Trump To Hold Top Level Briefing On North Korea Following US Citizen Arrest

Shortly after the news that later on Sunday, president Trump would hold a phone call with China president Xi and Japan’s PM Abe, the White House said in an advance schedule that on April 26 it will hold a briefing for senators with its ‘four principals’ on North Korea “as the administration considers its options for dealing with saber-rattling from Pyongyang” according to Bloomberg. Among those present will be Secretary of State Rex Tillerson, Defense Secretary Jim Mattis, Director of National Intelligence Dan Coats and Joseph Dunford, chairman of the Joint Chiefs of Staff.
While it is unclear if today’s arrest of a US citizen – the third such detention by the North Korean government – will be a key topic, a State Department official said in a brief statement that ‘we are aware of reports that a U. S. citizen was detained in North Korea,” and added that “in cases where U. S. citizens are reported to be detained in North Korea, we work with the Swedish Embassy, which serves as the United States’ Protecting Power in North Korea. Due to privacy considerations, we have no further comment.”

This post was published at Zero Hedge on Apr 23, 2017.

Bi-Weekly Economic Review

It wasn’t a very good two weeks for economic data with the majority of reports disappointing. Most notable I think is that the so called ‘soft data’ is starting to reflect reality rather than some fantasy land where President Trump enacts his entire agenda in the first 100 days of being in office. Politics is about the art of the possible and that is proving a short list for now. Republicans can’t agree among themselves and Democrats are following the golden rule of politics – never interfere when your opponent is busy self-destructing. I said after the election that tax reform would be a 2018 event at the earliest. I may have been too optimistic.
The energy sector-led economic slowdown that started a couple of years ago has only been partially reversed by the retracement of crude prices to the $50s. Supposedly the shale industry has reduced breakeven prices for a lot of the existing fields so if prices pull back here it won’t have the same impact it had in 2014-15 but that may not matter all that much. It seems that as the energy sector has healed somewhat, other sectors are starting to take its place. In particular, the retail industry appears to be in a mite of trouble recently with bankruptcies, layoffs and store closures ramping up. Some of that is probably due to the Amazon effect but the latest retail sales report wasn’t all that encouraging either. Overall, sales were down 0.2% and ex-autos were flat. That highlights one of the emerging problem areas – autos. Business inventories were reported up and a big part of that was vehicle inventory.

This post was published at Wall Street Examiner on April 23, 2017.

Confronting Russophobia

There is a paranoid, hysterical quality to the public discourse on Russia and all things Russian in today’s America. The corporate media machine and its Deep State handlers have abdicated reason and common decency in favor of raw hate and fear-mongering. We have not seen anything like it before, even in the darkest days of the Cold War.
The roots of Russophobia’s emotional appeal to the left seem clear: It comes as a huge mental relief to the ultrasensitive liberal mind to be able to hate an outside group with impunity, and even to appear virtuous in the process. Of course, the object of that animus is a Christian and European nation that stubbornly refuses to be postmodernized, or become gripped by self-hate and morbid introspection; a nation not ashamed of its past and unwilling to surrender its future to alien multitudes; a nation where nobody obsesses over transgender bathrooms, microaggressions, and other ‘issues’ indicative of a society’s moral and intellectual decrepitude.

This post was published at Zero Hedge on Apr 23, 2017.

The epic retirement crisis for older Americans: The median family of retirement age has $12,000 in savings.

Given the discussion of 401ks and IRAs you would think that most Americans have a nice nest egg ready to support them into their margarita drinking days on the beach. Yet like most dreams, the reality is very different. Most Americans are broke. The Economist put out some data highlighting that the median family of retirement age has $12,000 in savings. In other words, one minor injury and you are bankrupt. It is a troubling contrast to the image that is portrayed on television and throughout the media of the fully financially prepared family. Life just doesn’t work out that way for most. Unsuspected illnesses, job losses, stagnant wages, inflation, family changes, and student debt all throw a wrench into the plans of most. What is also startling is that this drought in retirement savings is happening at a time when the stock market is near an all time high. So what gives?
The crisis in retirement
The total stock market cap of the U. S. market is $27.35 trillion. You would think with that amount, there would be plenty of prepared individuals. The challenge is that most of this money is aggregated at the top 5 to 10 percent of the population.
Take a look at market caps around the world:

This post was published at MyBudget360 on Apr 23, 2017.

Dow Jumps, Gold Dumps As Markets Open After French Vote; Trader Warns “Beware The Hangover”

A Macron ‘win’ in the first round of the French elections has (judging by the initial reactions) allayed many fears of imminent doom. Dow futures are up around 200 points, Bond futures are down, gold is down (despite USD weakness)…
Stocks back at 3-week highs as gold sinks…
EURUSD is clinging to 1.09 as Treasury prices drop…
However, as Bloomberg’s Cameron “macroman” Crise notes, “Enjoy the party, parkets; but beware of the bangover.”
Sometimes, the pollsters get it right. The two favored candidates in the French first round vote have indeed gone through, setting up what looks like an easy victory for Emmanuel Macron in a couple of weeks. While today should be a good one for the euro and risky assets, the party may be short-lived; it won’t take long before market focus swings back to the United States and a potential government shutdown at the end of the week.

This post was published at Zero Hedge on Apr 23, 2017.

The French ‘Political Class’ Gets Crushed – on the Surface

It designed the rules to protect itself against an election like this.
According to preliminary results of the presidential election in France, the two candidates that came out on top during today’s first round and therefore made it into the second round, to be contested on May 7, are Marine Le Pen, leader of the right-wing anti-euro and anti-EU Front National, and Emmanuel Macron, leader of the centrist, pro-EU En Marche, which he founded just last year.
So congratulations to today’s winners.
This is the first time since the beginning of the Fifth Republic in 1958 that no candidate from the major establishment parties made it to the second round, and that neither of the two winning candidates are backed by parties that have ever held the presidency.
This is also the first time in the Fifth Republic that the winner’s party will have zero or practically zero power in Parliament.
According to preliminary results, Macron got 23.7% of the vote, Le Pen 21.9%, conservative Franois Fillon 19.9%, and far-left firebrand Jean-Luc Mlenchon 19.2%.

This post was published at Wolf Street on Apr 23, 2017.

Will the Stock Market Crash During a Government Shutdown?

The government’s funding runs out Friday (April 28), and without congressional action, there will be a government shutdown. With the Dow flattening as the Trump rally fizzles, investors are wondering, ‘Will the stock market crash during a government shutdown?’
And investors are right to wonder. A market crash in 2017 is a serious possibility if Congress can’t come to a funding agreement this week. The combination of overvalued stock prices with a destabilizing event like a government shutdown could lead to a massive sell-off.
That’s why we’re going to show you how to protect your money during a stock market crash and why a government shutdown can cause one…
Will There Be a Stock Market Crash?
The reason a destabilizing event like a government shutdown could cause the next stock market crash is that stocks are perilously high.
One of the biggest reasons behind historic stock market crashes has been extreme overvaluation, or a stock market bubble. The market rises far above the realistic value of its underlying assets.

This post was published at Wall Street Examiner on April 23, 2017.

Visualizing The Evolution Of The American Economy Over The Past 50 Years

The American economy and the industries that power it have experienced fascinating change over the last half century. An interesting way to track that change is by following the largest, most powerful companies in the United States has they make their way up and down the annual Fortune 500 list.
Slant Marketing has done just that and compiled their findings into a super interesting interactive that can be seen here.
They reviewed the top 20 companies of the Fortune 500, from 1965 to 2015. For reach year, they grouped companies by industry and calculated that industries revenue within the top 20. They’ve also created a more in depth look, but creating a secondary static graphic of the data that shows the companies by year and how they rank, along with their total revenue. They also include major events that have happened within those years that have had an impact on the economic landscape.

This post was published at Zero Hedge on Apr 23, 2017.

Wall Street, Retail Sales and Consumer Surveys

The Wall Street Journal took note of the decline in retail sales reported by the US Census Bureau last week, headlining:

The Journal blamed drops in spending at gas stations and auto dealerships.
Their lead paragraph was emblematic of the stupidity and misleading nature of Wall Street and economic conventional wisdom.
‘U. S. retail sales fell for the second straight month in March, -a sign economic growth eased to start the year despite strong consumer optimism and steady hiring.’
Exactly how did the Journal know that consumer ‘optimism’ was strong?
Answer: Surveys… particularly the University of Michigan Consumer Sentiment Index, and the Conference Board’s Consumer Confidence Index, also known as the Con Con Con Index. The real function of these surveys is to measure how well they have learned the lessons Wall Street has taught survey respondents. Consumers report not whether they have the wherewithal to spend or not. Instead, they report what they think they should say, based on the stock market.

This post was published at Wall Street Examiner on April 21, 2017.

Venezuela On The Verge Of Revolution As Hyperinflated Currency Crashes To New Record Low

Venezuela, a country with only $10 billion left in reserves to run on, is in trouble. As the currency hyperinflates to new record lows against the dollar…
James Holbrooks points out that the people are starving. The government has gone full-on authoritarian, and now desperate human beings are dying in the streets. From an Associated Press report on Friday:
‘Authorities in Venezuela say 12 people were killed overnight following looting and violence in the South American nation’s capital amid a spiraling political crisis.’

This post was published at Zero Hedge on Apr 23, 2017.

If You Understand History and Economics, You Understand Gold

How can ordinary people ever understand the importance of gold when they are continuously fed with false and distorted facts. The latest publication to publish false and ignorant propaganda on gold is the British weekly magazine the Economist. The article begins with a graph of gold starting in September 2011. Anyone who knows anything about gold recognises that this is the time when gold reached a peak of $1,930. Between 1999 and 2011 gold had gone from $250 to $1,930 which is an increase of almost 700%. During the same period, the Dow was virtually unchanged and the UK index, the FTSE 100 was down 3%. So whilst gold was up 8x during those 11 years, stock markets were static but the journalist did not mention this. Instead, he starts the graph at the very top of gold after an 8 year rally.
False propaganda and incompetence
In my article last week I talked about ‘Lies, Damned Lies and News’ and this is the perfect example of the most blatant lies and misinformation that we find in the media today. It has now gone so far that I and many others don’t trust anything we read in the papers or hear on television or radio. And how can you, when journalists either deliberately publish biased and false news or by sheer incompetence cannot bother to find out the true facts. But that is not enough, the article goes on as follows:
‘Although gold is seen as a hedge against inflation, it cannot be relied on to fulfil this function over the medium term; between 1980 and 2001, its price fell by more than 80% in real terms.’
Yet again, the author picks a point in time that is totally misrepresentative. For anyone who knows anything about gold, 1980 was a peak after a run from $35 per ounce in 1971 to $850 in 1980. The fact that gold had gone up 25x between 1971 and 1980 was of course not mentioned by this ignorant writer. Instead he starts from the peak in order to spread his false propaganda. I am not sure if it is a coincidence that the Rothschild family is a major shareholder in the Economist.

This post was published at GoldSwitzerland on April 22, 2017.

The Government Made a Mess They Can’t Clean Up

When I was a boy, I remember watching Richard Nixon on August 15, 1971 announce a complete ‘freeze’ on ‘all wages and prices.’ In today’s terms that’s what I’d call an attack on the free market.
Learn How to Exploit the Gold Frenzy!
At first, his price freeze sounded quite generous for consumers. You’d not see the price of your gas or milk creep up. Sounded like a win-win. At the time, 75% of Americans, including my mother, thought price controls were a wonderful idea. She changed her mind only a few weeks later.
During his speech that August night, Nixon severed ties between gold and the dollar. The gold standard ended. No longer would dollars need to be backed by gold.
Well, the results have been disastrous ever since then as price levels skyrocketed.
Oh, and as for his price freeze, my mother discovered her favorite brands stopped showing up in stores. Farmers stopped processing crops in the field. Manufacturers laid off workers and cut output.
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Venezuela tried a similar price freeze for a decade. The results were no different than the US. For a decade, imagine shortages of food and medicine for you and your family. That’s what happened in Venezuela.
Today, here in the United States, you and I still feel the effects of Nixon’s fateful announcement. The Federal Reserve now controls the money supply in place of an objective gold standard. They print as much money as they want at any time.

This post was published at GoldSilverWorlds on April 22, 2017.

Trump To Discuss North Korea In Sunday Call With China’s Xi, Japan’s Abe

While the world is focused on the outcome of the first round of the French election, which is playing out much as the market had largely anticipated with Macron and Le Pen set to face each other in the runoff round, the North Korea threat remains, and according to Reuters, Donald Trump will speak on Sunday with Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping, citing a administration official.
The topic of discussion is expected to be North Korea.

This post was published at Zero Hedge on Apr 23, 2017.

Macron And Le Pen Move To The 2nd Round: What Happens Next, According To Goldman And Citi

Most of the results are in, and while it remains close, Macron will likely be the winner of the first French presidential round and is set to face Marine Le Pen in the runoff.
What does that mean for various asset markets and the bigger macro picture? Here are two forecasts, just released from Goldman and Citi.
First, Goldman Sachs:
Emmanuel Macron will face Marine Le Pen in the run-off of the Presidential election on May 7, according to exit polls. We maintain our view that mainstream candidate Mr. Macron will likely win the French Presidential election. In the two week-period before the run-off, both Mr. Macron and Ms. Le Pen will resume their campaign. A televised debate between both candidates will be held on May 3 (9pm Paris time). Polls carried out prior to the outcome of the first round indicate that Mr. Macron has a 25pp lead over Mr. Le Pen. Reflecting France’s political realignment between mainstream pro-European and populist Eurosceptic voters, we expect the gap in polls between Mr. Macron and Ms. Le Pen to widen in favour of Mr. Macron in the run-up to the second round. We expect the ECB to maintain its existing refinancing facilities (namely the fixed-rate full allotment (FRFA) and the emergency liquidity provision (ELA) via the Bank of France) in the coming weeks, to sustain market functioning and continuity of pricing in the systematically relevant market segments. In the face of a politically-induced spread widening, this is also likely to be accommodated through its asset-purchase programmes, as long as it proves to be temporary.

This post was published at Zero Hedge on Apr 23, 2017.

The Cause of the Next ‘Black Monday’

Be afraid. Be very afraid.
So reads billionaire Paul Tudor Jones’ message to Janet Yellen.
Jones says that eight years of essentially zero interest rates have pushed stock valuations to their highest level since 2000 – right before the dot-com bust.
Nothing new there, you say?
But Jones also identified the ticking time bomb that could generate another October 1987-like explosion.
You’ve probably never heard of it – even though your portfolio might be loaded to the gunwales with financial dynamite.
But what could it be?
Answer anon. But first a check on the ammunition factory…
Dow down 31 today… S&P down seven… Nasdaq down six. Oil’s down about 50 cents.
The one patch of green?
Gold. Up about two bucks.
All in all: meh.

This post was published at Wall Street Examiner on April 21, 2017.