White House Denies Cohn Report, Says Considering “At Least Six” For Fed Chair

Denying yesterday’s WSJ report that Trump has “fired” Gary Cohn from his future role as Fed chair due to his strong opposition to Trump’s handling of the Charlotteville tragedy, Bloomberg reports that the White House is considering “at least a half-dozen candidates to be the next head of the Federal Reserve, including economists, executives with banking experience and other business people”
The breadth of the search goes against the narrative that has taken hold in Washington and on Wall Street that the Fed chair nomination is a two-horse race between National Economic Council Director Gary Cohn and current Fed Chair Janet Yellen, whose term expires in February. Actually, according to many, including online betting markets, the race has – for a while – been between mostly Yellen and Kevin Warsh, who as of today are both neck and neck in their online odds of being nominated Fed chair on February 4.

This post was published at Zero Hedge on Sep 7, 2017.

Why the War Party Loves to Call Foreign Leaders Insane

When the US government decides it doesn’t like a foreign regime, it’s become something of a tradition for US politicians – with the help of a compliant media – to portray those leaders as irrational, unhinged, or even downright insane.
This was true of Saddam Hussein, and it was true of Slobodan Milosevic. In both cases, a foreign head of state was condemned as irrational in order to help justify US invasions and bombings of foreign nations that were no threat to the United States.
The US narrative usually goes something like this – as described by Ronnie Lipschutz:
Why would so-called rogues – and these are the only countries that, according to Washington, threaten US forces, allies, or interests – choose to [threaten the US]? No rational reason can be given, and so irrational ones are offered instead. They hate us, but for no reason since we have no designs on them. They desire vengeance, but for no reason since we have never offended them. They wish to injure us, for for no reason, since they have only been injured through their interference with our pusuit of order.
This narrative helps to reinforce the credulous American public’s naive acceptance of the idea that the US government is an untrammeled force for good in the international sphere, and that any opposition to the US must be based on irrational, evil motives.1 If any other head of state is angry with the United States, it’s simply because he absurdly desires world conquest, or to massacre innocents. Or he may even be insane.

This post was published at Ludwig von Mises Institute on Sept 07, 2017.

How the Dow Jones Today Will Respond to Trump’s Debt Ceiling Deal with Democrats

The Dow Jones today is starting the day flat after U. S. President Donald Trump shocked Washington by making a surprise deal with Congressional Democrats on raising the debt ceiling. Dow Jones futures are down five points in premarket hours as Trump’s economic agenda is now in question and Florida braces for Hurricane Irma.
Here are the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:
Index Previous Close Point Change Percentage Change Dow Jones 21,807.64 54.33 +0.25% S&P 500 2,465.54 7.69 +0.31% Nasdaq 6,393.31 17.74 +0.28%

This post was published at Wall Street Examiner by Garrett Baldwin ‘ September 7, 2017.

Senate Passes Debt Ceiling/Govt Funding Deal: Here’s What Happens Next

Moments ago the Senat passed the debt ceiling/government funding/hurricane aid deal, cobbled between Trump and the Democrats to howls of protest from the GOP, in an 80-17 vote.
As a result, the debt limit will be suspended until December 8 and and fund govt through Dec. 8; it also provides $15.25b in disaster funding for hurricane assistance. A vote in the House is expected tomorrow, where the bill will also pass: it will be interesting which Republicans vote against the Trump/Democratic proposal.
As discussed yesterday and this morning, the deal has faced widespread opposition in the GOP, particularly among conservatives. Though Republicans support helping communities devastated by Hurricane Harvey, many are loath to raise the debt ceiling or fund the government without spending or entitlement reforms. The Republican Study Committee (RSC), the largest GOP caucus in the House with more than 150 members, came out against the deal on Thursday, calling it irresponsible. The RSC’s opposition means the deal might pass the House mainly with Democratic votes – an unusual dynamic with a Republican in the White House.
Meanwhile in the Senate, while few Republican senators were happy with the deal, they thought Trump was within his rights to make it. ‘I think Senator McConnell said it’s the president’s prerogative to cut a deal if he wants to. And he apparently thought that was advantageous,’ said Sen. John Cornyn (R-Texas), the No. 2 Senate Republican. But Cornyn added he would have preferred to have a longer extension noting that ‘lifting the debt ceiling is always unpleasant and usually we like to have some offsets or reforms.’

This post was published at Zero Hedge on Sep 7, 2017.

Feds File Suit in One of the Largest Precious Metal Fraud Cases in History

The US Commodity Futures Trading Commission (CFTC) has filed a civil lawsuit against California-based gold dealer Monex Deposit Co. in what officials call one of the largest precious metals fraud cases in the history of the commission.
The CFTC alleges Monex defrauded thousands of retail customers nationwide out of hundreds of millions of dollars, while executing illegal, off-exchange, leveraged commodity transactions.

As alleged, the Defendants defrauded thousands of retail customers – many of whom are elderly – out of hundreds of millions of dollars as part of a multi-year scheme. Fraud in our markets, like that alleged here, undermines confidence, reduces transparency, and harms competition. As this investigation shows, we’ll work tirelessly to detect and prosecute fraud of the sort that’s alleged here.’
The allegations revolve around leveraged trading in gold, silver, platinum and palladium through the company’s ‘Atlas’ program. Leveraged trading simply means the investor borrows money in order to invest in precious metals. If the investment pans out, the metal will increase in value enough to repay the loan, cover commissions and interest, and generate a positive return.

This post was published at Schiffgold on SEPTEMBER 7, 2017.

Unit Labor Costs Decline YoY To -0.2% As U-3 Unemployment Hits 4.4% (Phillip’s Milk of Magnesia Curve)

Today, US Unit Labor Costs Nonfarm Business Sector QoQ % SAAR was reported for Q2 FINAL. It declined 0.2% from 0.6% in Q1.
Aren’t we in a supposed tight labor market when wages (and labor costs) should be rising? That is the prediction of The Phillips Curve. But somehow it isn’t happening.
Unit labor costs YoY fell to -0.20% while U-3 unemployment is at 4.4%. This is the ‘Phillips Milk of Magnesia Curve’ because it is giving Fed Chair Janet Yellen and my friend Raphael Bostic (Fed of Atlanta President and CEO) acid indigestion.

This post was published at Wall Street Examiner on September 7, 2017.

One Trader Warns This Weekend’s Potential Chaos Is “Virtually Impossible To Handicap”

With VIX hovering below 12 still – despite a surge in realized volatility to its highest levels since the election – investors seem very confident that no matter what happens this weekend (or next), everything will be awesome. As former fund manager Richard Breslow warns however, “for traders, the two items with the biggest potential lasting effects are virtually impossible to handicap…And to make matters worse, we won’t know their punch-line until the weekend: when markets are closed for business.”

This post was published at Zero Hedge on Sep 7, 2017.


GOLD: $1345.50 UP $4.35
Silver: $18.04 UP 18 CENT(S)
Closing access prices:
Gold $1349.50
silver: $18.12
Premium of Shanghai 2nd fix/NY:$12.91
LONDON FIRST GOLD FIX: 5:30 am est $1340.45
For comex gold:
For silver:
2,200,000 OZ/
Total number of notices filed so far this month: 3,518 for 17,590,000 oz

This post was published at Harvey Organ Blog on September 7, 2017.

Powerful Republican Group, With 155 Members, Opposes Trump Debt Ceiling Deal

Having become best friends with top Congressional Democrats overnight, following yesterday’s stunning reversal in which President Trump unexpectedly struck a deal with Schumer and Pelosi in which he effectively handed control over the DACA process to Democrats in exchange for a 3 month extension on the debt ceiling as well as avoiding a government shutdown, Trump is now finding that it is Republicans who are engaged in open warfare with the president, and as Axios reports, the leadership of the powerful Republican Study Committee has come out against President Trump’s debt ceiling deal with Nancy Pelosi and Chuck Schumer.
For Trump, this is the harshest message of disagreement yet from the Republican Study Committee, which has 155 members, and one which “the Republican leadership – which strenuously opposed Trump’s surprise deal – fully anticipated.”

This post was published at Zero Hedge on Sep 7, 2017.

Western Australia Slaps Tax Increase on Gold Miners; Move Could Impact Production

Officials in Western Australia have announced a plan to raise the gold royalty payments the state levies on gold miners by 1.25%, a move that could depress gold output in the world’s second-largest gold producing country.
Western Australia Premier Mark McGowan said the gold royalty increase from 2.5% to 3.75% per ounce would raise an additional $422 million (US) over four years and will help repair the state’s lagging finances. The higher tax will apply as long as the spot price for gold remains above $1,200 (AUS) per ounce. According to a Reuters report, the last time the price of gold dipped below that level was November 2009.
The state’s 2017 budget showed a $2.44 billion deficit.
Western Australia covers the entire western third of the country and accounts for about 80% of the nation’s gold output, according to Reuters. Australia ranks second in the world in gold production, only behind China. The country produced about 287 tons of gold in 2016.

This post was published at Schiffgold on SEPTEMBER 7, 2017.

American Society Of Civil Engineers Warns Florida Could See Catastrophic Flooding

Hurricane Irma is one of the most powerful Atlantic Cat-5 hurricanes ever, barreling towards Florida with 175mph winds moving West North West at 16mph. The National Hurricane Center is now forecasting Irma will make Florida landfall as a ‘major hurricane’ (wind speed greater than 110mph) on Sunday morning at 8am.
Infrastructure in Florida is the backbone of the economy. The American Society of Civil Engineers released Florida’s 2016 Report Card with a rating of ‘C’. That means the overall health of the state’s infrastructure is ‘mediocre.’
Here is the concerning part. Coastal areas and stormwater systems are in very poor condition – under preforming with ‘D’ ratings. With Irma’s potential impact on Sunday this could be catastrophic for flood zones when considering the intensity of the storm. Furthermore the Florida chapter of the ASCA warned and that only 25% of stormwater drainage systems in Florida were adequately prepared to meet “urgent needs” for capturing excess water, while the erosion of Florida’s beaches could leave the coast without protection against storm damage.

This post was published at Zero Hedge on Sep 7, 2017.

Consumer Credit & The American Conundrum

What to do? This is not as an innocuous question as one might think. For most American families, who have to balance their living standards to their income, they face this conundrum each and every month. Today, more than ever, the walk to the end of the driveway has become a dreaded thing as bills loom large in the dark crevices of the mailbox.
What to do?
In a continuation of last week’s discussion on consumer debt, the conundrum exists because there is not enough money to cover the costs of the current living standard.
‘The average family of four have few choices available to them as discretionary spending becomes problematic for the bottom 80% of the population whose wage growth hasn’t kept up with the standard of living.’

This post was published at Zero Hedge on Sep 7, 2017.

Restoration Hardware Shorts Annihilated After Company Announces 50% Of Stock Repurchased

Restoration Hardware shorts had it too good for too long.
After reporting abysmal numbers in Q3 2016, Q1 2016, Q4 2015 – when the company went so far to blame its own crashing stock price for poor earnings – RH stock more than doubled after its better than expected Q4 2016 numbers as long-suffering investors (not to mentioned squeezed shorts) assumed that that was finally it: that the company has finally turned the corner. It all came crashing again last quarter, when as we reported “Restoration Hardware Imploded After Terrible Guidance, Bizarre Disclosures.”
Sadly for the shorts, who doubled down on their efforts to slam the stock, it all ended last night with a bank, not a whimper, when the company reported better than expected Q3 ESP and revenue and lifted its sales and profit forecasts for the year. On the subsequent analyst call, CEO Gary Friedman said he expects that RH, which has faced concerns about its high debt level, would generate about $400 million in free cash flow in 2017, once again reverting to the company’s infamous optimistic posture. That ‘should address any concerns about our balance sheet and debt ratios,’ he said.
More importantly, the company also unveiled a full blown war with shorts, when in its press release it announced that since the beginning of the year, the company had repurchased an unprecedented 49.5% of its shares outstanding, spending a record $1 billlion on buybacks in the 6 months ended July 2017. To wit:

This post was published at Zero Hedge on Sep 7, 2017.

Global Stock Prices Fueled by Ugly Earnings

Hype works, until it doesn’t.
In theory, stock markets surge because earnings are rising or are expected to rise. But the astounding thing in this eight-year bull market is the combination of how far stocks have surged since 2011 and how lousy earnings have been – globally!
I’ve been pointing this out for US equities, but this is a global thing, with global implications, and of global magnitude, and on that level, it’s even grander and more astounding.
Global stocks, as measured by the MSCI AC, which tracks equity returns in 23 developed and 24 emerging markets, has soared over 11% year-to-date and is up 32% since pre-Financial-Crisis peak-year 2007. Some components within it:
The MSCI US, reflecting US equities, is up 11.5% year-to-date and 75% since 2007. The MSCI EM for Emerging Markets surged 23% this year and is up 45% since 2007. Even the MSCI EU for European equities is above its level in 2007.

This post was published at Wolf Street on Sep 7, 2017.

Copper, Oil, Gold and US Stocks: Big Picture Status

Sometimes I like to trot these lumbering monthlies out so we can quiet everything down and see where various markets are slowly heading.
First of all, as I go down with my ‘strengthening US dollar’ ship*, I also mal-projected copper’s upside. I’d felt that $3/lb. would cap Doctor Copper because it is very clear lateral resistance at a handy 38% Fib retrace.**
* Well, insofar as I own UUP and EUO, it has not been fruitful; but that is the whole point because the positions are just a partial hedge against what has been a very successful long deployment in items rising against the declining USD. Still not thinking of dropping long-USD positioning, and I remember how long it took to see my bullish Treasury bond view get proven out against the herds earlier this year.

** Insert here the usual stuff about targets and resistance points being objectives, not stop signs.
Crude Oil sported a bullish looking pattern last year but has faded this year. The pattern is still viable. I am not currently an oil bull, but if at any time you see WTIC go above 55, plan on 75.

This post was published at GoldSeek on 7 September 2017.

AAPL Stock Slips After Reports Of New iPhone “Plagued By Production Glitches”

AAPL stock is sliding this afternoon as The Wall Street Journal reports the new iPhone is said to have seen “production glitches.”
Apple Inc.’s new iPhone, which is expected to be unveiled Tuesday, was plagued by production glitches early in the manufacturing process this summer, according to people familiar with the situation, which could result in extended supply shortfalls and shipping delays when customers start ordering the device later this month. New iPhones are typically in short supply when first released. But if shortfalls of the new phone extend beyond the initial sales period, which is expected to begin September 22, they could weaken analysts’ and investors’ projections for sales in the crucial holiday period.

This post was published at Zero Hedge on Sep 7, 2017.

Mutiny “For” The Bounty?

China recently announced they will trade oil for yuan ‘backed’ by gold. The story has gotten some press (none of it mainstream mind you), and many have questions as to what it really means. While quite complicated as a whole, when you break this down into pieces I believe it is a quite simple and logical end to Bretton Woods.
For a background, China has had an exchange open for about a year where gold can be purchased with yuan, though the volumes so far have been miniscule to this point. China has also been all over the world inking trade deals (in yuan) and investing in all sorts of resources from oil to gold to grains, they have made no secret about this. With the most recent example here. They have trade arrangements and treaties with Russia, Iran and many other non Western nations. They have also ‘courted’ many Western nations privately (remember their meeting with the King of Saudi Arabia?) and actually lured many with their ‘Silk Road’ plans via the AIIB which was huge news last year (but nearly forgotten by Americans at this point?). We also know China has been a huge importer of gold for the last 4-5 years and done so publicly via Shanghai receipts and deliveries.
So what exactly does ‘oil for yuan’ mean? In my opinion, China is basically leading a ‘mutiny FOR the bounty’ (we’ll explain this shortly). The only things holding the dollar up from outright death for many years has been the oil trade (and other trade commerce) between nations and settled in dollars. Anyone wanting to buy oil had to first buy dollars in order to pay for the trade. Anyone getting out of step and suggesting they would accept currency other than dollars was dealt with swiftly and harshly (think Saddam and Mohamar). In other words, the U. S. military ‘enforced’ the deal Henry Kissinger made with the Middle East (lead by Saudi Arabia) where ALL oil was settled in dollars. International trade settlement alone supported the dollar after the Nixon administration defaulted on its promise to exchange one ounce of gold for $35.

This post was published at JSMineSet on September 6th, 2017.

“We’ve Never Seen Anything Like This”: Repo Market Snaps As 10Y Suffers “Epic Fail”

It’s been a while since we saw any major dislocations in the Treasury repo market, i.e., collateral shortages as a result of surging TSY shorts, for the simple reason that after the first quarter when everyone was certain that Trump reflation trade would kick in but didn’t, the record number of built up spec net shorts got trampled by the rising price, rapidly shifting over to record longs.
However, the peace and quiet quiet in the repo market was shattered this week, when almost overnight the 10Y went from “normal” in repo, at a rate of 0.50% on Friday, to a special -2.00% on Monday, and then a Super Special, if not record, “fails rate” of -3.50% this morning.
Commenting on this dramatic move in 10Y repo rates, Stone McCarthy’s Alan Chernoff, in a note titled “Epic Fail”, writes that “the 10-year note has been below the fails rate and shows no signs of moving! It opened at -350 basis points, and though pressure has eased off of it slightly, it is STILL below the fails rate at -300 basis points.”

This post was published at Zero Hedge on Sep 7, 2017.