Yield Curve Crushed To 10 Year Lows As Stocks Signal Trump-Tax-Plan Won’t Pass

The bond market’s reaction to the Trump Tax Plan…
Bonds and Bullion were immediately bid and stocks and the dollar sank on the Trump Tax plan release – but as Europe closed, gold was ‘managed’ down, leaving bonds outperforming on the day… And stocks back to unchanged as the market realized there is little chance of this bill passing… (So Bonds price out a little more growth hope and stocks flat on status quo and Powell)

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


GOLD: $1277.55 UP $1.55
Silver: $17.12 down 6 cents
Closing access prices:
Gold $1276.80
silver: $17.12
PREMIUM FIRST FIX: $19.50(premiums getting larger)
Premium of Shanghai 2nd fix/NY:$19.80 PREMIUMS GETTING LARGER)
LONDON FIRST GOLD FIX: 5:30 am est $1276.40
For comex gold:
For silver:
1,305,000 OZ/
Total number of notices filed so far this month: 828 for 4,140,000 oz
Bitcoin: $7243 bid /$7262 offer up $489.00 (MORNING)
BITCOIN CLOSING;$7027 BID:7047. OFFER UP $273.00

This post was published at Harvey Organ Blog on November 3, 2017.

Just Short The Robots

Just two weeks ago, we detailed the launch of a new A. I.-driven equity ETF whose human ‘manager’ claimed:
“EquBot AI Technology with Watson has the ability to mimic an army of equity research analysts working around the clock, 365 days a year, while removing human error and bias from the process.’ According to Chida Khatua, CEO and co-founder of EquBot LLC:
‘Machine learning is one of the most powerful applications of artificial intelligence. As powerful as many algorithms underlying expensive quantitative hedge funds and other vehicles might be, unless they’re also built with AI and machine learning baked right in, mistakes can be propagated and opportunities for outperformance can be missed.’ Neither of the founders is lacking in confidence when discussing the potential for the new ETF. From Business Wire:
‘With the launch of AIEQ, we’re not only bringing our new fund to market,’ said Art Amador, co-founder and COO of EquBot. ‘We believe we’re pioneering a whole new investment category; one that will soon have investors and advisors diversifying their portfolios among passive, active and AI approaches’
So, we know you are wondering…

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

Apple Soars To $900BN In Mkt Cap After Crushing Earnings And iPhone X Guidance

While Apple gets a freebie in the current (fourth fiscal) quarter, as it came just before the official release of the iPhone 8 and X, traders were still looking at overall trends and guidance from Tim Cook on what to expected from the all important holiday quarter. What they got was just what they requested, with Apple not only reporting a beat on the top and bottom line, including the first positive quarter in China in one and a half years, but also providing strong iPhone X guidance for a record holiday quarter, which promptly sent the stock price surging over 3% in the after hours, now just $100 billion away from $1 trillion in market cap.
Apple reported Q4 EPS and revenues of $2.07 and $52.6bn, both beating expectations of $1.87 and $50.7bn, even if gross margin was a small disappointment, printing at 37.9% vs 38.0% expected. Apple also reported Q4 iPhone sales of 46.7 million, also higher than the 46.1 million consensus estimate with 10.3 million iPads sold in the quarter, above the 9.3 million sold a quarter ago.
Far more important, however, was Apple’s forecast for the current, holiday quarter, in which Apple sees record revenue in the range of $84-$87Bn, higher than the consensus midpoint of 84.5%, on margins of 38.0-38.5%, vs est of 38.5%.
The full forecast in a nutshell:

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

Stocks and Precious Metals Charts – Winning…. – The Great Dictator

“Then, in the name of democracy, let us use that power – let us all unite. Let us fight for a new world, a decent world that will give men a chance to work, that will give youth a future and old age a security. By the promise of these things, brutes have risen to power. But they lie! They do not fulfill that promise. They never will!”
Charlie Chaplin, The Great Dictator
Stocks managed to rally back off their losses to close largely unchanged.
Gold and silver held relatively steady in price.
Trump named Jay Powell as the new Fed Chair today.
Tomorrow is the Non-Farm Payrolls report.

This post was published at Jesses Crossroads Cafe on 02 NOVEMBER 2017.

Moody’s: Taxation Shift Spells Trouble for Underfunded States

Moody’s Analytics recently conducted a series of stress tests on each state in the US and found that only 16 of the 50 have the funds they need to weather an economic downturn.
Financial Sense spoke with Dan White at Moody’s to discuss which states failed the test, lessons learned from the Great Recession, and why their analysis of state preparedness is a “best-case scenario” in the event of another recession.
Lessons of the Great Recession
One thing we learned from the last downturn in 2008 and 2009 was that it matters whether or not states are fiscally prepared for the next recession.
For one, unprepared states’ ability to recover was greatly impacted because they had to take more desperate measures, either by raising taxes or cutting spending to make up for the loss of economic activity.
‘That’s one of the reasons why the Great Recession was followed by the not-so-great recovery,’ White said.
Poor state preparation led to extraordinary fiscal action to balance budgets, and layoffs followed, with over 750,000 total in the public sector.
‘The reason those job losses were so severe was because states just weren’t prepared and didn’t have any reserves or way of buffering themselves,’ he said.

This post was published at FinancialSense on 11/02/2017.

Tesla’s Having The Worst Day Ever As GOP Tax Plan Calls For Axing Electric Car Credit

Tesla may be officially having the worst day ever. One day after announcing its worst quarter in history, in which it burned a record $1.4 billion in cash (which is about $15.5 million every single day, btw)…

…a couple of GOP Representatives had to come along and propose a tax bill that would eliminate a key component on Tesla’s business plan: taxpayer subsidies. As SF Gate notes, each electric vehicle purchased in the U. S. is currently eligible for a $7,500 tax credit…a credit that has long served to artificially prop up a business that would likely not exist but for the generosity of taxpayers.
Tesla Inc., General Motors Co. and other major carmakers pushing to boost U. S. electric car sales were dealt a blow by House Republicans who on Thursday proposed eliminating a $7,500 per vehicle tax credit that has helped stoke early demand for the still small segment of the U. S. auto market.

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

Silver News: Indians Buying Silver and New Technological Breakthroughs

Indians are buying silver and this could have a major impact on the world market for the white metal.
The Silver Institute covers this story, and highlights several other technological innovations involving silver, in its latest issue of Silver News. It also features an interview with ICE Benchmark Administration COO Matthew Glenville. His company recently began administering the silver benchmark and operating the auction underlying the London Bullion Market Association Silver Price.
India’s cultural affinity for silver underscores the country’s importance as a leading source of silver demand. To meet this need, India consumed 160.6 million ounces of silver in 2016, accounting for 16% of global silver demand. Between 2010-16, India imported 990 million ounces of silver.

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


A new study confirms that humans love dogs more than they love their fellow humans. According to science, it’s because people see dogs as helpless.
According to two new studies, we’re more likely to empathize with struggling dogs than with struggling people. Medical research charity Harrison’s Fund conducted an experiment two years ago to test whether people were more likely to donate money to help dogs or humans, and they concluded it’s the former.
This idea was conjured up and backed up by another recent study into human-dog empathy, which concluded that we get more upset by stories of dogs being beaten up or hurt than humans going through the exact same treatment.
The researchers’ experiment was actually quite simple. They printed two advertisements, both of which posed the question: ‘Would you give 5 to save Harrison from a slow, painful death?’ The only difference between the ads was the picture. One featured Harrison as a little boy, the other featured Harrison as a dog. And it was Harrison the dog who received the most donations.

This post was published at The Daily Sheeple on NOVEMBER 2, 2017.

Analyzing the Mainstream Analysts: Are SLV Holdings Really Plummeting?

It was a headline designed for shock value. The title screamed, Investors Dumping SLV at Fastest Pace in 6 Years!
The headline came from Bloomberg, the epitome of ‘mainstream’ news in my opinion. The article reported that investors were ‘dumping’ holdings in SLV, the largest silver exchange-traded fund. They claimed the silver market had been ‘hit by a gale force, spurring an exit from ETFs backed by the metal.’
As you might guess, we do a lot of reading around here. And this was the first I’d heard of a ‘mass exodus’ from SLV. Did I somehow miss this development?
It’s important, because if holdings in SLV were really cratering, it might be a sign that the market – or at least these types of investors – had changed their mind about silver. You might know that holdings in silver-backed ETFs have been stubbornly high for years, refusing to bow to any price pressures. During the crash of 2008, for example, holdings rose sharply in spite of the price falling off a cliff. Same thing happened in 2013 when the price cratered… holdings never really declined all that much, in spite of GLD shares dropping hard.

This post was published at GoldSeek on 2 November 2017.

Is Saudi Arabia’s Oil Strategy Working?

The IMF estimated that Saudi Arabia will need oil prices to trade at about $70 per barrel in 2018 for its budget to breakeven, a dramatic improvement from the $96.60 per barrel it needed just last year. Saudi’s improvement is the most dramatic out of all the Middle Eastern oil producers, and it also suggests the combination of austerity, cuts to wasteful subsidies, new taxes and economic reforms are starting to bear fruit.
The improvement is all the more important because Saudi Arabia and its fellow OPEC members are restraining output as a way to boost oil prices. Selling fewer barrels means less revenue, although that is offset by the coordinated production cuts through the OPEC deal, which has helped raise prices.
Nevertheless, there is something glaring about Saudi Arabia’s breakeven price: It is still far higher than the current oil price, which means Riyadh is still feeling the economic and fiscal pressure from low crude prices. ‘The reality of lower oil prices has made it more urgent for oil exporters to move away from a focus on redistributing oil receipts through public sector spending and energy subsidies,’ the IMF said in its report. Saudi Arabia and other Middle East oil producers ‘have outlined ambitious diversification strategies, but medium-term growth prospects remain below historical averages amid ongoing fiscal consolidation,’ the IMF added. In other words, austerity might help narrow the budget deficit to some degree, but it can also be self-defeating if it slows growth.

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

A Falling Rate of Discount and the Consumption of Capital

Net Present Value
Warren Buffet famously proposed the analogy of a machine that produces one dollar per year in perpetuity. He asks how much would you pay for this machine? Clearly it is worth something more than $1.00. And it’s equally clear that it’s not worth $1,000. The value is somewhere in between. But where?
This leads to the concept of discount (which we mentioned in Falling Productivity of Debt two weeks ago). A dollar to be paid next year is worth less than a dollar in the hand today. One reason is that we are mortal beings.
In order to be alive next year, we must remain alive every single day between now and then. There are natural reasons for time preference – the desire to have a good today, and not postpone it. We are also not omniscient. Something may come up, such as an illness, which forces us to consume what we did not plan to consume.
Another reason is, of course, risk. Unlike the magic machine in our example, a business enterprise may cease to make money for any number reasons including a new competitor or changing customer preferences.
For many reasons, a dollar to be paid next year is not worth a dollar today. A dollar to be paid in ten years is worth even less. Future payments must be discounted. The discount is related to the interest rate, and it shares many of the same causes.

This post was published at Acting-Man on November 2, 2017.

Insider Trading Inc: Beat The Market, Work For The SEC

It’s often said in financial markets that correlation does not mean causation. On some occasions, however, denying the causation seems so outlandish to be, frankly, preposterous. As a case in point, Institutional Investor (II) discovered a newly published academic work investigating the investment returns of SEC employees. It turns out those guys are surprisingly good.
According to II, employees at the Securities and Exchange Commission may benefit from divesting companies ahead of investigations, research shows.
Employees at the U. S. Securities and Exchange Commission earn investment returns similar to the insider traders they prosecute, according to new research from Columbia University and Arizona State University.
Why aren’t we surprised. No matter, II continues…

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

President Trump Announces Jerome ‘Jay’ Powell As Fed Chair

Having been leaked to most major news organizations last night, President Trump is fully expected to announce that Fed governor Jerome “Jay” Powell is Janet Yellen’s replacement as the next bank-friendly Fed chair.
Live Feed (due to begin at 1500ET)..

Jerome Powell will be the first former investment banker to become Fed Chair (and first non-economics PhD in 40 years).
Powell, a Princeton graduate, was a lawyer in New York before he joined the investment bank Dillon Reed & Co. in 1984. He stayed there until he joined the Treasury Department in 1990. After he left Treasury, he became a partner in 1997 at The Carlyle Group (CG), the private equity and asset management giant. He left Carlyle in 2005.
He will also likely be the richest Fed head ever – Powell’s assets are worth between $21 million and $61 million, according to financial disclosures which require officials to give a range in the value of their various holdings.

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

What Do You Mean ‘No Inflation?’

When the Fed launched its aggressive monetary policy in the wake of the 2008 financial crisis, many free-market economists predicted it would result in massive price inflation. That never materialized. As a result, Keynesian economists like Paul Krugman love to finger-point and mock those who criticize easy money policies designed to ‘stimulate aggregate demand.’ They claim the lack of price inflation proves they were right all along. You can massively increase the money supply during a downturn to stimulate the economy without sparking inflation. Free-market people are wrong.
But just because we don’t see price inflation doesn’t mean there isn’t any inflation at all. After all, the new money has to go someplace. If we don’t see it manifested in rising prices, it’s because we’re looking in the wrong place.
In response to the Great Recession, the Federal Reserve plunged interest rates to near zero and held them at historically low levels for several years. It also engaged in three rounds of quantitative easing – in essence, printing money out of thin air. Over a span of nearly seven years, the Fed’s balance sheet increased 427%. With all of that new money entering into the economy, one would expect a significant increase in price inflation. And yet the rise in the consumer price index has been muted. In fact, officials at the Federal Reserve constantly fret about the lack of price inflation.
So where did all that money go?

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

Twitter-Russia Collusion?: New Email Reveals Twitter Pressing RT To Ramp Up Election Ads

A few weeks ago, after Twitter provided their first “Russian Collusion” update, which consisted basically of nothing other than details on the amount of advertising purchased by Russian news outlets via completely legitimate means, RT Editor-in-Chief Margarita Simonyan fired back at Twitter with a snarky article saying she wasn’t aware that paying for advertising is now considered suspicious or harmful in a developed democracy such as the United States. She went on to say that she’s very excited to find out how much U. S. media outlets spend in the Russian segment of Twitter…you know, since advertising on social media in foreign countries now seems to be a criminal act.
‘This is forcing us to go a step further and come clean that we also spent money on advertising at airports, in taxis, on billboards, on the Internet, on TV and radio. Even CNN ran our commercials,’ Simonyan said. ‘By the way, similar campaigns are conducted by the American media in the Russian segment of Twitter. It’ll be very interesting to find out how much they spend on it, who they target and for what purpose.’
Well it seems that Simonyan may now be exacting her revenge on Twitter as the following email from one of the company’s advertising executives sent to RT conveniently made its way into the hands of BuzzFeed News.

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

How US Debt Slaves Get Trapped by ‘Deferred Interest’

But over the next 2 months, they’ll try to prop up US retailers and the entire global economy.
Credit cards play a huge role in what the US retail industry hopes will be a $682-billion splurge by Americans over the holiday selling season. Already, total revolving consumer credit outstanding – mostly credit cards – has reached $1 trillion, up 5.4% from a year ago, and will surge over the next two months, as US consumers try to prop up the global economy by going deeper into debt.
So the consumer finance industry is proffering its services via store-branded credit cards to make this happen. It’s not doing this for the love of the US economy but to extract its pound of flesh from consumers who don’t make enough money to pay off their credit card balances every month – the very debt slaves that carry the $1 trillion on their backs – and who don’t read the fine print. For them, the finance industry has a special money extraction tool: ‘deferred interest.’
When consumers are at the cashier or online, they may get offers of 0%-financing and a discount on the first purchase if they sign up for a store-branded credit card on the spot. A study by WalletHub of the financing options offered online by 75 large US retailers found that all retailers that offer store-branded cards with 0% financing use ‘deferred interest’ clauses:

This post was published at Wolf Street on Nov 2, 2017.

Goldman’s Clients Are Becoming Increasingly Schizophrenic

Last weekend, Goldman’s clients were nervous: after 16 months without a 5% pullback in stocks, they were afraid that a steep correction could take place at any moment.
Today, they are just as afraid, but have no choice other than to remain invested and buy every dip, or as Goldman’s credit analyst Charles Himmelberg writes, “they characterize themselves as ‘reluctant bulls’, a view for which we have a lot of sympathy. While valuations are stretched, growth is strong and none of the major sectors in the US economy show much sign of critical imbalances that might lead to recession.”
Rereading that sentence, “reluctant bulls” is probably not the best designation because when it comes to trading decisions Goldman clients are becoming “schizophrenic”, and with reason: as Himmelberg explains there are reason to be both bullish and bearish. First, the generic reasons behind the endless “risk on”:
In favor of continued ‘risk on’ positioning, none of the major sectors in the US economy show much sign of critical imbalances. Indeed, the balance sheets of US households have been de-levering, and the stance of fiscal policy appears more likely to ease than to tighten from here. Corporate balance sheets have deteriorated, but interest coverage ratios remain comfortable and highly sustainable assuming the economy avoids recession. Even in the labor market, where the unemployment rate of 4.2% has arguably already fallen below its long-run sustainable level, wage growth is still well below an obviously unsustainable level.

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