Gold, Silver, Stocks and Economics – Stock Option Expiry on Friday

Gold and silver backed off almost perfectly from the overhead resistance on the charts.
The cause for this seemed to be ‘technical’ and was tied to a bounce in the dollar, which also seemed as much technical as anything else.
The equity markets were quiet, and tended to drift higher after the morning lows. Again, largely a technical type of trade.
Does anyone doubt that the markets are ‘holding their breaths’ for the inauguration of the Trump Administration this Friday?
The Fed minutes came out, and Chairman Yellen gave a long interview at the Commonwealth Club in San Francisco. A number of market commenters pointed to her remarks as the reason for the strength in equities and weakness in the metals, but I did not really see it that way, so much as a relief rally that she did not say anything shocking or ‘bad.’
I have posted a chart for this year below for US stock market option expirations. We will have such an event this Friday, so trading antics may add to any inaugural volatility.

This post was published at Jesses Crossroads Cafe on 18 JANUARY 2017.

NY Fed’s Dudley, Retail Sales, Home Prices And … Bubbles

Is the New York Fed’s Bill Dudley calling for another home price bubble to solve the malaise in retail sales in the USA?
The fate of U. S retailers, many of whom are under siege from online competitors, may rest in the prospects for the U. S. housing market, said William Dudley, president and CEO of the Federal Reserve Bank of New York, in an interview done on Tuesday morning by Macy’s CEO Terry Lundgren at the National Retail Federation’s (NRF) annual convention about evolving consumer behavior.
The second most important asset on the balance sheet of many households is housing equity. So, in addition to being a source of shelter, housing can be a major form of collateral for borrowing for many households. In fact, for those households that have collateral available to secure loans, housing equity is by far the most important form of collateral.
So, that more home prices rise, the more equity is available for home equity EXTRACTION. Remember the housing bubble?

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ January 18, 2017.

Over $100 Billion Redeemed From Hedge Funds In 2016 As Only 32% Outperform Their Benchmark

Two months ago, when looking at the monthly Evestment hedge fund fund flow report, we reported that investors had redeemed a net $14.2 billion from the industry in October, the fourth consecutive month of redemptions, bringing Year-to-date HF outflows to a net $77 billion removed from the industry. The breadth of redemption pressure in October was the industry’s largest in 2016 with 61% of reporting funds estimated to have net outflow during the month. Two months later it has only gotten worse, but before we get into the details, here is a quick summary of just why, courtesy of JPMorgan.
As JPM’s equity strategist explains in a note summarizing active manager performance, 2016 was one of the most challenging years for active equity managers with only 32% of fundamental and quantitative funds outperforming their benchmarks. JPM estimates that large cap U. S. fundamental managers underperformed by a median 33 bp before fees, with Value managers outperforming ( 0.77 bp vs. benchmark) and Growth managers underperforming (-79 bp vs. benchmark).

This post was published at Zero Hedge on Jan 18, 2017.

The ‘Soda Police’ Just Learned A Valuable Lesson About Taxes

I don’t like tax increases, but I like having additional evidence that higher tax rates change behavior. So when my leftist friends ‘win’ by imposing tax hikes, I try to make lemonade out of lemons by pointing out ‘supply-side’ effects.
Such as the big drop in soda purchases after a tax on sugary drinks was imposed in Berkeley. Such as the big drop in home sales after a tax was imposed in Vancouver on purchases by foreigners. I’m hoping that if leftists see how tax hikes are ‘successful’ in discouraging things that they think are bad (such as consumers buying sugary soda or foreigners buying property), then maybe they’ll realize it’s not such a good idea to tax – and therefore discourage – things that everyone presumably agrees are desirable (such as work, saving, investment, and entrepreneurship).
Though I sometimes worry that they actually do understand that taxes impact pro-growth behavior and simply don’t care.

This post was published at Zero Hedge on Jan 18, 2017.

Who Is Paying Protesters To Disrupt Trump’s Inauguration?

Who Is Paying Protesters To Disrupt Trump’s Inauguration?
Update: This from a reader: Dear Dr. Roberts,
I just read your recent post regarding the DC protesters. AND interestingly enough, I just had a job interview the first week in December when I had a FEMA sponsored job interview for a position as a FEMA Community Planner. AND interestingly, the interview questions, exactly match the objectives referenced in your posting! My question is this: Is FEMA being used as an inside job?
Unless this website – – is an Internet hoax,
big money is organizing a Maidan-like protest against Trump’s inauguration. Where would all this money come from? George Soros, the National Endowment for Democracy, the CIA?
This report from Sputnik and Global Research shows large sums offered for protesters who will disrupt Trump’s inauguration. If these ads are not hoaxes, clearly large sums of money are at
work doing the military/security complex’s dirty work.

This post was published at Paul Craig Roberts on January 18, 2017.

The Inheritance

On January 20th Donald J. Trump will assume the office of the presidency to become the 45th president of the United States. Unlike his predecessors, his presidency will begin under circumstances far different than those before him. He will inherit an aging business cycle, a tightening monetary policy, close to $20 trillion in national debt and a perilous international environment.
Since the end of WWII, the United States has experienced 11 recessions over 13 presidencies. Historically, it is not uncommon for a new administration to face a recession within the first year of office. Faced with a tightening monetary policy, a declining economy that eventually turns into a recession, most new presidents spend the majority of their first term in devising policies that eventually lead to economic recovery and hopefully a second term.
This will not be the case with our 45th president. Both George W. Bush and Barack Obama began their presidencies in the midst of a recession and a Federal Reserve that was slashing interest rates in an effort to pull the economy out of recession. Both Bush and Obama entered office with monetary tailwinds at their back. Trump will face the opposite, a monetary headwind that could clash with his efforts to revitalize the economy and create more American jobs.

This post was published at FinancialSense on 01/18/2017.

Lagarde Urges Wealth Redistribution To Fight Populism

As we scoffed oveernight, who better than a handful of semi, and not so semi, billionaires – perplexed by the populist backlash of the past year – to sit down and discuss among each other how a “squeezed and Angry” middle-class should be fixed. And so it was this morning as IMF Managing Director Christine Lagarde, Italian Finance Minister Pier Carlo Padoan and Founder, Chairman and Co-CIO of Bridgewater Associates, Ray Dalio, espoused on what’s needed to restore growth in the middle class and confidence in the future.
The conclusions of the discussion are as farcical as the entire Davos debacle, as three people completely disconnected from the real world, sat down and provided these “answers”…
As Bloomberg reports, while International Monetary Fund chief Christine Lagarde urged a list of policies from programs to retrain workers to more social spending…

This post was published at Zero Hedge on Jan 18, 2017.

JAN 18/CHINA’S HOUSING BUBBLES IMPLODES/CHINA SITES PLATFORM VIOLATIONS IN BITCOIN TRADING/PEARSON OF GREAT BRITAIN PLUMMETS AS DOES TARGET IN THE USA AS THEY ISSUE DIRE WARNINGS AS WELL AS POOR …

Gold at (1:30 am est) $1211.30 DOWN $0.70
silver at $17.23: UP 13 CENTS
Access market prices:
Gold: $1204.65
Silver: $17.04
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:
WEDNESDAY gold fix Shanghai
Shanghai FIRST morning fix Jan 18/17 (10:15 pm est last night): $ 1232.92
NY ACCESS PRICE: $1215.10 (AT THE EXACT SAME TIME)/premium $17.82
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai SECOND afternoon fix: 2: 15 am est (second fix/early morning):$ 1230.75
NY ACCESS PRICE: $1212.90 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD 2ND FIX TODAY!!: $17.85
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Jan 18/2017: 5:30 am est: $1212.50 (NY: same time: $1214.70 (5:30AM)
(???? why the discrepancy)
London Second fix Jan 18.2017: 10 am est: $1214.75 (NY same time: $1214.60 (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 18, 2017.

Mexico Gas Protests, Peso Collapsing, Bitcoin Skyrocketing

The following video was published by The Dollar Vigilante on Jan 18, 2017
Jeff interviews Jose Rodriguez of Bitso.mx, Mexico’s biggest Bitcoin exchange, topics include: the recent Mexican gas price hike riots and the falling peso, energy reforms and the end of subsidies, heavy tax on fuel, government corruption, denationalization of oil companies, how Trumps election played out in Mexico, cheap living in Mexico if you earn dollars, the growth of Bitcoin in Mexico, Bitcoin appreciated 161% in Mexico in 2016 vs 26% for gold, a great arbitrage opportunity on Bitso, a new international payments business, Cryptopulco crypto day at Anarchapulco 2017

Foreign Central Banks Liquidate Record $405 Billion In US Treasuries As China Sells Most US Paper Since 2011

The wholesale liquidation of US Treasuries continued in November, when according to the just released TIC data, foreign central banks sold another $936 million in US paper in November 2016, which due to an offset of $892 million in buying one year ago, means that for the 12 month period ended November, foreign central banks have now sold a new all time high of $405 million in the past 12 months, up from a record $403 million in LTM sales as of one month ago.
Where did the selling come from?
While Japan sold about $23 billion in November, its fourth month of consecutive selling, it was China which drove the selloff, dumping a whopping $66.4 billion in US Treasuries in its 6th consecutive monthly sale of US paper, and the biggest monthly selloff since December 2011. The monthly sale also brings China’s total Treasury holdings to the lowest level since early 2010.

This post was published at Zero Hedge on Jan 18, 2017.

World’s Worst Tax Haven Threatens to Expand its Operations

‘What they sell is escape: from laws, rules, and taxes of jurisdictions elsewhere, with secrecy as their prime offering.’
The UK chancellor, Philip Hammond, recently suggested that if the EU fails to budge over granting the UK market access after Brexit, Britain could transform its economic model into that of a corporate tax haven. In other words, in the event of a so-called ‘Hard Brexit’, which is the only option that would offer the UK any hope of self-rule in the foreseeable future, the British government would extend the City of London’s business model to the rest of the UK.
Unbeknownst to even many Brits, the ‘City of London Corporation’ has functioned for centuries as an offshore island inside Britain, even inside London, a tax haven in its own right, as Nicholas Shaxson, author of TreasureIslands, writes in the New Statesman:
The term ‘tax haven’ is a bit of a misnomer, because such places aren’t just about tax. What they sell is escape: from the laws, rules and taxes of jurisdictions elsewhere, usually with secrecy as their prime offering.
Provided you have fat bundles of cash, you get to enjoy rights and privileges offered by no other jurisdiction on Planet Earth. The City of London’s legal system takes US-style corporate personhood to a whole other level.

This post was published at Wolf Street on Jan 18, 2017.

China’s Bogus Currency War Promise

‘China is not trying to destroy the old boys’ club – they are trying to join it,’ said Jim Rickards in May of 2015.
It was Jim’s pithy way of saying Chinese leaders don’t want to kick over the table where Western powers make Big Global Decisions. They just want a few more seats at that table, in line with China’s status as the world’s most populous country and (depending on how you measure it) the world’s largest economy.
As if we needed any more proof of Jim’s proposition the Chinese President was front and center…
It’s the first time a Chinese president has dropped in on the global elite’s annual shindig in Davos, Switzerland – aka the World Economic Forum.
This year’s gathering is a hand-wringing affair. The elites are dazed and confused by the ascendance of Trump: ‘There is a consensus that something huge is going on, global and in many respects unprecedented,’ says Moises Naim from the Carnegie Endowment for International Peace. ‘But we don’t know what the causes are, nor how to deal with it.’
And so President Xi Jinping told the assembled worthies all the right things this morning, to wit: ‘No one will emerge as a winner in a trade war.’

This post was published at Wall Street Examiner on January 17, 2017.

Uncertain In 2017? Analysts Expect ‘Silver and Gold Rally Under Trump’

Editor’s Comment: Can they hold back gold and silver prices forever, despite obvious manipulations of the price? Maybe. It remains to be seen how much brute force and ridiculous propaganda can hold back the pressure piling on the fiat currency system, and an economy that is skewed to produce cream for the 1%.
More likely though, at some point, they won’t be able to hold gold and silver back any longer. Most analysts peg the real value of gold at over $5,000, though the market doesn’t come anywhere close to that value, with banksters trading on futures and messing with the price point. During a crisis, or a long-standing emergency, and one where goods and essential services are lacking or no longer available, the true value of gold and silver as lasting commodities will once again shine through – it could be used for barter, debt payoffs or collateral for barter of smaller or perishable items including food.
Regardless of all the funny business with the dollar, the propping up of the stock market and the push to move more and more onto the grid, precious metals can hold their own when allowed to do so.
Will Silver and Gold Rally in 2017 Under Trump?
by Steven Maxwell
Unstable economic conditions and a Trump presidency may cause a rally in precious metals.
Trump’s protectionist policies and his support for auditing the Federal Reserve could make silver and gold an attractive hedge in 2017. Couple that with a bubble economy that has many bloated sectors ready to be pricked, sending capital flooding out of paper assets into safer places.
Under Obama, silver hit a low of $9.46/ounce on November 6th 2008, a mere two days after Obama was elected as the 44th US president. After an epic real estate and stock market meltdown led to an unprecedented Fed bailout, a rally for paper assets and metals ensued. Silver hit highs above $50/ounce in April of 2011. While Obama readies his exit from the White House, the stock market continues to ride the stimulus bubble, but silver has substantially retreated to near its lowest price under his Administration – $16.80/ounce.

This post was published at shtfplan on January 18th, 2017.

Chinese Province Admits It Fabricated Economic Data For Three Years

While it will hardly come as a surprise to China watchers who have for years mocked China’s cooked “data”, overnight the state-run People’s Daily reported that the severely impacted by the commodity crunch of the past 2 years rust-belt province of Liaoning fabricated fiscal numbers from 2011 to 2014, raising fresh doubts about the accuracy of China’s economic data just two days ahead of the release of China’s GDP report.
City and county governments in the northwestern region committed fiscal data fraud in the period, Governor Chen Qiufa said at a meeting with provincial lawmakers Tuesday, Bloomberg adds. Not surprisingly, the fabricated economic data was meant to show a state of economic strenght with fiscal revenues inflated by at least 20%, and some other economic data were also false, the paper said, without specifying categories.

This post was published at Zero Hedge on Jan 18, 2017.

A Trade War Is in No One’s Interest

Since the election of Donald Trump, the financial markets have rallied sharply on the expectation that a Republican president and a Republican Congress would enact laws aimed at both reforming the tax code and deregulating the financial industry. And indeed, reforms aimed at lowering corporate taxes, for example, are likely to boost economic growth by allowing American companies to repatriate hundreds of billions of dollars to the United States, and encouraging foreign companies to invest in America. However, these benefits could be negated if the new president and congress are serious about a 35% tax on imports.
The United States has benefited greatly from past free trade agreements. According to the Department of Commerce total exports from the United States reached a record high of little over $2 trillion in 2014. This trend is likely to be reversed in the case of a punitive tariff on imports. Countries such as Mexico will not stand idly by and watch a 35% import tariff imposed by the Trump administration on goods entering the United States from Mexico without retaliation. Trade is a two-way street, and protectionist measures by the United States will most certainly trigger protectionist measures by Mexico as a response. According to the Office of US Trade Representative total trade with Mexico which is the United States’ third largest trading partner totaled $531 billion in two-way goods in 2015. ‘Goods exports totaled $236 billion; goods imports totaled $295 billion. The US goods trade deficit with Mexico was $58 billion in 2015′ (

This post was published at FinancialSense on 01/18/2017.