The Unthinkable is Happening to America

The unthinkable is happening so fast to America that there is a serious, growing threat that U. S. citizens are becoming desensitized to the chilling reality of our nation’s precipitous decline in respect and credibility around the world. The reflex action is to either deny it’s happening or pull the covers over one’s head.
Two weeks before President Donald Trump announced the U. S. withdrawal from the Paris Climate Accord, Der Spiegel, one of the most influential and widely read news magazines in Europe, published a breathtaking assessment of the sitting President of the United States. Written by its Executive Editor, Klaus Brinkbumer, the editorial was brutal and came from a publication known for its investigative acumen. Brinkbumer made the following observations:
‘Donald Trump has transformed the United States into a laughing stock and he is a danger to the world. He must be removed from the White House before things get even worse…
‘Donald Trump is not fit to be president of the United States. He does not possess the requisite intellect and does not understand the significance of the office he holds nor the tasks associated with it. He doesn’t read. He doesn’t bother to peruse important files and intelligence reports and knows little about the issues that he has identified as his priorities. His decisions are capricious and they are delivered in the form of tyrannical decrees…

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

Gymboree Misses Interest Payment, Prepares For Bankruptcy Filing

Another company on the infamous Fitch “retail death list” has taken its first step toward bankruptcy.
On Thursday, distressed children’s clothing retailer Gymboree elected not to make the interest payment due June 1 on its outstanding 9.125% notes due in 2018, Debtwire reported, with Moody’s downgrading the company to D from CC on Friday, as it does not expect Gymboree to make the interest payment, “or any other payments on its debt obligations, and sees a general default given ongoing lender negotiations.”
While not exactly news – the WSJ previewed the inevitable Chapter 11 at the beginning of May – a Gymboree bankruptcy filing is now assured over the next month, and certainly by July 1 when the grace period expires. In March, the company posted a $324.9 million loss for its fiscal second quarter; same-store sales fell 5% in the period while EBITDA crashed.
In early May, the WSJ reported that Gymboree was looking to close 350 of its 1,200 stores as part of a broader restructuring under Chapter 11 protection. Buckling under its debt, the company has been in talks with its lenders who may or may not agree on a prepackaged bankruptcy. According to the WSJ, the company has contacted firms known for liquidating inventories and other assets during store closures.

This post was published at Zero Hedge on Jun 2, 2017.

Dis-United States – Billionaire Bloomberg Builds Coalition Of States To Combat Climate Change

Billionaire, and former New York City Mayor, Michael Bloomberg would like for you to know that, despite Trump’s decision to withdraw from the Paris Climate agreement, he’s absolutely intent upon imposing the environmental ‘tax’ contemplated in the agreement on you anyway. As such, he’s developing a coalition of U. S. states, cities and business leaders to defy the President’s decision and comply with the terms of the original deal.
Billionaire philanthropist and businessman Michael Bloomberg is defying President Trump’s decision to exit the Paris climate change agreement, saying he is rallying a bipartisan coalition of states, cities and business leaders to meet the climate pact’s targets even as the president rescinds the nation’s commitment to it. “Americans are not walking away from the Paris Climate Agreement,” Bloomberg said on Thursday. “Just the opposite – we are forging ahead. Mayors, governors, and business leaders from both political parties are signing on to to a statement of support that we will submit to the U. N. – and together, we will reach the emission reduction goals the United States made in Paris in 2015.”

This post was published at Zero Hedge on Jun 2, 2017.

ABOUT JUNE 2/HORRENDOUS JOBS REPORT SENDS GOLD AND SILVER MUCH HIGHER/GOLD SHARES HOWEVER MUCH SUBDUED/TWO BANKING CRISIS MOMENTS TODAY: ONE FROM ITALY AND ONE FROM SPAIN/GYMBOREE IN THE USA READ…

GOLD: $1276.20 up $9.80
Silver: $17.49 up 25 cent(s)
Closing access prices:
Gold $1279.00
silver: $17.57
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: $127073 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: 1262.90
PREMIUM FIRST FIX: $7.83

This post was published at Harvey Organ Blog on June 2, 2017.

Big Miss in May Jobs Report: Only 138K Jobs Added, Wage Growth Stagnant (The Fed’s Famous Chili Recipe)

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
The Bureau of Labor Statistics (BLS) just released their May jobs report.
In a nutshell, it looks like The Fed’s Famous Chili Recipe. A recipe handed down since Alan Greenspan and perfected by Janet Yellen. 138K jobs added, stagnant average hourly earnings growth. Labor force participation declined to 62.7%. At least the unemployment rate fell to 4.3%.

This post was published at Wall Street Examiner by Anthony B Sanders ‘ June 2, 2017.

There IS No B.S. Like The BLS

Bureau of Labor Statistics. It has an Orwellian ring to it. I guess it should stand for ‘Bureau of Lying Statistics.’ A quick glance at today’s non-farm payroll report suggests that the economy likely lost hundreds of thousands of jobs in May. The headline 138k number was well below Wall St’s consensus estimate and below even the lowest estimate (140k).
The highly deceitful ‘Birth/Death’ model gave the BLS 238k ‘newly created’ jobs from alleged new business formation in excess of jobs lost from failed businesses in May. This number is shown before it’s sent through the BLS’ ‘X’13ARIMA’SEATS software developed by the U. S. Census Bureau.’ No one knows exactly how that statistical sausage grinder produces the alleged jobs added and lost by new business formation – not even the Census Bureau. Then that number is blended into the overall headline number.
In truth, it’s quite likely that the U. S. economy lost jobs in May. A report showing less working age people employed would be a better fit with the state of the economy as reflected by private-sector reports, such as retail sales and construction/capital formation spending. The BLS covers up this fact by ‘finding’ a large number of ‘new’ part-time jobs to offset the loss of 367,000 full-time jobs.

This post was published at Investment Research Dynamics on June 2, 2017.

Welcome To Covfefe-Land, Where Truth Doesn’t Matter

Authored by Howard Kunstler via Kunstler.com,
‘This is one of the things I find funny about the radical Left protests on campus…. You want to have it both ways. You want to be a fledgling member of the elite and a champion of the underprivileged. So, how narcissistic can you get? You want to have all the benefits of having all of the benefits, and you want to have all the benefits of having none of the benefits, because just having all the benefits isn’t enough for you.’ -Jordon Peterson, University of Toronto Psychology Professor
‘The empire could no longer afford the problem of its own existence.’
-Joseph Tainter on the collapse of complex societies
The extraordinary thought disorders of this moment in history are equally distributed across the political spectrum. They’re an inevitable product of what Sigmund Freud identified as the discontents of civilization, but they grow especially acute as that civilization enters an economic crack-up zone. The craziness is equally distributed while the nation’s wealth is not. The old middle, or center, is imploding both economically and psychologically, concentrating distortions of reality at each end, Left and Right.

This post was published at Zero Hedge on Jun 2, 2017.

Price of Gold in 2017 Could Hit This Target After June FOMC Meeting

This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
With this past week’s 0.8% gain, the price of gold in 2017 is now up 10.9% on the year. That means the metal is steadily on track to hit my end-of-year gold price target.
Over the past week, gold prices have managed to rise despite increased attractiveness toward more liquid investments like stocks. It finally closed above the important $1,265 level last seen on April 28. Not to mention this past week’s gain came as the Dow Jones shot to an all-time high of 21,144.18 yesterday (Thursday, June 1).
In my view, the next catalyst for gold will be the expected June 14 interest rate hike from the Federal Reserve.
At this point, we’re just 11 days away from the start of the June FOMC meeting. Keep in mind, the last two rate hikes on Dec. 14, 2016, and March 15, 2017, both led to gold rallies. The metal jumped 2.5% and 4.4% over the two weeks following each respective date.

This post was published at Wall Street Examiner by Peter Krauth ‘ June 2, 2017.

Russia’s Economy Minister: “We Can Live Forever At $40 Oil”

Authored by Tsvetana Paraskova via OilPrice.com,
The OPEC/non-OPEC deal is working, and the current underlying key assumption of Russia’s economic policies – oil prices at US$40 – can allow it to live forever at that price or below, Russia’s Economy Minister Maxim Oreshkin told Bloomberg in an interview on the sidelines of the St. Petersburg International Economic Forum on Thursday.
OPEC and Russia are already achieving what they intended to achieve with the deal – a decline in crude oil inventory levels around the globe, the minister said.
Arguing that OPEC ‘has not failed at all’ in its attempt to drive oil prices up, Oreshkin said that the price of oil is now much higher than it was this time last year, before the cartel and 11 non-OPEC producers led by Russia struck the initial output cut deal.

This post was published at Zero Hedge on Jun 2, 2017.

Illinois Charges to Lead in Race to Failed State Status

There is a sad race underway between two fiscally-troubled states in the Union, where the state governments of both Connecticut and Illinois appear intent on becoming the first full US state to file for the equivalent of bankruptcy.
Just over a week ago, Connecticut took a strong step backward toward reaching that status first when all three major US credit rating agencies downgraded the state’s credit, which immediately made it more expensive for that state government to borrow new money by issuing new debt.
This week, however, the state government of Illinois, thanks to its unadulterated dysfunction, has stormed back into the lead by achieving something that no other state has: the lowest credit rating ever assessed against a state government! Bloomberg has the story:
Illinois had its bond rating downgraded to one step above junk by Moody’s Investors Service and S&P Global Ratings, the lowest ranking on record for a US state, as the long-running political stalemate over the budget shows no signs of ending.

This post was published at FinancialSense on 06/02/2017.

The Silent Economic Boom

[Note: I was recently interviewed by Kenneth Ameduri who hosts the Crush The Street internet show. In it I discuss my take on gold, stocks, Trump, the economy and Bitcoin. The interview can be found here: Though many Americans aren’t feeling it, the economy is quietly gathering forward momentum. With consumers gaining in confidence and real estate heating up on both the commercial and residential levels, the U. S. economy is much stronger than it may seem at first glance.
One reflection of the strengthening economy is the equity market, which is in the eighth year of a bull market since the bottom of the credit crash. The bromide, ‘As goes the stock market, so goes the economy,’ is something that hardly needs explaining, yet so many investors lose sight of this cogent fact that it bears repeating. Rising corporate profits and efficiencies in recent years have contributed in large part to the economic improvement.
Another reflection of the recovery can be seen in our in-house New Economy Index (NEI), which combines the stock prices of the leading U. S. retail and business service stocks. The graph below shows that NEI continues to hit all-time highs on almost a weekly basis and as such is reflecting a strong consumer retail economy.

This post was published at GoldSeek on Friday, 2 June 2017.

Goldman Pushes Back Rate Hike Forecast Citing Slowing Job Growth And Weak Inflation

After last month’s “much stronger than expected” jobs report, Goldman was convinced that the Fed would hike in June and September, while disclosing its balance sheet tapering announcement in December. However, after today’s disappointing jobs report, Jan Hatzius has flipped the last two, and says that he “now expects the third hike of 2017 to occur at the December meeting (we previously expected a hike in September and a balance sheet in announcement in December).”
The reason for the switch is that “the committee will prefer to wait for clarity on the outlook before implementing a third hike this year – particularly given signs of slowing job growth and the recent drop in core inflation.”
Key excerpt:
Given the drop in the U3 and U6 unemployment rates and the lack of additional catalysts between now and the June meeting, we are increasing our subjective probability of a hike at that meeting from 80% to 90%. We are also moving forward our forecast for balance sheet normalization. We now expect the committee to announce a tapering of maturity reinvestments in September, and we now expect the third hike of 2017 to occur at the December meeting (we previously expected a hike in September and a balance sheet in announcement in December). This change reflects recent detailed discussion of the balance sheet among committee members, as well as our view that the committee will prefer to wait for clarity on the outlook before implementing a third hike this year – particularly given signs of slowing job growth and the recent drop in core inflation.

This post was published at Zero Hedge on Jun 2, 2017.

With 87 Months Of Consecutive Job Gains, This Is By Far The “Best” Job In The U.S.

Well over 5 years ago, we first dubbed the economy under Barack Obama as the “Waiter and Bartender recovery”, because while most other job categories had grown at a moderate pace at best, the growth in the category defined by the BLS as “Food Service and Drinking Workers” has been nothing short of spectacular.
How spectacular? As the chart below shows, starting in March of 2010 and continuing through April of 2017, there have been 87 consecutive month of payroll gains for America’s waiters and bartenders, an unprecedented feat and an all time record for any job category. Putting this number in context, total job gains for the sector over the past 7 years have amounted to 2.378 million or just under 15% of the total 16.4 million in new jobs created by the US over the past 87 months.

This post was published at Zero Hedge on Jun 2, 2017.

Spain’s Sixth Largest Bank Crashes Most In 28 Years On Liquidation Fears

Even as attention has turned once again to Italy as the next possible source of European financial contagion, Spain’s sixth largest bank has found itself in freefall over the past few days as concerns grow that the bank may be liquidated unless a last-minute buyer, or source of capital, emerges. In addition to the shares of Banco Popular crashing as much as 27%, the biggest intraday drop since 1989, its perpetual bonds have likewise been in freefall mode as investors liquidate securities which “they do not want to hold going into the weekend”, according to Ignacio Cantos, of ATL Capital in Madrid, quoted by Bloomberg.

This post was published at Zero Hedge on Jun 2, 2017.

Silver and NASDAQ Strength Will Reverse

Bubbles come and go.
Silver and gold – 1980
Japanese Nikkei – 1990
NASDAQ – 2000
Mortgages and Real Estate – 2006
Bonds, Debt, Stocks, Real Estate – 2017
Examine the following graph of monthly data for 32 years of the NASDAQ 100 Index and Silver.
We saw the NASDAQ bubble in 1999-2000, a rapid rise for silver in 2010 – 2011 and a large rise in the NASDAQ 100 during 2009 – 2017.
Prices for both markets have often risen too far and too fast, and then corrected or crashed. The NASDAQ dropped more than 80% from 2000 to 2002. Silver dropped about 70% from 2011 to late 2015.

This post was published at Deviant Investor on June 2, 2017.