The Russians Do It Again: Democrats Get Crushed In Georgia Election Despite 7x Spending Advantage

Summary:
After months of Democrats boasting that Georgia’s special election in the 6th district would be a startling referendum on Trump’s agenda, they just got served up another stunning defeat, as most networks have now called the race for Republican Karen Handel. In fact, rather than losing ground since Trump moved into the White House, Republicans actually performed better.
Of course, making Handel’s win even sweeter for Republicans is the fact that Democrats outspent them by a margin of 7-to-1, with Ossoff dropping a staggering ~$22 million versus only $3 million for Handel….which is kind of reminiscent of how things played our for Hillary…oops.

This post was published at Zero Hedge on Jun 20, 2017.

WTI Plunges To 7-Month Lows – Enters Bear Market As HY Bonds Crater

WTI Crude has entered a bear market (down over 20% from its highs) amid concerns OPEC-led output cuts won’t succeed in rebalancing the market (and not helped by the fact that Libya is pumping the most crude in 4 years).
For the first time since Nov 2016, WTI front-month traded with a $42 handle…
Here are eight factors that are behind the current fall in oil prices according to Arab News:
1. High exports from OPEC: Despite the reduction in production from oil producers, the level of exports is still high as many tanker-tracking data showed. Morgan Stanley in a report on June 8 said that tanker-tracking data showed that waterborne exports increased strongly in May across the world, up by 2.2 million bpd from April and 3.3 million bpd from May 2016.

This post was published at Zero Hedge on Jun 20, 2017.

Fading Further and Further Back Toward 2016

Earlier this month, the BEA estimated that Disposable Personal Income in the US was $14.4 trillion (SAAR) for April 2017. If the unemployment rate were truly 4.3% as the BLS says, there is no way DPI would be anywhere near to that low level. It would instead total closer to the pre-crisis baseline which in April would have been $19.0 trillion. Even if we factor retiring Baby Boomers in a realistic manner, say $18 trillion instead, what does the world look like with that additional $3.6 trillion of American income?
It is the one that is currently being described, that which earlier this year was supposed to set up the bond market for a 1994-style ‘massacre.’ Reflation was not just some nebulous idea, though it arose out of nothing but faith, rather it was the belief in a realistic trajectory back to $19 or even $18 trillion in income (maybe $17 trillion). At that level of future income, a lot of deficiency about the current economy would quickly vanish.
That would apply, of course, to far more than domestic circumstances. The rest of the world would be awash in US demand in terms of actual spending (the strong consumer in fact rather than just constant description). The feedback and spillover effects would restart what are now painfully broken foreign economies (not just in Brazil).

This post was published at Wall Street Examiner on June 20, 2017.

Doldrums and Summer lows? Pining sez No!

With analysts at most public PM websites now turning decidedly bearish, with the summer doldrums staring us in the face, with the new rate hike raising interest rates (on paper making gold less desirable as it provides no yield), and with the gold seasonals suggesting that ‘sell in May and go away’ was the play, there is a definite bearish tilt to the sector right now. That’s why (among other things) we have a great risk-reward setup staring us in the face.
Pining thinks it’s a great place to go long (with stops)! Let me give you a few reasons why, then I’ll outline the trade:
Sentiment:
A quick review of 7 popular and publicly available precious metals analytics/trading sites, and a glance through the comments on those sites, made clear to me that there is (at least roughly) a general consensus in the metals complex right now: after failing to break through 1300, and first pushing through then falling back below the long-term downtrend line in gold, the summer doldrums are upon us and consensus sentiment has turned bearish. The two most likely scenarios I saw discussed were either (1) we languish and churn lower for the next few months following typical gold seasonals pattern into a July or August low, or we cascade from here into an earlier low, perhaps late June or early July.
I like this widespread bearishness very much. This is precisely the type of setup the metals love; wrong-foot the investing public, going against well-known patterns (because it’s never that easy in the metals) and making sure the majority of retail is not on the train and has to chase price. That’s also why the so-so COT doesn’t bother me much, that pattern has been a bit TOO clear recently and has been becoming a little too easy to trade, so I think it’s due for a wrong-foot. In fact it is this ‘juking the crowd’ and subsequent chasing of price on the way up that provides the fuel for the best runs in the metals. This is an excellent setup from a sentiment standpoint. Just ask yourself, when was the last time the majority of retail sentiment was dead-on correct and on the right side of the trade in the metals? Thought so.

This post was published at TF Metals Report on June 19, 2017.

Watch Live: Speaker Paul Ryan To Deliver “Major Speech” Calling For Permanent Tax Reform

The @HouseGOP plan for tax reform will create more jobs & increase wages, putting American workers & families first. — Paul Ryan (@SpeakerRyan) June 20, 2017

In what is being hailed as a “major speech,” which means just about nothing to ordinary Americans living outside the D. C. bubble, House Speaker Paul Ryan is expected to call for permanent tax reform in 2017 in remarks to be delivered to the National Association of Manufacturers. According to the Washington Examiner, Ryan will report that the GOP intends to introduce and pass a joint tax bill in the fall of this year.
“We are going to get this done in 2017. We need to get this done in 2017. We cannot let this once-in-a-generation moment slip.”
“Transformational tax reform can be done, and we are moving forward. Full speed ahead.”
One component of Ryan’s tax plan, the so-called border adjustment provision, has become very controversial even among his Republican colleagues. It has elicited fierce opposition from retailers and other industries that fear it would result in higher taxes on imported products. In effect, the border adjustment would work by exempting export sales from companies’ taxable income, but disallowing the deduction of the cost of imported goods from taxable income.

This post was published at Zero Hedge on Jun 20, 2017.

Illinois Comptroller: “The State Can No Longer Function, We Have Reached A New Phase Of Crisis”

With just 10 days to go until Illinois enters its third year without a budget, resulting in the state’s imminent downgrade to junk status and potentially culminating in a default for the state whose unpaid bills now surpass $15 billion, Democratic Illinois Comptroller Susana Mendoza issued a warning to Illinois Gov. Rauner and other elected officials on Tuesday, saying in a letter that her office has “very serious concerns” it may no longer be able to guarantee “timely and predictable payments” for some core services.
In the letter posted on her website, Mendoza who over the weekend warned that Illinois is “in massive crisis mode” and that “this is not a false alarm” said the state is “effectively hemorrhaging money” due to various court orders and laws that have left government spending roughly $600 million more a month than it’s taking in. Mendoza said her office will continue to make debt payments as required, but indicated that services most likely to be affected include long-term care, hospice and supportive living centers for seniors. She added that managed care organizations that serve Medicaid recipients are owed more than $2.8 billion in overdue bills as of June 15.
“The state can no longer function without a responsible and complete budget without severely impacting our core obligations and decimating services to the state’s most in-need citizens,” Mendoza wrote. “We must put our fiscal house in order. It is already too late. Action is needed now.”
Unveiling the most dire langage yet, in her letter Mendoza said “we are now reaching a new phase of crisis” perhaps in an attempt to prompt the Democrats and Republicans to sit down and come up with a comrpomise:

This post was published at Zero Hedge on Jun 20, 2017.

Why The Wall Street Journal Is Wrong About The US Oil Export Boom

The lead editorial in Friday’s Wall Street Journal was pure energy nonsense.
‘Lessons of the Energy Export Boom’ proclaimed that the United States is becoming the oil and gas superpower of the world. This despite the uncomfortable fact that it is also the world’s biggest importer of crude oil.
The Journal uses statistical sleight-of-hand to argue that the U. S. only imports 25% of its oil but the average is 47% for 2017. Saudi Arabia and Russia – the real oil superpowers – import no oil.
The piece includes the standard claptrap about how the fracking revolution has pushed break-even prices to absurdly low levels. But another article in the same newspaper on the same day described how producers are losing $0.33 on every dollar in the red hot Permian basin shale plays. Oops.

This post was published at Zero Hedge on Jun 20, 2017.

MIAMI POLICE COMMANDER FIRED FOR ‘HINDERING’ SHOOTING INVESTIGATION

A North Miami police commander was fired on Wednesday after an internal affairs investigation concluded he hindered an investigation into a police-involved shooting and misled the North Miami police chief.
The commander, Emile Hollant, was in a position of authority last year when fellow officer Jonathan Aledda, a member of the department’s SWAT team, shot a group home therapist named Charles Kinsey, striking him in the leg. Kinsey was reportedly following police orders and pleading with officers not to shoot just before the incident.
Kinsey had been attempting to help Arnaldo Rios, a severely mentally impaired 27-year-old man and one of Kinsey’s patients at a nearby group home, who had police called on him for sitting in the middle of the road.
When police arrived at the scene, Kinsey was sitting next to Rios, trying to convince him to get out of the road. A silver toy truck Rios had in his hand was mistaken by officer Aledda for a weapon, prompting him to fire at Rios, but he missed and hit Kinsey, who fortunately survived with a minor injury.

This post was published at The Daily Sheeple on JUNE 20, 2017.

Caterpillar Retail Sales Rise Most In 54 Months

Caterpillar’s great depression ended three months ago, when in March following a record 51 consecutive months of annual declines, its global retail sales posted the first, if modest, monthly increase growing by 1% on the back of a surge in Chinese and other Asia/Pac sales. Since then the trend has accelerated, and in May the company reported that Asia Pac sales soared by 49%, the highest since April 2011, while maybe more notably, retail sales in the US rose by 2%, for the first time since May 2015.

This post was published at Zero Hedge on Jun 20, 2017.

JUNE 20/RAIDS CONTINUE DUE TO THE HIGH OPEN INTEREST IN SILVER AS THE BANKERS JUST CANNOT GET THOSE SILVER LEAVES TO FALL/DONALD TRUMP VERY UPSET WITH THE DEATH OF WAMBIER, WHO WAS ARRESTED AND T…

GOLD: $1241.00 DOWN $3.20
Silver: $16.40 DOWN 8 cent(s)
Closing access prices:
Gold $1243.40
silver: $16.45
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: $1254.94 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1245.60
PREMIUM FIRST FIX: $9.34
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1256.89
NY GOLD PRICE AT THE EXACT SAME TIME: $1246.70
Premium of Shanghai 2nd fix/NY:$10.11
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est $1246.50
NY PRICING AT THE EXACT SAME TIME: $1246.90
LONDON SECOND GOLD FIX 10 AM: $1242.20
NY PRICING AT THE EXACT SAME TIME. $1242.80
For comex gold:
JUNE/
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 23 NOTICE(S) FOR 2300 OZ.
TOTAL NOTICES SO FAR: 2612 FOR 261,200 OZ (8.1244 TONNES)
For silver:
For silver:
JUNE 3 NOTICES FILED TODAY FOR
15,000 OZ/
Total number of notices filed so far this month: 917 for 4,585,000 oz

This post was published at Harvey Organ Blog on June 20, 2017.

Hong Kong Warns: Its Housing Bubble is a ‘Dangerous Situation’

The HK financial system is ‘very strong’ and ‘can withstand an adjustment in the property market.’
The Hong Kong dollar is pegged to the US dollar. Hong Kong’s monetary policy is follows the Fed’s monetary policy. The Fed has embarked on a tightening cycle, raising rates four times so far. The Hong Kong Monetary Authority has followed each time. Last week, it raised its policy rate by 25 basis points to 1.5%. This will have consequences for the most expensive and ludicrously inflated housing bubble in the world.
‘We have to warn our people about the dangerous situation of the property market at the moment,’ Hong Kong Financial Secretary Paul Chan told Bloomberg TV.
‘No one can tell how deep the adjustment will be or what is the appropriate level of adjustment because it is market force,’ he said. ‘It is not up to the government to dictate, but I think it is important for people to recognize it is risky.’
But he doesn’t expect a repeat of what happened when Hong Kong’s prior housing bubble imploded during the Asian Financial Crisis.

This post was published at Wolf Street on Jun 20, 2017.

SocGen: The Fed Is Raising Rates Too Slowly To Contain Asset Bubbles

Yesterday, when looking at the divergence between the slowing US economy and the Fed’s insistence on hiking rates, Bank of America’s David Woo asked if there is a different motive behind the Fed’s tightening intentions, namely is the Fed trying to pop the market asset bubble:
“Can it be the case that its hawkishness was prompted by something other than its reading of the economy? For example, is it possible that the Fed has become concerned about the recent surge in the equity market, especially tech stocks that has been feeding off low interest rates and low volatility? According to our equity strategists, the P/E of the tech sector (19x) is currently at its highest levels post-crisis while the EV/Sales ratio is at the highest sinec the Tech Bubble”
Today, in a note which may have been inspired by BofA’s rhetorical question, SocGen’s FX strategist Kit Juckes picks up on what Woo said and notes that “Whether the Fed is raising rates too fast given their inflation mandate or not, they are raising them too slowly to contain asset price inflation.” Which, incidentally is confirmed by the latest Goldman data on financial conditions, which since the Fed’s 2nd rate hike of 2017 have continued to loosen and were “easier” by anotehr 5.4 bps

This post was published at Zero Hedge on Jun 20, 2017.

Argentina issues 100-year bond. What could possibly go wrong?

Apparently while I was in the air yesterday flying between Asia and Europe, the financial system proved once again that it believes in magic beans.
The latest absurdity is that the government of Argentina sold $2.75 billion worth of bonds yesterday afternoon.
It’s not strange or unusual for a government to sell bonds; it happens multiple times across the world nearly every single day of the year.
What’s totally insane about yesterday’s bond sale in Argentina, though, is the duration of these particular bonds.
Remember that a bond is similar to a loan; as an investor, you’re basically loaning money to whichever government issues the bond.
And, like a loan, a bond has a maturity date – the date at which the government is supposed to pay you back the ‘face value’ of the bond.
often have a 3-7 year term. Student loans can easily go 10 or 15 years. A home mortgage can last 30 years.
It’s the same with government bonds, which often have a term up to 30 years.

This post was published at Sovereign Man on June 20, 2017.

Argentina 100 Year Bond Sale 3.5x Oversubscribed

When we previewed yesterday unexpected announcement that Argentina would join Mexico, Ireland and the U. K. in issuing a 100 year bond, just one year after emerging from its latest default, we said “we expected the potential yield of 8.25% to come down as the offering will likely be many times oversubscribed.” It was.
According to Reuters, late on Monday Argentina sold $2.75 billion of a “hotly demanded” 100-year bond in U. S. dollars, and as expected the surge for yield resulted in 3.5x oversubscription: the South American country received $9.75 billion in orders for the bond, which in turn lowered the final yield to 7.9% with a 7.125% cash coupon, from the initial price talk of 8.25% in what Reuters dubbed an “otherwise low yielding fixed income market where pension funds need to lock in long-term returns.” Luckily for those same pension funds, they never have to worry about returns on capital as there is zero chance Argentina will not default again in the next 100 years.
Meanwhile, courtesy of yield-starved investors around the globe, the Argentina government increased its overall 2017 foreign currency bond issuance target even more, to $12.75 billion from its previous plan of issuing $10 billion in international bonds, Finance Minister Luis Caputo told reporters in Buenos Aires, in large part to fund its soaring budget deficit. As Reuters notes, Argentina will tap international capital markets to finance a fiscal deficit of 4.2% of GDP. Caputo said Argentina has $2.6 billion in bonds left to be issued this year. The new paper could be denominated in euros, yen or Swiss francs. It is not clear if the remaining issues will be in 100 year or longer maturities.

This post was published at Zero Hedge on Jun 20, 2017.

Trader: “We Need Another 20 Basis Points For The Entire Narrative To Change”

As noted yesterday, Bloomberg trading commentator Richard Breslow refuses to jump on the bandwagon that the Fed is hiking right into the next policy mistake. In fact, he is pretty much convinced that Yellen did the right thing… she just needs some help from future inflationary print (which will be difficult, more on that shortly), from the dollar (which needs to rise), and from the yield curve. Discussing the rapidly flattening yield curve, Breslow writes that “the 2s10s spread can bear-flatten through last year’s low to accomplish the break, but I don’t think you get the dollar motoring unless the yield curve holds these levels and bear- steepens. Traders will set the bar kind of low and start getting excited if 10-year yields can breach 2.23%. But at the end of the day we need another 20 basis points for the entire narrative to change.”
To be sure, hawkish commentary from FOMC members on Monday (with the semi-exception of Charles Evans) and earlier this morning from Rosengren, is doing everything whatever it can to achieve this. Here are the highlights from the Boston Fed president.
ROSENGREN SAYS LOW INTEREST RATES DO POSE FINANCIAL STABILITY ISSUES ROSENGREN: LOW RATES MAKE FIGHTING FUTURE RECESSIONS TOUGHER ROSENGREN SAYS REACH-FOR-YIELD BEHAVIOR IN LOW INTEREST RATE ENVIRONMENT CAN MAKE FINANCIAL INTERMEDIARIES, ECONOMY MORE RISKY

This post was published at Zero Hedge on Jun 20, 2017.

Asian Metals Market Update: June-20-2017

Factors which can affect markets
It should be a technical trade as there is no news. Geopolitical risk will be closely watched. This is the last week before Ramzan ends. Over the past decade there is a big spike in smuggled gold in India after Ramzan. Physical gold premiums can fall after two weeks. (unless gold prices continue to fall). Investors are happy due to continuation of bullish trend in stock markets.
Trend is down for gold and silver. One needs to look for signs of trend reversal.
COMEX GOLD AUGUST 2017 – current price $1247.01
Bullish over $1253.20 with $1260.20 and $1268.70 as price target
Bearish below $1249.10 with $1244.40 and $1237.10 as price target.
Neutral Zone between: $1249.10-$1253.20

This post was published at GoldSeek on 20 June 2017.

Futures, European Stocks Flat As Oil Suddenly Tumbles; Pound Slides

Maybe not too much of a surprise to see oil prices fall, given how much the G10 economic surprises index has collapsed in recent weeks. pic.twitter.com/aXkvHOzZMt
— Jamie McGeever (@ReutersJamie) June 20, 2017

European stocks were flat after starting off strongly earlier, dragged lower by energy stocks. Asian stocks, U. S. futures little changed as oil tumbled with Brent tumbling as low as $45.85/bbl to the lowest intraday since November 30 and taking out a 38.2% Fib support, after a one-minute spike in volume to a day-high 5,208 lots just after 6am, with WTI mirroring Brent’s momentum, and falling as much as 98c to $43.22, lowest since November 14.
As Reuters’ Jamie McGeever points out, “maybe not too much of a surprise to see oil prices fall, given how much the G10 economic surprises index has collapsed in recent weeks.”
The pound sank for a second day, with the GBPUSD tumbling to 1.2661, alongside gilt yields as Britain central bank governor Mark Carney reversed the earlier BOE “vote split” hawkishness and said he is still worried about the impact Brexit will have on the U. K. economy and said he “now is not the time” to raise rates. Sterling weakened against all of its Group-of-10 peers, and gilt yields declined as Carney said that domestic inflation pressures remain subdued. Speaking at London’s Mansion House on Tuesday, he also highlighted the weakness in the economy and the increased uncertainty as the nation formally starts talks to exit the European Union.

This post was published at Zero Hedge on Jun 20, 2017.