Did Cisco Just Say Demand is ‘Very Lumpy?’

It has a history of tripping the markets.
Revenues in the current quarter – Q3 of its fiscal year – would drop 4% to 6% year-over-year, Cisco said after hours today. Shares plunged 8% to around $31 in late trading. Timing of the announcement was impeccable: Minutes after the Dow finished its 372-point plunge.
It also announced 1,100 layoffs on top of the 5,500 layoffs it revealed last August (7% of its workforce at the time), and it added $814 million in charges related to those restructuring efforts, spread over Q3 and Q4.
Cisco has a history of tripping up the markets.
In an earnings call in November 2007, then CEO John Chambers famously used ‘very lumpy’ to describe growth in the US. The S&P 500 and the Dow had just edged down from all-time highs. The market was still blissfully ignoring the hissing from the housing bubble and the stench from the banks. Cisco’s quarter had been phenomenal, with revenues up 17%. But after some gushing, Chambers said revenue growth in the US would be ‘very lumpy.’ The Financial Crisis was next.

This post was published at Wolf Street by Wolf Richter ‘ May 17, 2017.

US Household Debt Surpasses 2008 High, Hits Record $12.7 Trillion

Total debt held by US household reached $12.73 trillion in the first quarter of 2017, finally surpassing its $12.68 trillion peak reached during the recession in 2008 according to the NY Fed’s latest quarterly report on household debt. This marked a$479 billion increase from a year ago, and up $149 billion from Q4 2016 after 11 consecutive quarters of growth since the deleveraging period immediately following the Great Recession.
the quick and durty breakdown:

This post was published at Zero Hedge on May 17, 2017.

California Governor Jerry Brown Slams Taxpayers As ‘Free Loaders’ For Opposing Higher Taxes

Millions of Californians are outraged by a recent bill that would increase the state’s gas tax by 12 cents per gallon, and increase vehicle license fees by $50 per year. All told, the plan amounts to a $52 billion tax hike. The proposal has since been passed in the state’s legislature, despite the fact that a majority of Californians opposed the bill. The tax is so controversial that state senator Josh Newman, who helped it pass, may face a recall election in the near future.
Amid this outrage, California Governor Jerry Brown defended the senator and the gas tax in a recent speech, during which he revealed how much disdain he has for middle class voters who are tired of being taxed to death.
Republicans say budget cuts should be made to fund road maintenance. A failed GOP plan proposed last year would have tapped into cap-and-trade money used to lower greenhouse gas emissions, cut Caltrans positions and eliminated other positions that have been vacant. It identifies other funding sources, but doesn’t specify what programs would be cut if that money was diverted to roads.
Brown said the plan is unrealistic.
‘The freeloaders – I’ve had enough of them,’ Brown said, adding that the approved tax and fee hikes bring those charges to the level they were 30 years ago if adjusted for inflation. ‘They have a president that doesn’t tell the truth and they’re following suit.’

This post was published at shtfplan on May 17th, 2017.

Central Bankers Are Now Trying To Explain Away The Collapse – Episode 1282a

The following video was published by X22Report on May 17, 2017
US household debt has now hit levels back in 2008. More debt is good for the bankers not for the people. Loan demand is down and credit has recently crashed. Mortgage application have declined again during the hot season for real estate. Central bankers are continually trying to explain why the recovery has not taken off, this time it is because the older generation is hoarding their savings. US Government officials have said they have been calculating the GDP incorrectly and it should be at least .4% higher. They are trying everything to re-manipulate the numbers to make the economy look better than it really is. Bill Blain says the stock market is up and there is really no reason for it be this high, everyone is expecting a correction.

Stocks and Precious Metals Charts – Mind the Gap

“Starting around 1980, American society began to undergo a series of deep shifts. Deregulation, weakened antitrust enforcement, and technological changes led to increasing concentration of industry and finance. Money began to play a larger and more corrupting role in politics. America fell behind other nations in education, in infrastructure, and in the performance of many of its major industries. Inequality increased.
As a result of these and other changes, America was turning into a rigged game – a society that denies opportunity to those who are not born into wealthy families, one that resembles a third-world dictatorship more than an advanced democracy.”
Charles H. Ferguson, Predator Nation
‘When the system is rigged, when ordinary citizens are powerless, and when whistle-blowers are pariahs at best, three things happen:
First, the worst people rise to the top. They behave appallingly, and they wreak havoc.
Second, people who could make productive contributions to society are incented to become destructive, because corruption is far more lucrative than honest work.
And third, everyone else pays, both economically and emotionally; people become cynical, selfish, and fatalistic. Often they go along with the system, but they hate themselves for it. They play the game to survive and feed their families, but both they and society suffer.’
Charles H. Ferguson, Inside Job
It was a risk off day in the markets. No doubt about it.
The purported reason was the disclosure by the ex-FBI Director Comey that President Trump apparently asked him to forego the investigation of the ex-Security Advisor Flynn.

This post was published at Jesses Crossroads Cafe on 17 MAY 2017.


GOLD: $1236.75 UP $22.00
Silver: $16.92 UP 15 cent(s)
Closing access prices:
Gold $1260.00
silver: $16.90
Premium of Shanghai 2nd fix/NY:$9.53
LONDON FIRST GOLD FIX: 5:30 am est $1244.60
For comex gold:
For silver:
For silver: MAY
Total number of notices filed so far this month: 4467 for 22,335,000 oz

This post was published at Harvey Organ Blog on May 17, 2017.

Oh Canada! A Cold Wind Blows from the Great White North

I am rushing this to you ahead of publication schedule as the message is both urgent and important. The great risk to the world’s economic system is that of a credit contraction. Western and Asian economies are ill equipped to absorb economic shocks as a result of their level of debt saturation. No one knows where such a shock will come from, but we have postulated China or even Canada. Recently Home Capital Group of Canada has suffered a full blown bank run and is in financial duress. Is this significant? Most would say no, however when we look at the charts of Canada’s biggest banks we see smoke billowing out. Something is wrong here.
Gold Silver Ratio-Metalic Credit Spread
The gold silver ratio has recently triggered an early warning signal. It is indicating financial stress in the future, most likely coming in the fall of 2017. By spiking and exceeding its trend high it is indicating credit troubles ahead. Note the clear break out of its consolidation triangle and the 30 EMA. Credit problems clear themselves in the fall and the GSR is indicating there is trouble ahead in the form of a credit contraction.

This post was published at GoldSeek on 17 May 2017.

A Bad Recipe: Failing Growth Amidst Sustained Global QE, Debt & Bubble Valuations

Economic growth came in at a tepid 0.7% in the first quarter of 2017. Nevertheless, officials at the Federal Reserve continue to insist the economy is strong. They held interest rates steady in April, but insisted hikes were still on the table. In fact, the Atlanta Fed forecast Q2 growth to come in at over 4%.
Peter Schiff called the Atlanta Fed’s prediction ‘crazy,’ nothing that they are starting out with a much higher estimate for Q2 than they had in Q1, despite having all of this information about how weak the economy was in Q1 that they didn’t have a few months ago.
And that’s the crux of the matter. The actual economic data doesn’t support the economic optimism, nor the Fed’s monetary policy. In this in-depth analysis of the current economic and policy climate, Dan Kruz makes a strong case against the policymakers’ optimism.
Introduction (‘It’s the economy, stupid!’)
US real GDP growth for Q1:17 was 0.7% with downward revisions likely given increasing weakness throughout the first quarter in retail sales and in auto sales. Yet the Fed remains upbeat on growth while it maintains that further increases in the Fed Funds rate are all but a given. The fly in the ointment: the faltering US economy, which will increasingly stress banking system solvency; money center bank solvency is the privately-owned Fed’s true mandate. In the meantime, the rest of the world keeps ‘printing.’ How long until the Fed rejoins the overt QE party? Is the Fed raising the Fed Funds rate to a miniscule level so that it can offer a few rate decreases prior to revisiting its ZIRP?

This post was published at Schiffgold on MAY 17, 2017.

Trump Turmoil Sparks Biggest Market Crash In 9 Months

VIX > 15, I'm sorry, I need to do some hedging trades pic.twitter.com/i1gCxbs1Va
— zerohedge (@zerohedge) May 17, 2017

It’s been a while since we used this one…
This happened…
And appears to be the straw that broke the complacency camel’s back….
Quite a day…
S&P 500 biggest drop since Sept 2016 (broke below 50-dma) Small Caps biggest drop since Brexit June 2016 (broke below 50-, 100-dma) Nasdaq biggest drop since Brexit June 2016 Dow Industrials biggest drop since Sept 2016 (broke below 50-dma) Dow Transports biggest drop since June 2016 (broke below 50-, 100-dma, and near 200-dma) – now negative year-to-date

This post was published at Zero Hedge on May 17, 2017.

Is It A Bull Market Or Bear Market In Metals?

First published on Saturday May 13 for members: Without fail, each and every time the metals have dropped since bottoming over a year ago, many panic and proclaim the bear market to have returned. Moreover, many have looked to the USD as their guide to what the metals will do, and are completely befuddled when the dollar trades in tandem with the metals, as we have seen for almost two months.
As for me, well, since I was taught at a young age not to ‘ASSUME,’ I only listen to price and try to ignore emotion as much as humanly possible. For this reason, I rely on my analysis to make decisions, as relying upon emotion often puts you on the wrong side of the market at the exact worst time.
Now, clearly, relying on analysis means that I am expecting the market to play out based upon probabilities, rather than certainties. So, I have to expect that I will be wrong in my analysis at times. However, the reason I utilize the analysis I do is because, over time, it has kept me on the right side of the market the great majority of the time, even though it ‘feels’ as though the rest of the market disagrees with my perspective.
Over the last few weeks, the bearish voices have become quite vociferous in their proclamation that the bear market has returned. Yet, as we were dropping into the target I placed on the GDX several weeks ago, I kept reminding those who would listen that one should ignore their emotions of fear, and focus upon the risk/reward being presented before you on the GDX chart, at least as long as we maintain over support.

This post was published at GoldSeek on 17 May 2017.

Stocks Down Because Of Trump? Plus Target’s Earnings Trick

The by-line on Fox Business this a.m. was that stocks were down because of ‘DC grid-lock.’ Is this some kind of joke? How about stocks are down because they are more overvalued than at anytime in history by every single financial metric except the highly manipulated GAAP accounting net income calculations.
Speaking of which, the entire financial reporting apparatus has become one of the biggest jokes – if not an outright fraud – in financial markets history (with all due respect to the Ponzi scheme’s currently in operation at Amazon and Tesla). Target’s earnings report this morning is the perfect example.
Target’s stock ‘pop’ was being attributed by the cable tv financial ‘reporters’ to the fact Target’s sales and earnings per share ‘beat’ Wall Street estimates. That’s not hard to do because the highly exalted ‘beat’ is a rigged game played by company management and Wall Street, as management slowly ‘guides’ Wall Street’s penguins into a series of reduced ‘estimates’ leading up to the earnings release. By the time the results are reported, the earnings bar is low enough for a paraplegic to ‘jump’ over.

This post was published at Investment Research Dynamics on May 17, 2017.

SP 500 Futures – Gap Filled Intraday – The Gathering Storm

“Sometimes I wonder whether the world is being run by smart people who are putting us on, or by imbeciles who really mean it.”
Mark Twain
The gap in the SP 500 futures continuous chart that we left behind a few weeks ago has just been filled intraday.
As a reminder this is a stock option expiration week, although as I recall May is not a particularly significant month.
I imagine a lot of enthusiastic call buyers have just been smoked out of their seats and their June positions.
The tension on the tape the last few days was palpable. It just took some small event to trigger it giving its overlong duration and extent out of balance.
I don’t think impeachment is on the table for President Trump, except in overheated Democratic rhetoric. Although I would not rule anything out while The Donald has access to twitter.
The NDX has a quite a way to go to close its gap, but that is another matter. For my purposes the SP 500 futures are the bellwether.
I have pulled in my short positions, and just left some other risk off positions run, mostly in gold. No silver at this time for a trade. It just doesn’t work as well in a panic because of its precious/practical nature.

This post was published at Jesses Crossroads Cafe on 17 MAY 2017.

This Is How an Asset Bubble Gets Unwound these Days

What the slow crash of classic car prices says about the future of other asset classes.
The global asset class of collector cars – these beautiful machines are perhaps one of the most enjoyable asset classes to play in – is quietly but persistently and very unenjoyably experiencing a downturn that parallels and in some aspects already exceeds the one during the Financial Crisis.
The index for collector car prices in the May report by Hagerty, which specializes in insuring vintage automobiles, fell 0.68 points to 160.06, down nearly 10% year-over-year, and down 14%, or 25.8 points, from its all-time high in September 2015 (185.86).
Unlike stock market indices, the Hagerty Market Index is adjusted for inflation via the Consumer Price Index. So these are ‘real’ changes in price levels. Since September 2015, the Consumer Price Index has risen 2.8%. So in unadjusted terms, comparable to stock market indices, the price levels dropped nearly 17%.
To put that into a Financial Crisis perspective: The index peaked in April 2008 at 121.0, then plunged 16% (20 points) to bottom out in August 2009 at 101.39. So the current drop of 14% from the peak in ‘real’ terms is just below the drop during the Financial Crisis, but the current 25.8-point-drop from the peak already exceeds by a wide margin the 20-point drop during the Financial Crisis.

This post was published at Wolf Street on May 17, 2017.

RBC: “Energy, Stat Arb And Value Teams Are Getting Blown Out”

Is today’s the day someone – following the suddenly resurgent VIX – finally blows up? Here are some timely thoughts from RBC’s head of cross-asset correlation Charlie McElligott.
* * *
Why Energy Teams Are Getting Blown Out
THE ENERGY / ‘VALUE’ MARKET-NEUTRAL / MEAN-REVERSION MELTDOWN: Currently, we see crude scrambling-higher despite last night’s bearish API’s and generally weak price-action as traders began fading the ‘9 month extension’ story as many instead continue to focus on ever-ramping US shale supply (word of warning: OPEC trades the market like no other, I would be shocked if they were keeping an additional ‘further production cut’ in their back-pocket (in conjunction with the extension) to catch the market with flat-footed expectations into their policy announcement).
The ‘real’ fireworks off the back of the crude move however have come in the energy equities space, specifically within the market-neutral community. Since the start of the year, the energy sector (-10.2% YTD) has come unglued, spending the majority of 2017 as the S&P’s worst-performing sector (although currently we see ‘Telco’ holding the title -11.6% YTD) after having finished 2016 as the S&P’s BEST performing sector (+23.7% in ’16).

This post was published at Zero Hedge on May 17, 2017.

Asian Metals Market Update: May-17-2017

There is no news. The next three days will be very crucial for gold, silver, crude oil and the Japanese Yen. If they are able to rise then I expect $1296, $18.76 and $52.20 in gold, silver and crude oil in the short term. Caution optimism along with a lookout for trend reversal is the need of the hour for day traders, jobbers and short term investors.
The only way to get over unending controversies for Trump is to divert home media attention to a war. North Korea could be the pawn for Trump. If Trump controversies do not end in the next two months then I expect North Korea to be eaten by NATO forces. Wars in Asia are always bullish for gold and silver.

This post was published at GoldSeek on 17 May 2017.

Net Asset Value Premiums Of Certain Precious Metal Trusts and Funds – Smokin’

“Here Homer with his nervous arms
Strikes the twanging harp of war,
And even the western splendour warms,
While the trumpets sound afar:
But, what creates the most intense surprise,
His soul looks out through renovated eyes.”
John Keats, Ode to Apollo
There is an obvious safe haven trade in precious metals, notably gold, and US Treasuries this morning as the accumulation of political and geopolitical risks have finally penetrated the consciousness of the denizens of the markets.

This post was published at Jesses Crossroads Cafe on 17 MAY 2017.