Chinese Banks Begin To Raise Mortgage Rates

Raising rates on reverse repos, hiking the cost it charges on its Medium-Term Loan Facility and Standing Lending Facility, five consecutive day without a reverse repo liquidity injection (or rather a CNY715 billion liquidity drain), and now in the latest indication of overall tightening of monetary conditions, China has started to hike mortgage rates.
According to press reports, some bank branches in Beijing, Guangzhou and Chongqing have raised mortgage rates for first-home buyers recently. The China Securities Journal confirms as much, reporting that China’s banks in some big cities have started to lower discounts on lending rates for fist-time home buyers, joining recent steps to curb financial risks stemming loose credit conditions.
Following up on the Chinese report, Reuters notes that since the start of 2017, banks in Beijing have started discounting mortgage rates as much as 10 percent off the official benchmark rate, reducing from as much as 15 percent previously, CSJ said on its website. The current one-year benchmark lending rate set by the People’s Bank of China is at 4.35 percent, the lending rate for loans up to five years is at 4.75 percent and loans longer than 5 years is at 4.9 percent.
Few lenders in Beijing and Shanghai still offer mortgage rate discounts more than 10 percent off the benchmark, the Chinese paper said. “There are indications that the financial environment for the property market will no longer be loose in 2017,” it said.

This post was published at Zero Hedge on Feb 9, 2017.

China, Russia And Iran Are Dumping The Dollar And Increasing Gold Purchases – Episode 1200a

The following video was published by X22Report on Feb 9, 2017
Initial jobless claims plunge to 44 year lows as continuing claims surge. Americans haven’t been this positive since 2007 and we know what happened in 2008. Coca-Cola and Kellogg’s are seeing declining revenue and are ready to close manufacturing plants. Wages don’t drop like this unless we are headed into a recession. Deutsche banks says we are near the end. China, Russia and Iran are dumping the dollar and Treasuries and purchasing gold, bye, bye petro-dollar.

Why Government Employees in Iowa Are Paid So Much

Iowa has the largest Pay Gap in the nation.
“The Pay Gap” is calculated using Bureau of Labor Statistics data, which gives the average annual wage of a state-government worker and the average annual wage of a private-sector worker for each of the 50 states and the District of Columbia. Our study uses these figures to determine the Pay Gap between the average state-government worker and the average private-sector worker in each state. In 2015, Iowa’s state-government workers received an average wage that was 149.76 percent of what the average private-sector worker in Iowa was paid. Iowa’s Pay Gap was larger than that of any other state or the District of Columbia. That is, state-government employees in Iowa earned relatively more than private-sector workers anywhere in the United States.
One of the reasons for this persistent Pay Gap is that Iowa taxpayers often do not have a seat at the table when unions negotiate contracts on behalf of state-government workers. Iowa’s collective-bargaining laws have stacked the deck against taxpayers. Iowa law states that if negotiations break down, arbitrators ‘shall’ take into consideration the state’s ability to raise taxes in order to pay for an increase in pay for state-government employees. Arbitration in 1991 resulted in a 9 percent raise for state-government employees, despite the state being in the midst of a budget crunch.

This post was published at Ludwig von Mises Institute on Feb 09, 2017.


Gold at (1:30 am est) $1235.10 DOWN $2.50
silver at $17.72: UP 4 cents
Access market prices:
Gold: $1229.25
Silver: $17.66
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:
THURSDAY gold fix Shanghai
Shanghai FIRST morning fix Feb 9/17 (10:15 pm est last night): $ 1251.40
NY ACCESS PRICE: $1241.60 (AT THE EXACT SAME TIME)/premium $9.80
Shanghai SECOND afternoon fix: 2: 15 am est (second fix/early morning):$ 1251.13
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
London FIRST Fix: Feb9/2017: 5:30 am est: $1241.75 (NY: same time: $1242.00 (5:30AM)
London Second fix Feb 9.2017: 10 am est: $1242.10 (NY same time: $1242.00 (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 February 9, 2017.

Stocks and Precious Metals Charts – Risk On – Snow Day – Crony Capitalism

‘A true opium of the people is the belief in nothingness after death, the huge solace, the huge comfort of thinking that for our betrayals, our greed, our cowardice, our murders, we are not going to be judged.’
Czesaw Miosz
As you may have heard a winter storm swept across the northeastern US this morning. Luckily it came up the coast a little further east than expected, so we only received about six inches of heavy wet snow, which failed to drift in the high winds. Those further east got clobbered. Even with a snowblower clearing it was tiring, though.
The continuing fraud and inequality is taking a toll on the economy and society. Yes, the pigmen are emboldened and elated, because they see themselves winning. Things have not blown up in their faces yet, and the bailouts which they received from their grateful servants in government has made them feel almost invincible.
About 11 tonnes of paper gold were dumped on the market early, as part of the risk on theme of the technical trade, and the perception management surrounding a number of odious IPOs coming to market.
It will not last. And Trump and the GOP are going to own the next financial crisis and its aftermath.

This post was published at Jesses Crossroads Cafe on 09 FEBRUARY 2017.

Why Food Stamps Don’t Promote Healthy Eating

From a small pilot program created by John F. Kennedy’s first executive order in 1961, the food stamp program (now called the Supplemental Nutrition Assistance Program, or SNAP) has grown to be the largest federal food assistance program. However, there have always been major questions about whether the hunger and nutrition goals of the program justify its design.
A good way to see the logic of SNAP supporters is to ask, ‘Why give poor people food stamps rather than money?’ Some fear that low income recipients may ‘waste’ the money for some other goods than food, and want to preclude that possibility. Agricultural and grocery interests piggy-back on the belief that food stamps will increase food demand more than giving recipients money, which promises them higher sales and profits. Politicians do the same, because they can assert greater effectiveness at reducing hunger with the funds.
Unfortunately, a major problem with that shared understanding is that money is fungible. A person can redirect money put to ones use to any other use as he or she chooses.

This post was published at Ludwig von Mises Institute on Feb 09, 2017.

“Euphoric” – S&P Risk-Reward Surges To Worst Level In 23 Years

Despite the constant clamor of money-on-the-sidelines (which Cliff Asness has summarily dismissed as being idiotic) about to take stocks on their next leg higher, and near-record high bullish investor sentiment, it appears institutional selling is doing nothing to affect the ‘euphoric’ levels of risk-to-reward in the markets.
Full of bull…

This post was published at Zero Hedge on Feb 9, 2017.

Why Silver Prices Will Rise with Trump’s Stimulus Plan

Silver prices have been climbing steadily recently, rising almost 12% since the beginning of the year. The cost of silver is normally closely tied to the rise and fall of the price of gold, which has also seen a recent jump. Causes for the push in precious metals include a sluggish dollar, political and economic uncertainty surrounding Trump’s executive orders, and the Fed’s pass on an interest rate increase last month.
Another factor to consider is Trump’s stimulus plan, which promotes investments in infrastructure: roads, bridges, electrical grids and telecommunications. The industrial uses of silver would make it a high-demand commodity within such a pro-growth environment. Whether Trump’s stimulus plan finds enough congressional support among Republicans is still to be determined.

This post was published at Schiffgold on FEBRUARY 8, 2017.

Mexico Hikes Rates By 50bps As Inflation Soars

The Central Bank of Mexico hiked rates 50bps to 6.25% (as expected) and sent the peso rallying modestly. As Bloomberg notes, Banxico appears more concerned at inflationary pressures than growth slowdown.
Mexico Central Bank Issues Statement Following Rate Decision: Banxico to Closely Watch Mid, Long-Term CPI Expectations Banxico to Watch Potential FX Pass-Through to CPI Banxico to Continue Watching Policy Posture vs U. S. Fed Banxico to Closely Monitor Gasoline Prices Bloomberg Intelligence Latin America Economist Felipe Hernandez:

This post was published at Zero Hedge on Feb 9, 2017.

7 Strange-Acting Presidents Who Make the Trump White House Look Good

If you believe the steady stream of media reports, odd behavior is the norm in the Trump White House.
Stories make a big deal about things like the addition of a larger television in the Oval Office dining room (so President Donald Trump can watch cable news), his removal of President Barack Obama’s crimson curtains in the Oval Office for a gold set, and the fact that President Trump often spends his nights alone because First Lady Melania still resides in New York.
There’s no disputing that President Trump has ruffled a lot of feathers with the decisions he’s made in his early days.
But attempts to paint the Trump White House as exceptionally bizarre fall woefully short when compared to the behavior of some of the previous occupants of 1600 Pennsylvania Avenue.
It’s hard to believe what these men were capable of…
So Far, Donald Trump Is No Match for These Presidents
President Warren Harding: The Gambler
President Harding loved to play poker so much that his regular group of friends, which included several members of his cabinet, were known as the Poker Cabinet. The group played regularly at the White House, during which they drank illegal bootleg liquor (it was Prohibition, after all).

This post was published at Wall Street Examiner on February 8, 2017.

Ed Yardeni’s Magical Stock Market Indicator (What Happens Next?)

…on Yardeni , stocks , CRB Raw Industrials , initial jobless claims , consumer confidence.
Years ago I stumbled upon this interesting stock market indicator created by famed strategist Ed Yardeni. I was intrigued because contrary to most equity models, Yardeni’s formula did not include the traditional inputs of earnings or interest rates.
Convinced it was just some sort of statistical fluke, I modeled it up in my Bloomberg and have been following diligently ever since. Every time Ed’s indicator has diverged from the S&P 500 I think to myself the time for the model to stop working has finally come. Yet, strangely, almost as soon as that thought crosses my mind, the series recouple.

This post was published at Zero Hedge on Feb 9, 2017.

11.1 Tonnes Of Paper Gold Dumped In Sixty Seconds

Central banks stand ready to lease gold in increasing quantities should the price rise. – Alan Greenspan, 1998 in Congressional testimony on OTC derivatives
Gold has been in a steady uptrend since December 18th, bottoming at $1131 after a four and half month price correction. Firmly back over the 50 dma, the price momentum appears to be a threat to the ‘bullion’ banks who suppress the price of gold in the paper derivatives market on behalf of the western Central Banks and, ultimately, the BIS.
The banks must feel threatened by the recent activity in both physical and paper gold trading. This morning the price of gold was attacked in the Comex paper market after St. Louis Fed-head, James Bullard, delivered remarks about interest rate policy that should have propelled the price of gold higher: ‘We think the low-safe-real-rate regime is unlikely to change in the near term. This means the policy rate can also remain relatively low over the forecast horizon’ (link).
Instead, the Comex was bombed with paper:

This post was published at Investment Research Dynamics on February 9, 2017.

Swiss National Bank’s U.S. Stock Holdings Hit A Record $63.4 Billion

Being able to print your own money and buy stocks at any price sure can be fun. Just as the SNB which unlike many other (if ever fewer) central banks admits to doing just that.
In its latest 13F filing, the Swiss National Bank reported that the value of its portfolio of US stocks rose again in the fourth quarter, increasing by 1.6% from $62.4 billion as of Sept. 30 to a record high $63.4 billion at the end of the year.
Over the past two years, the total Assets under management of this massive hedge fund, which occasionally engages in massive currency manipulation with disastrous results, have increased from $26.7 billion to $63.4 billion, a 138% increase, mostly as a result of relentless currency manipulation and monetization of various assets, including both bonds and stocks.

This post was published at Zero Hedge on Feb 9, 2017.

No Surprises Today: Solid 30Y Auction Stops Through, Failing To Repeat Yesterday’s Fireworks

After yesterday’s very ugly, massively tailing 10Y auction set off substantial intraday selloff across bonds, many were concerned that today’s 30Y refunding could be just as bad if not worse, and accelerate the steepening of the yield curve in the US and abroad. That, however, did not happen because moments ago the US Treasury sold $15 billion in ultra long dated paper at a yield of 3.005%, stopping through the When Issued 3.007% by 0.2bps, even though just like yesterday there was absolutely no pressure in the repo market ahead of the auction, suggesting little potential for a short squeeze. Of note: 3 of the last 4 30Y refundings have all tailed.

This post was published at Zero Hedge on Feb 9, 2017.

The Senate War Against Border Tax Begins

One week ago, we wrote that “Two Wars Are About To Break Out Over Border Adjustment Tax“: one of which would include a group of opposing Republican Senators (and their lobbyists), and US retailers and importers, and a second which would be waged between the US and all of its major trading partners.
Today, the war against BAT fired its first salvo, when the previously profiled Senator David Perdue of Georgia, former CEO of discount retailer Dollar General, emerged as the top Republican critic of the House GOP plan to adjust business taxes at the border, threatening the divisive proposal’s legislative prospects. Unlike other members of the upper chamber, Perdue has harshly criticized the tax idea in the press and actively tried to sway his colleagues against it.
In a letter issued on Wednesday, Perdue wrote that “this 20-percent tax on all imports is regressive, hammers consumers, and shuts down economic growth.”
Perdue said he supports three of the major ideas in the House Republicans’ plan: simplifying the individual tax code, lowering the corporate tax rate and making it easier for companies to bring foreign earnings back to the U. S. But he said that the border-adjustment tax would raise consumer prices.
“This would hammer consumer confidence and lower overall demand, thus putting a downward pressure on jobs,” he said.

This post was published at Zero Hedge on Feb 9, 2017.