These Are The Most Overbought And Oversold Assets In The World Right Now

There were several highlights worth noting in the latest Flow Show report from BofA’s Michael Hartnett, first and foremost that despite hitting daily all time highs, US equities have experienced outflows on 8 of the last 10 weeks, with $3.3 billion redeemed in the last week, while US value stocks have suffered outflows on 9 of the past 10 weeks while small cap stocks have seen outflows in 8 of the past 9 weeks. Additionally, junk bonds have similarly seen outflows in 8 of the past 12 weeks. This has been offset by inflows in European equities (9 straight weeks), tech stocks (12 straight weeks) and Emerging Markets (10 straight weeks). Also of note, total bonds have had inflows on 21 of the last 22 weeks, while Investment Grade bonds have seen inflows for 22 consecutive weeks, and a total of $541 billion in the past five years.

This post was published at Zero Hedge on May 26, 2017.

China Unexpectedly Changes Yuan Fixing Mechanism Sparking Confusion, Concern

China has done it again: without warning Beijing moved the goalposts and changed the rules of its currency fixing mechanism… again.
As reported first thing this morning, China announced it would introduce a new “counter-cyclical factor” to reduce exchange-rate volatility while undermining efforts to increase the role of market forces. In some ways this announcement was not unexpected: recall that after a period of eerie stability, on Thursday the Yuan surged shortly after China’s downgrade by Moody’s, which prompted speculation that the central bank was directly manipulating the currency as the PBOC’s daily fixings had “materially diverged” from the prescribed formula, resulting in a gap between the reference rate and currency’s spot value.
Roughly at the same time as a similar move was taking place on Friday, Bloomberg first reported and China later confirmed that policy makers would add a ‘counter-cyclical factor’ to the yuan’s daily fixing, a move which “would give authorities more control over the fixing and restrain the influence of market pricing.” Subsequent detailed revealed that authorities would change the daily $/CNY fixing mechanism, so that the change of the fixing from the previous day’s close would also take into account a ‘counter-cyclical adjustment factor’ (how this is determined is not specified though), in addition to the USD’s movement against a basket of currencies.
While the practical consequence was a surge in both the onshore and offshore Yuan to three month highs, traders and commentators were left confused by this latest intervention by Beijing into what has become China’s fulcrum security.
‘The counter-cyclical adjustment factor sounds like an increased role for the fixing to be nudged away from where markets would set it,’ Sean Callow of Westpac Banking Corp told Bloomberg. ‘The authorities’ actions give the impression that they are more worried about yuan stability than declared in their public statements.’

This post was published at Zero Hedge on May 26, 2017.

Government Silver Sales Have Totally Dried Up… WHY?

Before the turn of the century, Central Banks sold a record 97 million oz of silver into the market in 1999. This was great deal of silver as it accounted for 17% of total global mine supply that year. Over the next 14 years, Central Banks continued to sell a substantial amount of silver to supplement the market.
However, silver supply from Central Banks has totally dried up over the past three years….. Why? Well, the answer is quite simple when we understand the data. Central Banks silver stock piles have dwindled considerably over the past decade and a half.
According to the data in the recently released 2017 World Silver Survey, Central Bank silver sales were estimated to be a big fat zero for 2014, 2015 and 2016.

This post was published at SRSrocco Report on MAY 26, 2017.

MAY 26/GOLD BREAKS THROUGH $1264 AND FINISHES THE COMEX SESSION AT $1267.75/SILVER ALSO PERFORMS ADMIRABLY RISING 21 CENTS TO $17.33/ GOLD OPEN INTEREST RISES BY 3,000 CONTRACTS FOR THE ENTIRE CO…

GOLD: $1267.75 up $11.45
Silver: $17.33 up 21 cent(s)
Closing access prices:
Gold $1267.11
silver: $17.35
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1266.89 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: 1255.55
PREMIUM FIRST FIX: $10.34

This post was published at Harvey Organ Blog on May 26, 2017.

Boehner Bashes Trump: “Everything He’s Done Is A Complete Disaster”

Trump’s massive tax reform plan is “just a bunch of happy talk” exclaimed former Speaker of the House John Boehner during a keynote address at an energy conference today adding that “everything else he’s done (in office) has been a complete disaster.”
As The Hill reports, Boehner gave a keynote address at KPMG’s annual Global Energy Conference, where he said his faith in the passage of a tax code overhaul is fading.
‘I was a little more optimistic about it early in the year; now my odds are 60/40,’ the Ohio Republican said, according to energy-sector news publication RigZone. ‘The border adjustment tax is deader than a doornail. Tax reform is just a bunch of happy talk.’
‘Everything else he’s done (in office) has been a complete disaster,’ the Ohio Republican said, according to the publication.
‘He’s still learning how to be president.’

This post was published at Zero Hedge on May 26, 2017.

Really Bad Ideas, Part 2: Giving Up Without Admitting It

Doing the right thing is hard for both individuals and their governments. Name the goal – maintaining a healthy weight, paying off high-interest credit cards, keeping debt-to-GDP at reasonable levels, whatever – and with each missed deadline or broken promise success recedes further into the distance. And the temptation grows to just give up and pretend that the goal never really mattered.
This is happening everywhere. In the US, state and local pension plans are underfunded to the point of becoming a political (not just a long-term financial) issue. And governments, confronted with the resulting set of unpalatable options, are surrendering without admitting it. In California, for instance, the governor is proposing to fund part of its several hundred billion dollar pension liability by, believe it or not, borrowing more money:
California Proposes $6 Billion Boost to CalPERS
(Chief Investment Officer) – California Gov. Jerry Brown’s revised state budget proposes a $6 billion supplemental payment to The California Public Employees’ Retirement System (CalPERS), which he says will save the state $11 billion over the next two decades.

This post was published at DollarCollapse on MAY 26, 2017.

Federal Bureaucrat to the Public: Be Afraid!

States have always thrived on the fear of the taxpayers, and states have always justified their existence in part on the idea that without the state, we’d all be overrun by barbarians, or murdered by our neighbors. Charles Tilly, a historian of the state, frequently noted that the modern state as we know it, was born out of war, and was created to wage war. War and the state are inseparable.
Moreover, support for the state is so central to maintaining continued funding and deference to the state’s monopoly power, that Randolph Bourne famously went so far as to say that “war is the health of the state.”
By extension, agents of the state – whether elected officials or bureaucrats – fancy themselves as guardians of prosperity and civilization. Without them, they apparently believe, life would be barely worth living.
Thus, one should hardly be surprised when government bureaucrats spread fear as a means of self-promotion.
Keeping this tradition alive is Department of Homeland Security John Kelly who recently claimed that people would “never leave the house” if they “knew what I know about terrorism.”
This, incidentally, introduces a new variation on the time-worn they’re-coming-to-get-us propaganda that the state has relied on for centuries. Nowadays, we’re not even allowed to know what the threat is.

This post was published at Ludwig von Mises Institute on May 26, 2017.

UMich Confidence Shows Partisan Divide Widest Ever But All Agree It’s Time To Sell Your House

UMich confidence is stable at its post-Trump plateau for now, but the partisan divide between Republicans (robust economic growth ahead) and Democrats (recession looms) has never been wider. However, one thing they all agree on is that for the first time since the peak of the housing market in 2006, home-buyers are negative on home prices with home-sellers most dominant since 2005.
The current conditions dropped but hope rose once again…

This post was published at Zero Hedge on May 26, 2017.

Bitcoin, Propaganda, Fake News And Unmitigated Idiocy

I want to show two quotes from commentators in related areas of financial analysis because they illustrate the difference between truthful commentary and unmitigated idiocy.
Yesterday, James ‘Mc’ wrote in Bill Murphy’s nightly ‘Midas’ report:
‘The sexiness of Bitcoin, Tesla, Netflix, and hundreds of other techie things will become FAR less sexy in a good old fashion economic crash. Reality will quickly set in, and real stuff, made by real people will prevail. As history has shown everything else becomes superfluous. Millennials, or even Gen-Xer’s for that matter have never experienced truly hard times. Many will be shocked to learn when TSHTF a plumber is far more marketable than an IT guy. Bartering with Bitcoin might prove problematic.’
I doubt there’s anything with that statement with which anyone could dispute. Murphy prior to that made the valid points that Central Banks and sovereign nations will never incorporate Bitcoin into their currency reserves like they do with gold. The point being that, while Bitcoin is accepted as a form of currency by its users, it is not considered a wealth storage asset.

This post was published at Investment Research Dynamics on May 26, 2017.

Free Money: Potential Presidential Candidate Mark Zuckerberg Suggests That All Americans Should Get A ‘Universal Basic Income’

Should everyone in America receive a ‘basic income’ directly from the federal government? Considering the fact that we are already 20 trillion dollars in debt, such a concept may sound quite foolish to many of you, but this is an idea that is really starting to gain traction in leftist circles. In fact, Facebook CEO Mark Zuckerberg suggested that this was something that we should ‘explore’ during the commencement speech that he just delivered at Harvard. For quite a while it has been obvious that Zuckerberg is very strongly considering a run for the presidency in 2020, but up until just recently we haven’t had many clues about where he would stand on particular issues. If he is serious about proposing a universal basic income for all Americans, that would make Zuckerberg very appealing to the far left voters that flocked to the Bernie Sanders campaign.
Yesterday, I discussed the fact that the number of Americans that are receiving money from the government each month has reached an all-time high, but Zuckerberg would take things much farther. According to Zuckerberg, society would be far better off if everyone got an income from the government…
‘Every generation expands its definition of equality. Now it’s time for our generation to define a new social contract,’ Zuckerberg said during his speech. ‘We should have a society that measures progress not by economic metrics like GDP but by how many of us have a role we find meaningful. We should explore ideas like universal basic income to make sure everyone has a cushion to try new ideas.’

This post was published at The Economic Collapse Blog on May 25th, 2017.

Why OPEC Couldn’t Move Oil Prices Higher

Authored by Nick Cunningham via OilPrice.com,
The latest OPEC meeting was uncharacteristically tranquil, with little of the eleventh hour infighting and arm-twisting that has been so prevalent in previous meetings. The cooperative spirit has allowed OPEC to roll over its production cuts for another nine months, as expected, a move that has to be described as a successful outcome. “Nine months with the same level of production that our member countries have been producing at is a very safe and almost certain option to do the trick,’ Saudi energy minister Khalid al-Falih told reporters.
Yet the oil markets are unimpressed. Crude prices dropped on Thursday as it became apparent that a much more aggressive move – a lengthier extension or deeper supply cuts – was off the table. For OPEC, the price reaction is surely frustrating. Keeping so many oil producers on board with a plan that requires significant sacrifice has always been a monumental task, not least because many of the countries involved seriously distrust one another. More importantly, they are extending the cuts for another nine months, longer than anyone expected up until just a few weeks ago.

This post was published at Zero Hedge on May 26, 2017.

How Non-profit Organizations Saved Q1 GDP

For years the BEA traditionally used healthcare (i.e. Obamacare) as the “plug” variable to boost GDP at time when it, well, needed boosting.
However, now that Trump is in control, and Obamacare is on its way out one way or another, this will no longer work especially since healthcare spending is likely to significantly moderate in coming years as the GDP boosting mandatory tax that is Obamacare is repealed in some fashion over the coming quarters. And yet, in today’s GDP report personal spending was reported to nearly double, with Personal Consumption Expenditures jumping from only $9.7 BN annualized as per the first estimate, to $18.6 BN in the just released second revision, a nearly 100% increase.
What drove this? The answer was interesting as a new “plug” category appears to have emerged: non profit organizations. As the chart below shows, while healthcare was revised sharply lower in the second revision, this was more than offset by a $11.9 billion annualized increase in expenditures of “nonprofit institutions serving households.”

This post was published at Zero Hedge on May 26, 2017.

Estonia Expels Two Russian Diplomats; Moscow Warns This “Unfriendly Action Will Not Go Unanswered”

Two senior Russian diplomats, Consul General Dmitri Kazjonnov and Consul Andrei Surgjev, have been ordered to leave Estonia the country’s foreign ministry said on Friday. It was not immediately clear what prompted the expulsion, and the Estonian foreign ministry gave no other details. “We can only confirm that two diplomats have been expelled,” said spokesperson Mariann Sudakov.

This post was published at Zero Hedge on May 26, 2017.