White House “Weighing” Replacing Sean Spicer

Update 2:

This post was published at Zero Hedge on Jun 19, 2017.

Are Central Banks Getting Ready to Crash the System Again?

While investors pile into Tech Stocks based on endless promotion from the financial media, the US economy is rolling over.
Last week the NY Fed downgraded its economic forecast for 2Q17 to just 1.9%. Even worse, it is now forecasting 2017 total growth to be a measly 1.5%.
Yes, 1.5%.
There is a clear trend to this chart… and it’s NOT up.

This post was published at GoldSeek on 19 June 2017.

Otto Warmbier Has Died, Family Blames “North Korea’s Torturous Mistreatment”, Trump Condemns “Brutal Regime… Will Handle It”

Just days after North Korea released Otto Warmbier after holding him hostage for 17 months, his family has just reported the sad news of his passing.

Warmbier was sentenced to 15 years in prison with hard labor in North Korea, convicted of subversion after he tearfully confessed he had tried to steal a propaganda banner.
The University of Virginia student was held for more than 17 months and medically evacuated from North Korea last week. Doctors said he returned with severe brain damage, but it wasn’t clear what caused it.
Family Statement:

This post was published at Zero Hedge on Jun 19, 2017.

‘When I say cut taxes, I don’t mean fiddle with the code. I mean abolish the income tax and the IRS, and replace them with nothing’

The quote in the headline comes from Ron Paul, and it should be the goal of every conservative lawmaker in the entire country. When professional politicians tell you that they are in favor of reforming the tax code or reducing taxes a little bit, essentially what they are telling you is that they are perfectly fine with the status quo. They may want to tweak things slightly, but in general they are content with big taxes, big spending and big government. I spent an entire year getting a Master of Laws in Taxation at the University of Florida Law School, and in my opinion the best thing that Congress could do to the tax code would be to run it through a shredder and put it in a dumpster. As I noted the other day, the tax code is now more than four million words long and it takes Americans about six billion dollars a year to comply with it. Those that believe that they are offering the American people a ‘solution’ by proposing to tinker with this abominable mess are just fooling themselves.
The only long-term solution that is going to work is to get rid of the entire steaming pile of garbage. Ron Paul understood this, and we would be very wise to take his advice. The following is the full version of the quote from the headline above…
‘By the way, when I say cut taxes, I don’t mean fiddle with the code. I mean abolish the income tax and the IRS, and replace them with nothing.’

This post was published at The Economic Collapse Blog on June 19th, 2017.

Goldman Warns Of Rising “Potential For Rate Shocks”

Just in case you are not sick of reading about record low volatility yet (yes, the WSJ had another piece on it this morning “Market Volatility Has Vanished Around the World“), here is Goldman’s Ian Wright pointing out that “central bank meetings didn’t jolt rate vol” (in case anyone didn’t notice), and is the latest to warn that “the potential for rate shocks has increased over longer-term horizons as more pressure builds for rates to rise.”
Yes, eventually vol will rise, or rather explode, and shocks will emerge, not just in rates, but when? And will DB’s Aleksandar Kocic be right when predicting that the longer vol remains suppressed, the more “cataclysmic” the market reaction will be.

This post was published at Zero Hedge on Jun 19, 2017.


GOLD: $1244.20 DOWN $9.80
Silver: $16.48 DOWN 15 cent(s)
Closing access prices:
Gold $1244.20
silver: $16.53
Premium of Shanghai 2nd fix/NY:$8.22
LONDON FIRST GOLD FIX: 5:30 am est $1251.10
For comex gold:
TOTAL NOTICES SO FAR: 2589 FOR 258,900 OZ (8.0528 TONNES)
For silver:
For silver:
15,000 OZ/
Total number of notices filed so far this month: 914 for 4,570,000 oz

This post was published at Harvey Organ Blog on June 19, 2017.

South African Mining Stocks Crash To 5-Year Low Valuations After Policy Shock

South Africa’s new mining charter (that all local mines should be 30% black-owned) is scaring away investors.
The charter revision comes shortly after Africa’s most industrialised economy entered its first recession since 2009, with investor confidence already shaken by infighting within the ANC over the scandal-hit presidency of Jacob Zuma. The proposal was unveiled by the Department of Mineral Resources which said it intends to raise the minimum black-ownership level from the current 26% to ensure more proceeds from the country’s natural resources flow to the black majority, Mining Minister Mosebenzi Zwane told reporters on Thursday in Pretoria. The charter will also require companies to pay 1% of annual revenue to communities and new prospecting rights will require black control, Zwane said.
‘The mining sector does not exist in a vacuum,’ Zwane said as he unveiled the charter on Thursday. South African miners needed ‘strong legislative regimes’ to thrive, he added.
‘We have listened to miners who have not seen real economic benefit; people who don’t see benefit of transformation structures,’ he said.

This post was published at Zero Hedge on Jun 19, 2017.

10 Fold Increase in Cryptocurrencies by Year-End | BrotherJohnF

The following video was published by SilverDoctors on Jun 19, 2017
Money is rushing into cryptocurrencies, but are the biggest moves yet to come? John from the Silver for the People blog would not be surprised if the cryptocurrencies sector increased ten-fold by the end of 2017.
Can cryptocurrencies be stopped? John says individual cryptocurrencies might fail, but cryptocurrencies in general will survive. Cryptocurrencies may become the world’s most popular money, John says.

Chapter 18: Production and Distribution

Christian Economics: Teacher’s Edition
About that time there arose no little disturbance concerning the Way. For a man named Demetrius, a silversmith, who made silver shrines of Artemis [Diana], brought no little business to the craftsmen. These he gathered together, with the workmen in similar trades, and said, ‘Men, you know that from this business we have our wealth. And you see and hear that not only in Ephesus but in almost all of Asia this Paul has persuaded and turned away a great many people, saying that gods made with hands are not gods. And there is danger not only that this trade of ours may come into disrepute but also that the temple of the great goddess Artemis may be counted as nothing, and that she may even be deposed from her magnificence, she whom all Asia and the world worship.’ When they heard this they were enraged and were crying out, ‘Great is Artemis of the Ephesians!’ (Luke 19:23 – 28)
AnalysisDemetrius understood the economic law of supply and demand. He understood that demand for his silver shrines was based on widespread faith in the supernatural power of Artemis-Diana, the goddess associated with the city of Ephesus. The temple was known across the Mediterranean. It is numbered among the legendary seven wonders of the world. This demand for household shrines, meaning idols, was under assault from Paul, who was preaching salvation through faith in Jesus Christ, who was God incarnate. If the new faith spread, it would put Demetrius out of business.
He called together other craftsmen who supplied him with products. He warned them that their businesses were at risk, just as his was. He sold to final users. He bought support materials from these craftsmen. He understood that maintaining consumer demand was the key. If the producers were not successful in persuading buyers to buy the products of their hands, they would have to go into another market. They would still be competent craftsmen, but they would have to leave their profitable niche markets associated with the goddess, and produce silver goods that were less in demand. Their income would necessarily fall.
Demetrius understood that consumers direct production, not producers. Consumers own money. They can buy almost anything that is for sale. Producers must subordinate their skills to consumers if they expect to get paid.

This post was published at Gary North on June 19, 2017.

“Probably Nothing”

For the first time since September 2001, Robert Shiller’s CAPE Ratio measure of stock market valuation has topped 30x…
(…and yes, we know, we “don’t get it” and “this time is different” and “the world is a changed place” and so on…)
Time will tell…

This post was published at Zero Hedge on Jun 19, 2017.

Cry For Argentina! Issuing 100 Year Sovereign Debt As Fiscal Deficits Grow To Worst Since 2000

Cry for Argentina.
Argentina, which has defaulted on its debt seven times, is now faced with the worst fiscal gap since 2000.
(Bloomberg) Argentina is planning to sell its first 100-year bond a year after returning to global capital markets, as it grapples with a soaring budget deficit.
The bond, which will be used to shore up its budget and refinance debt, may be priced as soon as Monday and yield about 8.25 percent, according to a person with knowledge of the matter, who asked not to be named because the deal is private. Citigroup Inc. and HSBC Holdings Plc are managing the sale. The debt-issuance plan was announced on Twitter by the Argentine Finance Ministry, which hasn’t provided further details.

This post was published at Wall Street Examiner on June 19, 2017.

Gold’s Pricing Power Moving East – Part 2

China excluded from the global gold price or arbitrage includes it?
China is unhappy that gold prices should be driven by U. S. and dollar concerns. But many state that because there is no free flow of gold in and out of China, China will remain a parochial market, not integrated into the global gold market. Nothing is now further from the truth.
The author has worked with successful arbitrageurs in London in the past, so we can clearly see that through the London and Shanghai Gold Exchanges via bullion banks such as ICBC/Standard, HSBC and many others, arbitrage in gold is not just feasible but practiced.
Any overweight London gold stocks can easily be sent to Shanghai from, in particular the ICBC/Standard branch in London that control two warehouses capable of holding 3,500 tonnes of physical gold. With this bank being a ‘market maker’ in London and a member of the LBMA price setting body, such a trading activity would be consistent with its normal functions.
As to gold leaving China, it is not permitted, but the export of Yuan is. So a sale in Shanghai of gold receives Yuan which can be exported to buy gold in London. This is, in essence, giving arbitrageurs the ability to lower prices in Shanghai and raising them in London.
Capital Controls in China do not pose a hurdle for this business. We believe that while capital exiting China is now heavily restricted, it is not withheld for the purchase and import of gold bullion.
What this trade does do, is to smooth out price differentials between Shanghai and London. With Shanghai’s physical gold prices being more representative of physical gold demand and supply [due to volumes of gold traded] it is inevitable that Shanghai becomes the leading gold Benchmark pricer in the future.

This post was published at GoldSeek

Is Amazon/Whole Foods This Cycle’s AOL/Time Warner – A Sign That The Party’s Over?

Towards the end of the 1990s tech stock bubble, ‘new media’ – i.e., the Internet – was ascendant and old media like magazines, newspapers and broadcast TV were yesterday’s news. This was reflected in relative stock valuations, which gave Internet pioneer AOL the ability to buy venerable media giant Time Warner for what looked (accurately in retrospect) like an insane amount of money.
Now fast forward to 2017. Online retailing is crushing bricks-and-mortar, giving Amazon all the high-powered stock it needs to do whatever it wants. And what does it want? Apparently to run grocery stores via the acquisition of Whole Foods, the iconic upscale-healthy food chain.
The two deals’ similarities are striking, but before considering them here’s a quick AOL/Time Warner post-mortem:
15 years later, lessons from the failed AOL-Time Warner merger
(Fortune) – The landscape of mergers and acquisitions is littered with business flops, some catastrophic, highly visible disasters that were often hugely hyped before their eventual doom. Today marks the 15th anniversary of one such calamity when media giants AOL and Time Warner combined their businesses in what is usually described as the worst merger of all time. But what happened then will happen again, and ironically for the exact same reasons.

This post was published at DollarCollapse on JUNE 19, 2017.

Mark Hanson: Housing Bubble 2.0 – The End Is Nigh?

The incredible essay below is reproduced here with permission by Dr. Hunt for Epsilon Theory. If Dr. Hunt is even moderately accurate, which I believe he is, the housing market headwind on deck could be every bit as powerful as what hit at the end of Bubble 1.0.
Bottom line: The Fed, during Obama, did everything in its power to surge all asset prices – stocks, bonds, real estate, collectables, et al – with no regard for its own guidance, as to when it would take its lead-foot off the accelerator. Now, under Trump, they are doing the exact opposite; looking ‘through’ all the obvious coincident and near/mid term, economic weakening trends in an effort to raise rates as quickly as possible. If, the past 8-years of a Fed in Armageddon-mode created the ‘everything bubble’ (hat-tip Wolf Richter), what will shifting monetary policy into reverse do to said asset price levels?
Back in Bubble 1.0, the helium came out of house prices when the ‘unorthodox credit and liquidity’ was forced out of the markets all at once precipitated by the mortgage credit market implosion. Quickly, house prices ‘reattached’ to end-user, shelter-buyer employment, income, and credit fundamentals…or, to what end-user, shelter-buyers could really buy using a traditional, 30-year fixed rate mortgage, and a truthful loan application, which was about 30% less.
What’s really the difference between the ‘unorthodox credit and liquidity’ coming out back then and coming out now from a Fed in reverse? House prices didn’t surpass their 2007 peaks because everybody is working, making more money (with the exception of those in the footprint of tech bubble 2.0). They have been goosed for years by unorthodox demand using unorthodox credit and liquidity (i.e., investors, speculators, flippers, floppers, foreigners, money launderers, options, etc etc) just like in Bubble 1.0.

This post was published at Zero Hedge on Jun 19, 2017.

Why Peter Krauth Sees the Price of Silver Rebounding from Here

Calling the price of silver a roller coaster would be an understatement.
All you need is to look at a 60-day or 6-month price chart, and you’ll see exactly what I mean.
In fact, even the past week can make seasoned silver investors nauseous. It’s been a bumpy ride, and it’s not over. On June 7, the price of silver was trading as high as $17.60. By last Tuesday, it had fallen all the way to $16.80.
The price of silver today is down another 0.63% to $16.58.
Although silver has lost ground to gold in the last few days, a glance at the price chart shows we may already be at support, bolstering the case for a return to upside price action from here.
A quick comparison of gold and silver in the last five trading days shows their price behavior has been nearly identical, with silver of course amplifying the movements.
Let’s examine silver’s volatility over the past trading week, then look to what may lie ahead for the precious metal…
How the Price of Silver Is Trending Now
Silver began the week on a bearish note, following through on weakness from the previous trading sessions.

This post was published at Wall Street Examiner by Peter Krauth via Money Morning June 19, 2017.

FANG Falters As Best-Performing Tech Fund Manager Warns “When Things Are This Elevated, It’s Best To Be Cautious”

Joshua K. Spencer has managed his T. Rowe Price Global Technology Fund to become the best-performing mutual fund in the past five years with big bets on Amazon and Tesla is now selling some big winners… and it’s sending FANTASY stocks lower…
FANG stocks are rolling over…
And FANTASIA (Facebook, Amazon, Netflix, Tesla, Alphabet, SalesForce, Intel, and Apple) stocks are falling back from their 50% retracement…

This post was published at Zero Hedge on Jun 19, 2017.

Inflation Trade: AMZN + WFM

‘Markets go up on an escalator, they come down on an elevator. This is the most hideously overvalued market in history.’
David Stockman
Last week’s action by the Fed was an effort to restore normalcy, but in the context of extraordinary action by the central bank. When you tell markets that the risk free rate is zero, it has profound implications for the cost of debt and equity, and resulting in different asset allocation decisions. Ending this regime also has profound implications for investors and markets.
In the wake of the financial crisis, some investors found comfort in the fact that when risk free interest rates are at or near zero, the discounted future value of equity securities was theoretically infinite. Markets seem to have validated this view. But to us the real question is this: If a company or country has excessive and growing amounts of debt outstanding against existing assets, what is the value of the equity? The short answer is non-zero and declining. But hold that thought.
Reading through Grant’s Interest Rate Observer over the weekend, we were struck by the item on China Evergrande Group (OTC:ERGNF), a real estate development company and industrial conglomerate that has reported negative free cash flow since 2006, but has made it up in volume so to speak. The stock is up over 200% this year, Grant’s reports. The real estate conglomerate has its hands into all manner of businesses and seems to typify the China construction craze.

This post was published at Wall Street Examiner on June 19, 2017.

The Fed’s Policy and Its Balance Sheet

At its June meeting, the FOMC again raised the target range for the federal funds rate by 25 basis points, to 1 – 1 percent. They did so despite evidence that inflation had moderated and that the second estimate of first quarter GDP growth was clearly subpar at 1.2%. Furthermore, despite the fact that 7 of the 12 Federal Reserve district banks had characterized growth in the 2nd quarter as ‘modest,’ as compared with only 4 banks that described it at ‘moderate’ (the NY bank simply said that growth had flattened), the FOMC in its statement described growth as ‘moderate’ (here one needs to know that in Fed-speak ‘modest’ is less than ‘moderate’). The overall discussion evidenced in the statement and subsequent explanations by Chair Yellen in her post-meeting press conference, together with the fact that the only significant change in June’s Summary of Economic Projections was a slight downward revision in the unemployment rate for 2017, failed to make a convincing argument to this writer that there was a compelling case for a rate move at this time. The principal conclusion we can draw is that the FOMC had already conditioned markets to expect an increase in June and that the FOMC’s main rationale was its desire to create more room for policy stimulus should the economy take a sudden turn to the downside.
More significant than the rate move, however, was the detail the FOMC provided on its plan to normalize its balance sheet, which elaborated on the preliminary plan it put forward in March. Once the Committee decides to begin that process, it will employ a set of sequentially declining caps, or upper limits, on the amount of maturing assets that will be permitted to run off each month. The cap for Treasury securities will initially be $6 billion per month, and it would be raised in increments of $6 billion every three months until $30 billion is reached. Similarly, the cap for MBS will be $4 billion per month, which would also be raised by that amount every three months until $20 billion is reached. These terminal values would be maintained until the balance sheet size is normalized. Left unsaid was what the size of the normalized balance sheet would be.

This post was published at FinancialSense on 06/19/2017.