$75,560: The Cost Of Housing A Prisoner For One Year In California

Californians have grown accustomed over the years to massively overpaying for public services and infrastructure projects. In fact, one has to look no further than Jerry Brown’s two largest, ongoing pet projects, including the infamous ‘High Speed Rail‘ and ‘Delta Tunnels‘, for a couple of examples of California’s complete obsession with wasting taxpayer money.
That said, the cost of providing the best healthcare money can buy and luxurious accommodations to the state’s 130,000 prisoners is starting to move beyond outrageous, even by California standards. As the AP points out today, Jerry Brown’s new budget allocates a staggering $75,560 to cover the cost of housing each resident of California’s state prison system for a single year.
The spending plan includes a record $11.4 billion for the corrections department while also predicting that there will be 11,500 fewer inmates in four years after voters in November approved earlier releases for many prisoners.

This post was published at Zero Hedge on Jun 5, 2017.

IMF Warns, US Economy Uncertain As China’s Credit Growth Poses A Risk – Episode 1298a

The following video was published by X22Report on Jun 5, 2017
Toronto’s housing bubble has exploding, houses are up for sale and there is no traffic which means there are no buyers. US productivity has stalled. Banco Popular is in trouble and the contagion is going to spread if the bank is not bailed in or bailed out, the central bankers are looking for a buyer of last resort to step in and save the bank. The IMF says that the US economy is uncertain and China credit growth poses a major risk. This is a warning that the economy is about to collapse.

Debate: Will Shrinking the Fed’s Balance Sheet Crash the Markets?

Following the 2008 financial crisis, the US Federal Reserve purchased trillions in toxic debt and US treasuries in order to restore confidence in the banking system.
Academics referred to this multi-year process as quantitative easing or QE, but it was more commonly thought of as money printing, with many fearing that it would lead to hyperinflation, a collapse of the dollar, and skyrocketing gold prices.
Though these worst-case scenarios failed to materialize, fears over hyperinflation have now been replaced by hyperdeflation (or, simply, a market crash) as the Fed engages in so-called ‘quantitative tightening,’ simultaneously raising rates while allowing their balance sheet to shrink back to normal, pre-crisis levels – something that may begin as early as this year.
With the more popular bearish view getting louder in recent months and Financial Sense listeners emailing us in response, we decided to get Matthew Kerkhoff’s take on this debate since he correctly explained to our audience many years ago why QE wouldn’t lead to hyperinflation.
Kerkhoff is a long-time contributor at Dow Theory Letters and the Chief Investment Strategist at Model Investing. Here’s what he had to say…

This post was published at FinancialSense on 06/05/2017.

Russian Oil Chief Says Tesla, Electric Cars Are Overrated

The market expectations for electric vehicle makers are significantly overestimated, Igor Sechin, CEO of Russia’s oil giant Rosneft said on Friday, adding that the evaluation of Tesla is based on ‘extremely aggressive’ sales expectations.
Speaking at the St. Petersburg International Economic Forum, Sechin also criticized Tesla’s business model and capital spending.
‘The unconditional truth remains in the fact that the hydrocarbon power industry has been and will be in demand,’ Sechin said, as quoted by Bloomberg, adding that ‘The market’s assessment of the prospects of electric car producers, in our view, is significantly overestimated.’
‘Until the electric transport industry becomes as user-friendly and attractive for consumers as the cars with internal combustion engines, the prospects for electric vehicles remain largely uncertain,’ Rosneft’s CEO noted.

This post was published at Zero Hedge on Jun 5, 2017.

CropMobster: How To Put Your Local Food System To Its Highest Use

The following video was published by ChrisMartensondotcom on Jun 5, 2017
In America alone, it’s estimated that up to 40 percent of the post-harvest food supply is discarded, according to The Journal of the Academy of Nutrition and Dietetics. That represents more than 1,200 calories per day for every man, woman, and child in the U. S. — just thrown into the trash.
Yet at the same time we have food access issues and nutritional deficits that result in widescale health problems and hunger nationwide, despite having more than enough nutritional calories to go around. Our food system is a mess — and it doesn’t have to be that way.
In this week’s podcast, we talk with Nick Papadopoulos, founder of CropMobster; an innovative company focused on helping communities dramatically improve the potential of their local food sheds. Nick explains how CropMobster provides a platform that any community can build on to connect local producers with local consumers in ways that boost economic development, reduce wastage of food and other resources, and assist local hunger relievers.

Stocks and Precious Metals Charts – The Emperor Wears Nada

‘Every organization should tolerate rebels who tell the emperor he has no clothes.’
Colin Powell
But there are not always those who place principle over power and self-interest to tell him so, right Colin?
Great events abroad, but here at home just another blissfully uneventful day in the markets under the Pax Americana.
However, I cannot help but feel that there is a ‘tension’ on the tape, and that the largely unchanged nature of the box scores for the day are masking what may turn out to the an imminent move.
Stocks seem overpriced, and the metals, especially gold, seem to be undervalued and ill-supplied.
But who can argue with such success?
And if one did, who would listen?

This post was published at Jesses Crossroads Cafe on 05 JUNE 2017.

The Last Time Hedge Funds Were This Short, Small Caps Plunged 30%

The Russell 2000 Index posted a 2.2% decline in May, its worst month since October, and it appears a large swath of investors is now betting it has further to fall.
As Bloomberg notes, hedge funds and other major speculators have a combined net short position of 73,030 contracts in the small-cap index’s futures, according to the latest data from the Commodity Futures Trading Commission.

This post was published at Zero Hedge on Jun 5, 2017.

JUNE 5/IN A VERY SURPRISE MOVE, THE CFTC LAYS CHARGES AGAINST THAT JUNIOR TRADER FROM DEUTSCHE BANK/GOLD UP $3.10 AND SILVER UP 6 CENTS BUT GOLD/SILVER EQUITY SHARES FLOUNDER/ANOTHER ISLAMIST ATT…

GOLD: $1279.30 up $3.10
Silver: $17.55 up 6 cent(s)
Closing access prices:
Gold $1279.95
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: $1287.16 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: 1279.70
PREMIUM FIRST FIX: $7.46
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1288.54
NY GOLD PRICE AT THE EXACT SAME TIME: 1280.30
Premium of Shanghai 2nd fix/NY:$8.24
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est $1280.70
NY PRICING AT THE EXACT SAME TIME: $1281.25
LONDON SECOND GOLD FIX 10 AM: $1279.95
NY PRICING AT THE EXACT SAME TIME. $1280.15
For comex gold:
JUNE/
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 57 NOTICE(S) FOR 5700 OZ.
TOTAL NOTICES SO FAR: 1912 FOR 191200 OZ (5.9471 TONNES)
For silver:
For silver: JUNE
229 NOTICES FILED TODAY FOR 1,145,000 OZ/
Total number of notices filed so far this month: 447 for 2,235,000 oz

This post was published at Harvey Organ Blog on June 5, 2017.

Mystery Trader ’50 Cent’ Reappears, Bets Big On VIX Doubling By July

Having been able to sell back his protection purchases for a major profit amid Trump’s impeachment panic two weeks ago, the mysterious options trader ’50-cent’ has been spotted once again – loading up on cheap bets on a big blow-out.
As Bloomberg reports, the volatility buyer or buyers dubbed ’50 Cent’ appears to have returned to the market again on Monday, following Friday’s trades as the VIX continues to trade below 10.

This post was published at Zero Hedge on Jun 5, 2017.

David Morgan: Cryptocurrencies Can be Profitable for Nimble Investors

The following video was published by The Morgan Report on Jun 5, 2017
Morgan also discusses the metals he’s interested in right now and explains why he thinks gold and the blockchain could eventually be used together.
David Morgan is best known for his commentary on precious metals, particularly silver, but as he’s emphasized in the past, The Morgan Report covers a wide array of commodities and investment opportunities. At the recent International Metal Writers Conference, he proved that point with a presentation that covered precious metals and the blockchain.

Not Random; 2015 Still Matters For 2017

I have never understood the infatuation with randomness. When I was first introduced to statistics at a very young age, I had a hard time at first trying to comprehend the paradigm in my own intuitive fashion. It seemed like something was off about it, where random chance was the cornerstone of a philosophy trying to describe and predict a decidedly non-random world. Rolling dice makes sense in the context of a board game.
It started in finance, going all the way back to Louis Bachelier’s Thorie de la Spculation from 1900. He wrote, ‘there is no useful information contained in historical price movements of securities.’ Essentially, he contended, markets start over every single day with new information that in every way supersedes and replaces any and all information obtained yesterday.
If that was to be applied to financial markets correctly, then this random walk might also apply to the economy. What is an economy after all but the exchange of goods and services, massive if informal marketplaces spread all throughout the system. In Robert Merton’s 1997 Nobel Prize lecture, one that he gave before LTCM would fail, he said:
Thus, I felt that working in economics could ‘really matter’ and that potentially one could affect millions of people. I also believed that my mathematics and engineering training might give me some advantage in analyzing complex situations. Most important in my decision was the sense that I had a much better intuition and ‘feel’ into economic matters than physical ones.

This post was published at Wall Street Examiner on June 5, 2017.

India Announces Lower Than Expected Gold Tax Rate

The Indian government set the tax rate for gold under the uniform goods and services tax lower than expected, sending a wave of optimism through the country’s gold and jewelry dealers. Analysts say the lower rate signals a potential recovery in demand for the yellow metal in the world’s second-largest market.
According to a Bloomberg report, India fixed the duty at 3% over the weekend, lower than the 5% expected.
The goods and services tax, to be implemented from July 1, will replace more than a dozen domestic levies including excise tax and state tariffs, drawing India for the first time into a common market.’
The gold market has already showed signs of revival in India this spring.

This post was published at Schiffgold on JUNE 5, 2017.

The Market Has Zero Concerns About Thursday’s UK Election

Having learned its lesson that both an “unexpected” result (in the case of Brexit and Trump), and a “priced in”, favorable election outcome both lead to higher risk prices, the market no longer even pretends to be nervous about the outcome of this Thursday’s general election in the UK.
To be sure, it has good reason for that: despite fluctuating polls, virtually every analyst’s base case for this election remains a Conservative majority large enough to allow for the necessary compromises to deliver an orderly “hard Brexit” with a transition period lasting 1-2y. However, as shown in the chart below, a recent narrowing of the polls poses risks to this scenario.

In terms of election outcome, the extent of the Conservative majority matters most for Brexit risks; a less than 60 seats increases the risks of the UK walking away from Brexit negotiations according to BofA. On the other hand, a larger conservative majority increases the likelihood of securing transitional arrangements and fully implementing Brexit; a larger majority should enable Prime Minister May increased flexibility to compromise with the EU-27, despite opposition from the Eurosceptics within her own party.
Alternatively, while a Labour-led coalition or outright victory has the potential to lead to a softer Brexit, analysts are worried about growth risks posed by some of the policies put forward in their agenda.

This post was published at Zero Hedge on Jun 5, 2017.

Spanish Banking Crisis Spreads As Banco Popular Credit Curve Inverts

Having told its employees “don’t panic” over the weekend (at the crashing stock and bond prices of Spain’s 6th largest bank), it appears investors are ignoring that message as Banco Popular’s credit curve has inverted for the first time since 2012 in the biggest red flag yet that Spain’s banking crisis is systemic and about to test the EU’s bail-in laws.
Banco Popular Chairman Emilio Saracho sent a letter to staff assuring them the bank remains solvent after Friday’s stock crash, courtesy of Expansion, google translated:
“From the management we are aware that the information that is being published affects the work and the spirit of each one of you, but our obligation as professionals is to focus on the day to day and on the clients, since the activity of the bank must continue as it has so far” begins the statement, whose target is the Professional Association of Directors Banco Popular.
The central message of this letter sent yesterday is the following: “Banco Popular remains solvent and has positive net worth”.
“Our bank is in a difficult situation,” says Saracho. “For this reason and in order to meet the regulatory requirements that the European Central Bank demands for next year and guarantee our strength and future, we are working on different alternatives.

This post was published at Zero Hedge on Jun 5, 2017.

Gold and Silver Market Morning: June 5 2017 – Gold consolidating with a positive bias!

Gold Today – New York closed at $1,278.20 Friday after closing at$1,270.10 Thursday. London opened at $1,281.00 today.
Overall the dollar was weaker against global currencies, early today. Before London’s opening:
– The $: was weaker at $1.1264 after Friday’s $1.1222: 1.
– The Dollar index was weaker at 96.77 after yesterday’s 97.20.
– The Yen was stronger at 110.51 after Friday’s 111.51:$1.
– The Yuan was stronger at 6.8036 after Friday’s 6.8153: $1.
– The Pound Sterling was stronger at $1.2905 after yesterday’s $1.2875: 1.
Yuan Gold Fix
New York closed $4.17 lower on Friday than the Shanghai Gold Exchange was trading at today ahead of Monday’s opening. London opened at around $1 lower than Shanghai was trading earlier today. These are very small price differences evidencing arbitrage operations at very professional levels [likely banking operations]. We have been watching these markets, as you know, very carefully over the last year. Our conclusion is that we are watching global gold market developments that are much more significant than the 2005 ‘de-hedging’ operations by gold mining companies and the establishment of gold ETFs by the World Gold Council. These changes not only bring structural changes to the global gold market but demonstrate where gold is going in the future. As China has integrated gold into its financial system, the weight of physical gold trading is being brought to bear on global gold prices. As theemphasis moves to physical dealing in gold, so its importance as an international reserve asset as well as an asset in support of global finances will increase in the months and years to come.

This post was published at GoldSeek on 5 June 2017.

How To Destroy The Value Of College

It wasn’t that long ago that I could resoundingly recommend that teens in the US who had an interest in any sort of “STEM” field go to college and get their degree.
I’ve not been able to make that argument for the “social arts” or the “liberal arts” for close to 20 years, but as recently as 10 years ago it was still an excellent argument, even at the inflated, debt-laden price, for STEM-related fields.
About five years ago I started to sound the alarm even in the STEM fields, as the offshoring and H1b abuse got bad enough that with few exceptions the risk had risen to unacceptable levels even in those fields, considering that your risk profile extends out at least four years from when you go to college and usually five or six.
Now, today, it appears I was right to be concerned — and I can no longer make any sort of argument for post-secondary education at today’s prices in the United States.
Monthly salaries plummeted 16 percent to 4,014 yuan ($590) this year for a second-straight annual decline, data from recruitment site Zhaopin.com show. The Ministry of Education estimates that 7.95 million will graduate this year, almost the population of Switzerland.

This post was published at Market-Ticker on 2017-06-05.