“What Will We Be Talking About This Time Next Year” – Here Is Jeff Gundlach’s Answer

Over the weekend, Barron’s published its annual roundtable in which prominent investors previewed what they expect out of 2017: “a year of seismic shifts for the markets and, quite possibly, the world. Or, as Goldman Sachs strategist Abby Joseph Cohen said at this year’s Barron’s Roundtable, ‘We are breaking a lot of trends.’ As Barron’s dubbed it, “this could be the year the movie runs backward: Inflation awakens. Bond yields reboot. Stocks stumble. Active management rules. And we haven’t even touched on the coming regime change in Washington, which will usher tax cutters and regulatory reformers back to power after an eight-year absence.”
While there were many insightful observations by the group of participants – whose sentiment was decidedly more bearish than during last year’s event – which included Scott Black, Felix Zulauf, Mario Gabelli, Meryl Witmer, Brian Rogers, Oscar Schafer, and Abby Cohen, we will focus on the predictions of Jeffrey Gundlach, if only due to his track record from the similar Barron’s roundtable one year earlier, in which he turned out to be far more prescient than most of his peers, not least of all because he “made the greatest prediction at last year’s Roundtable – that Trump would win the presidency.”
The first question posed to Gundlach was also the broadest one: what are you predicting now?

This post was published at Zero Hedge on Jan 16, 2017.


Gold at (1:30 am est) $1202.90 UP $7.60
silver at $16.81: UP 9 CENTS
Access market prices:
Gold: $1202.90
Silver: $16.81
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:
MONDAY gold fix Shanghai
Shanghai FIRST morning fix Jan 16/17 (10:15 pm est last night): $ 1219.16
NY ACCESS PRICE: $1202.00 (AT THE EXACT SAME TIME)/premium $17.16
Shanghai SECOND afternoon fix: 2: 15 am est (second fix/early morning):$ 1219.16
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
London Fix: Jan 16/2017: 5:30 am est: $1202.75 (NY: same time: $1202.70 (5:30AM)
London Second fix Jan 16.2017: 10 am est: $1203.00 (NY same time: $1103.00 (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 16, 2017.

Pound Slides After Theresa May’s Full Speech Leaks, Laying Out Her 12-Point Plan

While hardly coming as much of a a surprise following the weekend’s news that Theresa May would call for a “clean and hard Brexit”, confirmation received moments ago from both the Telegraph, FT and Bloomberg that on Tuesday May will indeed declare that Britain is making a “clean break” from the EU and will not seek a deal that leaves the country ‘half in and half out’, has send the sterling lower by some 25 pips, because even though the news is not incremental, as Bloomberg notes quoting a trader, “Algos Trade Off Keyword Flagged in Speech.”
May’s office has said she will announce 12 key objectives for the negotiations, which will include gaining full control over immigration, restoring power over lawmaking to the U. K. Parliament and ending the jurisdiction of the European Court of Justice over British laws, preserving the Union, maintaining workers’ rights and signing major free trade deals.
According to The Telegraph, which has seen an advance copy of her speech tomorrow, the UK Prime Minister will set out a 12-point plan for Brexit as she vows that the UK will not have ‘partial’ membership of the EU ‘that leaves us half-in, half-out’. Mrs May will make her most significant speech since becoming Prime Minister in July last year and confirm that Britain will leave the single market and customs union after Brexit.
Some more details of her upcoming speech, courtesy of the Telegraph:

This post was published at Zero Hedge on Jan 16, 2017.

Whack-a-mole! The Case For Covered Bonds And Why It Is Difficult in the USA

My friend John Wake from Phoenix Arizona asked me about mortgage finance legend Jack Guttentag’s stance on covered bonds. I must say that I am a proponent of covered bonds for the US mortgage market.
What is a covered bond? A covered bond is a debt security backed by cash flows from mortgages or public sector loans. They are similar in ways to asset-backed securities created in securitization, but covered bond assets remain on the issuer’s consolidated balance sheet. A covered bond continues as an obligation of the issuer (usually a bank).

This post was published at Wall Street Examiner by Anthony B. Sanders – January 16, 2017.


In what Forbes is ingratiatingly referring to as ‘the most glorious economic event of our lifetimes,’ we’re now to a point that just eight men own as much wealth as 3.6 billion other people on the planet do.
Just eight men.
The eight include Michael Bloomberg, Bill Gates, Amazon’s Jeff Bezos, and Facebook creator Mark Zuckerberg. (Of course, they never mention the Rothschilds in these surveys, or the Queen of England as the world’s largest land owner, now do they. That question what rhetorical.)
Executive director Winnie Byanyima of Oxfam International, the outlet that released the report, said,
‘It is obscene for so much wealth to be held in the hands of so few when 1 in 10 people survive on less than $2 a day. Inequality is trapping hundreds of millions in poverty; it is fracturing our societies and undermining democracy.’
And with all that money, what are these super wealthy people doing with it?

This post was published at The Daily Sheeple on JANUARY 16, 2017.

Price of Silver in 2017 Depends on One Technical Indicator

The price of silver is officially back now that it’s posted its third weekly gain in a row.
After a considerable correction that lasted over four months and included a roughly 25% decline, the silver price bounced back in late December.
If the bottom is actually behind us, it came about a week after the gold price bottom – Dec. 15, the day after the Fed rate hike. And the metal’s been climbing since.
Silver prices haven’t seen the nearly relentless push higher that gold’s experienced, but given silver’s outperformance since bottoming in late 2015, it’s certainly been holding its own.
We’ve seen the metal’s price hit overhead resistance recently, a level we’ll now be watching carefully. Despite that, there are encouraging signs silver is still primed to head higher.
And we’re closely watching one silver price metric that will prove to be the most important in the coming months.
Before we discuss that, here’s why the silver price leaped higher last week…
The Rally in the Price of Silver Last Week (Jan. 9 – Jan. 13)
Silver prices kicked off the week with a modest gain. On Monday, Jan. 9, the metal began at $16.47 when it opened for trading. After a mildly volatile ride, the precious metal closed the day at $16.54 for a 0.4% gain.

This post was published at Wall Street Examiner on January 16, 2017.

How Trump Could Unwittingly Gut Boeing’s Global Business

Other US companies are equally vulnerable.
Boeing’s airliner business is in a slump. Serial large-scale layoffs of engineers and production workers have been percolating through its operations since early 2016, with another big wave announced a week ago, as net orders have collapsed 53% from 2014, to a seven-year low. The last thing Boeing needs is help from President Elect Trump to speed up the process.
But that’s what might happen next if the trade and investment policies proffered by Trump become reality after his inauguration.
In an interview published on Monday in the German tabloid Bild, Trump threatened BMW, Daimler, and Volkswagen with a 35% tax on imported vehicles, which would make them very expensive for US consumers. The automakers and their dealers would respond by cutting their margins, but it might not be enough to stem a large sales decline.
The three companies already have assembly plants, research & development offices, and logistics operations in the US, including:

This post was published at Wolf Street on Jan 16, 2017.

This President Will Move the Stock Market This Week – and It’s Not Donald Trump

Two presidents will move global markets this week.
First, the inauguration of President-elect Donald Trump on Friday, Jan. 20, has investors and markets anticipating what he will say when he speaks to the nation as U. S. president for the first time.
Historically, markets are always mixed leading up to and following a president’s inauguration. This year has been no different so far – particularly last week. The Nasdaq closed up nearly one percent at a record 5,574 last Friday. The S&P 500 ended the day down 0.1% to 2,274. The Dow was also slightly lower, down 0.4% to 19,885.
The accompanying graphic shows how markets have historically done after a presidential election, from Election Day to Inauguration Day. Again, it’s a mixed bag – and doesn’t always go the way everyone expects.

This post was published at Wall Street Examiner by Money Morning Staff Reports ‘ January 16, 2017.

The Geopolitics of 2017 in 4 Maps

International relations and geopolitics are not synonymous… at least, not the way we understand them at Geopolitical Futures. ‘International relations’ is a descriptive phrase that encompasses all the ways countries behave toward one another. ‘Geopolitics’ is the supposition that all international relationships are based on the interaction between geography and power.
Our brand of geopolitics takes this a step further and asserts that a deep understanding of geography and power enables you to do two things. First, it helps you comprehend the forces that will shape international politics and how they will do so. Second, it allows you to identify what is important and what isn’t.
This makes maps an extremely important part of our work. Writing can be an ideal medium for explaining power, but even the best writer is limited by language when it comes to describing geography. So this week, we have decided to showcase some of the best maps our graphics team (TJ Lensing and Jay Dowd) made in 2016… not just because these four maps are cool (though they are), but because we think they go a long way in explaining the foundations of what will be the most important geopolitical developments of 2017.

This post was published at Mauldin Economics on JANUARY 16, 2017.

NYSE Short Interest Plunges To Lowest In Three Years

Yesterday we reported that following a painful end to 2016, one of the most popular market bears, Horseman Global, had no choice but to begin capitulation and covering shorts:
[D]espite what I think, we are beginning to close parts of our short book. We have largely exited airline related shorts. We have also closed staple shorts, as they were largely there to protect against a fall in yields, which they did to a degree. We have also closed many developed financial shorts to make some space for Chinese financial shorts. We have also reduced the bond position and moved much of in to German bunds. The majority of the bund position is in 5 year bunds, the buy case I made a few months ago.

This post was published at Zero Hedge on Jan 16, 2017.

7 Federal Reserve Tools and Why They’re All Flawed

In recent decades, the Fed has engaged in a series of policy interventions and market manipulations that have paradoxically left it more powerful even as those interventions left a trail of crashes, collapses and calamities.
The following is a survey of seven Federal Reserve tools in the Fed toolkit to stimulate the economy if recession or deflation gains the upper hand and why their toolkit is flawed.
Helicopter Money
The image of the Fed printing paper money, and dumping it from helicopters to consumers waiting below who scoop it up and start spending is a popular, but not very informative way to describe helicopter money. In reality, helicopter money is the coordination of fiscal policy and monetary policy in a way designed to provide stimulus to a weak economy and to fight deflation.
Helicopter money starts with larger deficits caused by higher government spending. This spending is considered to have a multiplier effect. For each dollar of spending, perhaps $1.50 of additional GDP is created since the recipients of the government spending turn around and spend that same money on additional goods and services. The U. S. Treasury finances these larger deficits by borrowing the money in the government bond market.
Normally this added borrowing might raise interest rates. The economic drag from higher rates could cancel out the stimulus of higher spending and render the entire program pointless.
This is where the Fed steps in. The Fed can buy the additional debt from the Treasury with freshly printed money. The Fed also promises to hold these newly purchased Treasury bonds on its balance sheet until maturity.

This post was published at Wall Street Examiner on January 16, 2017.

One Incredible Indicator Shows The Economy Is Fast Approaching A Total Meltdown – Episode 1179a

The following video was published by X22Report on Jan 16, 2017
We are not seeing a recovery in retail, what we are seeing is a redistribution and a decline in retail. NY real estate is declining rapidly, prices are falling and sales are declining. Before Obama leaves office he allowed food stamp recipients to purchase goods on the internet. There are more individuals on food stamps since the 2008 crisis. One gauge to see if the consumer economy is actually recovering is to look at rail traffic, rail traffic is lower than the 2008 financial crisis, the economy is melting down. Trump says BREXIT smart and will do business, each country needs to have their own identity. There is massive inflation surging in Venezuela, Turkey and now Mexico

The world of pretend of housing shows on television: Blowing through budgets and simply making it up to induce consumption.

Fake it until you make it. No truer words have ever been uttered especially when it comes to Hollywood and the make believe of reality TV. Just because you put the word ‘reality’ in front of TV doesn’t make it so. Yet people flock to housing shows in mass because it feeds into their world view that real estate is always a winning bet. Whether the show is about a couple looking to buy their first home or a show where prospective investors take a chance at rehabbing a former meth home and turning it into a puppy daycare, these shows put out some unrealistic scenarios especially for those that actually buy and invest in the real estate market. Yet that is the rub. Most people never purchase investment property. Most that do own real estate own it as their place of residence. And that is why these shows do so well because they highlight an alternate reality that only works out in scripted reality.
Ridiculous budgets and emotional buying
I must admit to my chagrin I enjoy the episodes where they have first time buyers and how they analyze the situation:
‘Currently, we live in a 700 square foot studio apartment but with a baby on the way, we need to upgrade to a 2,500 square foot home so we can have space for our 6 pound baby. Oh, and a sauna and a walk-in closet would be nice.’
Then you get the agent slash personality TV star asking about the budget for the couple:
‘We can comfortably afford $400,000. If it is a dream place we can stretch to $425,000′

This post was published at Doctor Housing Bubble on Jan 16, 2017.

Pension Party! ‘Zero’ Interest Rate Policies Lead To Massive Debt Gorging (CalPERS Massive Pension Underfunding)

The Federal Reserve’s zero interest rate policies (ZIRP) have an unwelcomed effect: both the Federal Government and Private Pensions gorged themselves on low-cost debt.
The Federal Reserve lowered their Fed Funds target rate starting in 2007, then started their asset purchases in late 2008, culminating in a dramatic decline in interest rates.
Then, since the end of Q4 2008, both the Federal government AND private pension funds gorged on debt: Federal devt rose by 77% though the end of 2015 and private pension debt rose by 66%.

This post was published at Wall Street Examiner on January 16, 2017.

From “Promise” To “Payback” – Here Are The Five Stages of The “Trump Trade”

As Deutsche Bank’s Alan Ruskin puts it, without getting too cute about it, “there are probably five defining stages for the ‘Trump trade’: Trading i) ‘the promise’; ii) the deal-making; iii) the enactment; iv) the economic impact, and, v) the payback.“
Here are the details as market pscyhology shifts from phase 1 to stage 2, which DB says took place during last week’s Trump press conference, and what markets can expect going forward.
The five stages of the Trump trade
Trump’s press conference last Wednesday has probably drawn the line between ‘the promise’ phase, and, the stage where deliverables will become progressively more important. The ‘promise’ stage was never seen extending beyond Trump’s inauguration, since it was always expected that the market would start responding to actual President/Congress initiatives in what is likely to be a very active first 100-day agenda.
To get to the enactment stage it is usually important for the President to use political capital wisely, not least because 9 of the last 12 Presidents saw their popularity near peak and leak within months of their inauguration, making it progressively more difficult to get things done. However, in current circumstances, much of the impetus and detail on fiscal reforms, including ‘market hot buttons’ like the border tax adjustment, already have considerable Congressional impetus, not least from the Ryan – Brady tax plan.

This post was published at Zero Hedge on Jan 16, 2017.

Food-Stamp Recipients Can Now Order From Amazon, Other Online Retailers

Via Judicial Watch,
Food-stamp recipients can use their taxpayer-funded benefit to order online from retailers like Amazon under a new Obama administration initiative that aims to facilitate the shopping experience for rural and urban residents. It marks the latest of many costly experiments by the administration to expand the fraud-infested program, which has seen a record-high number of beneficiaries under President Obama. To eliminate the welfare stigma, the administration renamed food stamps Supplemental Nutrition Assistance Program (SNAP) and the rolls swelled to an astounding 46.5 million in 2016. This cost American taxpayers and eye-popping $70 billion, according to government figures.

This post was published at Zero Hedge on Jan 16, 2017.

Gold and Silver Market Morning: Jan 16 2017 – Gold and Silver correcting, U.S. buying!

Gold Today – New York closed at $1,198.30 on the 13th January after closing at $1,195.40 on the 12th January. London opened at $1,202.25today.
Overall the dollar is stronger against global currencies today. Before London’s opening:
– The $: was stronger at $1.0593: 1 from $1.0633: 1 Friday.
– The Dollar index was slightly stronger at 101.70 from 101.33Friday.
– The Yen was stronger at 114.11: $1 from Friday’s 114.70 against the dollar.
– The Yuan was weaker at 6.9082: $1, from 6.8873: $1, Friday.
– The Pound Sterling was weaker at $1.2056: 1 from Friday’s $1.2168: 1.
Yuan Gold Fix
Shanghai gold prices, having corrected on Friday, are, again, moving higher in Shanghai touching 270.1 Yuan or $1,211.1 in today’s trading [using the same quality of gold]. It is always tempting to make prices simple to understand even if it means attributing any moves in the gold price to any handy piece of news locally. But that would be misleading. Chinese prices are rising because of Chinese market conditions, not because of Trump’s latest tweet.
New York closed $11.34 lower than Shanghai on Friday. London opened at $3.85 lower than Shanghai was trading today.
LBMA price setting: The LBMA gold price setting was at $1,202.75this morning against Friday’s $1,196.35.

This post was published at GoldSeek on 16 January 2017.

Five Dead, 15 Wounded After Gunman Opens Fire At Mexican Nightclub

A lone shooter fired on a crowd at a nightclub in Playa del Carmen, site of the BPM electronic music festival in Mexico early Monday, leaving at least five people dead and at least a dozen more injured, according to a statement released by festival organizers. Local news reports suggest that the shooting came after a ‘disagreement’ and is connected to ongoing drug cartel wars in the area.
The rampage occurred inside the Blue Parrot nighclub in Playa del Carmen at about 2:30 a.m. local time, according to a statement by the attorney general of the Mexican state of Quintana Roo.
Playa del Carmen is a popular tourist destination not far from Cancun. Among the dead are four men and a woman. Two of those who died were part of a security team, the statement said. According to preliminary reports, three of the dead are foreigners.

This post was published at Zero Hedge on Jan 16, 2017.

The Biggest, Most Destructive Lie the Government Tells (and Why They Keep Telling It)

‘Radical truth-tellers’ have been demonized and shunned by the establishment for centuries – much longer, in fact. Those of us who have always refused to settle for insincerity, falsehood, and duplicity in our personal, business, and civic relationships are usually considered ‘difficult.’
And I am decidedly difficult.
For all of the 29 years I’ve spent trading and investing, I’ve watched governments and central bankers attempt to thwart the free market to serve their own ends – almost always at the grievous expense of regular investors – and then protest, often loudly on 500 channels, that they’re doing nothing of the sort, that they’re safeguarding or shepherding the markets somehow.
And through it all, one question has always persisted in my mind: ‘Are these people wrong because they’re stupid? Or because they’re lying.’
I’ve come to conclude those two possibilities aren’t mutually exclusive.
And that’s meant suffering and economic misery for millions of Americans.
I’m not going to hold my breath for it to change with the Trump administration; I’m going to attack the lie head on…

This post was published at Wall Street Examiner on January 16, 2017.