Wall Street Pouring Money Back Into Oil And Gas

Despite the near record increase in U. S. oil inventories last week – an increase of 13.8 million barrels – oil prices traded up on February 8 and 9 as traders pinned their hopes on a surprise drawdown in gasoline stocks, which provided some evidence of stronger-than-expected demand.
The abnormal crude stock increase took inventories close to 80-year record levels at 508 million barrels, and is another bit of damming evidence that should worry oil bulls. But the oil markets were not deterred. In fact, that has been a defining characteristic of the market in recent weeks – optimism even in the face of some pretty worrying signals about the trajectory of the market ‘adjustment’ process.

This post was published at Zero Hedge on Feb 12, 2017.

The most depressing chart showing US imports and exports in 2016 with top trading partners.

The manufacturing base has completely eroded in this country and one chart dramatically highlights this (shown later in the article). It is deeply disturbing that we now have as many people working in restaurants as waiters and bartenders as we do in manufacturing. This of course is for good reason given that you can’t export (yet) the ability to order a meal and have a stiff drink served to you to drown away your economic sorrows. As a nation we have enjoyed spending on a lax credit card for an entire generation. And now that money is coming back rushing in buying up real estate, studios, hotels, franchises, and everything else you can imagine. For every debt there is a collector. That is basic accounting (assets and liabilities). In a simplified equation you want to have more assets and fewer liabilities. However when you look at our export and import data, a troubling picture emerges.
Spending more than we earn
If you want to see the current situation we are in take a look at our trade balance with our top trading partners in 2016. What this highlights is our spending beyond our means:

This post was published at MyBudget360 on Feb 12, 2017.

Zombies and Zealots

I’m sure you’re familiar with someone who thinks they’re a Big Deal. Your boss, that weird cousin on Facebook, your toddler. No corner of society is immune from a puffed-up sense of self, and you know the government is no exception.
The Fed wants us to believe that its every move – every press conference, every meeting, and every quote in the papers – is a Big Deal. It really does take itself quite so seriously, but its recent history shows we don’t have to take it all that seriously.
Remember, the Fed promised four rate hikes last year and only delivered once, but with the amount of ink spilled on their press conferences and coffee orders (only sort of joking) you’d think they tried to create a whole new U. S. economy.
This year, it’s promised three rate hikes and according to its statement after the conclusion of this year’s first meeting, nothing has changed.

This post was published at Wall Street Examiner by Lance Gaitan ‘ February 10, 2017.

This Silver News Won’t Prevent a Bull Run in 2017

In silver news today (Friday, Feb. 10), the price of silver closed 1.1% higher at $17.93. With that gain, silver logged a weekly rise of 2.6%.
The most shocking part about silver’s performance is how it’s rallied in the face of news that’s usually bearish for silver prices.
Even if this news persists, Money Morning Resource Specialist Peter Krauth expects the price of silver to keep rallying this year. That’s why we’re going to reveal our silver price prediction for 2017.
First, here’s the news story that failed to put a damper on the silver price this week…
How This Silver News Story Has Affected Prices This Week
The big story for both silver investors and broader market participants has been the Dow Jones Industrial Average hitting new all-time highs this week.
You see, investors everywhere rejoiced when the Dow Jones soared above 20,000 for the first time ever on Jan. 25. The index had already teased the milestone on Jan. 6 when it reached 19,999 during intraday trading. The S&P 500 also reached a fresh high late last month.

This post was published at Wall Street Examiner by Alex McGuire ‘ February 10, 2017.

The Number 1 Reason Why Trump Is Good For Stocks

The US equity market is very different than before Election Day 2016, and that’s not just because we are at fresh all-time highs. There were plenty of new highs from 2013-2016, after all. What’s different is the lack of sector and asset class correlation now versus 2009 – 2016.
Simply put, they are finally back to normal. The drop in correlations among the 11 sectors of the S&P 500 has been profound, from 75-80% pre-Election to 57-62% afterwards. This month’s reading of 57% points to the lasting nature of the change; this is a not blip.

This post was published at Zero Hedge on Feb 12, 2017.

Zimbabwe 2.0: South Africa’s President Vows To Redistribute White-Owned Land And Businesses

In a stark flashback to the events that led to Zimbabwe’s terminal collapse into banana republic status, as well as unleashing hyperinflation and economic devastation, on Thursday South African President Jacob Zuma pledged to break up white ownership of business and land to reduce inequality, in a State of the Nation address which as the WSJ reports was disrupted by a fistfight, walkouts and a release of pepper spray in the parliamentary chamber. It appears South Africa is not fond of implementing “Rule 19.”

This post was published at Zero Hedge on Feb 12, 2017.

Chart of the Day – $GOLD

In a bull market surprises come to the upside and it’s never advisable to lose one’s core position. This rally isn’t going to top until sentiment gets excessively bullish. Right now sentiment is dead neutral and it will take 5-10 more weeks before sentiment reaches 75% or higher.

This post was published at GoldSeek on 12 February 2017.

Consumer Spending “Pothole” Ahead: IRS Refunds Tumble As New Law Delays Payments

A period of consumer spending, retail sales and housing weakness may be imminent, after federal tax refunds tumbled by 78% in the early part of February compared to 2016, the result of a new law which requires the IRS to delay the printing of checks to households claiming specific tax credits. The reason for the slowdown is that in late 2015 Congress passed a law forcing the IRS to hold back refund checks related to the earned-income tax credit and the child tax credit until at least Feb. 15. The delay would reportedly give the IRS more time to match tax returns with income data on W-2s filed by employers. Allegedly, such payments had become a tempting target for identity thieves and unscrupulous tax preparers, who falsify tax returns to get thousands of dollars.
The IRS has told affected taxpayers that they shouldn’t expect to receive their refunds until Feb. 27 because of weekends, holidays and bank delays.
While the Joint Committee on Taxation projected the law would increase federal revenue by $779 million over a decade, it may result in a period of stagnant spending until the calendar effects are wrinkled out and US households get the money they are owed. According to a WSJ analysis, refunds paid through Feb. 3 were only $13.2 billion, down almost 80% from $58.6 billion through Feb. 5, 2016. Additionally, the average refund also declined, to $1,994 from $3,385.

This post was published at Zero Hedge on Feb 12, 2017.

Three Things Are About To Derail Trump’s Fiscal Plan, Goldman Warns

For some still unknown reason, Goldman Sachs, the bank that single-handedly accounts for the bulk of Trump’s closest economic and financial advisors, and whose former COO has been reportedly tasked with hatching Trump’s “phenomenal” tax plan, has been on a tear in the past month to discredit his proposed political agenda. Just last week Goldman slammed Trump’s proposed economic plan, warning that unlike its earlier optimism, “one month into the year, the balance of risks is somewhat less positive in our view.” Goldman’s Jan Hatzius then gave three reasons why his outlook had soured substantially in just a few months:
First, the recent difficulty congressional Republicans have had in moving forward on Obamacare repeal does not bode well for reaching a quick agreement on tax reform or infrastructure funding, and reinforces our view that a fiscal boost, if it happens, is mostly a 2018 story. Second, while bipartisan cooperation looked possible on some issues following the election, the political environment appears to be as polarized as ever, suggesting that issues that require bipartisan support may be difficult to address. Third, some of the recent administrative actions by the Trump Administration serve as a reminder that the president is likely to follow through on campaign promises Now, in yet another note from Goldman over the weekend, the bank’s Washington analyst Alec Phillips breaks down the “Fiscal Constraints on the Political Agenda” and lays out why, despite Trump’s intention to announce “something phenomenal on taxes in the next 2-3 weeks“, a statement which promptly boosted stocks to new all time highs, the reality is far different, and that between Trump’s tax plans and various other aspects of the president’s fiscal agenda, the most likely outcome will be imminent disappointment as the plan begins to move through Congress where it is about to hit major roadblocks.

This post was published at Zero Hedge on Feb 12, 2017.

Trump To Nominate Former Bear Stearns Chief Economist For International Treasury Role

Having filled up his administration to the brim with former Goldman staffers, to the point where even President Trump realizes there may be too many “Goldman Guys” on his team, Bloomberg reports that in an attempt to branch out, Donald Trump plans to nominate David Malpass, 60, the former Bear Stearns economist, as U. S. Treasury undersecretary for international affairs.
For those trading FX, his role will be critical: “His first job will be to help guide policy as the world wonders whether the new administration will make a habit of talking up or down other countries’ currencies.”
Malpass will report to the Treasury secretary on the U. S.’s international economic relationships, most importantly with China. Ties between the world’s two largest economies have become more tenuous since Trump’s election. The Republican and his advisers have not only talked about China and Japan artificially manipulating their currencies — after walking back a pledge to label the former as a manipulator in the early days of the administration — but have also moved foreign exchange markets by jawboning the U. S. and Canadian dollars, Mexico peso, and the euro.

This post was published at Zero Hedge on Feb 12, 2017.

Passengers Flee United Flight After “Unstable” Pilot Goes Off On Bizarre Trump, Clinton Rant

Nearly half the passengers reportedly fled a United Airlines flight before it could take off on Saturday evening after a seemingly disturbed pilot went on a bizarre political and personal rant over the intercom.
As passenger Randy Reiss wrote on Twitter, the pilot dressed in a ball cap and casual shirt remarked on her appearance after she boarded the flight at Austin-Bergstrom International Airport in the late afternoon, “Then she says ‘sorry, I’m going through [a] divorce,’’ Reiss wrote. ‘Ummmm uh oh.’
Reiss told BuzzFeed that other passengers even sympathized with her at first. The sympathy quickly changed to dread as her speech veered from her personal life into a string of non sequiturs, at which point the mood aboard the San Francisco-bound jet turned from cozy to uncomfortable, to worse.

This post was published at Zero Hedge on Feb 12, 2017.

Gold Price News Today Shows Second Weekly Gain in a Row

Gold price news this past week has mostly revolved around the White House as we gradually move into the Trump administration’s tenure.
The precious metal retraced slightly in the week following Trump’s inauguration. But since then, the price of gold has risen 3.8%. As of 12:05 p.m., the gold price today (Friday, Feb. 10) trades at $1,236 per ounce.
January alone was even more impressive, with the gold price gaining 4.9% that month. I’d caution anyone to expect that pace of gain to continue through the rest of this year. But the common saying is ‘as goes January, so goes the year.’ And January clearly marked the start of a long-term rally in 2017.
On the sentiment side, we have more encouraging news. The World Gold Council just reported that gold-backed ETFs increased their holdings by 1% last month. And one of the world’s greatest investors moved back into gold in late December and January, just as gold prices bottomed.

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

“Are You Ready For Greed?” Morgan Stanley Asks

‘And some things that should not have been forgotten, were lost’ – The Lord of the Rings
“Are you ready for greed?” asks Morgan Stanley’s Andrew Sheets in his Sunday Start note, in which he compares the current market situation to the early days of 2007, when the first harbingers of the financial crisis emerged (recall “10 Years Ago Today, The Financial Crisis Started With An Announcement By HSBC“) and when early warnings that it would all end in tears were roundly ignored for almost a year, all because of – you guessed it – a resurgence of greed.
“It’s happened before. As TABX cratered and credit markets wavered in early 2007, the S&P 500 went on to make new highs, not peaking until October. Greed is a powerful force. We are trying not to forget that.”
Morgan Stanley notes that after the crisis, greed became an anachronism as animal spirits died along with a wholesale shift in investor mentality:

This post was published at Zero Hedge on Feb 12, 2017.

Juncker Will Not Run Again for President of EU – Says it Will Break Up

President of the European Union Jean-Claude Juncker has announced his departure saying he fears the breakup of the EU and says there is just too much defeatism in Europe. The EU has refused to listen and its fixed goal on a federalized Europe has been unwilling to yield. They have made it an all or now choice, typical of politicians detached from reality.
Juncker says he doubts whether the member states would find a unity in the face of Brexit: ‘Because the British will be able to divide the other 27 member states without great effort.’ Juncker is blaming Britain rather than its own dictatorial powers and announced that he would not to run again for the presidency of the EU Commission.

This post was published at Armstrong Economics on Feb 12, 2017.

Hedge Fund CIO Amazed At The Absurdity Of It All

The latest weekly recap from One River Asset Management CIO Eric Peters tries to bring some sense to an increasingly absurd global economic, social and political situation, and fails, finding that the “more than absured is no longer absurd.”
From Eric Peters’ Weekly Notes
‘More than absurd!’ cried Jens Weidmann, outraged by Pete Navarro. Trump’s trade advisor had deliberately talked-down the dollar to boost US exports by accusing Germany of deliberately weakening the euro to boost European exports.
The argument is quite obviously absurd, because everyone’s trying to engineer a weaker currency. But according to Jens, it’s so absurd as to be more than absurd. Like lifting yourself into the air by grabbing your ass with both hands.
Germany’s current account surplus is over 8% of GDP, 2016 factory orders soared 8.1%. Absurd!
Greek unemployment hit 23%; the IMF forecasts 275% Debt/GDP by 2060. Absurd!

This post was published at Zero Hedge on Feb 12, 2017.