Remember This Milestone: The Dow Jones Industrial Average Hits 22,000 For The First Time In U.S. History

The Dow hit the 22,000 mark for the first time ever on Wednesday, and investors all over the world greatly celebrated. And without a doubt this is an exceedingly important moment, because I think that this is a milestone that we will be remembering for a very long time. So far this year the Dow is up over 11 percent, and it has now tripled in value since hitting a low in March 2009. It has been quite a ride, and if you would have told me a couple of years ago that the Dow would be hitting 22,000 in August 2017 I probably would have laughed at you. The central bankers have been able to keep this ridiculous stock market bubble going for longer than most experts dreamed possible, and for that they should be congratulated. But of course the long-term outlook for our financial markets has not changed one bit.
Every other stock market bubble of this magnitude in our history has ended with a crash, and this current bubble is going to suffer the same fate.
But many in the mainstream media are still encouraging people to jump into the market at this late hour. For example, the following comes from a USA Today articlethat was published on Wednesday…

This post was published at The Economic Collapse Blog on August 2nd, 2017.

Hussman Hammers “Mad Hatter” Bernanke’s “Hypervalued Financial Markets”

For context, John offers a brief history lesson for the goldfish-like memories of Wall-Street-wannabes and head-in-sand home-gamers who have forgotten what it was like in 2000 and 2007…
At the height of the technology bubble, the median of the most reliable market valuation measures we follow (those most strongly correlated with actual subsequent S&P 500 total returns) briefly reached an apex 178% above historical norms that had been regularly approached or breached over the completion of every market cycle in history. That level of valuation implied a prospective market loss of (1/(1+1.78)-1 = ) -64% as the bubble collapsed.

Attempting to ‘stimulate’ the economy from the recession that followed, the Federal Reserve cut short-term interest rates to just 1%, provoking an episode of yield-seeking speculation, where yield-starved investors created demand for higher-yielding mortgage-backed securities, and a weakly-regulated Wall Street rushed to create new ‘product’ to meet the demand (by lending to anyone with a pulse).
At its peak, the resulting bubble took the median of the most reliable market valuation measures we follow to a level more than 95% above their historical norms, implying a prospective market loss on the order of -49% as that bubble collapsed.

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

The Crypto Revolution to Sweep Away Institutions of Violence- Jeff Berwick on The Silver Doctors

The following video was published by The Dollar Vigilante on Aug 2, 2017
Jeff is interviewed By Elijah Johnson for The Silver Doctors, topics include: a huge surge of interest in crypto currencies, is it a bubble? attempts to control and shut down bitcoin, the beauty of a decentralized currency, government coercion, the threat they represent to existing power structures, remittance and banking greatly simplified and facilitated, addressing skepticism, risk and speculation, complimenting gold and silver, the biggest thing since the internet, the TDV Bitcoin seminar course.

Gingrich To GOP: Pass Tax Cuts In 2017 Or Prepare For Speaker Pelosi

Former House Speaker Newt Gingrich and former Best Buy CEO Brad Anderson penned an op-ed in the USA Today warning Republicans that they have about 4 months left to pass tax cuts or suffer the inevitable consequences of massive losses in the 2018 mid-terms that will return control of Congress to Nancy Pelosi.
The specter of House Speaker Nancy Pelosi is looming.
Following Republicans’ failure to fix the country’s health care system, polls show Americans are increasingly flirting with Democratic governance in Congress next year. This means Republicans must change their game plan. The next six months must not be the same as the last six months.
To regain their legislative momentum and keep their majority, Republicans must clearly demonstrate they are fighting for the country’s hardworking taxpayers. This means passing a major tax cut by Thanksgiving – and making it retroactive to the start of this year.
By 2018, the tax cuts will have spurred economic growth and wage increases, giving Republicans substantial momentum and a popular record of success to tout during their campaigns.

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

US Dollar Testing Long Term Support

The U. S. Dollar has continued to fall hitting a low of 92.72 on Monday, July 31st. The U. S. Dollar also broke through shorter term support levels and is now closing in on long term support that could very well define the longer term trend over the next several years.
When most financial writers (to which I include myself) refer to the U. S. Dollar they are typically referencing the DXY index. The DXY index is composed of 6 currency pairs that are based mostly in Europe. The Euro vs. the U. S. Dollar makes up 58% of the DXY index with the Great British Pound, Swedish Krona and Swiss Franc making up an additional 19.7% of the index combined.
What this means is that the DXY Index, which is widely cited as the ‘U. S. Dollar’, is really a basket of currencies as measured against the U. S. Dollar. 77% of this DXY Index are European currency pairs. The U. S. Dollar vs. the Canadian Dollar and the U. S. Dollar vs. the Japanese Yen make up the remaining 23% of the index. This leaves a vast number of countries not represented at all within the DXY Index.
It is still useful to track the DXY as it is still a widely used barometer of the strength of the U. S. Dollar. The lack of diversity within the index does at times lead to divergences of currency pairs that are inside and outside of the Index. We can often use how much divergence is being seen in the DXY index to help to gauge the overall strength of the trend.
The month of July saw some increased divergence with the component pairs of the DXY Index. This was in comparison to the relative lack of divergence that was seen from the January top into the August lows.

This post was published at GoldSeek on 2 August 2017.

Venezuela Bolivar Loses A Third Of Its Value In The Past Week

With events in Venezuela now well into the endgame, following US sanctions that named “dictator” Maduro personally and a likely subsequent sanction that will cripple Venezuela’s oil industry promptly resulting in the nation’s insolvency as it loses its last remaining source of revenue, things are moving fast. So fast, in fact, that according to Reuters, Venezuela’s money supply surged 10% in just one week earlier this month, its largest single-week rise in a quarter of a century.
Meanwhile, in addition to now daily protests and strikes, Venezuela is undergoing a major economic crisis, with millions suffering food shortages, monthly wages worth only the tens of U. S. dollars, and soaring inflation – although no official data is available. The central bank said late on Friday the total amount of local currency in circulation, or M2 as of July 21, was 27.3 trillion bolivars, up 9.66% from the previous week.
Obviously, the exponential rise in M2, the sum of cash, together with checking, savings, and other deposits, also means an exponential rise in the amount of currency circulating. As a result, Venezuela’s money supply is up 384% in the last year. In contrast, the United States’ money supply is up 5.5% in the same period.

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

These Snapchat Stock Price Predictions Are Dead Wrong

You see, IPOs are just get-rich-quick schemes for investment banks and institutional investors. These investment banks and large institutions are able to buy shares at the offer price.
Retail investors don’t get in at the offer price. Instead, we have to wait until the higher ‘open price.’
Because these big banks and large institutions need the price to be bid up in order to make a profit, analysts (who work at these banks) rate the new stock very favorably. This entices people to buy the stock at an inflated price. Once the excitement vanishes (and the big banks and institutions cash out), the stock price drops.
We saw it with GoPro Inc. (Nasdaq: GPRO) and Fitbit Inc. (NYSE: FIT). Both are trading about 90% below their post-IPO peak prices.
‘The thought that any sane investor would buy Snapchat is frightening,’ said Money Morning Capital Wave Strategist Shah Gilani. ‘Buying shares in SNAP is like trying to pick up nickels in front of buses.’
After all, this is a company that admitted it might never make money when it filed for its IPO.

This post was published at Wall Street Examiner on August 2, 2017.

It’s Not The Economy, Stupid – Trader Warns “It’s All About The Euro”

With the dollar set for its worst year in 32 years (and if that trend continues, a considerably bigger drop from here), the euro is at its strongest since January 2015 – to Draghi’s dismay – as no matter what the ‘economies’ either side of the Atlantic do, the trend remains your friend… for now. The big question, as former fund manager Richard Breslow notes is “So where do we go from here? Or, more properly, what can we use for signs?”
Via Bloomberg,
Do you think the euro goes home every night and is serenaded with a gusty version of “For He’s a Jolly Good Fellow”? Given how it’s been trading, it wouldn’t be a surprise or undeserved. There have been impulsive days higher and moments it looked under stress, yet ended up holding support. And not just against the beleaguered dollar but a virtual pantheon of other currency crosses deemed to measure its relative strength. It seems to be an appropriate song to mark the achievement because it too is shared by many countries not always on the same page.

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

Non-cycle Auto Paralysis

In December 2015, automakers were still riding high. Auto sales that year were to be another record, both in terms of units as well as dollars. Americans had spent about $437 billion on new vehicles in those twelve months, up from $407 billion the year before. Though there were notable disturbances throughout especially the second half of 2015, that December more economists and therefore carmaker projections were focused on the Federal Reserve.
John Humphrey, Senior VP of the Global Automotive Practice at JD Power, assured his industry audience that the first rate hike in a decade ‘should have a minimal impact on new-vehicle sales.’ Consumer surveys about monetary policy were encouraging for 2016.
There is the risk of a knee-jerk reaction from consumers to big economic news, leading them to delay buying, but the survey suggests it’s a very small proportion of shoppers who are concerned about rates, particularly at this low level. In other words, we’re not expecting much of a negative impact.
The big economic news in reality had little to do with the Federal Reserve apart from why the central bank hesitated so much in 2015 and again in 2016; and why it doesn’t think it will ever get to normalize monetary policy at all. There was already at that time a sizable downturn, a near-recession even, that economists just missed because the Fed was ready to ‘raise rates.’ Downturn and less ‘accommodation’ just don’t go together in the Economics textbook.

This post was published at Wall Street Examiner on August 2, 2017.

“Risk Of Meaningful Decline”: The TBAC’s Disturbing Normalization Slides

As part of the Treasury’s Q3 refunding announcement, which as discussed earlier sent 30Y yields to session lows after it failed to either boost upcoming debt issuance or mention ultra-long dated bonds, the Treasury Borrowing Advisory Committee or TBAC, a select group of bankers from Wall Street’s biggest firms tasked with providing periodic guidance to the Treasury, released its latest presentation, whose topic this quarter was “Normalization of SOMA Portfolio“, or a breakdown of i) how Wall Street expects the Fed’s balance sheet reduction will play out from a chronological and structural basis, ii) how treasury issuance will be impacted as a result, and most importantly, iii) the expected impacts on markets.
The full agenda was as follows:
1. Expectations for balance sheet normalization
When will Fed start phasing out Treasury holdings? What will be the size of Treasury holdings once the Fed balance sheet is normalized? 2. How will the Fed distribute eventual Treasury purchases across maturities?
Expectations for resulting Treasury issuance How large will Treasury’s financing needs be? When should Treasury start increasing auction sizes? What will be the impact on auction stop-out rates? What is the recommended distribution across tenors for higher financing needs?

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

It’s Not The Stock Market Bubble You Need To Worry About It’s The Everything Bubble – Episode 1347a

The following video was published by X22Report on Aug 2, 2017
European banking system is getting worse and the central bankers are preparing for a collapse of the banking system. Core Logic is reporting the housing is overvalued, it is exactly what we saw in the 2008 crisis. Manufacturing last another 4000 jobs. Greenspan is worrying that its not the stock market bubble everyone should be worried about it is the bond bubble. Trump is playing the game, the corporate media and Fed has been pushing the idea that the market is the indicator for the economy and if it goes higher it means everything is going well. He will use this to his advantage when the system crashes

Crashing Auto Sales Reflect Onset Of Debt Armageddon

July auto sales was a blood-bath for U. S auto makers. The SAAR (Seasonally ManipulatedAdjusted Annualized Rate) metric – aka ‘statistical vomit’ – presented a slight increase for July over June (16.7 SAAR vs 16.5 SAAR). But the statisticians can’t hide the truth. GM’s total sales plunged 15% YoY vs an 8% decline expected. Ford’s sales were down 7.4% vs an expected 5.5% drop. Chrysler’s sales dropped 10.5% vs. -6.1% expected. In aggregate, including foreign-manufactured vehicles, sales were down 7% YoY.
Note: These numbers are compiled by Automotive News based on actual monthly sales reported by manufactures. Also please note: A ‘sale’ is recorded when the vehicle is shipped to the dealer. It does not reflect an economic transaction between a dealer and an end-user. As Automotive News reports: ‘[July was] the weakest showing yet in a year that is on tract to generate the industry’s first decline in volume since the 2008-2009 market collapse.’
The domestics blamed the sharp decline in sales on fleet sales. But GM’s retail sales volume plunged 14.4% vs its overall vehicle cliff-dive of 15% And so what? When the Obama Government, after it took over GM, and the rental agencies were loading up on new vehicles, the automakers never specifically identified fleet sales as a driver of sales.

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

How to Prepare for a Stock Market Crash in 4 Simple Steps

Smart investors always have a plan to prepare for a stock market crash. In fact, stock market crashes only devastating because most investors are rarely prepared for a major pullback.
Plus, the timing of stock market crashes is impossible to predict with certainty…
The stock market crash of 1929 wiped out 86% of the value of the Dow in just three years. But before the crash, the Dow had gained over 300% during the 1920s and economists were predicting that stocks could only rise. Famed economist Irving Fisher claimed stocks had reached a ‘permanently high plateau’ in 1929, just over a month before the crash.
Investors were similarly caught off guard in 2000 and 2008. The dot-com bubble popped in 2000, leading to a 14% drop in the Dow in just over a month and a 36% decrease before it began recovering. The Dow lost half its value during the 2008 stock market crash.

This post was published at Wall Street Examiner on August 2, 2017.

30Y Yields Slide After Treasury Refunding Does Not Mention Ultra-Longs; Can Fund Through September

2017 9:04 AM
Contrary to expectations that the Treasuey may address the growing financing need (with implications for curve) by announcing a higher than expected amount of near-term Treasury issuance, the US Treasury announced a $62.0 billion refunding package this morning, in line with expectations and unchanged from recent Refundings. The Refunding auctions will consist of a $24.0 billion 3-year note, a $23.0 billion 10-year note and a $15.0 billion 30-year bond.
The Refunding auctions, which will be held next Tuesday, Wednesday and Thursday, will raise a combined $14.7 billion after accounting for maturing issues excluding Fed holdings, based on SMRA calculations. The 3-year note auction will pay down $3.0 billion when the auctions settle, the 10-year note auction will raise $7.5 billion, and the 30-year bond auction will raise $10.2 billion.

This post was published at Zero Hedge on Aug 2,.

“We’re Back To Square One” – Saudi Bloc Reinstates Demands As Qatar Economy Collapses

The four countries leading the boycott against Qatar are going back to their list of 13 demands for Doha to meet before talks can start, essentially reverting the Arab Gulf spat back to square one.
At the same time, economic data for June shows that Qatar’s imports plummeted due to the blockade imposed by most of its neighbors, and foreign deposits at Qatari banks dropped to their lowest in nearly two years.
However, Qatar has a huge sovereign wealth fund, and boasts considerable foreign exchange reserves. Although Qatar’s non-oil economy is expected to see some pressure due to the fact that it has to use alternative trade routes, the world’s largest LNG exporter has not seen its LNG trade disrupted yet, which is precisely why analysts do not see the blockade as potentially crippling Qatar’s economy. Rather, they see it as merely straining economic growth.

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

Machine Mania in the Marketplace: How Computers Came to Own the World

With 60% of stocks now being traded by bots that fake each other out in order to create buying opportunities, stock exchanges have lost their connection to the reason markets are created in the first place. The exchanges no longer exist as places for people to buy and sell ownership in a corporation. They exist simply as the neural junctions of a conglomerated machine that plays tricks on itself, and your sole goal is no longer to invest, but to put money in the slot machine that is the quickest trickster.
Many of the people who think of themselves as investors see this pretend investing as being almost risk free now that computers and central banks are running the racket. They put their money in the machines, and machines follow the central banks’ lead, purring along at historically low levels of market volatility as the machines run their automated tasks. A minority of market experts see a market that is building cataclysmic risks as it accumulates fake pricing that has nothing to do with intrinsic value and as the component machines keep getting reprogrammed to do a better, faster job of faking out the other machines.
[Brad] Katsuyama, whose firm and company were made famous by Michael Lewis’s 2014 book, Flash Boys: A Wall Street Revolt, says computers running complex software conducting trades at lightening speeds [are] a ‘dangerous’ threat to the stability of the market, juicing volumes and sparking so-called flash crashes, where assets swing rapidly in value in a matter of seconds. ‘I think the biggest risk in the market is that 50-, 60-plus percent of the volume is being executed by computer programs who have no idea what companies actually do. They’re just reacting to data. And I think it’s dangerous.’ (MarketWatch)

This post was published at GoldSeek on 2 August 2017.

Chile Silver Production Plummets

Silver production in Chile plummeted 32% in May.
This precipitous drop in output in the world’s fifth largest silver producing country is part of a broader trend of falling production and tightening silver supply.
According to reporting by Seeking Alpha citing Chile’s Ministry of Mines, the country’s silver production in May fell to 97.1 tons compared to 141.9 tons in May 2016.
Chile, a country which produced a record high of 54 million ounces of silver in 2014, is forecast to see its mine supply decline to less than 40 million ounces in 2017.’
According to preliminary production figures released by the ministry, Chile produced 485 tons of silver from Jan-May 2017. That compares with 655 tons of silver during the same period last year – a 170 ton (26%) decline.

This post was published at Schiffgold on AUGUST 2, 2017.