Price of Gold Today Continues 2017 Rate Hike Rally

This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
The price of gold today (Friday, March 31) is up 0.4% to $1,248, continuing the metal’s strong rally recently.
If you’ve been watching gold prices, you know the metal has blasted higher since the Fed hiked rates on March 15. Since then, gold has gained 3.9%, or about $47.
Meanwhile, the U. S. dollar, stocks, and oil prices have been stalling. That’s reversed somewhat in the past week, but gold’s price action has remained resilient.

This post was published at Wall Street Examiner by Peter Krauth ‘ March 31, 2017.

Mark Cuban Challenges Trump Over the ‘Exploding Cost of College’

This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
The very public Mark Cuban-President Donald Trump beef has once again surfaced on Twitter.
Cuban’s latest challenge to his fellow billionaire came Wednesday (March 29) in a tweet about the new president’s plans to address the ‘exploding cost of college’ in the United States:
Cuban’s post didn’t seem to have been provoked by recent Trump administration policy changes regarding student debt.

This post was published at Wall Street Examiner by Money Morning Staff Reports ‘ March 31, 2017.

Goldman’s ‘Analyst Index’ Tumbles In March As ‘Soft’ Survey Data Rolls Over

Since the election, talking heads have crowed about improving economic data (macro- and micro-). However, what they have failed to mention is all of the improvements have been in ‘soft’ survey and sentiment data, not ‘hard’ economic figures; and now, judging from the plunge in Goldman Sachs Analyst Index, soft data is starting to lose faith rapidly.
The Goldman Sachs Analyst Index (GSAI) declined by 5.2pt to 51.5 in March, but remains above 50, a level we have found represents trend growth. Underlying components also edged lower, though the month-over-month decline in the headline index was primarily driven by declines in materials prices and sales and shipments indexes. Consistent with the February survey, analyst commentary remains optimistic about the pace of growth in business activity this year, but some sector analysts suggested a few potential headwinds remain.

This post was published at Zero Hedge on Mar 31, 2017.

Start Your Timer: Brexit’s Going to Shake U.S. Market Stability for the Next Two Years

This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
On Wednesday (March 29), UK Prime Minister Theresa May officially triggered ‘Article 50′ of the Brexit process, thus commencing separation proceedings between the United Kingdom and the European Union (EU).
Now the British government and the bloc have two years to work out the specifics of the divorce.
One worrisome factor expressed by various media reports on the 24 months ahead:
No one knows exactly what’s going to happen.
No one knows exactly what’s going to happen. You see, Britain is the first country ever to trigger Article 50 and exit the bloc.
And there’s no telling how difficult the Brexit negotiation process will be in the months ahead. Some predictions about it have surfaced, however…
For example, ABC News predicted on Wednesday that the separation will likely be protracted and arduous given the fact that it took Britain more than a decade of trying to get into the bloc some 46 years ago.

This post was published at Wall Street Examiner by Money Morning Staff Reports ‘ March 31, 2017.

Market Talk- March 31, 2017

China’s PMI released a tad better than previous months, but the Shanghai index was the only green amongst the core Asian indices today. Although the Hang Seng lost ground today on the quarter, they have seen around a 9% return at the close. Many question if the market can repeat this type of performance and a call back towards cash is a popular cry. Japan’s Nikkei lost all of the earlier 100-point rally as the afternoon book-squaring took the index back into negative territory to close down 150 points. CPI grew 0.2% in February coupled with a small decrease in the unemployment from 3% down to 2.8%. The JPY lost ground also in early trading with moves over 112 in early European trade. The late US however, continues to hover around the mid 111’s.

This post was published at Armstrong Economics on Mar 31, 2017.

Healthcare Fiasco, Tax Reform, Markets

Pundits have hypothesized that the failure of Obamacare repeal and replacement has so undermined Trump that the tax reform – infrastructure – repatriation package is likewise doomed. We disagree.
In the past few weeks, we have encountered audiences in various cities and venues. The largest audience for a speech numbered over a thousand, while the smallest was 14. The composition of the groups included the investor class, bankers, independent businesspeople, charitable organization senior staff or trustees, etc.; so our conclusion below is based on a collection of thousands of anecdotes. We often asked audiences for their views by a show of hands.
The results – and this was before the Ryan – Trump vote debacle – were heavily one-sided. Few wanted the Trump administrative machine to tackle healthcare first. Nearly all wanted to get tax reform done. Nearly all were deferring decisions and waiting to see what the new rules would be so they could proceed with their personal and professional plans. That was a universal view.

This post was published at FinancialSense on 03/31/2017.


Gold: $1247.30 UP $2.30
Silver: $18.23 UP 5 cents
Closing access prices:
Gold $1249.50
silver: $18.27!!!
Premium of Shanghai 2nd fix/NY:$18.32

This post was published at Harvey Organ Blog on March 31, 2017.

China’s Record Iron Ore Glut: Enough To Build 13,000 Eiffel Towers

Earlier this week we discussed the reason for the recent drop in iron ore prices, which had been attributed to the discovery of massive data fabrication and misrepresentation of commodity production cuts in China (think OPEC), whose biggest steel-producing province was found lying about mandatory output reductions, and instead of curbing was in fact accelerating production.
As Reuters reported at the time, Hebei, China’s biggest steel-producing province, launched a probe into steel overproduction in the city of Tangshan “amid concerns that firms have continued to raise output despite mandatory capacity cuts.”
Tangshan is the heartland of Chinese steel production. The city is home to the headquarters of the state-owned Tangsteel Group, which in 2006 merged with other companies to form Hebei Steel Group, the second-largest steel producer in the world. Located around 100 miles east of the capital Beijing, Tangshan is on the frontline of the country’s “war on pollution”, and was seventh on the list of China’s ten smoggiest cities in the first two months of this year.

This post was published at Zero Hedge on Mar 31, 2017.

Unraveling QE ‘Later This Year’ Gets Serious

New York Fed President William Dudley is on board.
Today it was New York Fed President William Dudley’s job to hammer home the message. He’s one of the most influential members on the policy-setting Federal Open Market Committee. His New York Fed deals with the securities that are on the Fed’s balance sheet as a result of QE. And he said the Fed might start reversing QE this year.
With this call to shrink the Fed’s balance sheet, he is following in the footsteps of other Fed heads, including Cleveland Fed President Loretta Mester, San Francisco Fed President John Williams, and most notably Boston Fed President Eric Rosengren – a former ‘dove’ who has been publicly fretting about bubbles in commercial real estate and housing and the risks they pose to ‘financial stability.’
So this theme unraveling QE, not in the foggy future but this year, is picking up momentum.
There is a lot to unravel: the Fed’s $4.5-trillion balance sheet holds $1.8 trillion in mortgage-backed securities and $2.4 trillion in Treasuries. As they mature, the Fed replaces them by buying more.

This post was published at Wolf Street by Wolf Richter ‘ Mar 31, 2017.

Why China Is About To Bring The Global Reflation Rally To A Halt

Previously we reported that iron ore prices – having almost doubled in the past year and launching a global reflationary wave – are on the verge of tumbling as the world becomes increasingly aware that China has a “13,000 Eiffel Tower” record inventory problem.

And while we previously discussed the immediate adverse implications for iron ore bulls, the conseqences for the global economy could be far more material.
Conveniently, in a note this morning, BMO’s Mark Steel looked at the same issue, focusing on the big picture implications.
His note titled “China’s greatest gift to the US” – a “gift” which will become clear in moments – takes aim at the latest overnight selloff in iron ore, when prices fell 1.7% on Friday.

This post was published at Zero Hedge on Mar 31, 2017.

Intel Official Behind “Unmasking” Of Trump Associates Is “Very Senior, Very Well Known”

Day after day, various media outlets, well really mostly the NYT and WaPo, have delivered Trump-administration-incriminating, Russia-link-related tape bombs sourced via leaks (in the hope of keeping the narrative alive and “resisting.”). It now turns out, according to FXN report, that the US official who “unmasked” the names of multiple private citizens affiliated with the Trump team is someone “very well known, very high up, very senior in the intelligence world.”
As Malia Zimmerman and Adam Housley report, intelligence and House sources with direct knowledge of the disclosure of classified names (yes, yet another “unnamed source”) said that House Intelligence Committee Chairman Devin Nunes, now knows who is responsible – and that person is not in the FBI (i.e. it is not James Comey)
Housley said his sources were motivated to come forward by a New York Times report yesterday which reportedly outed two people who helped Nunes access information during a meeting in the Old Executive Office Building. However, Housley’s sources claim the two people who helped Nunes “navigate” to the information were not his sources. In fact, Nunes had been aware of the information since January (long before Trump’s ‘wiretap’ tweet) but had been unable to view the documents themselves because of “stonewalling” by the agencies in question.
Our sources: This surveillance that led to the unmasking of private names of American citizens started before Trump was the GOP nominee.
— Adam Housley (@adamhousley) March 31, 2017

This post was published at Zero Hedge on Mar 31, 2017.

Morgan Stanley: Used Car Prices May Crash 50%

For months we’ve been talking about the massive lending bubble propping up the U. S. auto market. Now, noting many of the same concerns that we’ve highlighted repeatedly, Morgan Stanley’s auto team, led by Adam Jonas, has just issued a report detailing why they think used car prices could crash by up to 50% over the next 4-5 years.
Here’s the summary (flood of supply, poor lending standards and desperate OEMs who need to keep new car sales elevated at all costs):
Off-lease supply: This has already more than doubled since 2012 and is set to rise another 25% over the next 2 years. Extended credit terms: Auto loans are at record lengths and lease assumptions (residuals, money factor) are at record levels of accommodation. Rising rates: Starting from record low levels in auto loans. Overdependency on auto ABS: The outstanding balance of auto securitizations has surpassed last cycle’s peak. Record high deep subprime participation: 32% of subprime auto ABS deals were deep subprime (weighted average FICO < 550) in 2016 vs. 5% in 2010. Record high units of new car inventory: 2016YE unit inventory levels were near 10% higher than 2015YE, and are continuing to trend higher in 2017.

This post was published at Zero Hedge on Mar 31, 2017.

Brazil Unemployment Hits Record High, Same As Government’s Disapproval Rating

Things are going from bad to worse in Brazil where, contrary to what the stock market suggests, the economy continues to disintegrate.
Earlier today, the government reported that the labor market deteriorated further in February, with the unemployment rate surging to a record high (and higher than expected) 13.2%, resulting in 13.5 million unemployed workers (up from 10.4mn a year ago). The national unemployment rate printed at 13.2% in the 3-month period ending in February, up from 10.2% a year ago, and 7.4% two years ago. In seasonally adjusted terms the unemployment rate rose to 13.1% in February, from 12.9% in January and 10.1% a year ago.

This post was published at Zero Hedge on Mar 31, 2017.