Europe Starts Freezing Britain Out Of EU Contracts

Diplomatic relations between the UK and EU are fast approaching zero degrees Kelvin.
One day after Theresa May not only cemented, but allowed herself Brexit negotiating breathing room with her stunning, yet cunning decision to announce snap elections which would only boost the leverage of her party, Brussles has retaliated and as the FT reports, Brussels is starting to “systematically shut out British groups from multibillion-euro contracts” while urging companies to migrate to one of the 27 remaining EU members.
The Brussels note suggests that tensions between the UK and EU mey deteriorate to the point where even Bremainers may turn on Brussels:

This post was published at Zero Hedge on Apr 19, 2017.

Euro Banks Still Can’t Value Their Own Equity Research; Subscriptions Range From $50k – $600k A Year

Literally no one knows the true ‘value’ of research, not even the investment banks that are selling it. Up until now, equity research has been treated as a ‘freebie’ given away to institutional clients in return for trading commissions but that is all about to change thanks to the European Union’s MiFID II regulations, which require asset managers to separate trading commissions from investment-research payments.
Unfortunately, at least for the Investment Banks of the world, while the cost of generating equity research may be substantial, it turns out that the true ‘value’, as defined by institutional clients’ maximum willingness to pay for reports, may be much less. Which is shocking given the creativity required to constantly generate new variations of daily reports politely suggesting that you “Buy The Fucking Dip.”

This post was published at Zero Hedge on Apr 19, 2017.

The Truth is a Dangerous Thing

This time in history might be like no other – or at a minimum is on a much bigger scale. There is more access to information, analysis, and expert opinions than ever. Obviously, everyone claims to be telling ‘the truth’. A few psychopathic individuals notwithstanding, nobody sets out in the business of providing information, then says ‘But we’re going to lie like a rug, 24/7, how about them apples?’. Everyone is telling the truth. The odd thing about all this is that the stories that come out of these ‘truth telling’ outfits couldn’t be further apart from each other. That leaves the average person with a distinct problem – it is up to YOU to find the truth. To seek it, to think it, to try to live it.
At the end of the day, the truth is more about perception than anything else. It is amazing how ten different people can look at the same facts and come to 10 different conclusions. Perhaps that is a tribute to our ability to think and cogitate or perhaps it is simply the sum total of our biases and perceptions. This becomes insanely apparent when dealing with politics, and even economics. Since they’ve become inextricably linked, even the study of economics has become poisoned with normalcy bias, perceptions, and dogmatic stubbornness.
We are going to take a look at a couple of examples from economics – politics is a lost cause – and a place where people who seek to analyze have no business dabbling anyway. The good news is that in the case of America, economics does transcend politics because all of the negative (at least we see them that way based on history) trends extend for long periods of time and continue unaffected by changes in the political structure. This will undoubtedly annoy some people because they thought their political idols were just so smart and said all the right things, when in fact they were merely just part of a machine – again, in our opinion.

This post was published at GoldSeek on Graham Mehl.

Passive Negligence – The Soaring Popularity Of “Cover Your Eyes & Buy” Investing

Passive Negligence Part II
Almost a year ago, we stumbled upon a topic that is currently generating much discussion in the financial media. In Mm Mm Good, published August 2016, we highlighted the Campbell Soup Company (CPB) and the utility sector to show how yield-starved investors were chasing dividend stocks to dangerously high valuations. The following quote from the article highlights the risk inherent in CPB’s valuation: ‘This concept of a no-growth company with soaring valuations is alarming. The price of CPB would have to drop 30% to return to its post-recession average P/E. If that were to occur, it would take 16 years’ worth of dividend payments to recoup the price loss, assuming dividends remain stable’.

This post was published at Zero Hedge on Apr 19, 2017.

Gold is the New Green

Gold is an investment as well as being money, but gold is also increasingly in demand for environmental and energy production applications. In 2011, new catalytic converter technology utilizing gold was introduced to the market. Catalytic converters remove pollutants from automobile exhaust. They are made from a heat resistant substrate, with a large internal honeycomb structure covered with a thin coating of tiny particles of metal.
According to the World Gold Council, research has shown that a stable and effective formulation can be obtained using a combination of gold, palladium, and platinum. Cleaning up auto emissions is just one of several new ways the yellow metal is helping clean up the environment.
Renewable Energy
Gold is an important component in the development of renewable energy sources. Researchers at Stanford University have developed a gold-based sheeting shown to improve the performance and efficiency of solar panels. Gold nanoparticles have also been shown to increase solar panel performance. Gold-based materials show promise in the search for new, more effective fuel cell catalysts.

This post was published at Schiffgold on APRIL 19, 2017.

Chinese Carmakers, Volkswagen, BMW Roll Out “Tesla Killers”

The much anticipated Tesla Model 3 has yet to be released and already a groundswell of electric car competition is forming to challenge Elon Musk’s upcoming offering. Start in China, where the Model 3 is not due to arrive until next year, but already Chinese-funded, smart, connected plug-in car start-ups are scrambling to launch “Tesla killer” cars to go head-to-head against Tesla “mass market” sedan.
In taking on the monopoly, yet cash-burning premium electric car juggernaut that is Tesla, the key for leading Chinese electric vehicle start-ups such as Future Mobility, WM Motor and Singulato Motors, is that they will produce their cars locally, making them better able to match the Model 3’s price, Reuters notes. Tesla is expected to price its Model 3 from $35,000 in the United States. Buyers in China would expect to add 25% to that in import tariffs.
The Chinese strategy is simple: beat the Model 3 in China by making their cars more premium but cheaper than Tesla’s mass-market all-electric battery car.

This post was published at Zero Hedge on Apr 19, 2017.

Stocks and Precious Metals Charts – All Is Well

Fed Vice Chair Stanley Fischer sought to reassure markets just after the close.
“On Wednesday, he [Stanley Fischer] said that spillovers from [rate] tightening ‘will be manageable.’
It’s possible that U. S. and foreign economic growth can align, Fischer said. He added that downside risks from overseas are noticeably smaller and that foreign growth appears more entrenched.
Fischer said that China’s economy also seems to be on more solid footing.”
Stanley, you are not all that reassuring.
This seems to be just another self-serving exercise from the Fed which wishes to get off the zero bound so that they can cut rates later on when their latest financial paper asset bubble starts deflating.
Stocks were wobbly into the close after giving up most of their gains after yesterday’s loss.
I am not recommending going short, by the way. These guys have more paper than you have patience.
Geopolitical jitters affecting the markets include the freedom wars in the Mideast and the Kid in North Korea.
And of course the rising populism in Europe, particularly with an eye to this weekend’s French election which seems to be following the divergence from the status quo to both the left and right.

This post was published at Jesses Crossroads Cafe on 19 APRIL 2017.

Brace Yourself, The Warning Signs Are Getting Darker – Episode 1258a

The following video was published by X22Report on Apr 19, 2017
Gold has been slammed down again, but gold moved up and is continually resisting. Harvard study show an increase of minimum wages causes a 4-10% chance of restaurants closing. IBM tumbles as earnings collapse. Used car prices are plunging as leases are coming due, this is not going to go well for the auto manufacturers. Mortgage rates fall a little which did not help applications. Mnuchin covers for Trump about the dollar, Trump is setting him up. Larry Fink warns of dark signs ahead. The economy is being brought down, everything is in place. Maduro is ready to sell all the gold for dollars.

Scientific Proof ETFs Make Markets Dumber

One of the horses we have beaten to death starting in 2013 (with Why The TBAC Is Suddenly Very Worried About Market Liquidity) is that the relentless growth in ETFs in particular, and passive investing in general, is one of the greatest threats facing the US equity market for one main reason: “phantom liquidity”, and specifically the thought experiment, conducted back in March 2015 by Howard Marks, of what happens if and when the ETF selling begins.
This is what we said one week ago:
The relentless growth of passive investing in general, and ETFs in particular, has been extensively discussed on the pages over the past few years, most recently overnight when we presented a note from Convergex which laid out some ideas how investors can profit from the unstoppable – for now – shift from active, and expensive, management to cheaper, passive forms of asset allocation. Others, such as One River’s Eric Peters gave a decidedly more downbeat outlook on what the creeping growth of ETFs means for capital markets and price formation, warning that ‘there is no such thing as price discovery in index investing. And there will be no price discovery on the downside either. The stocks that have been blindly bought on the way up will be blindly sold.”
That simplified analysis touches on the biggest threat facing ETF investors: namely “phantom liquidity” of what has effectively become the market’s biggest quasi-derivative product. In a nutshell, the threat here is that what is traditionally considered to be the market’s most liquid instrument, would be unable to satisfy a massive redemption wave due to a huge liquidity mismatch between the synthetic product, the ETF itself, and its underlying instruments, particularly in various types of debt ETFs.

This post was published at Zero Hedge on Apr 19, 2017.


Gold: $1281.40 DOWN $10.30
Silver: $18.14 DOWN 12 cents
Closing access prices:
Gold $1280.00
silver: $18.16!!!
Premium of Shanghai 2nd fix/NY:$6.25
LONDON FIRST GOLD FIX: 5:30 am est $1282.05
For comex gold:
For silver:
For silver: APRIL
Total number of notices filed so far this month: 830 for 4,150,000 oz
The open interest in silver continues to advance with today’s reading just UNDER 228,000 contracts (227,984 contracts/a new record) or about 4000 contracts ABOVE the record set last year AND 200 CONTRACTS ABOVE THE RECORD SET YESTERDAY. It seems that the boys want to attack our precious metals as they are quite nervous about silver and its gigantic high OI for the front month of May.
I wrote the following last night:
‘Tonight’s open interest for gold should rise by about 2,000 contracts. The silver OI should fall because the price fell by 24 cents. A rise will cause migraines galore for our bankers.’
I guess I was right about the migraines as they attacked again today.
Let us have a look at the data for today

This post was published at Harvey Organ Blog on April 19, 2017.

The Real Message From The GDXJ Mess

In what seems a lifetime ago, I was the equity index trader at a big bank on Bay Street. Although a lot has changed since then, there are parts of the game that are timeless. So I am putting my old hat back on to analyze VanEck’s recent problems arising from the success of their GDXJ ETF (Junior Gold Miners). And lest you think this will be a boring ETF specific piece, I urge you to suffer through the details as I believe the market is missing the bigger picture message.

This post was published at Zero Hedge on Apr 19, 2017.

Gold and Silver Market Morning: April 19 2017 – Gold building strength below $1,300 still!

Gold Today – New York closed at $1,290.10 yesterday after closing at$1,283.30 Tuesday. London opened at $1,283.00 today.
Overall the dollar was weaker against global currencies early today. Before London’s opening:
– The $: was weaker at $1.07.24 after yesterday’s $1.0649: 1.
– The Dollar index was weaker at 99.66 after yesterday’s 100.24.
– The Yen was weaker at 108.99 after yesterday’s 108.84:$1.
– The Yuan was slightly stronger at 6.8854 after yesterday’s6.8860: $1.
– The Pound Sterling was stronger at $1.2857 after yesterday’s $1.2590: 1.
Yuan Gold Fix
The Shanghai Gold Exchange was trading at 286.00 towards the close today. This translates into $1,286.95. New York closed $3.15 ABOVE Shanghai’s closing. London opened at a $3.95 discount to Shanghai.

This post was published at GoldSeek on 19 April 2017.

European Stocks, Futures Rebound As Stronger Dollar Eases Haven Demand

European stocks rebounded after the biggest one-day drop since November, alongside S&P futures, while Asian equities posted modest declines after yesterday’s weak US close. Gold and yen slid, while the dollar gained on the latest Mnuchin comments to the FT according to which Trump was “absolutely not” trying to talk down the dollar.
European equities rose 0.4% in early trading, hinting at some cautious optimism following a day of risk off sentiment, and reversing the 0.6% fall in Asian equities outside Japan which dipped to a one-month low. U. K. shares initially traded lower as the pound held much of its gains following the surprise election announcement, however have since rebounded back to unchanged. Having dragged it lower on Tuesday after another major rout in China, commodity companies helped prop the Stoxx Europe 600 Index, which rebounded following the biggest one-day loss since November. Sterling pulled back slightly after reaching the strongest level since October on Tuesday. Oil fluctuated after dipping on yesterday’s API data which showed U. S. oil inventories fell 840,000 barrels last week, a lower than expected draw. On Wednesday official EIA data is expected to show a larger drop of 1.4 million barrels.
“Sterling rallied across the board yesterday on the back of Prime Minister May’s announcement of snap UK elections. The market interpreted the move as an effort to strengthen the prime minister’s majority and reinforce a more unified stance for the upcoming negotiations with the EU,” Unicredit analysts said in a note on Wednesday. “Geopolitical tensions are providing strong support to U. S. Treasuries … (and) in the euro zone Bunds are receiving support from the general decline in risk appetite and uncertainty related to the French presidential election.”

This post was published at Zero Hedge on Apr 19, 2017.

As French Election Looms, Risk Premia Spike Near Record Highs Across Every Market

With establishment pollsters paniccing at the closeness of the first round of the French elections, it appears investors in every market – stocks, bonds, and FX – are just as concerned with hedges and risk premia at (or near) record highs across the board.
With just a few days to go before Sunday’s first round of voting, every poll for the past month has shown independent Emmanuel Macron and the National Front’s Marine Le Pen taking the top two spots. Macron would then easily win the May 7 runoff, polls show. Yet both front-runners have been steadily slipping over the past two weeks, and Republican Francois Fillon and Communist-backed Jean-Luc Melenchon are now within striking distance.

This post was published at Zero Hedge on Apr 19, 2017.

Asian Metals Market Update: Apr-19-2017

The key headline is early UK snap polls in June. There will be big moves in the UK Pound and gold either a fortnight before or a fortnight after the UK election results are declared. The UK elections result will have a big impact on the medium term trend of precious metals as well as the US dollar. The period between 23rd May till 23rd June will be very crucial for gold bulls as well as cable bulls. I expect short covering in the cable before the UK elections.
France’s Sunday referendum will have an impact if and only if Le Pen wins majority. It is basically elections in Europe which will have an impact on bullion as well as the US dollar.

This post was published at GoldSeek on 19 April 2017.

One Boston Employer Gave Potential Workers A Math And Drug Test; The Result Was Disturbing

While the Fed’s traditionally drab Beige Book described the US economy in traditional terms, growing “at a modest to moderate” pace, one relatively new development was the recurring complaint by employers that they are having an increasingly more difficult time in finding qualified and skilled workers to fill empty positions.
Labor markets remained tight, and employers in most Districts had more difficulty filling low-skilled positions, although labor demand was stronger for higher skilled workers. Modest wage increases broadened, and reports noted bigger increases for workers with skills that are in short supply. A couple of Districts reported that worker shortages and increased labor costs were restraining growth in some sectors, including manufacturing, transportation, and construction

This post was published at Zero Hedge on Apr 19, 2017.

2nd Red Flag: London Gold Fix Breaks Down AGAIN

The following video was published by SilverDoctors on Apr 19, 2017
After trading as high as $18.60 and $1298 early in the week, gold and silver pulled back Wednesday.
Gold is down $15 to $1278, and silver is down 50 cents since Monday to a low of $18.10. Weakness in the metals is being driven by a rally in the dollar off of recent lows. Unsurprisingly, today’s dollar rally found resistance at 99.9. Keep an eye on the USDX in the days ahead for clues to the direction gold and silver are headed over the short term as the 100 level has now become resistance. Perhaps more notably, gold witnessed another highly suspicious event during yesterday’s London fix. $3 billion notional was dumped onto the paper gold market moments before Tuesday’s London fix, resulting in an $8 haircut on the price of gold…which promptly gapped up $15 above the rigged fix price once the London fix was completed: As we referenced in last week’s Metals and Markets, this is a huge red flag that could potentially be signalling a Mega Move in gold.

Act Accordingly

The textbook says that whenever the central bank raises its policy rate that means tightening. Actual experience over more than just this last lost decade demonstrates that at the very least it is much more complicated than that. There is far more evidence of monetary policy being nothing more than a response, as that reverse condition can absolutely be established by global monetary behavior time and again. Alan Greenspan ‘tightened’ from June 2004 forward to no effect, and then Ben Bernanke ‘accommodated’ in perfectly equivalent fashion from September 2007 forward, likewise to no effect.
In the past month and three days we have run into the same sort of contradiction. The FOMC voted in mid-March to ‘raise rates’, but all it really did was increase the upper and lower boundaries for the federal funds rate. Unlike the pre-crisis era, there is today much more looseness as money market hierarchy was obliterated (not by regulations or bank reserves) by the paradigm shift of bank balance sheet behavior (risk vs. reward). Federal funds are completely irrelevant, but for practical purposes they might as well be. Therefore, as little as a ‘rate hike’ might have meant in 2005 or 2006, it means even less in 2017.

This post was published at Wall Street Examiner on April 18, 2017.

The Tax-Man Cometh

With April 15 falling on Easter weekend this year, tax day in the United States was moved to April 18. Although Americans got a few days reprieve, the tax-man inevitably made his annual appearance, and we are all poorer for it.
Even my non-political friends were posting ‘taxation is theft’ memes on social media yesterday. This indicates just how deeply most Americans loath the IRS. Why shouldn’t they? In an article posted on the Mises Wire, Judge Andrew Napolitano give a succinct summary of just how deeply the tax-man bites:
‘With a tax code that exceeds 72,000 pages in length and consumes more than six billion person hours per year to determine taxpayers’ taxable income, with an IRS that has become a feared law unto itself, and with a government that continues to extract more wealth from every taxpaying American every year, is it any wonder that April 15th is a day of dread in America? Social Security taxes and income taxes have dogged us all since their institution during the last century, and few politicians have been willing to address these ploys for what they are: theft.’
To add insult to injury, Americans had to dig a little deeper into their own pockets to facilitate IRS takings this year.

This post was published at Schiffgold on APRIL 19, 2017.