By A High-Ranking Mason

Earlier this morning we reported the bizarre story of how two hackers had managed to penetrate the email accounts of not only ECB head Mario Draghi, but also former Italian PMs Matteo Renzi and Mario Monti, as well as countless other highly placed politicians and executives. On the surface this may have been a non-event, especially if the hackers were unaware of the potentially market-moving content of the various emails hacked, and had no means of acting on the uncovered information.
However, as subsequent information revealed, there appears to be much more to the story, including a very surprise twist.
First, as Bloomberg reported, in addition to Draghi and Renzi, the extensive cyber-spying operation targeted more than 18,000 e-mail accounts, according to a court document. The aptly named operation ‘Eye Pyramid’ (more on that shortly) revealed cyber-spying of institutions, state agencies, professionals, political figures and business people lasting for years, Italian police said in an e-mailed statement Tuesday.
Police said two people were arrested: a nuclear engineer and his sister, both living in Rome “and well-known in Roman financial circles.”
The two were Giulio Occhionero, 45, and his sister Francesca Maria Occhionero, 48, who were charged with stealing state secrets and illegal hacking. Lawyers representing the two could not be immediately reached. According to the complaint, the alleged hackers acted ‘with the aim of making a profit for themselves or for others.’

This post was published at Zero Hedge on Jan 10, 2017.