GOLD: $1213.90 UP $3.50
Silver: $15.71 UP 28 cent(s)
Closing access prices:
Gold $1214.00
silver: $15.66
Premium of Shanghai 2nd fix/NY:$6.49
LONDON FIRST GOLD FIX: 5:30 am est $1207.55
For comex gold:
For silver:
305,000 OZ/
Total number of notices filed so far this month: 2323 for 11,615,000 oz

This post was published at Harvey Organ Blog on July 10, 2017.

Chinese Umbrella-Sharing Startup “Loses” Its 300,000 Umbrellas In Weeks

China has a peculiar habit of taking the latest and greatest financial innovation available, and then taking it too far. The latest example is the startup Sharing E Umbrella, which hoping to follow in the footsteps of successful bike-sharing startups, decided to – as the name implies – provide shareable imbrellas. There was just one problem: as the Shanghaiist writes only a few weeks after starting up operations in 11 cities across China, Sharing E Umbrella announced that it had lost almost all of its 300,000 umbrellas.
While the details are probably superfluous at this point, it all started with a 10 million yuan investment – arguably by a rich, if not too intelligent investor – into the Shenzhen-based company. The concept, at least in theory, was to create a “sharing” ecosystem similar to those that bike-sharing startups have used to great success. Customers use an app on their smartphone to pay a 19 yuan deposit fee for an umbrella, which costs just 50 jiao for every half hour of use. The South China Morning Post reported that company CEO Zhao Shuping said that the idea came to him after watching bike-sharing schemes take off across China, making him realize that “everything on the street can now be shared.”

This post was published at Zero Hedge on Jul 10, 2017.

Banking Reform in China: Too Little, Too Late?

China’s economic expansion requires a responsive and responsible banking system to keep money flowing. This means financial reform in how China does business or else face severe financial implications having global consequences.
China’s economy has grown in leaps and bounds for a number of years. While it is ambitious, there are dangers along the way that could spell problems for China and the regional and global economy. China must catch up with the economic superpowers of the United States, Japan, and the European Union, but to do so, it must make key reforms in its financial industry or else lay the foundation for economic disaster. More specifically, there must be reforms in China’s commercial and shadow banking sectors. If these reforms do not occur or are neglected for an extended time, China is trading short-term economic growth for long-term financial calamity. The key question is: Is it too little, too late for these reforms?
The Need for Commercial Banking Reform
One area of reform is China needing more independently-owned banks. China’s banking industry is dominated by state-owned commercial banks that have historically funneled financial capital into government run projects including state-owned enterprises (SOEs). While this may help to spur on China’s economy by providing jobs and financial growth, many SOEs lose money and would probably be refused loans by banks elsewhere, globally. The problem is that the Chinese government is building up certain companies and industries while discouraging others, rather than letting free-market forces make that decision.

This post was published at FinancialSense on 07/10/2017.

China’s Richest Man Forced To Sell World’s Largest Indoor Ski Resort 2 Weeks After It Opened

7:35 PM
The man who declared war on Disneyland just opened the world’s largest indoor ski resort. And now he’s being forced to sell it.
As the South China Morning Post reports, Wanda City, the $6 billion resort development built by China’s wealthiest tycoon Wang Jianlin, opened for business two weeks ago. The resort, which, at 1.6 square kilometres, is the world’s largest indoor ski park.
Now, it’s being sold along with the company’s other theme-park related holdings as Wanda Group seeks to pay down some of its enormous debt burden, which has recently attracted the scrutiny of Chinese authorities. The push into theme parks, part of the conglomerates debt-fueled global shopping spree involving several entertainment businesses, was partly an issue of national pride for Wang. When Disneyland Shanghai opened last year, drawing enormous crowds, Wang angrily declared ‘the frenzy of Mickey Mouse and Donald Duck and blindly following them is over,’ according to the New York Times, and vowed that his theme parks would be even more successful.

This post was published at Zero Hedge on Jul 10, 2017.

Stocks and Precious Metals Chart – Me and My Baby

‘Learn what is to be taken seriously and laugh at the rest.’
Hermann Hesse
The silliness of these markets and those who enable them make me laugh.
The politicians of the day are almost unbelievable.
The vanity of the self-important is both sad and amusing. What a bunch of boobs.
I would laugh harder if I were much further away.
Even a little problem conquered lifts the spirits and renews our energy.

This post was published at Jesses Crossroads Cafe on 10 JULY 2017.

Why Wages Are So Weak – A Thought Experiment

A thought experiment on why wages are so weak
I propose a microeconomic rationale for why macro wage performance is so weak, despite tight labor markets. The idea is that we are getting paid less for our job-specific knowledge because technology is making it easier to replace us without major loss of productivity with less skilled workers. The implications for markets:
Flattish Phillips curve and low wage inflation continue for an indefinite period Living standards may increase because of lower price relative to wages, not higher wages relative to prices Monetary policy will have to get on with dealing with a low inflation economy — this means setting aside obsessions about balance sheet reduction and setting up the facility to use fiscal policy as needed when the zero bound is approached It’s relatively positive for equities in innovating sectors Long-term bond yields will be driven by monetary policy fears, not long-term inflation worries Short-term policy rate moved will be capped by the sensitivity of the economy to interest rates which may not be large. Note that this cuts both ways -both tightening and easing may be ineffective. The thought experiment
My idea is that wages are driven by how scared your boss is that you are going to leave. If replacing you, retraining your successor and waiting for him to climb the experience curve is costly, he will pay a lot to keep you from leaving. If you are a cog in a wheel, then he won’t care much.
Imagine an economy of a bus driver, a taxi driver, a cook, a translator, a baby sitter, a doctor and a foreign exchange strategist. Conceptually you can measure average job specific content by asking the following question: if you randomly reallocated jobs among these workers how much would productivity fall? For example, if the FX strategist was given the cook’s job and the cook became a doctor and the doctor a taxi driver and so on, what would happen?

This post was published at Zero Hedge on Jul 10, 2017.


Sport to some, digital bullying to others – whether you abide online trolling or find the inflammatory, sometimes cruel, practice repulsive – the Internet’s myriad disparate troll armies are apparently here to stay.
Seeding malcontent, disputation, division, needless provocation, and, often, chaos, trolls merit their characterization by the hordes as the bane of the Internet.
But, upon examining the psychology of these ruthless keyboard provocateurs, their likely detriment to civil discourse – already evinced in the mimicry of youth – sounds a warning not to be ignored.
Trolls, researchers found, possess a worrisome psychologic profile, laced with psychopathy and sadism, as well as a dearth in empathy – all of which they employ in online manipulation to sow mayhem, an ultimate reward for their mischief.
Researchers at Federation University in Australia queried 415 participants, approximately two-thirds of them female, with a median age of 23, to determine their levels of psychopathy, sadism, and empathy – such as gauging trolls’ agreement with the statement, ‘People would enjoy hurting others if they gave it a go.’

This post was published at The Daily Sheeple on JULY 10, 2017.

The Fed Is Getting Ready To Pull The Plug On The Markets, This Is A Game Changer – Episode 1328a

The following video was published by X22Report on Jul 10, 2017
German Secretary Economics warns that low to negative interest rates do not work, they have failed. Department stores are being hammered they are trying everything to bring in the customers. A stock market tsunami is getting ready to go off, and nobody is really noticing the storm warnings. The Fed is pulling the plug on the entire market, they are bringing down the economy. BofA points out why the Fed is doing this at this point, in not so many words the Fed is worried that the system will come down and they will lose control, they want it to come down on their terms.

Retail Investors Are Piling Into “The Most Dangerous Trade In The World”

It shouldn’t be too surprising that the XIV exchange-traded note – which is designed to deliver the inverse performance of the well-known CBOE Volatility Index (or the VIX) on a daily basis – is attracting fresh attention after surging as much as 87 percent this year.
But, as CNBC notes, some caution that investing in the exchange-traded product now could be deeply risky.
This could be “the most dangerous trade in the world,” according to macro strategist Boris Schlossberg of BK Asset Management.
“It’s already had a massive runup because we’ve had very low volatility,” but at this point, “it’s very likely that volatility is going to increase,” Schlossberg said Thursday on CNBC’s “Trading Nation.”
The rise in this product hasn’t escaped traders’ attention. In terms of the dollar value of shares traded, the short-VIX-futures XIV has actually surpassed the long-VIX-futures VXX.

This post was published at Zero Hedge on Jul 10, 2017.

When It Shows Up in Economic Releases, This Data Will Push Fed to Tighten Fast

The other day we explored Federal Withholding Tax collections that suggested that the US economy is beginning to overheat. Data on other tax collections in June from the US Daily Treasury Statement also is leaning that way. It takes a month or two for the economic data to catch up with the reality of what is happening in real time.
The tax collections data has no lag. It tells us what is going on in real time, with no manipulation whatsoever. We merely need to track it to know what’s coming in the lagging economic data reports. That gives us an edge enabling us to stay ahead of the crowd to take advantage of, or protect ourselves from, what’s coming.
In this case, strong economic data will encourage the Fed to begin its promised course of balance sheet reductions. That will be a real tightening, as opposed to the sham tightening of increasing the interest the Fed pays the bank on the excess reserves at the Fed.
Jim Rickards refers to this coming balance sheet reduction as Quantitative Tightening. I think that’s an apt monicker. Just as Quantitative Easing, QE, or money printing, pumped money into the markets and drove the asset bubbles that are still raging today (see yesterday’s price data on new home sales), QT will drain money from the markets and starve those bubbles.

This post was published at Wall Street Examiner on July 10, 2017.

Gold and Silver Capitulation – Precious Metals Supply & Demand Report

Last Week in Precious Metals: Peak Hype, Stocks vs. Flows and Capitulation
The big news this week was the flash crash in silver late on 6 July. We will shortly publish a separate forensic analysis of this, as there is a lot to see and say.
It’s hard to tell – we don’t have the tools to measure such a thing – but it seems like the hype and aggression from the gold bugs and conspiracy theorists is reaching a fever pitch.
For example, one high-profile commentator, whose reputation goes way beyond the world of gold, claimed that 1.8 million ounces of gold were sold in a few seconds on June 26. A contract is 100oz, so that means 18,000 contracts. Surprisingly (so often these guys are off by orders of magnitude), this is in line with the data in our own analysis.
On a typical day, it is common for 250,000 (active month) contracts to change hands. This is about 777 tons. That conspiracy theorist compares this quantity to the amount produced by the miners. He does not acknowledge that virtually all of the gold ever mined in human history is still in human hands, and all of that metal is potential supply, at the right price and under the right conditions.
And there is another point. Of course, in a free market there would be no futures market in gold or silver. A futures market is for goods that are produced seasonally, but consumed throughout the year. It is a market for warehousing.

This post was published at Acting-Man on July 10, 2017.

“… A Recession Has Always Followed”: Is This The Real Reason The Fed Is Suddenly Panicking

“Why is the Fed so desperate to raise rates and tighten financial conditions? Why has the Fed shifted from a dovish to a hawkish bias?”
That is the question on every trader’s, analyst’s and economist’s mind in the past month. Is it because the Fed is suddenly worried it has inflated another massive equity bubble (major banks now openly warn their clients the market is in frothy territory, if not inside a bubble), or is the Fed just worried that it will fall too far behind the curve and be unable to regain control of the economy once inflation spikes, without creating a recession (in what will soon be the second longest, if weakest, economic expansion of all time).
This is also what BofA’s chief economist Ethan Harris tried to answer over the weekend, when he recalled that while from 2013 to 2016 the Fed seemed to have a “dovish bias” signaling a slow exit from super easy monetary policy, but pausing at any sign of trouble, this year the Fed appears to have shifted to a “hawkish bias:” signaling a slow exit, but only pausing if the outlook changes significantly. He says that this was most evident when the Fed hiked rates and signaled balance shrinkage at its June meeting despite weak growth and inflation data.
The second reason for the Fed’s hawkish turn is that it is probably encouraged by how easily the markets have absorbed its forecasts. Since the start of the year the Fed has hiked more than expected and has accelerated its balance sheet shrinkage plans and yet, as Goldman has repeatedly noted and all other banks have promptly followed, stocks have rallied while bond yields have been little changed on net. If a steady exit is causing no apparent pain, why not continue? (for one answer, read the latest note from Deutsche Bank on Conundrum 2.0)

This post was published at Zero Hedge on Jul 10, 2017.

Gold and Silver Market Morning: July 10 2017 – Gold and silver consolidating at lower levels!

Gold Today – New York closed Friday at $1,212.40. London openedat $1,207 today.
Overall the dollar was weaker against global currencies, early today. Before London’s opening:
– The $: was stronger at $1.1408 after Friday’s $1.1414: 1.
– The Dollar index was stronger at 96.15 after Friday’s 95.98.
– The Yen was weaker at 114.21 after Friday’s 113.70:$1.
– The Yuan was stronger at 6.8034 after Friday’s 6.7990: $1.
– The Pound Sterling was weaker at $1.2873 after Friday’s $1.2897: 1.
Yuan Gold Fix
As you can see Shanghai has not dropped as far as New York or London. The price differential is very wide now on today’s price of $15.94 between Shanghai and London. We have no doubt that today, gold, from the SPDR [GLD} is flowing across to Shanghai via HSBC the Custodian of the gold ETF.
The big question is will Shanghai pull up London and New York prices or will Shanghai be pulled down to a much narrower differential? At the moment it is New York and London that are pulling prices down, but at the cost of gold flowing eastwards.

This post was published at GoldSeek on 10 July 2017.

Mall Stocks Hammered As Even Cheap Make-Up Fails To Lure Customers

This morning’s announcement of Abercrombie’s failed sale process served as a startling reminder of just how toxic mall-based retailers have become to investors in the post-Amazon era. News that not a single suitor was willing to touch the once high-flying, teenage-catering, cologne-infused, mall-based wonderland has wreaked havoc, yet again, today on retail apparel chains, with Abercrombie down over 20% and several others plunging to new all-time lows.
Of course, it’s not just the specialty apparel stores that are getting crushed. As we’ve noted several times in the past, the beloved anchor tenants of mall REITs have been among the hardest hit as a new generation shoppers have shunned over-priced department store products.
As the Wall Street Journal points out today, department stores like Macy’s, Sak’s and Lord & Taylor are even being forced to discount their last bastion of hope in order to lure customers into their dying stores: cosmetics.
Desperate to get shoppers in the door, department stores are discounting the one item they had long been able to sell at full price: cosmetics.

This post was published at Zero Hedge on Jul 10, 2017.

June Employment Report Supports Further Fed Tightening

A generally upbeat June 2017 employment report supports the Fed’s case for additional monetary tightening, most likely in the form of balance sheet action in September followed up by a 25bp rate hike in December. Moreover, the solid pace of job growth will encourage the Fed to maintain 2018 policy projections as well. Although the unemployment rate ticked up, ongoing job growth at this pace will eventually push it back down. Weak wage growth continues to restrain the Fed from accelerating the pace of easing; the tepid pace of wage gains suggests the Fed’s estimates of full employment remain too high.
Read Jobless Claims and Economic Turning Points
Nonfarm payrolls rose by 22sk in June, above expectations. Moreover, both April and May were revised higher. The three month and twelve-month paces are just below 200k. Job growth continues to slow, but the rate of decline is very shallow:

This post was published at FinancialSense on 07/10/2017.

SNAPgeddon Strikes – Stock Falls Below IPO Price, Down 40% From Highs

Well that escalated quickly…
Just 4 months after its magnificently-lauded IPO – proving to every Bob, Dick, and Mary on business media that this time is different and everything’s awesome – Snap has collapsed back to below its IPO price and down 42% from its post-IPO highs.
SNAP IPO’d at $17 and opened at $24, trading up to $29.44. Today it traded down to $16.95…
We are reminded of Dennis Gartman’s recent epic rant against the company he calls “a time sapping hobby; a diversion.”
Finally, is there anything in the investment world less investable than SNAP?
This is a company losing millions of dollars/month, whose product is the ability to create funny pictures of friends that can be sent via the net and messages that disappear soon after having been transmitted.

This post was published at Zero Hedge on Jul 10, 2017.

Somebody Created A Campaign Committee To Urge “The Rock” To Run In 2020

America, I hear you.
Tune in TONIGHT for our season finale of @nbcsnl for suprises and big laughs. #SNLFinale #5xHost #2020 pic.twitter.com/EdEgDwXX4V
— Dwayne Johnson (@TheRock) May 20, 2017

Somebody is taking Dwayne “The Rock” Johnson’s lighthearted musings about running for president a little too seriously.
In a formal filing with the FEC first reported by The Hill, somebody has filed to create the campaign committee to draft Dwayne Johnson, the highest-paid actor in Hollywood who is better known by his WWE wrestling moniker ‘The Rock,’ into running for office.
Paperwork establishing ‘Run the Rock 2020,’ the name of the official organization, was filed on behalf of Johnson with the Federal Election Commission (FEC) on Sunday, according to FEC records. It was filed by a man named Kenton Tilford under a West Virginia address. Tilford’s connection to Johnson and his motivation for filing the organization is not clear.

This post was published at Zero Hedge on Jul 10, 2017.

Indian Gold Imports Top 2016 Total as Gold Continues to Flow from West to East

Indians bought more gold in the first half of 2017 than they did all of the previous year, as the yellow metal continues to flow from the West to the East.
Indians within every economic class buy gold. Even the poor in India invest in the yellow metal. But demand for gold slumped to a seven-year low in 2016, leading some to wonder if Indians had lost their appetite for the metal.
Apparently not.
Demand for gold in India rebounded through the first half of the year. According to GFMS Thomson Reuters, India imported 521 tons of gold through H1 2017. The world’s second leading consumer of gold only imported 510 tons through all of 2016. According to Business Standard, analysts say India is on pace to hit its highest gold import value since 2012.
Going by industry estimates, gold import are likely to cross 900 tons against the average imports of 709 tons in the past five years, and the imports bill is expected to cross $40 billion in 2017. If the estimates come true this would be the highest imports in value terms since 2012.’

This post was published at Schiffgold on JULY 10, 2017.

Asian Metals Market Update: July-10-2017

Factors which can affect markets
Expectations of an early interest rate hike after June US nonfarm payrolls resulted in the slide of 50gold and silver. Key long term supports are being tested. Either gold and silver manage to trade over key long term support OR in case they fall below key long term support then there can be new multi year lows. FOMC meet is on 26th July. The Federal Reserve will not be there in August but will be there in the middle of September. Continued US jobs growth in July and August will not result in an interest rate hike by the Federal Reserve in October. I expect an October interest rate hike by the Federal Reserve if the US continues with higher employment in this quarter.
Investors all over the world are obsessed with the global liquidity cycle and the global interest rate cycle. Gold has been a very short term investment play this year. Investors are not holding on their gold investment for the medium term to long term as there are other investments which offer quicker return. The inability of gold to show signs of breaking past $1500 is also preventing higher investment demand.

This post was published at GoldSeek on 10 July 2017.

Deutsche Bank Warns “Markets Seem To Have Entered Frothy Territory (If Not Being In A Bubble)”

Another day, another warning of market froth, only this time not from the (widely ignored) Federal Reserve, but from Mikihiro Matsuoka, chief economist at Deutsche Bank who in a note released on Monday says that he believes that “the equity market in developed countries begins to show symptoms of ‘froth’. A simple average of the standard deviation of the stock market capitalization as percentage of GDP of seven major developed countries has been approaching very close to the previous peaks of 2000 and 2008. The reason we believe it is entering a frothy territory is that an eventual turnaround of monetary policy after a long period of post-GFC accommodation is under way in major developed countries, which in our view, raises the returns on safe assets and lowers the valuation of risk assets.”
While Matsuoka hardly says anything Janet Yellen did not cover in the past two weeks, here is the summary:
Some factors, such as 1) higher nominal GDP growth above long-term bond yield thanks to massive monetary accommodation, 2) chimera equities in which dividend yields get higher than the long-term bond yield and a resulting rise in P/E thanks to ‘search for yield’, and 3) financial surplus of non-financial businesses in developed countries, might help evade or put off a large and prolonged adjustment in asset prices.
However, the gap between nominal GDP growth and the long-term bond yield has expanded to a historical high under which monetary policy turnaround would naturally shrink the gap. The decline in the potential growth in the post-GFC era eventually restrains the profit growth and a resulting dividend growth over the long run. The price-earnings ratio has been on a slow but persistent rise after the GFC. The monetary policy turnaround could counter this by lowering the valuation of the risk assets. An expanding financial surplus for non-financial businesses reflects disappearance of investment (or profit) opportunities, i.e. an end of capitalism. The fall in the potential growth restrains a rise in the valuation of risk assets over the longrun.

This post was published at Zero Hedge on Jul 10, 2017.