Global Equity Markets Mostly Weaker Despite Record High In Dow Wednesday

This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
(Kitco News) – World stock markets were mostly weaker overnight, in the wake of the Dow Jones Industrial Average setting a record high above 22,000 on Wednesday.
U. S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.
Gold prices are solidly lower in pre-U. S.-session trading, on profit taking from recent gains and amid a quieter geopolitical front this week.
In a worrisome report overnight, the Paris-based OECD think tank said global inflation in the 20 largest countries has dropped to its lowest level in eight years. The OECD said consumer prices in the group of countries rose at a 2.0 rate in June, from a year earlier. This news falls into the camp of the monetary policy doves who do not want the major central banks of the world to tighten their monetary policies. The OECD June reading on consumer inflation was up 2.2%.

This post was published at Wall Street Examiner by Jim Wyckoff ‘ August 3, 2017.

US Orders All Passport Holders Out Of North Korea After September 1

Having issued an indirect travel alert “urging” US national to “depart immediately” from North Korea two weeks ago, the US State Department has escalated their perspective on US citizens’ travel to, in, or through North Korea dramatically by declaring all U. S. passports invalid for travel, implicitly ordering all Americans out of North Korea from September 1st 2017.

ACTION: Notice of passport travel restriction.
SUMMARY:
The Department of State is declaring all U. S. passports invalid for travel to the Democratic People’s Republic of Korea (North Korea) unless the travel meets certain criteria.
DATES:
The travel restriction is in effect on September 1, 2017.
FOR FURTHER INFORMATION CONTACT:
Anita Mody, Bureau of Consular Affairs, Passport Services, Office of Legal Affairs, 202-485-6500.
SUPPLEMENTARY INFORMATION:
The Department of State has determined that the serious risk to United States nationals of arrest and long-term detention represents imminent danger to the physical safety of United States nationals traveling to and within the Democratic People’s Republic of Korea (DPRK), within the meaning of 22 CFR 51.63(a)(3). Therefore, pursuant to the authority of 22 U. S. C. 211a and Executive Order 11295 (31 FR 10603), and in accordance with 22 CFR 51.63(a)(3), all United States passports are declared invalid for travel to, in, or through the DPRK unless specially validated for such travel, as specified at 22 CFR 51.64. The restriction on travel to the DPRK shall be effective 30 days after publication of this Notice, and shall remain in effect for one year unless extended or sooner revoked by the Secretary of State.

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

German Diesel Summit Moved for Security Reasons

The German Diesel Summit was moved because of protests in the Federal Ministry of the Interior from the Ministry of Transport for security reasons. Greenpeace’s environmental activists were present with a huge banner that read: ‘Welcome to Fort NOx’ they put on the roof of the building. The Summit was moved effective to a backroom setup with closed doors. What has come out is that diesel causes more nitrogen oxides than gasoline, yet the emission of the carbon dioxide is significantly lower. There is clearly a major threat to the German auto industry. A CDU party politician appeared on the TV at ZDF shortly before the Berlin Diesel Summit stating that the manufacturers had to pay for their vehicles to meet the stipulated pollutant limit values. Of course, that is a court order rather than political will. But the problem is much more comprehensive. The meeting of politics and corporations is trying to save the diesel only because diesel produces less CO2. Of course, if the whole Global Warming argument is wrong and CO2 does not alter the climate whereas diesel buses use to make the air unbreathable in London, we have a lot of fake research leading to even more economic decision making.
Armstrong Economics

This post was published at Armstrong Economics on Aug 3, 2017.

“It Won’t Be Long Now” – David Stockman Warns “Amazon Is The New Tech Crash”

Authored by David Stockman via The Daily Reckoning,
It won’t be long now. During the last 31 months the stock market mania has rapidly narrowed to just a handful of shooting stars.
At the forefront has been Amazon.com, Inc., which saw its stock price double from $285 per share in January 2015 to $575 by October of that year. It then doubled again to about $1,000 in the 21 months since.
By contrast, much of the stock market has remained in flat-earth land. For instance, those sections of the stock market that are tethered to the floundering real world economy have posted flat-lining earnings, or even sharp declines, as in the case of oil and gas.
Needless to say, the drastic market narrowing of the last 30 months has been accompanied by soaring price/earnings (PE) multiples among the handful of big winners. In the case of the so-called FAANGs + M (Facebook, Apple, Amazon, Netflix, Google and Microsoft), the group’s weighted average PE multiple has increased by some 50%.

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

The Fed Gave Wall Street a Bomb, and the Taxpayers are Paying Ransom

When Janet Yellen testified before the House Financial Services Committee last month, she faced grilling on a topic that hasn’t received enough mainstream attention: the interest being paid on excess reserves at the Fed. While the topic has come up occasionally since the program began in 2008, it is worth noting that Yellen was pushed by both Jeb Hensarling, the committee chairman, and Andy Barr, the chairman of the Monetary Policy Subcommittee. While ending this taxpayer subsidy to Wall Street is important, it’s also important to understand the dangers posed by allowing these excess reserves to be lent out of major financial institutions.

This post was published at Ludwig von Mises Institute on Aug 2, 2017.

Raising the Debt Ceiling Means Jacking Up Future Inflation

The dramatic failure of the U. S. Senate’s last-ditch Obamacare repeal effort leaves Republicans so far without a major legislative win since Donald Trump took office. No healthcare reform. No tax reform. No monetary reform. No budgetary reform.
The more things change in Washington… the more they stay the same.
Despite an unconventional outsider in the White House, it’s business as usual for entrenched incumbents of both parties. The next major order of business for the bipartisan establishment is to raise the debt ceiling above $20 trillion.
Since March, the Treasury Department has been relying on ‘extraordinary measures’ to pay the government’s bills without breaching the statutory debt limit.
By October, according to Treasury officials, the government could begin defaulting on debt if Congress doesn’t approve additional borrowing authority.
Treasury Secretary Steven Mnuchin wants Congress to pass a ‘clean’ debt limit increase. That would entail just signing off on more debt without putting any restraints whatsoever on government spending.
Fiscal conservatives hope to tie the debt ceiling hike to at least some budgetary reforms. But even relatively minor spending concessions will be difficult to obtain from the bipartisan establishment.

This post was published at GoldSilverWorlds on August 2, 2017.

IMF admits disastrous love affair with the euro and apologises for the immolation of Greece

The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory.
This is the lacerating verdict of the IMF’s top watchdog on the fund’s tangled political role in the eurozone debt crisis, the most damaging episode in the history of the Bretton Woods institutions.
It describes a ‘culture of complacency’, prone to ‘superficial and mechanistic’ analysis, and traces a shocking breakdown in the governance of the IMF, leaving it unclear who is ultimately in charge of this extremely powerful organisation.
The report by the IMF’s Independent Evaluation Office (IEO) goes above the head of the managing director, Christine Lagarde. It answers solely to the board of executive directors, and those from Asia and Latin America are clearly incensed at the way European Union insiders used the fund to rescue their own rich currency union and banking system.
The three main bailouts for Greece, Portugal and Ireland were unprecedented in scale and character. The trio were each allowed to borrow over 2,000pc of their allocated quota – more than three times the normal limit – and accounted for 80pc of all lending by the fund between 2011 and 2014.

This post was published at The Telegraph

Greenspan Sees No Stock Excess, Warns of Bond Market Bubble

Equity bears hunting for excess in the stock market might be better off worrying about bond prices, Alan Greenspan says. That’s where the actual bubble is, and when it pops, it’ll be bad for everyone.
‘By any measure, real long-term interest rates are much too low and therefore unsustainable,’ the former Federal Reserve chairman, 91, said in an interview. ‘When they move higher they are likely to move reasonably fast. We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace.’
While the consensus of Wall Street forecasters is still for low rates to persist, Greenspan isn’t alone in warning they will break higher quickly as the era of global central-bank monetary accommodation ends. Deutsche Bank AG’s Binky Chadha says real Treasury yields sit far below where actual growth levels suggest they should be. Tom Porcelli, chief U.S. economist at RBC Capital Markets, says it’s only a matter of time before inflationary pressures hit the bond market.
‘The real problem is that when the bond-market bubble collapses, long-term interest rates will rise,’ Greenspan said. ‘We are moving into a different phase of the economy — to a stagflation not seen since the 1970s. That is not good for asset prices.’

This post was published at bloomberg

Why We’re So Risk-Averse: “We Can’t Take That Chance”

If our faith in the future and our resilience is near-zero, then we can’t take any chances.
You’ve probably noticed how risk-averse Hollywood has become: the big summer movies are all extensions of existing franchises–mixing up the superheroes in new combinations, or remaking hit films from the past–all safe bets. The trend to “playing it safe” is not limited to Hollywood:–we see risk aversion in every sphere of the economy and society.
The unfailingly stimulating Ben Hunt of the Epsilon Theory newsletter has been highlighting the connection between super-easy-money financial policy and the avoidance of risk that’s so apparent in Corporate America: rather than take a chance that an investment in new technology, worker productivity etc. will increase sales and profit margins, corporations are borrowing super-cheap money and using this “nearly free money” to buy back their own shares in the stock market. ( Gradually and Then Suddenly).

This post was published at Charles Hugh Smith on WEDNESDAY, AUGUST 02, 2017.

Here’s The Most Alarming Sign Yet That Manhattan Real Estate Is Heading For A Crash

The Chinese government’s latest crackdown on capital outflows and corporate leverage is intensifying, and that’s bad news for Manhattan’s property market.
According to a report by Morgan Stanley cited by Bloomberg, new restrictions being imposed on the most acquisitive Chinese companies will likely lead to an 84% drop in Chinese overseas property investment this year, and a further 18 percent drop in 2018.
The markets most vulnerable to this slowdown, according to MS, are the US, UK, Hong Kong and Australia, with commercial properties the most vulnerable.
Manhattan commercial real-estate prices could fall sharply.
‘Manhattan is a particular worry, with about 30 percent of transactions in the borough that’s home to Wall Street involving Chinese parties in 2017. In Australia, China is the largest foreign real estate investor, accounting for as much as 25 percent of office property transactions in the last two to three years, according to Morgan Stanley.’ As we reported on Tuesday, the Chinese government is pushing Chinse insurance company Anbang – the company that was in talks with Jared Kushner to buy his company’s stake in 666 Fifth Ave. – to liquidate most of its overseas holdings and repatriate the proceeds of the sale. The company, whose chairman was detained by Chinese authorities in June, responded by saying it has no plans to comply…but we think the Communist Party will find a way to convince the company’s executives that deleveraging is in their best interest.

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

It’s 7pm In New York, Do You Know Where Your Precious Metals Manipulators Are?

It appears the machines have found a new pattern to follow…
Last night we pointed out the ‘odd’ – in the sense that nothing amazes us anymore, but still, behavior in precious metals futures markets.
At 1906ET last night, Silver futures flash-smashed higher, running the day’s high-stops, before plunging back to earth…

Gold futures also followed suit tonight…

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